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One9iner
14th Sep 2008, 23:11
In light of the current economic climate I'm sure if you're reading this you are

a) worried about the impact on the airline industry

b) (if you're like me) bored of the media jumping on the back of every single negative result in the property/currency/stock market; casting doom on the world just to sell papers - glue eyes to the idiot box . . and in turn damaging consumer confidence in the process.

c) trying to understand when the drop in economic performance will level before rising (?) .

Some economists / bankers etc... are quoting 18 months, some say 2 years . . whilst some are stating this is a once in a century downturn of economic stripping which the the global population need to massively adjust before a recovery is possible .. (oil output etc...)

It doesn't take Einstein to understand how and why we're in the motions of a global slow-down, and we understand what factors are required to turn things into a positive direction .

My question to you is what 'cogs' will fall into place first; what will act as a flux to accelerate an improvement; the US elections? pressure on OPEC? One after another lenders and banks being taken over by governments? Are we just going to have to ride a natural sequence. etc.. ?

A big topic if not the main topic of conversation amongst many at the moment, and although I'm sick of the media continually banging on about it and making things worse (in effect), I'd like to hear genuine opinions ..

VinRouge
15th Sep 2008, 08:24
I am afraid the debt boom of the past 10-15 years had to unwind. It was rather obvious to many, Vince cable in the UK and ron paul in the states.

The only thing that will get the global economy expanding again is the correction from the upcoming uvercontraction. In other words, the recovery from the worst global depression in living history. That is my opinion anyway. the effect of the media is overhyped. The fact that banks lent trillions of dollars to silly sods that couldnt afford the repayments has a bigger effect. THe media are simply talking about it now. JUst as they talked the markets up until 1 year ago (housing market springs to mind.... :hmm:)

http://www.pprune.org/jet-blast/297216-why-house-prices-wont-go-down-10.html#post4303660

demonstrates how screwed we are in one sector...

rubik101
15th Sep 2008, 09:17
Do any pilots have much sympathy for the employees of Lehman Brothers?
I'm afraid I don't. Even though the job losses are regrettable, I am in one sense quite pleased that it is not just us that are suffering.
By the way, just what did Lehman Brothers do?

VinRouge
15th Sep 2008, 09:38
Lots of things. Including help lend billions in NINJA loans to feckless idiots that couldnt repay them.

They effectiuvely packaged up the mortgage debt, gave them a fancy name (collateralised debt obligations/Retail motgage backed securities) and sold them to people that had more money than sense...

They also bought quite a few themselves. Now everyone and their dog realises that houses are only worth about 50% of what was originally thought and handing their keys back to the estate agents, not paying off the debt, they are in the dwang. This means that companies such as fitch that rate securities and bonds as to their intrinsic value or likelihood to say how credit worthy they are are marking tem down. Triple A rated securities are now worth cock all. This means that as an investment firm, they have to spend oodles on insuring the now worthless paper. Problem is, ewveryone is doing this and the insurance premiums are going through the roof. the share holders dont want to pay into companies that are effectively bankrupt so sell their shares or hope things will recover. Which, of ourse, they wont. More to the point, the Fed and the global banking system are in the dwang. No liquidity = no profits = collapsing economies and asset values. = Lehman and a bunch of other banks are abgout to go bust. And the recession hasnt even started yet. Its going to be ARMageddon. (thats adjustable rate mortgages for those not in the know).


http://www.itulip.com/images/armadjust.gif





Oh, if you are interested in how much money is involved, 2 trillion dollars in CDOs alone at the last count. RMBSs are worse. This explains it pretty well:

Subprime mortgage crisis - Wikipedia, the free encyclopedia (http://en.wikipedia.org/wiki/Subprime_mortgage_crisis)

http://upload.wikimedia.org/wikipedia/commons/0/08/Borrowing_Under_a_Securitization_Structure.gif

Lehman was the Issuer in the above.

dead_pan
15th Sep 2008, 10:27
Lehman Bros and Merrills gone in the same weekend - blimey. The powers that be in the world markets are girding their loins to prevent the contagion spreading wider. Situation is not being helped by the hedgies placing some very large bets on some of our other reverred institutions going belly up (when enough people go short on a stock these bets have a habit of being self-fulfilling).

I think we have some distance to go before the situation in the financial sector eventually stabilises and people can begin picking up the pieces and starting over. I sincerely hope the regulators take a much more vigorous and hands-on approach to prevent a re-occurance of the past twelve months - it must be one of the worst ever examples of market excess. Everyone knew the party was going end with one almighty hangover, it was just a matter of when would the beer run out...

Fortyodd2
15th Sep 2008, 10:37
As the banks and financial institutions are only too quick to remind their customers........ "The value of your investments may go down as well as up".

Seems to me, as a humble pilot, that if you have to borrow money in order to lend it then you really shouldn't be offering to lend it. Face up guys, you gambled and you lost. Take responsibility for your own actions and stop pleading for the sort of special treatment and understanding from your governments that you yourselves would never give out to your customers.

peterpallet
15th Sep 2008, 10:55
As an ex trucker and seller of trucks let me put my view of the financial mess we are in.

Take truck companies. So they lay up one truck - that puts one driver out of work- and as most companies nowadays lease their trucks that is one less lessee paying their dues. Now multiply this by hundreds and the next thing you will see is lease companies going to the wall. And the car lessors and all the other lessors following them down the tube.

Apply above to aircraft and you will see that ( as aircraft lease companies are not able to re- lease their aircraft) then we have the lessors going to the wall.

Don´t blame the media for the mess we´re in and the larger mess of tomorrow blame the capitalist system we live by. Which as Karl Marx forecast "Capitalism contains the seeds of its own destruction" In the search for ever higher "profits" it seals its own fate.

Read this in 2 years time and see if it still rings true.



Peter

Effluent Man
15th Sep 2008, 11:44
VR, You can't blame feckless idiots,because - well thay are feckless idiots.The people responsible are those who authorised,nay pushed,the poilcy of lending to them.

The retail motor trade is in a nosedive,prices are spiralling down,as much as 5% per MONTH.I sold a 2005 Mondeo Diesel last week.I had bought it for £3300 last month.Out of interest I checked the trade value for February -£5500
The car has dropped exactly 40% of its value in six mionths.Big dealerships are in trouble all over the place. i normally stock 35-40 vehicles and I now have 21.It's not a problem to me in financial terms because I own my stock.If I was on the bank I would be seriously thinking of jumping ship.

Capt.KAOS
15th Sep 2008, 13:26
Lots of things. Including help lend billions in NINJA loans to feckless idiots that couldnt repay them. Some people get bonusses to be a feckless idiot and issue stupid loans.. :ugh:

PS
Warren Buffett was right all the way back in 2002 (http://image.guardian.co.uk/sys-files/Business/pdf/2008/09/15/2002pdf.pdf), as usual:Charlie and I believe Berkshire should be a fortress of financial strength – for the sake of our owners, creditors, policyholders and employees. We try to be alert to any sort of megacatastrophe risk, and that posture may make us unduly apprehensive about the burgeoning quantities of long-term derivatives contracts and the massive amount of uncollateralized receivables that are growing alongside. In our view, however, derivatives are financial weapons of mass destruction, carrying dangers that, while now latent, are potentially lethal.

Overdrive
15th Sep 2008, 17:15
http://upload.wikimedia.org/wikipedia/commons/0/08/Borrowing_Under_a_Securitization_Structure.gif


I think in future, there may be some of those dotted lines connecting directly to the investors

SpringHeeledJack
15th Sep 2008, 18:10
A quick side-slip into the shirt (main ?) sponsor of Manchester United, AIG who are in financial distress to the tune of over $20 Billion and have lost over 60% of their share price today.

What say the lads to it remaining the sponsor ? After poor old West Ham losing XL ( and yes I am aware people have lost their jobs etc) and now playing in bare jerseys, will the red devils be doing the same soon ? Perhaps they might be more inclined to sell Ronaldo to their neighbours in January now :E


Regards


SHJ

airship
15th Sep 2008, 18:35
Having read alll the news reports, I walked upto my HSBC bank branch this afternoon and withdrew what I could in cash.

I don't doubt that measures are being taken to ensure that there is no disruption to life as we've known it uptil now. Having said that, whilst I didn't withdraw the maximum of available assets back in 2000 (and all the worries surrounding Y2K), the latest worries are too much to ignore. I certainly didn't want to find myself without a working VISA card or without cash on hand to back it up in case they stop accepting credit cards...?!

But what is going to happen when they start unwinding Lehmann's obligations...? Frankly, I couldn't give a toss for Lehmann or their employees who have probably greatly benefitted from the huge profits made and distributed over the past few years. Welcome to the real world! Hey, maybe you could convert that great big mansion into a bed & breakfast...?! :rolleyes:

BlooMoo
15th Sep 2008, 19:17
Welcome to the real world!

Every person working at LB is already in acceptance and fully aware of the 'real world'. There is a sector though that, as yet, has not been re-introduced - but it will be...

SpringHeeledJack
15th Sep 2008, 21:26
Well, whilst the world is seemingly falling down around our ears, here is something really important to put things into their proper perspective.....:}

BBC NEWS | Scotland | Tayside and Central | Pet bunny's ears prompt 999 call (http://newsvote.bbc.co.uk/1/hi/scotland/tayside_and_central/7616451.stm)


Regards


SHJ

BlooMoo
15th Sep 2008, 22:05
Yet we have record numbers of GCSE 'passes' (what again? Now that is amazing)

And a significant %age of these previously unnoticed geniuses are going even further to gain such prestigious degrees as this (http://www.lincoln.ac.uk/home/courses/dbs/undergraduate/equinesports/index.asp) say.

10 years ago the prestige of a degree in the UK was based on some elitist crap like being clever. Now, (thank-you Labour) I can be clever too. (Thank-you Labour, have I said that already?) My £20k loan was just marketing to get your brill idea off the ground,yes? I mean, if 50% of us kids can get a degree then obviously we'll have Googleplexes springing up around every shed in the country before you can say 'socialist smoke and mirrors'.

We'll be sharing the rewards of growth and benefiting from the white heat of technology so my 20k of debt isn't really MY problem, is it, if you get my drift, eh? eh? Hello? Anyone there?

banana9999
15th Sep 2008, 23:32
Having read alll the news reports, I walked upto my HSBC bank branch this afternoon and withdrew what I could in cash.

I don't doubt that measures are being taken to ensure that there is no disruption to life as we've known it uptil now. Having said that, whilst I didn't withdraw the maximum of available assets back in 2000 (and all the worries surrounding Y2K), the latest worries are too much to ignore. I certainly didn't want to find myself without a working VISA card or without cash on hand to back it up in case they stop accepting credit cards...?!

But what is going to happen when they start unwinding Lehmann's obligations...? Frankly, I couldn't give a toss for Lehmann or their employees who have probably greatly benefitted from the huge profits made and distributed over the past few years. Welcome to the real world! Hey, maybe you could convert that great big mansion into a bed & breakfast...?! :rolleyes:

Fantastic post. Made me laugh so hard. You should go into stand-up.

mini
15th Sep 2008, 23:39
Methinks the Cousins will now see the "Big Picture" (in finance at least...) and get their Corporate Governance issues sorted.

Greed chaps, pure Greed.

priapism
16th Sep 2008, 00:57
Was it Gordon Gecko who said "greed is good"?????

Charlie Foxtrot India
16th Sep 2008, 01:58
Did none of these people learn about the South Sea Bubble at school?

PS Collective noun for bankers: a "wunch".

VinRouge
16th Sep 2008, 07:01
Read this on Paul Mason's BBC blog and wet myself!!! Very funny!

Tomorrow we will just see a stunned American media in full denial/do-not-understand mode, watching the spectacle of bank bosses come and go by limo as they nix their entire careers and the certainties that have sustained Wall Street for a decade.
"And hey Joe how's that affected the Nasdaq? Well Jim it's down by a sqillion basis points; investment banking? didn't that used to be great? Now it's screwed. You're watching XYZABC Network... now over to Jack with the weather, but first an advertisement for some pills you can take if you feel depressed..."

Der absolute Hammer
16th Sep 2008, 07:12
Wait now for effect of prime mortgage default on US markets.
Wait for Lehman asset fire sale.
Wait for UK bank write down.
Have a look at how big HBOS really is.
HSBC? HIE/Lehman, big connections.
Balthasar's feast is nearing dessert time, money brains with vineger.

SpringHeeledJack
16th Sep 2008, 17:16
Hammer, you seem to know a bit about things, care to expand ? Geiler nahm, ubrigens :ok:

I learnt about a venture that the London Stock Exchange was about to launch with Lehman Bros this year. It was/is called 'Baikal' and is a 'dark liquidity pool' FFS!

Baikal...

The joint venture called Baikal would offer access to securities across 14 European countries in a so-called dark liquidity trading pool that also offered algorithmic, or computer-driven, trading functions.

Dark pools of liquidity - Wikipedia, the free encyclopedia (http://en.wikipedia.org/wiki/Dark_pools_of_liquidity)

These 'dark pools' allow large investors to trade anonymously thus making the markets IMHO less open to due scrutiny as and when required. It just seems to my simple mind that the more convoluted and automated the trading becomes, then the risks of it going bad are greatly increased. :*

AIG, will it be 'nationalized' ? Apparently it's so deeply embedded in the Chinese market that there would be political repercussions along with the obvious financial aspect. These are rare times that's for sure...

Regards


SHJ

Capt.KAOS
16th Sep 2008, 23:23
The bonusses are the source of all evil. From the good times (2006)
Lehman Brothers said it would pay its average member of staff $335,441 (£170,933) this year as it reported a record fourth-quarter profit of $1.0 billion, capping its most profitable year ever.

The US investment bank is paying its 25,936 staff a total of $8.7 billion in salary, bonuses and other benefits for 2006 on the back of a 23 per cent rise in net income to a record $4.0 billion.

Profits for the fourth quarter jumped by 22 per cent, from the year earlier period, to $1.0 billion, as revenue from fixed-income sales and trading rose by nearly a third to $2.1 billion.

Revenues from equities sales and trading rose by 21.6 per cent to $900 million for the quarter, ended November 30, although fees from advising on mergers and acquisitions increased by only 5 per cent – to $256 million – despite the surge in deals worldwide.

Lehman was not alone in announcing a record year for profits and bonuses this morning.

Bearn Stearns, the US investment bank best known for packaging home loans into mortgage-backed bonds, reported its highest ever quarter in the three months to November 30, chalking up a 38 per cent rise in net income to $563 million.
This fourth quarter profit was made on the back of a 25 per cent increase in revenues to $1.1 billion and a 58 per cent jump in investment banking fees, to $364 million, as the bank attracted more M&A advisory work.

The quarter contributed to a 40 per cent rise in net income for the year – to $2.1 billion – and handed its 13,500 staff an average of $321,740 in salary, compensation and other benefits for the year.

But the record compensation dished out by Lehman Brothers and Bear Stearns this year pales by comparison to Goldman Sachs.
On Tuesday, Goldman Sachs announced that it would pay its 26,400 staff an average of $622,000 in compensation this year as it announced a 70 per cent rise in profits to $9.5 billion for 2006.
Lehman's CEO Fuld got a $22 Mil bonus in 2007 and 5-Year Compensation Total was a whopping $375.81 mil

Richard Taylor
17th Sep 2008, 07:00
What pisses me off are the speculators that drove up the price of oil (now betting on it falling!) & also taking profits on betting the share price will fall...part of the reason HBOS shares for example are collpasing.

Greed is good indeed :rolleyes:, but they are helping to create the self-fulfilling prophecy that the world is heading for recession...even depression.

It's making me depressed! :eek:

arcniz
17th Sep 2008, 07:27
AIG, will it be 'nationalized' ? Apparently it's so deeply embedded in the Chinese market that there would be political repercussions along with the obvious financial aspect. These are rare times that's for sure...

The N-word is not politically discreet in the USofA, however the deal announced late on Sept 16 seems to have approximately such effect: For an $85B line of credit, on comparatively hard cost and repayment terms, the US govt appears to have permanently and irrevocably taken 80 percent of the equity ownership in the enterprise - more than enough to control all the assets and outcomes.

Exactly how this works is not yet fully clear, but it would seem the shareholders of AIG's 2.2 billion outstanding common shares have been hung out to dry - with no say in the deal, no future control, and no recourse to negotiate less onerous terms. Had the company gone into bankruptcy, the shareholders' interests likely would have been much better preserved, but that was not consistent with the political and management goal of politicians, Treasury, and the Fed to reduce "system" risks unrelated to AIG's interests per se.

Very onerous terms for the shareholders, as currently explained. Also not clear how the enterprise will ever be able to return to operation as a normal shareholder-owned business following this castration by the Feds.

Better than being lined up against a wall and shot, but not by much.

Wod
17th Sep 2008, 08:37
So, closer to home.

No change?, or Fire sale, but no change?, or fleet disposal/dispersal?

ILFC Company Description

John Travolta bought his own Boeing; if your cash flow is more limited, International Lease Finance Corporation (ILFC) would be glad to lease you one. The company, which leases the entire range of Boeing and Airbus commercial aircraft, lays claim to being the largest lessor of new aircraft and the largest lessor of widebody aircraft in the world. It also boasts of owning the world's most valuable fleet -- reportedly more than 900 planes -- of leasable aircraft. High-rollers and movie stars aside, commercial airlines outside the US account for most sales; ILFC counts about 145 airlines as customers. ILFC is a subsidiary of insurance firm American International Group

SpringHeeledJack
17th Sep 2008, 09:53
Man alive! They (The Fed) done did it, they 'N'd' AIG and we step back from the abyss once again, or did we ?

It would seem that the markets aren't seeing it as a permanent solution, perhaps akin to sewing up a wound that might burst again soon. Even IF this solution does hold things together, the psychological effects on the markets will mean that everyone (excluding the delusional) will be waiting for "the other boot to drop" and that isn't a nice feeling. Even Mr Soros sees things in somewhat negative terms.

I hope that this present situation will sober up ALL the players and scare them into acting both prudently and wisely instead of just bending down to the table and taking another sniff of the financial feel good powder. I'm not optimistic that they will, the human ego being what it is.... :(


Regards


SHJ

Stockpicker
17th Sep 2008, 10:16
Just a quick explanatory word about dark pools - they are not rocket science or some kind of wierd financial alchemy. They are meant to help deliver "best execution" of large trades. If you are a massive pension fund and want to buy a million shares in ITV (say), you run the risk of driving the shares up against you if you just wade into the market with your hobnailed boots. The "dark pool" option lets you see if there is a natural seller of that unusually large volume of shares. The trade is then reported in the normal way.

SpringHeeledJack
17th Sep 2008, 10:26
Thankyou Stockpicker for that clear and concise explanation, it was just the way I read the wiki and reuters articles, it seemed like a device to hide trades from prying eyes and could be open to abuse.

You must be having fun at the moment :ugh:


Regards


SHJ

ORAC
17th Sep 2008, 13:03
Five Top Lehman Brother Souvenirs on e-Bay. (http://timesonline.typepad.com/comment/2008/09/top-five-lehman.html) :uhoh:

simon brown
17th Sep 2008, 13:13
What do you expect when the financial services sector mainly consists of spivs and wide boy salesmen, presided over by incompetent governments and regulatory authorities. Add to this the fact that the whole economy is purely driven on idle speculation, poor projections,greed and quick profits and you have the mess we are in today...

Blacksheep
17th Sep 2008, 13:28
Yes, that was a very intersting map of "Spivvery" at its best at the beginning of this thread. As to Dark Pools that conceal who is behind the real deals, how are we to take that in the context of market theory? Total Assymmetry of Information perhaps?

At the opposite pole to the unattainable Perfect Market we now have the perfectly formed Imperfect Market - and its perfectly legal! :rolleyes:

Binoculars
17th Sep 2008, 13:31
These 'dark pools' allow large investors to trade anonymously thus making the markets IMHO less open to due scrutiny as and when required.

....dark pools ... are not rocket science or some kind of wierd financial alchemy. They are meant to help deliver "best execution" of large trades. If you are a massive pension fund and want to buy a million shares in ITV (say), you run the risk of driving the shares up against you if you just wade into the market with your hobnailed boots.

Precisely, stockpicker. Is there anything in your response to negate anything SHJ said in his original quote? You sound as though you take it as an article of faith that institutions able to manipulate share prices through sheer volume of cash available should be allowed more insight into the underlying market than the average investor? Do you agree or not that this does in fact allow the market to operate with less scrutiny than desirable?

No, the patronisingly named Mum ad Dad investors with their lousy couple of hundred thousand dollars of shares are never going to influence the market; I'm just not sure that's an argument for letting anybody else do it. The results of a lack of governance and turning a blind eye to utter greed are available at the moment for all to see.

Geez, I might even have to repost the Peggy Noonan article I posted a few years ago, for surely nothing has changed. A simple search of that name will turn it up.

Stockpicker
17th Sep 2008, 15:18
Is there anything in your response to negate anything SHJ said in his original quote?

Um, yeah, the bit that you didn't quote where I said it gets reported in the usual way.

He seemed happy with the response.

D SQDRN 97th IOTC
17th Sep 2008, 15:44
Stockpicker

you said:
The "dark pool" option lets you see if there is a natural seller of that unusually large volume of shares.

well if you could see.......it wouldn't be a dark pool, now would it ?:}
to educate yourself, you should read this

Turquoise (http://www.tradeturquoise.com/tq_trading.shtml)


I don't know....all these so called experts on how the city works !:ugh:

Stockpicker
17th Sep 2008, 15:47
I was trying to keep it simple, D Sqdrn.

And I've been working in the City for fifteen years, so now have a vague idea how it works, thanks. Have you worked in the City long?

Turquoise is one of several such platforms.

Binoculars
17th Sep 2008, 16:01
He seemed happy with the response. He did, didn't he? I was surprised at that. You can fool some of the people........

the bit that you didn't quote where I said it gets reported in the usual way.

Ahh, and the VERY interesting omission there is the word "then" at the beginning of said quote.

Don't get me wrong here. This isn't any sort of personal slur against you. You know your way around a stock exchange a lot better than I do, for I am reduced to poring over bullshit annual reports audited by incompetents and/or criminals ( I don't think I have to name names here) and trying to sort the wheat from the chaff.

I just believe the computer age has sucked many in to believing they can follow what's going on. At the same time they trust those handling their money to know more than they do and invest wisely. The instances of that being proven wrong, that is the boom and bust cycle where people simply will not learn from history because things have changed now, are becoming more frequent. People's memories are becoming shorter because they want to see things that way. Most people in the market these days have never experienced a prolonged recession.

The more time moves on the more Warren Buffet is being proven correct in virtually everything he says. I personally hope a lot of people gambling on derivatives have done their arse. Speculation is an uncompromisingly unproductive part of society. The funny thing is that when you listen to the chat rooms, everybody had gone short the day before! Nobody loses money!

Until we get the kids out and (shock horror) scrap the trade in derivatives that are getting so complex even those playing in them don't understand them, the world economy will be affected, well, as it was in 1993 when Bill Clinton had one of his remarks leaked upon finding the real truth. "What? You mean my handling of the economy is being held to ransom by a group of f*cking bond traders?"

Bill was right then and he's still right.

Stockpicker
17th Sep 2008, 16:14
On the complex instruments, couldn't agree more, Binos. I was just trying to clarify that you don't somehow avoid disclosing dealings when you're accessing the dark pools. Ironically, large institutions have to be far more open than small ones in terms of disclosure, as they are the ones who have to make a public announcement of a large change in shareholding within 24 hours. Dark pools don't change that.

Binoculars
17th Sep 2008, 16:26
Point taken, stockpicker.

dead_pan
17th Sep 2008, 16:41
scrap the trade in derivatives

Ain't gonna happen - way too much money involved and too entrenched in the system. In the good old days no-one made money when markets fell - derivatives have gone some way to correcting this 'problem' for traders etc.

Quite amusing to see the widespread use of the term 'speculation' in this thread - sounds so much more acceptable than gambling/betting, which it simply is. Problem is there probably a greater understanding of risk and downside involved in your average bookies than many of the big players in the City.

Incidentally, if anyone is interested you can play in the murky world of spread-betting and CFDs (basically derivatives for the common man) without risking a penny - you can create a virtual portfolio on www.bullbearings.co.uk (http://www.bullbearings.co.uk). I tried it earlier in the year and, having had my portfolio wiped out several times over in just a couple of weeks, realised what a complete mugs game it really is.

Capt.KAOS
17th Sep 2008, 16:59
Bill was right then and he's still right.Well, it was under Bill that the repeal of the Glass-Steagall Act (http://en.wikipedia.org/wiki/Glass-Steagall_Act) took place with the legislation of the Gramm-Leach-Bliley Act (http://en.wikipedia.org/wiki/Gramm-Leach-Bliley_Act), which was embraced by McCain and opposed by Biden (as most Dem. senators)

BTW, Phill Gramm ( "Even his friends don’t like him.") is McCain's econ brain (http://www.texasobserver.org/article.php?aid=2767) and who has recently dubbed the United States as "a nation of whiners" in a "mental recession" when asked for the credit crisis.

Interesting the fact what McBush yesterday said (on Today show): "I do not believe that the American taxpayer should be on the hook for AIG." NBC's Matt Lauer asked, "So, if we get to the point, in the middle of the week when AIG might have to file for bankruptcy, they're on their own?" McCain replied, "Well, they're on their own." Today he turned 180 degrees saying: "I didn't want to do that. And I don't think anybody I know wanted to do that. But there are literally millions of people whose retirement, whose investment, whose insurance were at risk here." Flip-flopping, or just plain ignorance ( this is what McCain said himself: "The issue of economics is not something I've understood as well as I should." ).

It's the economy, stupid.

ORAC
17th Sep 2008, 17:29
Well, it was under Bill that the repeal of the Glass-Steagall Act took place with the legislation of the Gramm-Leach-Bliley Act, which was embraced by McCain and opposed by Biden (as most Dem. senators)

Senate Vote on Conference Report: S. 900 [106th]: Gramm-Leach-Bliley Act
Vote Number: Senate Vote #354 in 1999 [primary source]
Date: Nov 4, 1999 3:30PM

Nov 4, 1999: After passing both the Senate and House, a conference committee is created to work out differences between the Senate and House versions of the bill. A conference report resolving those differences passed in the Senate, paving the way for enactment of the bill, by roll call vote. The totals were 90 Ayes, 8 Nays, 1 Present/Not Voting.

AZ McCain, John [R] - No Vote
DE Biden, Joseph [D] - Aye

con-pilot
17th Sep 2008, 17:36
BTW, Phill Gramm ( "Even his friends don’t like him.") is McCain's econ brain and who has recently dubbed the United States as "a nation of whiners" in a "mental recession" when asked for the credit crisis.

Do try to keep up Capt. K, that was back in May. Below are the names of both Obama's and McCain's economy advisers.

Bloomberg.com: U.S. (http://www.bloomberg.com/apps/news?pid=20601103&sid=ajMl5w.sSXGo&refer=us)

larssnowpharter
17th Sep 2008, 17:51
I have never really understood the concept of 'money' or 'investment'.

However - in order to keep up my French - I read a Froggie books. One of them was a 'standard' lycee history text.

As best as I can remember the final line on its single chapter on the USA went (excuse the tranlation) something like this:

The concept on which the United States is founded is an interesting social experiment; it has yet to be shown that it will be successful over the long term

SpringHeeledJack
17th Sep 2008, 18:13
Thanks for kind of standing up for me Binos from that ferocious Stockpicker lassie :ok:

However, her explanation was enough for me (taking into account her expertise and previous well mannered form). I would imagine, as you did, that the big players would be able to have favorable strategic dealings using the deep dark pool that the tiddlers might not.

Whatever happens in the next while in the US of A WILL have an affect on the whole world's economy, so this fool is hoping that they might take a lead from this http://www.nytimes.com/2008/09/17/business/17leonhardt.html?hp


Regards


SHJ

SpringHeeledJack
17th Sep 2008, 19:03
And that's not all!

Having heard a few times in the last 2 days that the Russian stock markets were suspended and trading thereby, it made me lament....... Why ?

If markets are allowed to stay open when shares are booming, then why not when they are falling ? If we take out the fact that there are those who make money on both sides of the curve, the fact that 'the market' has lost faith in XYZ should be part of the game. If not, then it's just privatizing the upside and nationalizing the downside again :mad: Now I realize that certain stocks are of importance due to their strategic nature (tell that to the UK as they have sold off nearly ALL major power and water companies), but surely there IS a risk to playing the market and mostly man-made problems at that, so all's fair in love and war as far as i'm concerned.


Regards


SHJ

BlooMoo
17th Sep 2008, 22:08
A very good point by SHJ.

In my view there is, and has been too much State intervention. The markets work better than any alternative provided players lose - and are seen to lose - when they f*ck up, whether they're selling bricks or CDOs.

Half the economic volatility just now is about uncertainty in ultimately who has lifeboats/competitive pressure and who doesn't - and that makes for obviously p!ss poor judgement of risk in hindsight by a lot of MoUs heading yet further away from the the real ball.

With one or two exceptions all Western Governments are currently weak politically so State intervention is too easy a card for those Governments compared the global 'tragedy' of the risk to their egos.

If we want stability in a capitalist market then let the losers lose - simple, no?

frostbite
17th Sep 2008, 22:42
Don't necessarily disagree with you there, BlooMoo, but I think the recent activity is aimed at the protection of people who were not 'active in the market' but simply savers, mortgage holders etc..

arcniz
17th Sep 2008, 22:53
If we want stability in a capitalist market then let the losers lose

Ay, laddie.... you're on to it.

Problem arises when the Leaders and legislators and sometimes even administrators try to redesign their societies so that water will run uphill when they tell it to, yet set aside no pile of resources to support the expense of maintaining that perversion of gravity's cause & effect.

Instead they arrange a clever "provision" with powerful players under their sway, so that the govt gives them a little bit of pot-sweetening somewhere by way of rules or regs, & in return the players help assure that water keeps running against gravity in the manner promised by the swells.

Those deals tend to work for a while, until the going in business grows less sweet and the players stop paying for the resources that were being burned to suspend gravity. Suddenly things do not work as well as before, government grows spiteful and vindictive, and cherished illusions crumble.

Hope that's clear enough. Wouldn't want to step on toes, of course.

BlooMoo
18th Sep 2008, 00:17
frostbite, I agree with you in terms of 'savers' ie those that lend their money to a bank in return for what they assume is a 'risk free' interest rate. However, those that enter into a mortgage contract are, in my view, 'active in the market' as they are betting the future value of the asset they purchase outstrips the time value of the money they need to pay now and in the interim. If that were not the case then why would anyone buy a property rather than pay rent?

In effect, anyone buying a mortgage on say eg a fixed payment basis is doing the equivalent of issuing a fixed bond for the face value of the purchase price of their 'asset' against the time value of their cash flow in terms of payments against the future value of the asset (+a small premium and the diff on this is pretty much the only competitive advantage a mortgage borrower had). When the asset in question is assumed to appreciate in excess of the time value of the payments then all is cushty. Lender gets their 'risk free':} cash flow and issuer (i.e housebuyer) gets their interim utility (somewhere nice to live beyond their current means) and eventual premium on the asset.

This is the essence of leverage and therefore derivatives. So, anyone with a mortgage is effectively in the derivative market - as are their lenders in turn

As individuals they may be unaware of the complexity of the offloading of the time value of money vs asset value risk over 25yrs and into what kind of contracts their expected future cash flows may be being pooled into behind the scenes, but if you add a good proportion of the individual cash flows together then you can see that at varying levels the name of the game is simply greed across the board.

Binoculars
18th Sep 2008, 03:21
I think the recent activity is aimed at the protection of people who were not 'active in the market' but simply savers, mortgage holders etc..

Frostbite has it in one, unfortunately. There is no choice.

But even think about limiting profits and wait for the howls of protest. Next station communism. End of the line. Game over.

GrandPrix
18th Sep 2008, 03:22
We are SOOOOO Effed.
Dick N' Bush have ruined everything.
The US embassy was attacked in Yemen today.
How's that War of Terror thing worked out so far?
Oil prices are killing us at home. Banks, commercial and investment, are failing left and right.
GM and Ford are on the brink. Chrysler is buried.
Airlines can't make it.
Most of our jobs have been outsourced to the Chinese and Indians. We innovate nothing!
Local and state governments are slowly going bankrupt.
Restaurants and the small businessman are being squashed.
Osama has won this war without another shot being fired since 9-11. Oh yeah and he is still running around in the mountains of Afghanistan 7+ years after Shrub said "dead or alive". Ahhh, the Kennebunkport Cowboy. They are going to greet us with flowers Cheney mumbled. Trillions $ spent and thousands of lives lost on a useless war.
McSame declares 100 years in Iraq. Obama just says "change".
The current depression is gonna make the last one look like a party. Load up the wheel barrow with cash to buy a dozen eggs because we are going to look like a S. American country in a few weeks. Its called hyperinflation my friends.
Bombs, bodybags and oil are the only investments to go up during Dick N' Bush.
We are SOOOOO Effed.

BenThere
18th Sep 2008, 04:20
GrandPrix,

Get out while you still can. Where will you go?

StbdD
18th Sep 2008, 06:37
SHJ

Having heard a few times in the last 2 days that the Russian stock markets were suspended and trading thereby, it made me lament....... Why ?

There comes a point in a horrible news/trading day where it is clear that panic has overcome logic. Suspending trading for the day and sending everyone off to the pub is generally seen as better than letting emotions cause irreperable damage.

If the market still sucks the next morning, no harm has been done. But neither have brokers and retirees been swan diving out upper floor windows.

Arcniz

AIG shareholders effectively crucified for "system" benefit

As one of those share holders I certainly share your concern. However, as the ownership stake is time limited (18 months?) and the Govt will be charging 11.5% interest on the loan, I strongly hope that a message is being received by management to aggressively clean up their shop as I am too deep underwater to get out now.

arcniz
18th Sep 2008, 07:59
...as the ownership stake is time limited (18 months?)..

Is it really? I have yet to see a definitively clear statement of the terms, etc, but did see several references in the financial press to the thought that it is an interest 'forever' - a form of "boot" for taking the trouble to seize control and keep a lid on things while the choice assets are sold off.

One writer said the authorised shares would increase to 5x the present number,
with Uncle holding on to the 4x part until the Fed monies are paid back, and then the new shares would be sold into the market, if one exists.

That would provide about 2 shares for every person on the planet.

angels
18th Sep 2008, 08:04
The world's central banks are steaming in right now with dollar liquidity.

StbdD
18th Sep 2008, 08:27
The (18 months?) was definitely a question mark. The fact that it was reported to be time limited I'm sure of, the duration I am not.

The 'boot' aspect will not sit well here. The bridge loan was certainly understandable in light of their rather vast international obligations but the understanding here is that they will be on their own to fix it. With a time limit.

I am emphatically with the "let them fail" brigade in most cases. AIG unfortunately (and maybe unforgivably) got too damn big and has to many other countries banks on its portfolio of assets. This one had to be stopped. Then we need to make sure this can't happen again

Stockpicker
18th Sep 2008, 08:51
I see. It was the fact that your profile says "barrister" that made it unclear to me what your background in the City was.

angels
18th Sep 2008, 09:02
Are a City legal eagle eh Mr D Squadron?

Interesting that sarcastic (for that's what your initial response to Ms Picker was) lawyers tend to be higher on people's shite-lists than bankers!

D SQDRN 97th IOTC
18th Sep 2008, 09:08
so being both a lawyer and a banker means you should be rude to me?

Stockpicker
18th Sep 2008, 09:19
What part of

I was trying to keep it simple, D Sqdrn.

And I've been working in the City for fifteen years, so now have a vague idea how it works, thanks. Have you worked in the City long?

Turquoise is one of several such platforms.

was rude?

:confused:

mustpost
18th Sep 2008, 09:35
To lighten this all up a bit, SP, to quote your example why on earth would anyone want to buy a million shares in ITV??
I used to work there :E

D SQDRN 97th IOTC
18th Sep 2008, 09:49
stockpicker

you weren't rude
my question was aimed at angels

re yourself.....this is jet blast.
anyone who puts themself up as being a city expert on jet blast, and says something i think is misleading, or wrong, i will pull them on it.

if i say something wrong or misleading, then happy for someone to also pull me up on it.

but i don't have a go at people just because they are lawyers, bankers, doctors, dentists, MPs. if angels wants to put me high up his shite-list of people, not knowing me from adam, i consider this rude.

Stockpicker
18th Sep 2008, 10:11
Good to know I was on the mark, mustpost - I was trying to think of the most unlikely example possible in case someone decided to take it as a recommendation! :ok:

mustpost
18th Sep 2008, 10:20
The way things are going, its not just HBoS with the problems - look for some major re-structuring of the ITV model after Christmas...:suspect: and again OFCOM being told to ignore isssues that will undoubtedly surface..
What's wrong with shares in SMG then? :\

angels
18th Sep 2008, 11:09
Oh it was me.

this is jet blast

That ought to be enough in response, but -

* Your intial response to Ms Picker came over to me as sarcastic.
* If you only have 15 years in the city, then in comparison you are relatively inexperienced. I have 20+ years.

If that isn't rude, its verging on it. Of course she's experienced. To fight you at your own game, I have 30+ years (does that make you relatively inexperienced?). :p

* I think you'll find that I'm not the only one to have posted a derogatory comment about lawyers, or bankers, on this forum before. But then,

this is jet blast

Cheers! :ok:

Gordon17
18th Sep 2008, 11:30
From yesterday's Daily Telegraph....

Imagine, if you can, an unemployed black man sitting on a crumbling porch somewhere in Alabama in his string vest and a chap comes along and says would you like to buy this house before it falls down and why don't you let me lend you the money?

Then this mortgage is bought by a bank and packaged together on Wall Street with a lot of other similar debts. Somehow this package of dodgy debts stops being a package of dodgy debts and starts being what we call a structured investment vehicle.

I buy it and then I will ring up somebody in Tokyo and say 'look I've got this package do you want to buy it?' and they say 'what's in it?' and I say 'I haven't got the faintest idea' and they say 'how much do you want for it?' and I say 'a hundred million dollars' and then they say 'fine' and that's it. That's the market.

SpringHeeledJack
18th Sep 2008, 11:55
Gordon17, that was a good analogy from the telegraph. The question that is being begged to be asked is WHY didn't the persons (company) who packaged these CDOs and such vehicles if not for their own best interest, let alone the interest of their fellow traders, investigate what they were making and selling, i.e DUE DILIGENCE ?

Perhaps, in general terms D SQDRN might like to comment on the legal angle of these trades ? How is/was it possible legally to sell (whatever) with the contents being so worthless ? The possibility of there being an avalanche of legal actions against everyone who partook must be high, or have all 'the boys' a gentleman's agreement to let sleeping dogs lie ?

Or are they all insured by AIG against their sins ? :}


Regards


SHJ

angels
18th Sep 2008, 12:23
This is where the credit ratings agencies come in.

A lot of this stuff was rated 'AAA'. The attitude at the time was, "If it says Triple-A on the CDO tin, I don't have to look inside."

I started looking at securitisations in the 80s (mortgages, auto loans and credit card receivables were the main stuff). Back then the underlying package was worth five times the bond and was of genuine high quality.

I must admit I've never really checked to see if that ratio diminished, certainly the quality of the underlying assets did.

I also recall that Michael Jackson securitised his royalties (in the early 90s?). That was a sure sign he was a bubbles (sic) waiting to burst.

SpringHeeledJack
18th Sep 2008, 14:00
I also recall that Michael Jackson securitised his royalties (in the early 90s?). That was a sure sign he was a bubbles (sic) waiting to burst.

Your name might be Angel(s), but with wrongness like that you might end up in the hot place instead := ;)

So..... assuming that the credit agencies have been negligent, just how accurate is their (Fitch's, Moody's, etc) word on the street ? If these toxic offerings were AAA rated, then what IS really AAA in these times ?

Either it's (the denial assets) all going to be clumsily swept under the carpet in the next while, so to say, or there's going to be the spring-clean of the century in the near future.


Regards


SHJ

everynowandthen
18th Sep 2008, 14:09
Springheel asks: Or are they all insured by AIG against their sins ?

Nah, they all tried to insure each other (sort of) with Credit Default Swaps - but that's another story.

angels
18th Sep 2008, 14:33
SHJ - Could have sworn it was Jacko that did the deed, but having Googled, you are correct, he didn't.

It was David Bowie. Still, the principal is the same.

Re the ratings agencies, they are under investigation. Purely personally, I'm sure the ratings agencies were not deliberately generous with their Triple-A ratings. This is where we have to go a bit further down the line. The ratings agencies looked at a bundle of mortgages.

Now, and here I am purely assuming (and simplifying), IMHO they saw mortgages -- and that's all they saw. They didn't see who the mortgages had been granted to. IE NINJAs. Salesmen sold people mortgages who had NO chance of paying them off.

Once these mortgages started defaulting -- and the bonds with them -- then everyone started heading for the exit at the same. The rest is history which is being made this very day, and no doubt in the days ahead.

The same thing happened with the perpetual FRN market in the 1980s. It was best thing since sliced bread and then liquidity dried up and that was that. The market was killed off in days and a good mate of mine called Andy topped himself shortly thereafter as a direct result of it.

Edited to add CDS' are a different matter. Haven't got time to get into them.

aviate1138
18th Sep 2008, 14:43
So glad to see Al Gore's Carbon Offset company was part of the Lehman Brothers setup.
Quote....
Lehman Brothers Close Ties to Gore, Hansen and Carbon Trading
"Al Gore’s carbon trading business GIM was banked with Lehman Bros. It will be interesting to see how this will play in the future but I suspect that this increases the risk of participating in Carbon trading. Merrill Lynch, was also deeply involved in this business.

Last year Lehman Brothers released a long and highly publicized report about climate change in which they preached about decarbonization, trying to make their investors keep getting high profits from the Kyoto carbon trade scheme and the support of huge public subventions. All that, of course, with the applause of the usual choir of politicians, the entire media and the Greens.

A year ago they couldn’t predict their bankruptcy but were predicting the climate 100 years ahead. Thousands of green militants have been using the Lehman report as a proof of global warming and impending chaos. Lehman Bros said it! sacred words! Its scientific advisor is James Hansen! The report is the basis for policies on climate change in Spain, Argentina and several other countries playing the progress game; it is used by economy professors playing the climatologists; by newspapers editorials, and even by a State Secretary: Lehman Bros, said it!"

D SQDRN 97th IOTC
18th Sep 2008, 14:55
angels

if someone puts themselves up as being very experienced on the basis of 15 years, this cuts little ice with me as there will always people out there with more experience. As you have demonstrated. And whilst the amount of someone's experience maybe be persuasive and give weight to someone's opinion, it is not determinative. I am sure even with your 30+ years of experience you would not say you were infallible.

I repeat what I said earlier - if someone incorrectly states how certain parts of the city operate, I will try to correct them. Happy on the other hand to also be corrected myself - by someone straight out of school, or by a wizened old dog.

But in saying I was high up someone's shite list, jet blast or not, is just rude.

Groundbased
18th Sep 2008, 15:18
SHJ,

I guess the contents of the tin were only worthless if people didn't pay their way. I assume that you could present this tin as being worth somewhere between zilch and the full value of the combined repayments at a given point in time and be technically correct.

To help me out can someone explain where the $40bn the BoE pumped into the market today comes from? I assume someone simply types a number into a PC somewhere and hey presto $40bn arrives. There must be more to it than that though, surely?

Cheers.

frostbite
18th Sep 2008, 15:30
I'm wondering how much feverish printing of money is going on, diluting what's already in circulation.

Binoculars
18th Sep 2008, 15:31
Well, what a fascinating duel. D Squadron whatever (all salute) thinks that 20 years means more than 15 years. How lucky we are to have an expert in so many fields operating under the one name.

Can I suggest that in my chosen field of air traffic control, somebody after five years of accumulated experience is probably at the mental peak of their career. It's not unreasonable to suggest that after 15 years the bell shaped curve heads downwards.

While I'm sure Squadron Ldr wotever will maintain his expertise till the day he dies, he may have a little trouble persuading those who know a little of the subject that he is infallible. You lost me, Admiral. If you float your opinions here they will be weighed by a variety of people, some of them qualified to comment, others not. Such is Jet Blast.

I just know your arrogance doesn't impress me.

One9iner
18th Sep 2008, 15:50
Frostbite - good question !!! (Although Im now slightly worried about discussing the economy on this forum with fear of a backlash from people who actually know what they're talking about)

I read yesterday that after the $80bn recovery buy-out / loan from the U.S. Federal Reserve to AIG, the fed. reserve is trying to secure another $40bn to inject into the system to avoid further complications surrounding J.P.Morgan and Goldman Sachs.. However due to the Fed Reserve physically running low on cash they were being forced to sell assets to raise the funds required....

It's been widely known for some time that the Chinese have been stock piling american dollars and apparently have around 1/3 of physical $er's in the world in their pocession. This is obviously to gain a better control on import/export prices etc...

The American economy has apparently always run in huge debt of around 600/800billion but this has never been a problem due to the huge level of consumption within their own economy; the dollar has always survived ( relatively ).

Due to the levels of consumption within the American economy being so high, the fed reserve has always avoided selling assets to generate cash. It is my understanding that this is something which Gordon Brown did years ago to inject the cash into the UK economy improving schools / NHS / services etc... and in turn creating a more bouyant economy.

Now that the Fed reserve require the printing of more cash, what will the next move by the Chinese be re: the stock pile of dollars their sat on??

If I have quoted something completely incorrect I apoligise.. I haven't got 15/20/25/95 years experience within the sector ;)

Effluent Man
18th Sep 2008, 16:21
If evidence for the prosecution were required I might be forced to point out that D Squadron was foremost amongst those supporting the motion of "Why house prices won't go down" a little while back.

It seems that lots of experience doesn't prevent you from getting something very,very wrong.

johnfairr
18th Sep 2008, 16:22
Binos,

Can't follow half the arguements here, for or against. However, your last little post was exquisite in its directness, sharpness and lucidity! Bloody good effort, I understood every word! :ok::ok::ok::ok:

arcniz
18th Sep 2008, 16:35
due to the Fed Reserve physically running low on cash they were being forced to sell assets to raise the funds required..

One hears from a generally reliable source that the price of zeros is going to rise at a spectacular rate all the way through to this time next year.

Classic demand supply problem: So many zeros are suddenly being used in so many new ways, they can't produce 'em fast enough to keep up with the need.

The current surge of demand comes on an already high level caused by the Zimbabwe situation.

For the sake of the environment, the Fed, the Chinese and Granma Floyd, please don't throw away any old, slightly used zeros that still have some life in 'em! Help save the planet. Recycle them!

G-CPTN
18th Sep 2008, 16:43
That would 'challenge' China if the US devalued by a factor of 100 (don't think it would work how the Zimbabweans have done it though . . . ).

Come to think of it, do you think Mugabe has done this devaluation just to thwart the Americans holding Zimbabwe dollars?
Smart move!

One9iner
18th Sep 2008, 16:44
I presume 'zeros' = $ ?

arcniz
18th Sep 2008, 16:53
I presume 'zeros' = $ ?

Not quite. $=hamburgers.

Zeros are those little round thingies that resemble O=Oscar's, except they mainly work in calculators and what we laughingly call "Finance".

Scumbag O'Riley
18th Sep 2008, 16:58
If you look at Land Registry data or the Financial Times data then house prices haven't gone down. That might change, but right now there isn't a liquid enough market of actual completed sales to make a proper determination.

Am looking into remortgaging the gaff and was offered 5x salary today. Should I short them?

dead_pan
18th Sep 2008, 17:24
Regarding the China situation, they must be sorely tempted to use some of their enormous dollar stockpile to go on a global shopping spree. No doubt some of the other soveriegn wealth funds are thinking along the same lines.

Re the Bowie bonds, I recall that these created quite a stir when they issued (they also were triple A rated). Mr Bowie did very well out of the deal, unlike those who bought the bonds - sales of his back catalogue were disappointing to say the least.

DP

PS One gets the sense today that the hedge funds et al have been "gripped" by their backers and told to reign in their behaviour, at least for the time being. I suppose there's little point having a huge pile of cash if the world lies in ruins around you...

GrumpyOldFart
18th Sep 2008, 17:26
I just know your arrogance doesn't impress me.



You got that right, Binos. His arrogance is nowhere near as good as yours.


:E


Oh, come on. Somebody was going to say it.

Track Coastal
18th Sep 2008, 17:36
Can I suggest that in my chosen field of air traffic control, somebody after five years of accumulated experience is probably at the mental peak of their career. It's not unreasonable to suggest that after 15 years the bell shaped curve heads downwards.


I salute you Binos.

D SQRN whatever has jousted with me before. The proof is in his previous callings. Rubbish IMO. But he had x years 'in the city'.

Just made 300% in two days in the options market. Lucky I'm not a 'city' boy.

G-CPTN
18th Sep 2008, 18:08
FSA saying that shorting is now prohibited . . .

D SQDRN 97th IOTC
18th Sep 2008, 18:37
Track Coastal

Well done. Always a winner, eh? Shame the central banks haven't got your skill and prowess.

Angels - on the basis that after 5 years we are shagged - you and I are for the knackers yard.

larssnowpharter
18th Sep 2008, 18:38
One sees that the US gov has bailed out AIG to thee tune of x zillion dollars.

The Ewekay govmint did something similar with some outfit that lent 'money' to peeps who would or could not pay it back.


Simple question really:

Where does this money that the peeps in charge use to bail out these outfits come from?

As one understands things, govmint either taxes or borrows in the form of something called 'bonds' on which they pay something called 'bondholders' interest. This seems to be rather less than the going rate.

Said 'bonds' are bought by furriners.

Govmints devalue the currency. And then pay back less than was 'borrowed' in the first place.

I really do not undertand it all.

The word 'corruption' comes to mind. Not in the sense of taking bribes, double dealing or such but in a more technical sense:

Corruption, when applied as a technical term, is a general concept describing any organized, interdependent system in which part of the system is either not performing duties it was originally intended to, or performing them in an improper way, to the detriment of the system's original purpose.

Seems valid to me.

In the sense of corruption as an institutional thing (and I guess here I am thinking of the bonuses paid to peeps who sold mortages or lent money to peeps who - obviously - could not pay), the word 'corruption' as I understand it applies:

Specific types of corruption include:

Institutional corruption, as corrupt actions or policies within an organization that break the law, serve to subjugate humans in unlawful manners, discriminate against humans based upon race, ethnicity, culture, or orientation, or serve to degrade other humans or groups for that institution's own profit.

As I have oftimes said. I really do not undertsand concepts such as 'money' and 'investment' as they are used today.

Must be a lot of folk out there cleverer than me makin money on my lack of knowledge/education.

larss

twb3
18th Sep 2008, 19:52
This link goes to as cogent an explanation of the mess as I've seen -- in the form of a stick-figure cartoon:

http://www.businesspundit.com/sub-prime/ (http://www.businesspundit.com/sub-prime/)

Caution: there is some rude language in the captions.

Squeegee Longtail
18th Sep 2008, 19:55
As an ex market-maker, I would not like to be out there trading in this f***ed up market. No short selling in a market heading one eight zero? Hit the silk.

Effluent Man
18th Sep 2008, 20:27
Scumbag old bean,I don't think we really need a bank of data to tell us what is happening out there.The true test of the market is what you get if you HAVE to sell.At an auction last week a house of the type selling quite happily at about the £120k mark was knocked down and sold at £80,500. That looks awfully like a 33% drop.

GrumpyOldFart
18th Sep 2008, 21:48
Squeegee:


Hit the silk.



Hasn't disrespect towards lawyers already been covered in this thread?


:confused:

BlooMoo
18th Sep 2008, 22:59
Ban on short selling till end Jan 2009?

Hmmm - Sounds to me like more state intervention in the market to me - yet the State keeps banging on about the markets only having short term interests - Hmmm

Every shorter needs a counterparty willing to pay - so, why is nobody shorting BP or Google?

As I've said before why don't the US/UK Governments just let the markets actually work? Why not just suspend trading full-stop if they're so worried? Oh. there's a clock ticking on their time in office, the GeorgieBroons and their lackeys maybe place their short term 'legacies' as higher priority to the longer term stability of the economic credibility of their nations - Hmmm.

Goldman, Morgan, HBOS, - under pressure from shorters? - let 'em stand or fall on their existing business models. If they go down then tough sh!t, that's capitalism, our economies would be in better shape in 5 years regardless of the short term pain simply because the pain of failure by some will hit so many and change attitudes accordingly. Tough love but in my opinion necessary. As I said, that's capitalism, the losers need to lose.

SpringHeeledJack
18th Sep 2008, 23:06
One is just watching Newsnight on the Beeb and Paxman is grilling Alister Darling about the descision to ban short-selling until january from midnight tonight. Poor old Darling, he's having a rough time of it. Paxman asked him why this was being implemented so late in the day, after the horse had bolted so to say, the chancellor was squirming. F**king amateurs :ugh: :mad:

So the banning of short selling is happening to the UK market, but what of all the other markets, as it's possible to trade in foreign stocks and shares whilst being outside the market in question ?

Also, this 'rescue plan' that is being mooted in America will effectively bundle all the trillions ? of $s into a corporate off-sheet entity status thingy and then we all pretend that everything is as before and the madness goes on ? Or did I misunderstand :confused: Oh yes and the government will take the responsibilty, desto the poor taxpayers hocked to the hilt ten fold.

Regards


SHJ

Stockpicker
18th Sep 2008, 23:13
(tiptoes back in....)

Maybe banning shorts is the necessary step in the short term until they sort out how to stop speculative market trading bringing down a major part of the UK economy. That's what was happening yesterday - HBOS was IMO perfectly able to weather the current funding storm, with a hell of a lot of hard work by a lot of very decent employees; but as one of the salesmen said to me yesterday, "the shorts have got the bit between their teeth and they won't be happy until there are queues at the HBOS branches". I didn't have any exposure to HBOS, but it still felt just plain wrong.

So, does that make the banking profession a confidence trick, or a confidence business model? Discuss!

My theory on the rating agencies is that their key failing is to be funded by the people they rate - as a plc, you pay for your S&P, Fitch etc credit rating, and in return the ratings agencies get a greater degree of visibility of your trading position than they would otherwise have. Surely that, then, isn't going to create an environment where they are going to be ahead of the curve in indicating when a company may be downgraded?

Parapunter
18th Sep 2008, 23:23
My brother built up a business over ten years, sold it, banked £2.5 million & Barclays invested it. With AIG.

He's waiting to find out how much he's lost, but was told yesterday it will be between 10% & all of it.

Capt.KAOS
18th Sep 2008, 23:33
Senate Vote on Conference Report: S. 900 [106th]: Gramm-Leach-Bliley Act (http://senate%20vote%20on%20conference%20report:20/)
Vote Number: Senate Vote #354 in 1999 [primary source]
Date: Nov 4, 1999 3:30PM

Nov 4, 1999: After passing both the Senate and House, a conference committee is created to work out differences between the Senate and House versions of the bill. A conference report resolving those differences passed in the Senate, paving the way for enactment of the bill, by roll call vote. The totals were 90 Ayes, 8 Nays, 1 Present/Not Voting.

AZ McCain, John [R] - No Vote
DE Biden, Joseph [D] - AyeORAC, orac, orac....this vote was a vote on the conference report, which took place 6 months after the bill had already passed in the senate, and just over a week before it was signed into law. The bill was not passed 90-8; it was passed 54-44, almost strictly down party lines, look at this page (http://www.senate.gov/legislative/LIS/roll_call_lists/roll_call_vote_cfm.cfm?congress=106&session=1&vote=00105). And look again under the names of Biden and McCain.
Do try to keep up Capt. K, that was back in May. Below are the names of both Obama's and McCain's economy advisers.It's not me whoz keeping up CP, it's McBush. You can hardly think he will ask Gramm for advise for a disaster he created? Gramm has been McCains main economic advisors for a long time.

Interesting times, the economic and spiritual heart of capitalism Wall Street is falling apart, the US government is nationalising AIG, Wall Street goes socialist...

BlooMoo
18th Sep 2008, 23:46
Maybe banning shorts is the necessary step in the short term until they sort out how to stop speculative market trading bringing down a major part of the UK economy.

No it's not. Unless you pretend that you can ban market speculation across the entire planet. If that's not on the cards (it's not) then the 'problem' will just move with the flow, as SHJ just pointed out. I don't see shorting as a problem myself, provided soon to be failed heads of western governments act like adults and stop trying to f*ck things up by creating uncertainty as to whether we live in a marxist or socialist economy - whereas we of course assumed at time of voting that we were in a capitalist one. The Chinese amongst many others are arguably new to 'market trading' but they're learning f*cking fast - trust me.

My theory on the rating agencies
Here we go, theory #1,283. My personal current theory (which might be complete crap) is that rating agencies provide ratings that are complete crap.

BlooMoo
19th Sep 2008, 00:06
banked £2.5 million & Barclays invested it. With AIG.

Banked the money (i.e deposit) or agreed Barclays should play with it?

He's waiting to find out how much he's lost, but was told yesterday it will be between 10% & all of it

At time of posting, Barclays is still very much liquid so GBP2.5m on deposit will still be there awaiting withdrawl + interest.

Not quite the whole story I suspect.

Scumbag O'Riley
19th Sep 2008, 00:39
Shorting is for mugs. Real men buy puts. Limit yer losses and a far more exciting ride than even a Pitts can give you.

angels
19th Sep 2008, 07:00
Morning. DSquadron - I'm already in the knackers yard! Still close to the prop traders but after nearly 10 years on the front line in the Far East, culminating in the currency crisis, and it was all a bit too much and the decline into my nervous breakdown last year began.

One of my jobs now is to help people here who've never really seen the shit hit the fan (apart from when Brian Clough lamped someone who ran on the pitch at Nottingham Forest).

One thing about current events is that, only this week, I had to give a talk to some people working here about the importance of short term money markets. The 'canary in the coal mine' was my phrase (no doubt someone else has said it).

People have been entering the markets and working for years without the spectre of high inflation, depression, recession etc hanging over them. Reality has come home to roost.

Ms Picker - fully agree on HBOS. Nothing wrong with it per se. But once those boring short term rates started blowing out that was going to be that.

Edited to correct spelling of knackers yard, which is quite ironic when you think about it.....

larssnowpharter
19th Sep 2008, 07:15
This link goes to as cogent an explanation of the mess as I've seen -- in the form of a stick-figure cartoon:

The Subprime Mortgage Primer (http://www.businesspundit.com/sub-prime/)

Caution: there is some rude language in the captions.

Thanks for the link, Sir. Very droll and, one suspects quite near the truth.

One just listened to the news where it seems the the gov of the USoA is going to take on the bad debts of various institutions.

Where does the government get the money to do this? On understood that it was already overspending (expenditure greater than income) and was borrowing money.

arcniz
19th Sep 2008, 08:07
One just listened to the news where it seems the the gov of the USoA is going to take on the bad debts of various institutions.

Where does the government get the money to do this? On understood that it was already overspending (expenditure greater than income) and was borrowing money.

One of the fun things about being a Sovereign (government) is that you can, in the short term at least, simply invent money when needing it. Likewise, a Sov can readily destroy money, causing it to cease to exist, to offset prior binges of creating it. If, over months and years, the aggregate supply of money remains moderately stable, balanced invent-destroy cycles blend into the mainstream and have little monetary effect. Bursts of cash can add a lot of sunshine to particular situations, however, for either private or public benefit.

Richard Taylor
19th Sep 2008, 08:19
Morning all, another day of turmoil in the markets probably awaits.

Is there another "ism" that could bring better stability, or is Capitalism still, for all its faults, the way ahead (& I'm NOT advocating Fascism!!)

Could it be merely less the system, more the PEOPLE behind the system, causing the turmoil - be they in Govt, Marketplaces etc?

What can be done to alleviate the problems in Capitalism - I see "short selling" is on the agenda, with the FSA in the UK suspending such dealings...although I understand it is probably only a temporary measure.

Or could there be a new "ism" that no-one has yet devised that could be the answer to all the problems world markets & companies face? I suppose as long as there are HUMANS:eek: in the equation, there will always be problems.

One9iner
19th Sep 2008, 08:26
larss . . . by selling assets ....

tony draper
19th Sep 2008, 08:27
That being the case the answer is simple, kill all the humans.:uhoh:

Captain Stable
19th Sep 2008, 08:35
As far as the way HBOS was run (i.e. for the profit of the few rather than the benefit of the people who had actually built up both Bank of Scotland and Halifax Building Society), I think mutualism works quite well - compare John Lewis Partnership and the building societies before deregulation.

ORAC
19th Sep 2008, 08:35
Like democracy in politics, in finance capitalism is merely the least worse; and just as democracy needs careful checks and balances, so does capitalism.

They just tend to ebb and flow from restrictive to lax depending on recent history.

Dan D'air
19th Sep 2008, 08:45
If nothing else good comes out of all of this, at least HBOS have gone to the wall, which means that we won't get any more of those adverts with the irritating t**t with the glasses singing at us. Maybe thats why it all went pear-shaped for them....................

Captain Stable
19th Sep 2008, 08:48
You sure about that, Dan? Perhaps Lloyds TSB bought 'em just so they could get him for all the ads - maybe we'll have him singing as he rides a black horse...

Parapunter
19th Sep 2008, 09:27
It's the tale as related to me Bloo. Bruv has been prescribed Diazepam, so while this may well not be the full story, it is neither a false one.

Effluent Man
19th Sep 2008, 10:02
I think this may be a bigger version of what my brother did.About five years ago he had £80k to invest and I suggested a terraced house that he could have bought for that sum.He chose to go with Barclays and he told me that his capital has lost about 12,000 (this was about a month back) I think the house would have been better as it is still worth more than £80k,I'm not sure how much he could lose from the Barclays stunt.

angels
19th Sep 2008, 10:11
Para - only a year ago I was on the stuff and it can addle the mind a bit! Hope your bruv gets well soon.

Anyway, I can't really see how Barclays would have the lost the lot. As bloomoo surmises, I'm sure we're not getting the whole story here.

Anyway, calmer in the markets today as stock prices are rising on the hopes of this rescue deal. I still don't get how this all supposed to work, but it rather looks like that either way the taxpayer will be involved.

vee-tail-1
19th Sep 2008, 10:24
Fascinating stuff. But this is a pilots forum so lets bring it down to my level. Old retired flight engineer with an airline pension and £150k savings in a UK building society. Presumably my pension fund could go bust anytime now. And my savings could vanish since my building society became a bank without telling me. What do I do... take out my savings in cash, or buy gold Krugerrands and bury them in the garden. :ugh:

Stockpicker
19th Sep 2008, 10:30
No idea about the rest of your circumstances, vt1, but if you split your savings between several building societies it's safer than putting all your eggs in one basket - you get a £35k guarantee per account.

One9iner
19th Sep 2008, 10:39
I agree with stockpicker ... however when splitting savings into numerous accounts with a max value of 35k ( which is the protected level ) - you will only have one account protected per bank / institution...

So if you have 35k with HBOS and 35k with Lloyds TSB and the whole thing comes crumbling down, only one account will be protected..

Likewise if you have a current account with Natwest - £40k and a savings account with Natwest £ 80k - Total - 120k - only 35k will be protected.

Just make sure you understand where the different baskets are before deciding where to keep your eggs .. :ok:

One9iner
19th Sep 2008, 10:45
Also... another nugget of information I was given.. Apparantly in the UK, there is not one banking institution who offers the best deal / rate etc... on more than one service...

E.g. If you have a mortgage with HBOS and a savings account with HBOS, you aren't getting the best deal on one of those services...

I like many, bank with one insitution for a number of services i.e. savings / current accounts / loans / credit cards etc... which isn't good practice as I could get a better deal by using one bank per service/account.

(I obviously bank with more than one bank but don't spread my wealth:ugh: around enough)

worth thinking about.

G-CPTN
19th Sep 2008, 10:47
At what stage does the £35K apply?
If you originally deposited £34K and the accrued interest on the books had raised that to £36K would you get £35K if the bank went TU?
Do they back-date their assessment, or does it include interest up to the date of the collapse?

One of the bummers is that if you have £35K on deposit with each of two banks that subsequently merge (as have LloydsTSB and HBOS) then, I believe, your combined guarantee drops from £70K to £35K . . .

SpringHeeledJack
19th Sep 2008, 10:48
I still don't get how this all supposed to work, but it rather looks like that either way the taxpayer will be involved.

Allow me to explain Sire :8

http://www.telegraph.co.uk/money/main.jhtml?xml=/money/2008/09/19/bcn-jqcomm11.xml

It's SO simple innit ? Either this will be the hoodwink of the century or..... This oh so clever 'solution' is based on the premise that American real estate will go up in value by an impressive margin in the next years and that to my mind is counting yer chickens before they have hatched on an industrial scale. My feeling is that except in 'must-live' areas, American property will stay depressed due to the changing face of the way we will be living.

Vee-tail, as to what to buy there are better to advise than I, but as you are only insured up to £35,000 per person in any one bank/B.S rather than per account, I would say spread the risk and open new accounts elsewhere asap! This being more imperative as you are retired.


Regards


SHJ

angels
19th Sep 2008, 10:50
Just make sure you understand where the different baskets are before deciding where to keep your eggs

Absolutely.

Depending on how much money you ever need at any one time it could be worth bunging some money on longer term deposit (max 35k of course), a year is the most usual, but to get the maximum advantage you do have to leave it there for the duration.

Without advertising too directly, there's a web site along the lines of money/supermarket dot com, that's pretty handy for looking at this sort of thing.

And having four or five Krugers floating around would probably do you no harm in the long run (I can see Ms Picker , throwing her hands up in horror here!). :}

One9iner
19th Sep 2008, 10:58
Yeah that is a good website .... as well as (this is money . co. )

The below table will now need updating due to the Lloyds TSB HBOS deal. It shows which insitutions are classed seperately by the financial services authority..

http://img.thisismoney.co.uk/i/pix/2008/03/whoholdsyourcash_470x415.jpg

vee-tail-1
19th Sep 2008, 11:21
:ok::ok::ok::ok: Thanks everyone for really useful advice.

Mr Grimsdale
19th Sep 2008, 11:40
Maybe they'll have a singing horse?

Mr Ed anyone?

One9iner
19th Sep 2008, 11:44
Did anyone see paxman on newsnight last night ...

During the opening headlines they played a snippet of the Halifax advert with the short guy singing;

"Woke up this morning.. feeling fine !!!!"

Paxman " NO YOU DIDN'T !! .. hbos shares tumlbe etc.... "

classic Paxman

BombayDuck
19th Sep 2008, 11:48
Bringing Down The Bear (http://www.vanityfair.com/politics/features/2008/08/bear_stearns200808?printable=true&currentPage=all)

A fascinating and horrifying story about the demise of Bear Stearns. Reads like a fictional novel.

James 1077
19th Sep 2008, 12:09
My question for the bankers on this thread is around short-selling.

As I understand it Mr F Cat's hedge fund goes to Big Bank Plc and asks to borrow X many shares in Without a Paddle Plc (that Big Bank Plc currently holds as an investment) for a number of days. In return Big Bank Plc will get some cash.

Mr F Cat then flogs the shares on the market and, if enough people are doing it (or enough shares are sold) then Without a Paddle Plc's share price collapses.

Mr F Cat then buys back the shares at a greatly reduced price and hands them back to Big Bank Plc.

My F Cat ends up with loads of cash. Without a Paddle Plc ends up in trouble. Big Bank Plc ends up with a small amount of extra cash and a worthless investment.

Why then does Big Bank Plc agree to lend the shares in the first place? It makes no sense to me but there must be some reason!

angels
19th Sep 2008, 12:55
You've certainly got me there James. I quite agree with you. There was a guy from Scottish Widows being grilled about this on the radio this morning apparently and he didn't really give a straight answer I'm told.

Over to Ms Picker, or at least someone more into equity markets than me.

U.S. currently announcing money market measures, they're dipping into the exchange stabilisation fund to the tune of $50 billion.

green granite
19th Sep 2008, 13:10
I suspect no mater how you legislate, Mr F Cat will find a new way to exploit the markets. All you could do would be to cap peoples earnings to say 3/4 mill and anything over that is taxed at 110% so as to be a big disincentive to earn any more. Can't see that happening though.

Stockpicker
19th Sep 2008, 13:18
Why then does Big Bank Plc agree to lend the shares in the first place? It makes no sense to me but there must be some reason!

For the little bit of cash you talked about at the start, James - but you're right, they have to be really sure that eventually the shares will go back up in order to decide to lend them rather than sell them outright.

Interesting that the BT Pension Fund, Hermes, has announced this morning that it's no longer going to stock-lend in the financials.

airship
19th Sep 2008, 13:46
Unless I'm very much mistaken, this whole crisis is due to a handfull of mainly non-regulated Wall St. investment banks who came up with the idea of packaging lots of home-loans off and out to other investors. Repackaging mortgages this way mean't that noone, beginning with the broker who arranged the initial loan, bothered about the credit-worthiness of the home-buyer because:

1) House prices would continue rising anyway limiting any eventual writeoffs
2) Those who initiated the original oans weren't going to be hanging onto them anyway

Who are / were the principal Wall St. investment banks and their antecedents?

1) JP Morgan Chase gobbled up what was left of Bear Stearn's for merely $240million aided by $30 billion in central bank loans. A year before, Bear Stearns had a market cap. of over $18 billion.

2) Lehman Brothers are sacrificed to assuage fears that the US authorities will rescue anyone or everyone.

3) Having said that, all the mainly WASPish investment banks and other major entities like FreddieMac and FannyMae, AIG etc. have been able to find a safe haven.

Which leads me to the distasteful aspect:

1) Have Wall St. investment banks of Jewish origin been unfairly, or overly accused of being behind the recent crisis?

2) Is it another Nazi plot?

3) Why has Merrill Lynch found solace under the wings of BOA whilst Lehman was allowed to go to the wall?

We should be told as it's the ordinary taxpayers who will be picking up the final bill.

PS. I don't understand why the Federal Reserve, SEC and others don't simply invite all those individuals who made important profits or earned huge bonuses in the period leading upto the crisis to voluntarily make amends. There must be at least some sharp Wall St. operators since departed who have more than a slice of moral fibre? They might say: "I've bought my private tropical island, the superyachts, the Gulfstream V jet etc. and provided you understand that what I'm offering to do in no way admits any liabilities, I'd be willing to contribute to some sort of Wall St. stabilisation fund. Provided of course, the IRS reimburses me for the taxes previously paid...?!

Well, if you don't ask for it...?! :D

angels
19th Sep 2008, 14:05
To paraphrase ex-UK Chancellor Lamont, it has been a dramatic week in the money markets.

My answers to airship -

1) No.

2) No.

3) Merrill jumped to BoA, Lehman was pushed into Chapter 11. They turned down offers the previous week.

A couple of last thoughts afore I set off across the Thames to the colourless suburbs. Overnight USD Libor was fixed at 3.25 percent this morning despite central banks bunging billions of dollars the way of the banks. The Fed funds rate is 2.0 percent.

More worryingly to my mind, there is still sod all liquidity in the three to six month area which most people actually fund with.

Its not over yet.

airship
19th Sep 2008, 14:07
Communism: when 95% of the population struggles to keep the other 5% in the comfort they've become accustomed to. When things go wrong, there's a revolution and then we have capitalism.

Capitalism: when 95% of the population struggles to keep the other 5% in the comfort they've become accustomed to including multiple homes on private islands, superyachts and private jets. When things go wrong, there's always someone like the Federal Reserve ready to intervene. When 95% of the population takes on the increased burdens and continues their struggles to keep the other 5% in the comfort they've become accustomed to.

Correct me if I'm wrong... :(

BenThere
19th Sep 2008, 14:27
Airship,

My observation is that capitalism tends to put people into their own homes, with a car or two, internet, cable/satellite, cell phone, etc.

Take a look at a chart of the world's per capita income levels by nation and note which ones practise the various degrees of capitalism. Then draw your own conclusions about the 95 % statement you made.

Captain Stable
19th Sep 2008, 14:31
Yes, BenThere. And the USA also has one of the highest poverty levels of the world as well.

BenThere
19th Sep 2008, 14:36
I could be wrong, but it's beginning to seem that the shakeout in US financial markets is drawing to a conclusion/denouement. I think the survivors have been identified as Goldman Sachs, JP Morgan Chase, Barclays, Bank of America, Morgan Stanley and a few others.



I sold an in the money put this morning on Goldman, hoping to buy it today at these levels. Look at the companies scooping up assets on the cheap, who are all trading below their 200 day moving average, and there is money to be made in the turmoil.

AIG is being given away today. A small bet on AIG could bring big returns in a short time.

Just my guess and not a recommendation to buy or sell anything.

One9iner
19th Sep 2008, 14:38
It's all relative . . . as long as I can buy a beer and pay my mortgage Im happy.. Having said that - due to current circumstances I'm probably contributing around 10% of my income on fuel ... which means I'm defined as being in "fuel poverty."

Can't wait for that new boiler :ok:

BenThere
19th Sep 2008, 14:40
Show me, Captain. I don't think I believe you.

We have a lot of obese poor people with cell phones, cars, and cable TV, too.

One9iner
19th Sep 2008, 14:43
JetBlue one of the worst perfomers today on the NASDAQ so far..

down 6.85%.

No other U.S. airline falling at that rate..

Any specific reason for this:confused:

Blacksheep
19th Sep 2008, 14:45
The opposite of capitalism is not communism as many seem to imply, both are different means of exploitation of the majority by the few and, unregulated, both lead to chaos. We have recently seen the collapse of Soviet style communism and the chaos that followed: now we see the collapse of western capitalism and will soon suffer the chaos that follows.

The perfect system is called Heaven and there's only one way to find out how that works. :uhoh:


I do hope and pray it involves exploitation of the majority by celestial guitar players. ;)

One9iner
19th Sep 2008, 14:49
I dont think we're going to see the demise of capitalism in the west tbh.. :=

Blacksheep
19th Sep 2008, 14:54
As in the 30's, we are in its current form.

South Sea Bubble - gone
Gold Standard - gone
Junk Bonds - gone
DotCom - gone

What new methods of screwing the majority will begin the next boom and bust cycle?

Captain Stable
19th Sep 2008, 14:59
BenThere, I can't find the website I was looking at a few days ago. While I carry on looking, check out http://www.unicef-irc.org/publications/pdf/repcard1e.pdf Page 4. It places the UK not far below the USA, so I am not crowing about it.

Track Coastal
19th Sep 2008, 15:12
Track Coastal

Well done. Always a winner, eh? Shame the central banks haven't got your skill and prowess.
Easy pick mate. Kaching Kaching :ok:

you and I are for the knackers yard.

No.

I stop aircraft hitting each other.

My wife is involved with the prevention of death.

Ciao.:ok:

Wiley
19th Sep 2008, 15:32
To paraphrase Winston Churchill (who was commenting on the Westminister system of government at the time): "Capitalism is the worst system there is... except all the other systems."

Communism - (and some would say 'the Welfare State') should be the perfect system, wherein it caters for each person's needs - except it does not make provision for human laziness. The collapse of the Russian experiment (and some would say, the shortcomings of the Welfare State, which allows for multi generations of bludgers who've never contributed a thing to the system) proved that such a syetem just doesn't allow for that human failing.

A social safety net (something the US brand of capitalism does not provide - or hardly provides]) is something many of us believe a government should provide for citizens who've fallen on hard times. However, such a safety net should not provide a long term, (sometimes whole of life), sustainable way of life for some, as the systems in the UK and Australia currently do.

Blacksheep
19th Sep 2008, 15:33
My wife is involved with the prevention of death.Like so many bankers, she's backed a certain loser... ;)

airship
19th Sep 2008, 15:36
My observation is that capitalism tends to put people into their own homes... I don't recall exactly where I read about this, but I believe that the highest levels of home-ownership are to be found in Asia someplace (perhaps Mongolia). Where the something between 90-95% of people owned their own homes. Whilst that may be true, I'm sure that the majority of these home-owners don't own 2 cars, have cable or cellular phones (though quite a few would have satellite dishes I'll wager). I can understand encouraging home-ownership to a certain extent, provided that at the end of the day, workers are still able to move to where the jobs are. From what I've seen to date, that aspect has been wholly ignored.

Regardless, these 95% are under continuous pressure to 'improve their lives' by I imagine, subscribing to 1st World financial products and services so that the burdens of supporting the '5%' element are shared more widely...?!

Frankly, I don't care very much for the '5%'. I've worked for some in a personal capacity for a number of years. Those whom I've worked for have been considerate and mostly correct. But I've heard of many other instances which lead me to believe that the majority of these folk abuse their employees because they truly believe that their status allows this priviledge whatever local laws say otherwise.

'Illegal Mexicans' or more accurately, Americans illegally (ie. not declaring) the employment of workers (including Mexicans)...?!

If, as in 95% of cases, you're going to depend on a state pension, then you ought to be crying in misery even 15-20 years before you eventually retire. Because like many other pensioners today, the state (with private enterprise looking on) will allow you only the most miserable pension, you will have to claim winter fuel allowances etc? Why? Because the 5% that truly govern our economies insist on it. And they've persuaded even the most left-leaning governments of that virtue for whatever reason.

95% of us don't stand a fecking chance. Just start to consider all the wildlife, birdies, forests etc. who don't even get to vote, and you'll begin to appreciate why the situation is more dire than anyone in government would admit to.

BenThere
19th Sep 2008, 15:49
You need to find that other website, Captain Stable, because the Unicef report you linked me to puts the US in the middle of the pack among the world's richest nations, with half the child poverty of the UK, lower than Australia, and on par with Germany using PPP criteria, the most accurate methodology, I admit.

Also this report only measures child poverty, and we subsidize that by paying our poorest mothers more in welfare benefits to have more children.

Any conclusion anyone would draw from this report would be a far cry from your assertion:

Yes, BenThere. And the USA also has one of the highest poverty levels of the world as well.

Load Toad
19th Sep 2008, 15:53
It's time for this one to be given a try...

Anarcho-syndicalism - Wikipedia, the free encyclopedia (http://en.wikipedia.org/wiki/Anarcho-syndicalism)

G-CPTN
19th Sep 2008, 16:09
In 1986 I 'bought' a house (and sold one) from the manager of the regional Building Society.
In retrospect, the survey that valued the property somewhat higher than the asking price was probably 'arranged'. The building society offered (almost insisted) on 130% of what we needed to complete (in retrospect that was fortunate as it tided us over the subsequent jobless nine months* . . . ).
At the time of 'purchase' the market was in fact rising strongly, but subsequently there was a fraud enquiry involving a 'cartel' of Estate Agents and Valuers throughout the region whereby they had all been overvaluing properties (why not, especially as fees were proportional to valuation/price, and, the market was rising strongly?).
Was this the equivalent of talking-down shares by shorting traders?

We escaped with a worthwhile profit when we sold (and, indeed, have never lost on any house (1971-76, 1976-86, 1986-89, 1989-2008).

*During that nine-month period the perceived value of the property (based on local comparisons) rose by more than the equivalent salary that I would have expected had I been working

airship
19th Sep 2008, 16:10
As BenThere has just amply demonstrated (sic), capitalism works very well for the most fortunate 5% of us. OK, I'm feeling generous, say 10% of us...?! :zzz:

GetTheFlick
19th Sep 2008, 16:15
I vote for Capitalism -- just regulate it. Which the capitalists will fight -- and occasionaly win.

It's all about checks and balances. Right now, there are no effective balances to capitalism in America if not the world. In effect, we are trying to contain greed.

If you look at it from this standpoint the dangers of a State religion become more obvious. Without the counter balance of morality -- Religion or Values -- all you're left with is greed.

Have I mentioned the importance of the separation of Church and State in America lately ? If one is co-opted by the other -- say the Republican Party and the Religious Right -- then you're left with believing that "greed is good."

It isn't.

Don Brown

Little Blue
19th Sep 2008, 16:16
...at least Mussolini got the trains running on time in his '-ism'!

airship
19th Sep 2008, 16:48
*During that nine-month period the perceived value of the property (based on local comparisons) rose by more than the equivalent salary that I would have expected had I been working. But isn't true capitalism almost defined by those that possess the capital, allowing them to attend garden parties, openings or whatever, generally speaking, not required to clock in anywhere but being able to devote the majority of their waking hours to activities that don't always bring immediate monetary rewards (whilst accepting that there are a whole horde of workers (the other 95%) busily assuring this way of life...?! :confused:

I mean, it need not be so bad, if one fortunate individual remarked to another fortunate individual: "My dear, I've heard that the bees are in some difficulty this year, the roses do look a little poor. " Oh yes, but I can assure you that my hubby, who is a very high-up at Monsanto assured me that there are absolutely no foundations to these accusations. In fact, he told me to go out and buy myself a huge bouquet!

Most people would not want to have to deal with these sorts of problems, nor are they asked to do so. If the 5% that rule the planet rely on the other 95% to produce the wherewithal, they only need say, another 1% of us (often illegally-employed) for their daily sustenance.

Of course, they all mostly believe in God. Which is why (or so I'm told), there will be anywhere between $20-30 trillion that the richest souls on the planet will eventually redistribute when they pass away. To pervert more innocent interpretations of General Patton's passage on the planet: I can well imagine some people alive today when they eventually see this huge wave of trillions of dollars which once belongedto all the great capitalists passing before them: "Yeah, our blood, his guts. Our meagre riches confiscated to ensure the survival of the likes of...?!"

PS. Did Warren Buffett ever buy into AIG eventually or what...?!

Binoculars
19th Sep 2008, 17:04
It's worth forgiving airship his lapses for the occasional insightful gem like that last one. Don't leave us, Airship!

Binoculars
19th Sep 2008, 17:24
BTW, the contrarians like me sitting out there watching the panic are smiling. As long as China doesn't decide to close its borders and stop their industrial revolution (let's throw India's 1 billion people into the equation as well) the prices currently on offer for resource stocks will have people looking back and scratching their heads in two years time.

Beware the dead cat bounce, we haven't reached the bottom yet. But oh, the bargains!

Um... lifting...
19th Sep 2008, 19:21
Blacksheep
You forgot the Dutch tulip bulb bubble... frankly, I'm disappointed... crushed, even... another paragon is found to have feet of clay... whatever the h*ll that means...

obgraham
19th Sep 2008, 19:56
I dunno anymore, maybe Airship is onto something. Let's see:

US: Capitalism in name. But government comes in and saves your butt if you are a loser, but you get to keep the winners.

China: Communism in name. But government leaves most everyone alone to become a capitalist. No bailouts for losers.

Hard to say which is better sometimes.

tony draper
19th Sep 2008, 20:08
Heard a good description of what's going on in the States now on Newsnight last night,bailing the Banks out, Socialism for rich folks.
:rolleyes:

DON T
19th Sep 2008, 21:16
Pinched from somewhere else:-

If you had purchased £1000 of Northern Rock shares one year ago they would now be worth £4.95.

With HBOS, earlier this week your £1000 would be worth £16.50.

£1000 invested in XL Leisure would now be worth less than £5.

But if you bought £1000 worth of Tennents Lager one year ago, drank it all, then took the empty cans to an aluminium re-cycling plant, you would get £214.

So based on the above statistics the best current investment advice is to drink heavily and re-cycle.

Makes you think don't it.:confused::confused:

con-pilot
19th Sep 2008, 21:23
So based on the above statistics the best current investment advice is to drink heavily and re-cycle.


AH, HA! One day I knew I would be vindicated! :p

dead_pan
19th Sep 2008, 21:48
South Sea Bubble - gone
Gold Standard - gone
Junk Bonds - gone
DotCom - gone

"History is littered with examples of people finding new ways of making the same old mistakes" - quote I read a while ago

Does the events of the last week herald a new era? I think not, unless this 'liquity' genie can somehow be put back in the bottle. There's simply too much money swilling around the system chasing super-normal returns - the result irrational exuberence, speculative bubbles, mis-selling etc etc. We may fix the problem with toxic assets for now but sure as eggs are eggs the market will come up with another money-making wheeze which will once again threaten the entire financial system.

DP

Crosshair
20th Sep 2008, 01:49
obese poor people

Please, give this a rest. One does not get fat from having extra money. One gets fat from eating cheap (processed) food, being worried, feeling out of control of one's life, and not having time to exercise.

Wealthier people do not eat more calories. They may eat more expensive, better quality food, and they may have it prepared for and served to them more often. But they don't eat more calories.

Anyone on about obese poor people having too much money has not been to a Pacific island.

con-pilot
20th Sep 2008, 02:05
Please, give this a rest. One does not get fat from having extra money. One gets fat from eating cheap (processed) food, being worried, feeling out of control of one's life, and not having time to exercise.

Wealthier people do not eat more calories. They may eat more expensive, better quality food, and they may have it prepared for and served to them more often. But they don't eat more calories.

Anyone on about obese poor people having too much money has not been to a Pacific island.

Well said sir, well said. :ok:


(Or if a madam; Well said madam, well said. :ok:)

Lost man standing
20th Sep 2008, 02:24
Since nearly all poverty statistics use a measure that is utterly meaningless, made up by sociologists wanting to keep themselves in a job by ensuring permanent poverty, there is no point in discussing poverty statistics. Unfortunately it is the poor (impoverished or otherwise) in society who suffer for this, one way or another. They are a constiuency that their alleged saviours, the left-wing politicians and sociologists need to perpetuate for their continued purpose in being.

The bubbles that have been mentioned have all been caused by people wanting something for nothing, and being naive enough to think that they could have it. Greed combined with willful blindness to what is not only fairly obvious but was in most cases being reported by a few lonely voices. If it looks too good to be true, it probably is!

Capitalism needs a few simple rules to promote honesty, and those rules need to be ruthlessly enforced. Unfortunately the rules are complicated and often irrational, and poorly enforced. Governments try to control or influence the market without understanding the effects, and they allow people to profit from dishonest trading. Both poor rules and poor enforcement decrease the efficiency of capitalism.

Capitalism will always have its ups and downs. Failure is an essential part of capitalism. It never could be, and no-one ever claimed it was, a perfect system. However it has two advantages. It works better than any other to improve people's lives and prospects, and it allows freedom. Freedom always included the freedom to fail. However the only way to avoid possibility of failure is not to have the freedom to try in the first place.

con-pilot
20th Sep 2008, 02:40
Yeah, what he said. :ok:

(That of course would be Lost man standing.)

Loose rivets
20th Sep 2008, 03:57
I have recently seen a breathtakingly beautiful home. The owner is buying serious acreage in all directions. He is also employing people for numerous service trades -- paying largely in cash. What does he do? He acquires things for the NHS.

Now, it might be, that this person is as honest as the day is long, and it might be that he is cost effective for our poor beleaguered health service, but somehow, I tend towards thinking he's in a good old-boy's club. Who you know, and all that.

Okay, suppose he's totally kosher, it still begs the question. Why? Why the f:mad:k can't all those overpaid managers acquire things for themselves? Is it not a necessary skill to know where to purchase from anymore. Such is the value of this mini mansion, that it has raised some eyebrows in important places. But how many mansions are our sick people paying for? That's not a mistake in my logic BTW


Before we go on to analyze the best social models for the future, we should recognize the sad fact that what 90% of us do...90% of the time, is bordering on futile. It produces the square-root of f:mad:k all.

From the moment your alarm goes off, and you start to waste even more energy, the summing of negative productivity is building against you. The people that are really making a difference to the improvement of the world are so few, that it's likely that you'll not meet one all day.

It is probable, that the old man you see on a path to his allotment, wearing boots that he's cared for for 30 years, is more beneficial to the Earth Goddess than any of the delivery truck drivers taking crap from China to your local store. The fact that such people are honorably employed is irrelevant. "Getting the nation back to work" is a typical statement from a politician that's been to banal school.

The nation would be better off if hundreds of thousands...perhaps even millions of people, stayed at home. Stay there, watch telly...we'll bring you some food and beer. It'll be sooooooooooo much cheaper for the nation than token employment.

I count myself in this. Burning fuel in a car that's cost a mass of energy to make, simply to get to an aircraft that cost...well, you get the picture. I then burn thousands of tonnes of fuel...cos it's my job. I felt good about it when I started. I certainly don't now. So few of the people that I took somewhere really needed to go there. Okay, a holiday perhaps, a reward for hard work. Fine, providing they have really contributed one jot towards a perfect society. A rather grand goal. Most likely, I'll not take anyone, not with a clear conscience anyway, anywhere ever again.

A doctor or a nurse riding a bicycle to a patient. An idle that has no place in our new world, but you get the point. A vital service, with minimal expenditure of the nation's resources. An example perhaps as ridiculous as Two Jags waiting at a bus stop in a suit on a nice day. He was trying to make a point, but just made a fool of himself. It is the need to not have to get on the bus in the first place that is part of the perfect model.

Overdrive
20th Sep 2008, 06:03
Loose rivets, that's a great post :ok:

arcniz
20th Sep 2008, 06:42
While convenient in political discussion, most -ism concepts fall down badly in practice. Common sense, fairness and pragmatism are the qualities most needed in government. Ideology and -isms are most prominently trotted out when sensible solutions cannot be found.

Political and religious ideologies offer conceptual framework for one or another style of governing, but the real platform for success or failure of a civilisation is in the everyday execution of rules, policies, and laws that may either help or harm people they affect.

After fifteen millennia of historical time, our most successful societies seem to be the ones that have been able to tolerate wide variation and great heterogeneity in the makeup of their populations. In our era, the planetwide thrust of social evolution has been away from close-knit inbred tribes toward more cosmopolitan societies that politely and kindly tolerate and selectively assimilate many cultural flavours and philosophies in the ordinary lives of citizens, yet still retain a coherent and self-consistent set of shared laws and practices that all must follow. Public laws are often neither very fair nor very wise, but consistency at least assures all will share comparably, if not equally, in the flaws and virtues of the social compact.

The -isms resemble stone obelisks and similar show-stopping monuments that potentates of yore would erect to demonstrate the specificity and concentration of their state's power. While grand and polished and by definition uniquely perfect in their place, the rigid tenets of -isms serve better for making an impression - and for casting a fine clear shadow in the morning sun - than they do for making practical rules that soft and vulnerable people can happily live by.

Not far in distance from the obelisk but vastly further in the evolution of a model for cooperative, coexistant humanity, one may find a more human, more voluble, and more valuable platform for social progress in the simple stones of the agora - a place where potentially all may meet to argue and complain, discuss and digress, discourse and disagree in the kneading of ideas from the rough-grist of experience into the sweet rich bread of collaboration and succesful coexistence. The future of humanity lies less in the evocation of fossil solutions frozen in the old memory of simpler and meaner times, and more, much more, in the evolution of newer and better concepts forged on the open stage of the public forum where the brightest and best may compete - along with the old, the wise, and the silly - for acceptance of ideas by the people who must endure them.

Dr Jekyll
20th Sep 2008, 07:00
So few of the people that I took somewhere really needed to go there.

So they think the travelling is worthwhile to them, but you know better than them, is that it?

A doctor or a nurse riding a bicycle to a patient. An idle that has no place in our new world, but you get the point. A vital service, with minimal expenditure of the nation's resources. An example perhaps as ridiculous as Two Jags waiting at a bus stop in a suit on a nice day. He was trying to make a point, but just made a fool of himself. It is the need to not have to get on the bus in the first place that is part of the perfect model.

We have tried a society where nobody travelled more than a few miles, it was caused the dark ages. hardly a perfect society.

D SQDRN 97th IOTC
20th Sep 2008, 08:51
Benthere

I think you are right. The light is dim, but starting to shine at the end of the tunnel. Angels reckons we aren't out of the woods yet...and for sure we will probably have some more volatility ahead, but I hope the last of the big bank scares is now behind us........

not that I have a crystal ball....... I did say last year that house prices would not fall to any material extent ! And where are we now - 10-12% lower? :ouch:

Effluent Man
20th Sep 2008, 11:15
There was an argument on here a year ago for non-intervention in the money crisis.I just have a feeling that if Northern Rock had been allowed to go then the disaster would have been even bigger than it has been.
It can never be right to stand on hard line capitalist principles whatever the fallout.There comes a time when the economy has to be managed by government and I think that the US (dare I say this) deserves credit for acknowledging that there are situations so grave that political dogma cannot be allowed to stand in the way of common sense.

The housing situation in the UK however is still dire and I think we are certainly heading for a 30% fall before things flatten out.

El Grifo
20th Sep 2008, 12:40
Correct me if I am wrong, but I remember it was "Mag the Bag" that initially instigated the de-regulation of the UK financial markets.

Self regulation being the then buzzword.

The concept has dismally failed. Recent events prove this beyond any doubt.


Amazing that after all these years she is still fcukin us, from the senile discomfort of her bath chair.

El Grifo
20th Sep 2008, 12:54
For us mere tax-paying mortals, the footsoldiers in the great game of life, it is another affirmation of the same old story.

Any extreme version of "ism", any "ism" that is allowed to spin out of control, impacts on us the heaviest.

Extreme socialism finds us running ragged whilst our "superiors" languish in luxury.

Extreme capitalism finds us running ragged whilst our "superiors" languish in luxury.

The current model has run it's course.

Thankfully it has screwed people higher up the food chain than most of the recent cycles.

Maybe now we might see a bit of reining in.

One of the most brazen and extreme tools "Short Selling" appears to be the first victim.

Roll on the changes.

airship
20th Sep 2008, 13:31
I have recently seen a breathtakingly beautiful home. The owner is buying serious acreage in all directions. He is also employing people for numerous service trades -- paying largely in cash. What does he do? He acquires things for the NHS. "Any discount if I pay in cash?" The tradesman's eyes light up. "We could knock off the VAT, how's that squire?" In as many languages and accents that exist almost anywhere on the planet.

Someday, someone in the NSA will sell or at least 'leave behind on a train or bus somewhere', several high-density double-layer DVDs containing details of all the dubious cross-border financial transactions that this agency has been able to intercept over the years. Much like that ex. Lichtenstein bank employee, only with 1,000 times the repercussions...?! But I wouldn't count on it... :rolleyes:

PS. Anyone up for an investment offering a minimum 60% return over 3 years (http://www.epi-world.com/) (running on PPRuNe at the moment)... :\

Saab Dastard
20th Sep 2008, 13:41
Capitalism is the best system that money can buy.

SD

Wod
20th Sep 2008, 13:47
The system is doing what it does; correcting itself following a degree of excess.

The Pollies, who must be seen to be doing something, are pointing fingers.

'Twill pass, and the sun will come up in the morning.

It's only money after all.

SpringHeeledJack
20th Sep 2008, 13:56
http://www.nytimes.com/2008/09/20/business/worldbusiness/20markets.html?_r=1&hp=&adxnnl=1&oref=slogin&adxnnlx=1221912477-1SOdm61RK1y0wGcUX5zOKw

It would appear that many in NYC are saying that the markets are reacting to what the government will do next, rather than the underlying book value of their assets. I can't but help have the feeling that 'the market' would rather have the pain of the truth coming out and things getting a floor now, rather than the uncertainty of this government brushing of things under the carpet.

Such actions will only be fruitful IF the assets are guaranteed to increase in value and these are assets that are volatile by their very nature, so the odds of that happening are less than certain, therefore.......


Regards


SHJ

Whiskey Oscar Golf
20th Sep 2008, 14:13
I would support capitalism if we let it work the way it was supposed to. Instead we get greedy clowns thinking up ways to make money off nothing and when it all falls apart I'm meant to hand them a heap more cash to stop the whole deal crashing This keeps them in fine suits and holidays without learning those harsh lessons capitalism would teach failures if allowed to work properly. How about the strongest survive, that would mean the safest too. That and actually making money because you PRODUCE something other than paper and bytes.

The powers that be will regulate away all of the smoke and mirror tricks the geckos have been using today. Then some smart uber grad from somewhere will evolve a new way to create wealth from stealing my superannuation and bank savings. It'll work for 10 years getting bigger and bigger with everyone reaping the whirlwind, until it implodes as usual and they'll regulate again. Then another smarty greedy comes along and figures out an new way and it goes on.

I'm fed up with the rich people welfare we are forced to pay every time these greed bubbles burst. I get the, if you don't it will mean the end of your life as you know it, and it may very well do that. I just feel a bit disgusted that some stockbroker gets pulled out of the s#*t and if it happened to me I'd be a statistic. I'd rather give him/her $1 for a coffee for being so smug when the game they played worked.

Low Flier
20th Sep 2008, 14:35
My question ... is around short-selling.
....
Why then does Big Bank Plc agree to lend the shares in the first place? It makes no sense to me but there must be some reason!

They do so because they make a profit on the rent money that they charge you for renting the shares to you. They make money both ways if the shares go up, which they usually do over the long term. They collect your rent payment on the shares; and they collect the dividend income; and they rack up the potential capital growth on the shares which (mostly) go up; and finally, they collateralise the value of those shares which you are paying for and use that collateral to go and borrow more money on the wholesale market to fund loans to suckers on the retail market.

How do they deal with the occasional short-term losses? Simple. They insure aginst those losses either by spread-betting or taking out insurance with firms who specialise in that niche of the market.

The biggest such insurer is/was, of course, AIG. Oops!:ooh:

frostbite
20th Sep 2008, 15:33
I had a foray into share dealing some years ago but I never came across this 'renting' business.

In those days, if you wanted to short something, you phoned your broker and told him to sell shares that you didn't have. Then, before the 10-day settlement period ended, you bought the same amount that you'd 'sold' - hopefully at a cheaper price.

I would like to see confirmation that this renting business actually exists and is not something dreamed up by the feeble minded media to 'explain' it to folk.

Stockie?

El Grifo
20th Sep 2008, 16:21
Hey Basil smartie pants, read it and weep.


BBC NEWS | Business | FSA introduces short-selling ban (http://news.bbc.co.uk/1/hi/business/7624012.stm)

El Grifo
20th Sep 2008, 19:22
Touche Basil.


Lets look at this way, shall we.

I am half right and you are half wrong :ok:

You good with that ?

vee-tail-1
20th Sep 2008, 20:31
Just announced on Irish Radio one. The Irish government has raised to 100,000 euros the amount they will guarantee in compensation to private savers whose bank/BS goes bust.
What chance A Darling will increase the UK FSA compensation limit of £35K ?

El Grifo
20th Sep 2008, 20:54
Already talked about a likely increase to 50K.

SpringHeeledJack
20th Sep 2008, 23:52
Fury at $2.5bn Lehman bonus - Times Online (http://business.timesonline.co.uk/tol/business/industry_sectors/banking_and_finance/article4795072.ece)

:yuk: :mad::mad::mad:


Regards


SHJ

SpringHeeledJack
21st Sep 2008, 13:12
HBOS shares speculators made £190m from Lloyds TSB takeover before BBC broke news - Telegraph (http://www.telegraph.co.uk/money/main.jhtml?xml=/money/2008/09/21/bcnhbos121.xml)

My money is on either that Robert Peston was being bugged by interested parties due to his insider knowledge OR it was someone close to the deal who gave mates the nod at the appropriate moment. I wonder if it will ever be disclosed who it was ?


Regards


SHJ

airship
21st Sep 2008, 15:17
Insider-dealing has existed ever since there were stock-markets. Isn't that why it's always cost a literal fortune to be admitted to the club (as a member of the stock exchange) in the first place...? :rolleyes:

It's illegal today, but how can you completely exclude it when the brokers who process your trades also trade on their own account...? I'm less interested to know that: Shortly before Mr Peston’s announcement, about 160 million HBOS shares were traded, making speculators an estimated profit of about £190 million. The two single biggest buyers bought 10 million and 12.4 million shares respectively. The biggest buyers were betrayed by their greed. What I'd like to know is how many brokers / dealers / individuals made money from 'inside information' yet will probably escape investigation because the volumes don't warrant it. And therein lies the secret I guess. It's not what you make on a single deal, it's the aggregate of what you make out of 10s of transactions...?!

Another thing: Apparently stock exchanges these days are one of the biggest customers of 'atomic clocks' or at least, require and are indeed willing to pay for the most accurate clocks whether that's from the US GPS system or Europe's equivalent in-build.

I would ask anyone why any of these stock exchanges require such facilities. After all, the truly underlying performances of most companies do not change from day to day, much less in hours, minutes or milliseconds. All short-term volatility is entirely a phenomenom of the way stock exchanges are set up.

Why bother banning short-selling when allowing brokers to both conduct trades for others and on their own account? Why allow stocks to be traded on the basis that the underlying fundamentals do not change every millisecond, hour or even daily...?!

PS. Ever since lots of European governments were embarrassed sufficiently to admit that they were taking kickbacks from contracts awarded to private contractors on public contracts in order to finance their political parties and campaigns and had to cease these activities, I've thought that they all merely took a cut out of the national loto drawings - nothing simpler or more anonymous...?!

In an ideal world, the authorities would not rest until they'd identified every single entity suspected of having traded on inside information. I imagine however, that they don't dig too deeply in case they're confronted by their own masters. That's just my own opinion obviously.

Capt.KAOS
21st Sep 2008, 16:04
Financial Bailout: America's Own Kleptocracy (http://www.globalresearch.ca/index.php?context=va&aid=10279)

A kleptocratic class has taken over the economy to replace industrial capitalism. Franklin Roosevelt's term "banksters" says it all in a nutshell. The economy has been captured - by an alien power, but not the usual suspects. Not socialism, workers or "big government," nor by industrial monopolists or even by the great banking families. Certainly not by Freemasons and Illuminati. (It would be wonderful if there were indeed some group operating with centuries of wisdom behind them, so at least someone at least had a plan.) Rather, the banksters have made a compact with an alien power -not Communists, Russians, Asians or Arabs. Not humans at all. The group's cadre is a new breed of machine. It may sound like the Terminator movies, but computerized Machines have indeed taken over the world - at least, the White House's world.

Here is how they did it. A.I.G. wrote insurance policies of all sorts of that people and businesses need: home and property insurance, livestock insurance, even aircraft leasing. These highly profitable businesses were not the problem. (They therefore will probably be sold off to pay the company's bad gambles.) A.I.G.'s downfall came from the $450 billion - almost half a trillion - dollars it was on the hook for as a result of guaranteeing hedge-fund counterparty insurance. In other words, if two parties played the zero-sum game of betting against each other as to whether the dollar would rise or fall against sterling or the euro, or if they insured a mortgage portfolio of junk mortgages to make sure that they would get paid, they would pay a teeny tiny commission to A.I.G. for a policy promising to pay if, say, the $11 trillion U.S. mortgage market should "stumble" or if losers placing trillions of dollars in bets on foreign exchange derivatives, stock or bond derivatives should somehow find themselves in a position that so many Las Vegas patrons are in, and be unable to come up with the cash to cover their losses.
A hedge fund does not make money by producing goods and services. It does not advance funds to buy real assets or even lend money. It borrows huge sums to leverage its bet with nearly free credit. Its managers are not industrial engineers but mathematicians who program computers to make cross-bets or "straddles" on which way interest rates, currency exchange rates, stock or bond prices may move - or the prices for packaged bank mortgages. The packaged loans may be sound or they may be junk. It doesn't matter. All that matters is making money in a marketplace where most trades last only a few seconds. What creates the gains is the price fibrillation - volatility.

This kind of transaction may make fortunes, but it is not "wealth creation" in the form that most people recognize. Before the Black-Scholes mathematical formula for calculating the value of hedge bets, this kind of put and call option was too costly to provide much profit to anyone except the brokerage houses. But the combination of powerful computers and the "innovation" of almost free credit and free access to the financial gambling tables has made possible a frenetic back-and-forth maneuvering.
Remember when President Bush and Alan Greenspan informed the American people that there was no money left to pay Social Security (not to mention Medicare) because at some future date (a decade from now? 20 years? 40 years?) the system might run a deficit of what now seems to be merely a trivial trillion dollars spread over many, many years. The moral was that if we can't figure out how to pay, let's plow the program under right now.

Mr. Bush and Greenspan did have a helpful solution, of course. The Treasury could turn Social Security and medical insurance money over to Bear Stearns, Lehman Brothers and their brethren to invest at the "magic of compound interest."

What would have happened to U.S. Social Security had this been done? Perhaps we should view the past two weeks' events as having assigned to Wall Street gamblers all the money that has been set aside since the Greenspan Commission in 1983 shifted the tax burden onto FICA wage withholding. It is not retirees who are being rescued, but the Wall Street investors who signed papers saying that they could afford to lose their money. The Republican slogan this November should be "Gambling insurance, not health insurance."


PS: Isn't it about time to investigate Allan Greenspan's role in this disaster?

Stockpicker
21st Sep 2008, 21:45
frostie sorry for the delay responding! Yep, "renting" alive and well, except it's called lending (for a fee, so that kind of makes it renting I suppose). And yes, the person who lends the stock keeps getting the dividends. And yes, they will report performance as though they still had the shares. Not familiar with the idea of collateralising the shares, though, not clear how they can use the same security twice, but maybe someone else can clear that one up.

On shorting, it still exists in the UK - the FSA ban is only on a list of 29 financial services companies which seem to have been drawn up in a pretty arbitrary fashion - and if you want to short the banks, you can still buy a "basket" of everything-else-in-the-index-except-the-banks and then short the index...sounds like a fairly extreme measure but let's not rule out a few young turks deciding to give it a whirl... :hmm:

frostbite
21st Sep 2008, 22:54
Thanks for that, Mme Stockie.

I really thought it was something made up by the media to explain shorting to the proles.

Sounds like it's getting spivvier, and I thought it was bad when I was involved!

dead_pan
22nd Sep 2008, 10:57
A couple of choice quotes from the Wikipedia's entry on credit derivatives:


As reported in Times Sept. 15.08 "Worldwide credit derivatives market is valued at $62 trillion".


How much is Paulson requesting from Congress? Sounds like this may only be the tip of the iceberg.


Risks involving credit derivatives are a concern among regulators of financial markets. The US Federal Reserve (http://en.wikipedia.org/wiki/US_Federal_Reserve) issued several statements in the Fall of 2005 about these risks, and highlighted the growing backlog of confirmations for credit derivatives trades. These backlogs pose risks to the market (both in theory and in all likelihood), and they exacerbate other risks in the financial system.


...and finally, a helpful link at the end of the page (made me laugh anyway):


(http://www.investinginbonds.com/assets/files/LehmanExoticCredDerivs.pdf)The Lehman Brothers Guide to Exotic Credit Derivatives (http://www.investinginbonds.com/assets/files/LehmanExoticCredDerivs.pdf)
(http://www.investinginbonds.com/assets/files/LehmanExoticCredDerivs.pdf)

angels
22nd Sep 2008, 11:11
The Aussies banned short selling on ALL stocks overnight and made a hash of it, forgetting people who were hedging existing positions.

I'm not involved at all in the equity markets but I have bad feeling about people fiddling with something they don't really know about for what are really political ends.

For example, the pension funds in Oz are furious, and if anyone was interested in a market functioning properly then I would have said it was the pension funds, and the people whose money is tied up with them.

Again, I defer to Ms Picker's superior knowledge.

The concept of the investment bank in the U.S. is now dead with Goldman and Morgan Stanley succumbing to the siren call of the Fed.

I actually really rate Goldman as an outfit, although some of their workforce are not my cup of tea. But there we go.

Lost man standing
22nd Sep 2008, 11:36
Airship

If you want to know why financial institutions want atomic clocks then watch Hustle*. The time of a trade can be vitally important not because the fundamentals have changed but because the news appears and spreads, so shares can go up or down very quickly. With the speed of communications and computers today a few seconds' delay could in principle be used to make a killing.

* The conmen in the TV programme do not actually use time-delayed feeds to make money, they just persuade the mark that they are doing, then fleece him.

Scumbag O'Riley
22nd Sep 2008, 11:42
Stopping short selling is stupid and demonstates a complete lack of understanding on how a healthy market works. What should be stopped is selling shares sort when the shares don't exist i.e somebody long hasn't leant them out. One understands the large 'my work is my bond' type traders have several days to come up with the shares after they have sold them short, and people take advantage of this.

It's about time some people started going to jail. If somebody nicked twenty grand in cash out of my pocket they should go to jail. These traders etc should be punished in exactly the same way if they cause me indirect significant loss though their white collar trading scams. And that is what is happening now with the additional interest I will be paying on all this massive borrowing made in my name as a taxpayer.

Capt.KAOS
22nd Sep 2008, 20:34
The global Derivative Market is an incredible $600 Trillion (600,000,000,000,000), the amount at risk in the entire derivatives market is $15 trillion. To see things in perspective, the Global GDP is 64 trillion of which US is 15 trillion and China 7 trillion (all in 2007).

And then there's the Credit Default Swap stone around the neck of many banks. Them smart guys in pinstripe suits forgot (?) to ask one thing when they invented these savvy financial get-rich-quickly-with-other-peoples-money computer models - what if the parties on the other side of the bet don't have the money to pay up?

What we see here is a string of Ponzi scheme (http://en.wikipedia.org/wiki/Ponzi_scheme) investments, largely ignored by Allan Greenspan's Fed, who is in favor of derivatives; "The use of derivatives -- obligations derived from debt and equity securities, commodities and currencies -- has ''significantly improved the flexibility of economies,'' (Mr. Greenspan on a Banque de France symposium via satellite).

GWBush has looked for the wrong WMD's in the wrong place.

I predict, we ain't see nothing yet.

I've been in trading and manufacturing for 30 years, currently owing a factory employing 55 people and proud of being a part of our nation's GDP and positive export trade balance and it makes me sick to the stomach to see what them banksters are doing with the money I and many other hardworking people are putting in the hands of 29 year old Maserati driving, champagne fountain loving financial whizzkids, blowing away kazillions of dollars, euro's with a computer key stroke and GETTING AWAY WITH IT, because when it goes wrong me and all the other tax payers have to pay for these disasters through our ignorant governments.

Nick Leeson was jailed for losing 5 Billion, so what happen with all them investment bank CEO's who cashed hundreds of millions in bonusses the last years? Can they get away with it?? :ugh::yuk::ugh::yuk::mad::mad:

ORAC
23rd Sep 2008, 13:10
A perceptive set of comments, or at least I believe so, on the current situation in the Daily Telegraph:


.............The money market has frozen because traders have realised the truth of Warren Buffett's warning that derivatives were "weapons of financial mass destruction": a market in which no one knows the price of anything cannot operate.

This ignorance will not end simply because government regulators have taken over. In the US, regulators do not know exactly what they have got into by taking on the "toxic debt" of the nation's banks, any more than did the dealers who made the loans in the first place.

Lack of government regulation was anyway not the problem. The problem was rather a failure of the regulators to do their job. They had the powers which would have enabled them to intervene and stop the excessively risky, indeed the downright fraudulent loans which are at the heart of today's economic crisis. They failed to use them.

Will a new army of officials be any more effective than the last lot at identifying the blunders and the mendacity of some bankers? We all hope they will - but it is not the way to bet. The record of state officials in running any business is even more dismal than the recent performance of investment bankers..........

Flypuppy
23rd Sep 2008, 16:43
If you had purchased £1000 of Northern Rock shares one year ago they would now be worth £4.95.

With HBOS, earlier last week your £1000 would be worth £16.50.

£1000 invested in XL Leisure would now be worth less than £5.

But if you bought £1000 worth of Tennents Lager one year ago, drank it all, then took the empty cans to an aluminium re-cycling plant, you would get £214.

So based on the above statistics the best current investment advice is to drink heavily and re-cycle.

boogie-nicey
23rd Sep 2008, 17:53
Booze is finally the answer after all and it makes economic sense too I can't believe my luck :p All those years of just a pint or two once in a blue moon are over I'm of to the boozer.

BlooMoo
23rd Sep 2008, 20:23
Nick Leeson was jailed for losing 5 Billion, so what happen with all them investment bank CEO's who cashed hundreds of millions in bonusses the last years? Can they get away with it??

Of course they can. AND, some even get a title and get to set the rules on top. (http://financialadvice.co.uk/news/11/tax/7970/Hypocrisy-of-the-highest-order-at-the-FSA.html)

BlooMoo
23rd Sep 2008, 20:28
Nick Leeson was jailed for losing 5 Billion, so what happen with all them investment bank CEO's who cashed hundreds of millions in bonusses the last years? Can they get away with it??

Of course they can. AND, some even get a title and get to set the rules on top.

From financialadvice.co.uk... (posting a link seems to result in nannypprune vetting procedures)

As the new chairman of the FSA settles into his new office and joins in the Labour Party led rant against the sky high wages in the City and excessive bonuses it seems as though the tenure of Lord Turner has hit a rocky patch already!

After joining the assault on the so called City fat cats it was pointed out to Lord Turner and the Chancellor Alistair Darling that Lord Turner himself was one of these so called City fat cats with a career in investment banking with Merrill Lynch and Chase Manhattan Bank. So quite how he has the nerve now to stand up and criticise the City for the wages it pays and the bonuses earned by the work force is amazing. Hypocrisy in its truest form, or a realisation that the City culture needs to be changed?

Lord Turner has also attracted criticism for his apparent support for the Labour Party when the chairman of the FSA is deemed to be impartial on all matters political. Surely if he felt so strongly about the need for change in the City he could have waited until after the Labour Party conference instead of acting in unison?

Capt.KAOS
23rd Sep 2008, 22:50
The problem was rather a failure of the regulators to do their job.From The Economist (http://www.economist.com/opinion/displaystory.cfm?story_id=12263158): "But naive faith in regulators’ powers creates ruinous false security. Financiers know more than regulators and their voices carry more weight in a boom. Banks can exploit the regulations’ inevitable blind spots: assets hidden off their balance sheets, or insurance (such as that provided by AIG) which enables them to profit by sliding out of the capital requirements the regulators set. It is no accident that both schemes were at the heart of the crisis."

Many derivatives were so incredibly complex that even financial whizkids didn't have a clue about the real risks and that in fact was the reason why Lehman wasn't bought. Pandora's money box.

G-CPTN
25th Sep 2008, 00:19
We may soon know when President Bush makes his address to the US on the financial crisis:-
Bloomberg.com: Worldwide (http://www.bloomberg.com/apps/news?pid=20601087&sid=a2ivSmT_ziVk&refer=home)
but meanwhile, McCain said he was suspending his campaign to return to Washington to deal with the crisis:-
BBC NEWS | World | Americas | US rivals at odds on debate delay (http://news.bbc.co.uk/1/hi/world/americas/7634455.stm)

Here in the UK the Banks are choosing to deposit their money with the Bank of England at low rates rather than put it into the Market with other borrowers at higher risk . . .

mocoman
25th Sep 2008, 01:34
It does seem as if nerves are on a razors edge.

I remember doing an Economics module at University 25 years ago.

At the time I didn't quite understand how the global economy, being a closed system, could undergo infinite expansion.

I still don't...:E

"One company can grow so large that it threatens the whole financial system"

I would extend that analogy:

One country can hold so much power that it threatens the global balance.

:}

arcniz
25th Sep 2008, 04:44
The history of civilisation is marked by periodic economic crises - many of them brought about by environment changes leading to crop failures and famines, plagues, etc. Modern times have seen a marked increase in the frequency and intensity of economic cycles caused by combinations of politics, market psychology, and economic distortions due to "innovations" in finance. The post WW2 era has provided the greatest economic stability - for the largest number of people, in the entire history of civilisation, but even this has been affected by several dozen booms and busts in various places.

One has the sense that the likelihood of large-scale policy failures has been reduced because of advances in economics concepts, advances in analytical tools, and advances in methods for keeping better track of values and balances in finance. The current situation in the USA puts this premise to a test.

Certainly a fair part of the immediate situation is a crisis of politics - a gang of folks who have been used to living off the fat of the land are loathe to give that up, and so are petitioning for public assistance to the wealthy on the premise that this will preserve a prosperous status quo.

One's own observation is that the alleged prosperity stemming from the now begging financial geniuses on Wall street has increasingly been smoke and mirrors over recent years. Perhaps it would be better to let their schemes collapse atop them and just be done with their failures in that arena. Certainly America still has a fair number of healthy financial institutions to carry on with business.

What the "bailout" really seems to be is a political shot at a last-ditch financial coup d'etat sought by folks in Manhattan who have grown arrogant with a degree of power they could not adequately or competently manage.

"Off with their heads!" should be the cry.

Loose rivets
25th Sep 2008, 06:37
It was a good speech. And that's from a totally aye-political animal. (Geddit?)


He made the justification for intervention in an otherwise financially self-regulating democracy, then twice emphasized the importance of not allowing the fat-cats to profiteer out of the restructuring. He even made the promise to the honest taxpayer that eventually they would be paid back. For a while, he even had me believing it.

For him, it really was well delivered, and the calling in of the other parties and indeed candidates, was a very impressive decision...or ploy if you're totally skeptical.

angels
25th Sep 2008, 07:45
The markets have totally ignored Bush. He's a politician who doesn't have a clue about what's happening. Anything he says is mere rhetoric and treated as such.

What's more important is the point that G-CPTN has made and that I've been banging on about for a bit now.

The money markets are crucial for banks with three and six month money the main areas. Overnight money is important, but only in the day to day smoothing of volatile financial flows. It is not (or shouldn't be) a funding base.

Not only has the price of three and six month money gone up, you can hardly get it! When banks become reluctant to lend to each other -- and that is what three and six month rates are telling us -- then you have cause for concern.

hardhatter
25th Sep 2008, 07:51
It was a good speech. And that's from a totally aye-political animal. (Geddit?)

:confused: No...:\

CherokeeDriver
25th Sep 2008, 07:51
angels. I'm out of the job market at the moment, and should be back in the square mile in about 1 years time with a nice MBA qualification. What's the chance of there being any jobs about in September 2009?:\

acbus1
25th Sep 2008, 07:57
I still can't grasp the level of incompetence required to cause the current meltdown. The people responsible, Bush included, are supposed to be the best brains in finance and Government. Why are they allowed to get away with being so unbelievably dumb? How did they come to be in such positions? In the case of Bush, because of lack of choice and an electorate just as dumb as he. But how did the prats running the banks etc. ever get through the interview?

Forget big fat salaries and bonus payments, lets form a lynch party instead.

angels
25th Sep 2008, 08:35
Check PMs Cherokee. :ok:

SpringHeeledJack
25th Sep 2008, 09:53
Forget big fat salaries and bonus payments, lets form a lynch party instead.

If (and it's a big if) things go down the plug hole, it wouldn't suprise me if disenchanted people might take matters into their own hands. If I were one of the 'fat cats' in the US I'd be feeling a bit sweaty right now and not just because of the volatility of the markets :suspect:


Regards


SHJ

Barkly1992
25th Sep 2008, 10:11
I heard Bush say 'The financial markets aren't working...'

Yes they are - exactly as you planned it and set it up to happen.

:}

BladePilot
25th Sep 2008, 11:33
How can Bush stand in front of the World and deliver such a load of twaddle when it has just been announced that traders at Lehman Brothers are still in line to share in a $500million 'performance' bonus payout!

So please, tell us again Mr Bush where the $700million of US taxpayers money is going?:= Shame on you.

Captain Stable
25th Sep 2008, 11:39
Report on BBC R4 financial slot the other night reported that (as they put it) all was not doom and gloom - a Japanese bank apparently buying up bits of UK branch of Lehman's and thus saving jobs. :confused:

GOOD NEWS, PEOPLE!!!!
The economy has been totally F :mad: ED by a bunch of greedy no-hoper whizzkids who should be playing with their XBoxes instead of the global economy, your savings are in jeopardy, your home may be repossessed but hey - it's not all bad! The people who did this may get to keep their jobs!! :uhoh: :sad: :*

SOPS
25th Sep 2008, 11:52
Blade, are you serious!!!?? 500 million performance bonus...no wonder we are all doomed.:confused:

SpringHeeledJack
25th Sep 2008, 12:05
Blade, are you serious!!!?? 500 million performance bonus...no wonder we are all doomed

It was in fact 2.5 Billion, I can't remember if it was pounds or dollars, but it was the amount needed by Barclays to 'ring-fence' the 'talent' within the Lehman NYC operation, that is the identified key workers who would otherwise jump ship and go elsewhere. Mr Diamond (Geezer) of Barclays capital said that this was a fundamental part of the takeover....... If the promised performance bonuses weren't honored (because old Lehman didn't exist anymore) said workers said they would walk, thus no business for Barclays for a period. Allegedly the $8 Billion transferred from Lehmans London to Lehmans NY in the days before was to cover the wages of staff there as someone obviously knew that the game was up....... you have to love these guys!


Regards


SHJ

tony draper
25th Sep 2008, 12:38
I think a few people Stateside might finish up in nick over this, but over here they will just have to wait a extra couple of years for the knighthoods to come through,never mind,lessons will be learned.
:)

One9iner
25th Sep 2008, 12:46
The Irish Republic now officially in recession :suspect:

BBC NEWS | Business | Irish economy goes into recession (http://news.bbc.co.uk/1/hi/business/7635426.stm)

SpringHeeledJack
25th Sep 2008, 13:06
The Irish Republic now officially in recession

In Ireland, although only now in recession by a defined standard, things have been in recession for the last 2 years i'd say. The price of property has gone down in real terms by over 20%, car dealerships are whistling to keep amused, small businesses that catered to the discretionary spend are closing up quicker than you can keep up and big (mostly American) subsiduaries are retreating across the waters or to 'new' European economies......:hmm:

Obviously governments are averse to admitting that things are tough, but surely if there was a bit more honesty and sooner spoken, then people and companies could reign in their spending without the stigma of being seen by their peers as not keeping up and the landing might be less traumatic ? Obviously in Ireland there has been a 10 year plus orgy of consumption fuelled by cheap credit, so perhaps a hard-landing was on the cards any which way it happened when the music stopped. I'd also wager that there are a few larger economies that are embracing the 'R' word right now, but are still in denial.

Regards


SHJ

Binoculars
25th Sep 2008, 14:06
For the first time in my life I am thinking that if discretion is indeed the better part of valour, the metal chest buried in the back yard might not be such a bad idea for two or three months.

Mind you, if the poo really does hit the fan your cash will be worth nothing anyway. Perhaps you should stock the chest with gold bullion? Or shares in companies which produce gold?

Lots of luck, people, may you live in interesting times. It's all Kev's fault.

BladePilot
25th Sep 2008, 14:20
Love the Headline

Gulfnews: Perfect storm hits investors (http://www.gulfnews.com/business/Markets/10247557.html)

:ok:

Roger Sofarover
25th Sep 2008, 14:39
Things are far far worse than you imagine. The problem is that we are all (including the vast majority of American people) subject to an incredibly corrupt scam and the US citizens are suffering very badly. The reason for the demise of the American economy is the Federal Reserve.

Does anybody know anything about the Federal Reserve? Suffice to say it is as Federal as Federal Express! It is not a US government owned bank or agency. It is a private banking system, owned by private bankers who pull all the strings in the US. For some reason Wilson Woodrow allowed the passing of the federal Reserve Act, to pull the US out of the dwang many years ago. The great depression was meticulously engineered and the bankers who did it then stepped in with an offer that could not be refused.

What the US government did was to allow a private bank with private shareholders to print its money. The government then pays the Federal reserve interest on that money. There is no 'reserve'. The Fed Res just continue to write blank cheques. When you and i write a cheque for say £1000 we have to make sure we have £1000 in our account. The federal reserve just print it, it is as simple as that, and then claim the interest on the money they pay. Every single Nickel of tax collected from US citizens goes to pay the interest on Federal reserve 'Loans'. Money which never existed until it printed it. According to the 16th ammendment there is absolutely no law that requires any US citizen to pay tax.

The latest turn of events are very frightning. Bush is saying 'we must take the $700 Billion dollar bail out'. Where will the money come from? The Fed Res. No wonder the Chairman of the Fed Res is saying act quickly. The Fed Res will then have almost total control of the entire monetary system in the US. It is accountable to no one, it is not subject to audit of any description.

I am a most unhappy man. I have unwittingly ruined my country. A great industrial nation is now controlled by a system of credit. We are no longer a government by free opinion, no longer a government by conviction and the vote of the majority, but a government by the opinion and duress of a small group of dominant men.

Woodrow Wilson 1919



It is well that the people of the nation do not understand our banking and monetary system, for if they did, I believe there would be a revolution before tomorrow morning.

Henry Ford


and finally

If the American people ever allow private banks to control the issue of their money, first by inflation and then by deflation, the banks and corporations that will grow up around them, will deprive the people of their property until their children will wake up homeless on the continent their fathers conquered.

Thomas Jefferson


Please spend 30 minutes or so googling or youtubing about the Federal Reserve and find out about it. It affects you.

Here is a starter

The Federal Reserve - A Private Corporation (http://www.youtube.com/watch?v=eWYNXXHeWM8&feature=related)

Secret Bank (http://www.youtube.com/watch?v=kBg22A_y0Lk&feature=related)

Think I will start a thread on this one as its a huge subject on its own. I doubt it will last long though before it 'goes missing'

Wader2
25th Sep 2008, 14:40
Billion not million. Few noughts missing.

$500m is insignifcant less than .01% if I got the maths right.

Binoculars
25th Sep 2008, 15:37
Oh god, we've descended to the Protocols of Zion. Spare me please!

In case anybody thinks my last post was anything but a genuine expression of uncertainty about the possible results of the excesses of capitalism, please let me distance myself from this conspiracy theory crap.

The insiders have a lot to answer for, but they are all so dominated by self-interest and greed that the idea of a conspiracy between them, especially in this age of information technology, is more laughable than ever.

Roger Sofarover
25th Sep 2008, 15:45
Bino's

Oh god, we've descended to the Protocols of Zion. Spare me please!

In case anybody thinks my last post was anything but a genuine expression of uncertainty about the possible results of the excesses of capitalism, please let me distance myself from this conspiracy theory crap.


What an idiotic statement! Who has mentioned Zionism? Conspiracy theory about what? The Federal reserve is NOT a government bank ....FACT! Thats all.

Head, Bucket, Sand.

G-CPTN
25th Sep 2008, 15:53
Apparently (based purely on hearsay from the Beeb I must state) that $700 billion equates to $2000+ per US citizen, and the total cost of intervention so far runs to around $15,000 per US household . . .

Binoculars
25th Sep 2008, 15:53
Then why did you spend so long justifying your one "fact" and link it to a Twilight Zone conspiracy theory mpeg? Nobody mentions the Elders of Zion. You are either "with 'em or against 'em". Ring any bells?

We'll have Captain Ed, disguised as I.M.Esperto, turning up shortly and supporting you, and that should be all anyone needs to know. He probably won't mention the KKK either.

Aaaaaaaaaaaaaaaargh!
25th Sep 2008, 16:03
He made the justification for intervention in an otherwise financially self-regulating democracy, then twice emphasized the importance of not allowing the fat-cats to profiteer out of the restructuring. He even made the promise to the honest taxpayer that eventually they would be paid back....was that the same person who said "he has Weapons of Mass Destruction and we know where they are" ?
For a while, he even had me believing it....but hopefully not for long.

Aaaaaaaaaaaaaaaargh!
25th Sep 2008, 16:07
If Capitalism really works, do you follow Bush's request "Please may we have a handout" or do you stand by that economic system and follow Kennedy's thoughts "We do this not because it is easy, but because it is difficult".Time to stand and be counted really.

v6g
25th Sep 2008, 16:55
I wonder if Bush's speech last night to the Peoples Republic of America actually turned more people against the idea. It did for me.

I was beginning to think that this bailout might be the least bad option but hearing all this Iraq-style worlds-gonna-end fear mongering has turned me back into a skeptic.

Binoculars
25th Sep 2008, 17:02
So what's changed?

Verily I say to you, follow me into the Valley of Death. Hey, i'm not a god-botherer, if I got it wrong you still get the idea. Apparently 19% of Americans still trust George. Seems to be a slightly higher percentage than that on this forum, I just don't know what to make of that.

arcniz
25th Sep 2008, 18:40
Well, ya gotta look at it from George Hoover Bush's perspective:

Ya gotta try to say something nice. Cheer people up. Avoid panic in the streets, etc.

Everybody with access tries to scam the Pres - in every possible direction. It's hell to be in charge but have no visibility -- and not a lot of public credibility or trust with regard to the officials appointed to fix the mess.

Give him a break. He's having a tough week!

G-CPTN
25th Sep 2008, 18:53
A few years ago, Communism (in the form of the Soviet Union) saw a financial melt-down and the falling apart of the USSR.
Are we now seeing the demise of the great Capitalist Society (and could this result in a break-up of the United States (of America)?)?
I think we should be told.

SpringHeeledJack
25th Sep 2008, 19:21
Are we now seeing the demise of the great Capitalist Society (and could this result in a break-up of the United States (of America)?)?

Nah, the money has been approved, the sale of the century has been passed and the indices are going up again, "move along now, there's nothing to see".....

However, the money markets seem to be going in the other direction with a real freeze on 3 month term interbank lending, much as Angels said a few days ago. Already in the UK some banks are putting up their lending rates to retail customers, another straw on the mortgage payer's back.


Regards


SHJ

FlightTester
25th Sep 2008, 19:37
The Fed Res will then have almost total control of the entire monetary system in the US. It is accountable to no one, it is not subject to audit of any description.

On the flip side I could argue that the reason the Fed is outside of the general political system is so that no one Administration can dictate it's policies. Alan Greenspan et al are elected to the Fed for a 14 year period so that they are outside the vagaries of even a two term President, and maybe I should stress the point about them being elected. It's explicit in there that they can also be un-elected. The Fed is subject to audit and it is accountable to the citizens of the US via the usual processes of Government.

Your point about it controlling almost the entire monetary system in the US being what? That's one of the reasons the Fed is there in the first place.

Just as an aside, how much money (in actual dollar bills) do you think is currently sitting in the vaults of the Chinese State Banks, Saudi Banks, etc. (it's just one of the things the Fed keeps an eye on when deciding how much money to print)

I believe that the Old Lady of Threadneedle Street went to a similar system about ten years ago.

One thing that will come out of all of this will be to keep economists debating over the merits and demerits of Keynesian vs Monetarist policies.

Der absolute Hammer
25th Sep 2008, 20:49
Things may be a little worse when there is the connection worked out between AIG and Ocean Finance. (2006)
It may be doubdt full that the US will fund foreign arm of AIGs investments..

SpringHeeledJack
25th Sep 2008, 21:34
Things may be a little worse when there is the connection worked out between AIG and Ocean Finance. (2006)

Hammer, you've lost me there with Ocean Finance ? Apart from those God-Awful TV commercials imploring 'Trisha Trash' (UK white trash) to 'give themselves that holiday they always promised themselves' or some such lunacy, they seemed to be niche market and small. Are you about to tell me that they were a front for Dr Evil ? :}


Lg


SHJ

mocoman
25th Sep 2008, 23:51
Just as an aside, how much money (in actual dollar bills) do you think is currently sitting in the vaults of the Chinese State Banks, Saudi Banks, etc. (it's just one of the things the Fed keeps an eye on when deciding how much money to print)


Given that global confidence in US currency is backed to a degree by the fact that Oil is currently traded in US dollars it would be very interesting if Chavez et al are ultimately successful in their wish to trade oil in Euros rather than dollars.

I recall watching a TV programme a couple of years ago (The History Of Oil?) by comedian Rob Newman, working in the same kind of vein as Mark Thomas, who postulated the downfall of the Dollar if sales of Oil were no longer traded and quoted in that currency.

(For non-UK readers; Mark Thomas and Rob Newman are stand-up comedians who base their acts upon political and social issues of the day)

Edit:
Robert Newmans History of Oil (http://video.google.com/videoplay?docid=-5267640865741878159)
Euro/Dollar is at 21 mins 20 secs onwards but the whole thing is worth a watch. :ok:

G-CPTN
26th Sep 2008, 00:01
It was suggested that large quantities of sterling notes were printed by Germany during the War in an attempt to destabilise Britain.

If the Chinese (and the Russians) unleashed their stocks of dollars . . . (although it would devalue their holdings I suppose).

If they bought American assets, would the Fed withdraw notes from circulation? (I'm not an economist.)

G-CPTN
26th Sep 2008, 00:25
We should very briefly mention what has been called the greatest counterfeiting operation of all time, Operation Bernhard. This was not a propaganda campaign, although the very same people who prepared the banknotes were also involved in a PSYOP campaign to parody British postage stamps with Communist and Jewish symbols. Operation Bernhard was instead, a secret German plan devised during World War II to destabilize the British economy by flooding the country with forged Bank of England £5, £10, £20, and £50 notes of 1934.
The plan was directed by, and named after, SS Major Bernhard Kruger, who set up a team of 142 counterfeiters at the Sachsenhausen concentration camp. The research on, and production of the British banknotes began in 1942. The major problem was the engraving of the complex printing plates and the breaking of the British code used to generate valid serial numbers. One of the experts on the team was Salamon Smolianoff, a Russian who had been forging British 50-pound notes since 1927 and who had been arrested and jailed in Amsterdam for counterfeiting. Another was Adolf Burger, a Slovakian Jew who had been trained as a printer. According to Burger, who wrote a book about his experiences, the forgers at Sachsenhausen also successfully copied the U.S. $100 bill.
By the time Sachsenhausen was evacuated in April 1945, the printing presses there had produced 8,965,080 banknotes with a total value of £134,610,810. The Germans used them all over Europe for espionage and covert operations, purchased weapons with them from partisan bands, and even paid their spy "Cicero" in the British embassy in Turkey with the counterfeits. The notes are considered the most perfect counterfeits ever produced, being extremely difficult to distinguish from the real thing. The best grade was used by German spies in enemy countries and for purchases in friendly or neutral countries. The second best grade was for collaborators and informers. The third grade would have been dropped over the British countryside to destroy its economy. This never happened because it was impossible to produce enough notes to destroy an economy, and worse, it would tip off the British that their notes were being counterfeited. The last grade was destroyed.
The camp had thirteen machines for the production of British pound notes

Crosshair
26th Sep 2008, 03:21
One in 10,000 USD notes is a very good forgery (http://en.wikipedia.org/wiki/Superdollar).

Der absolute Hammer
26th Sep 2008, 04:16
SHJ

I was wandering only whether new AIG would be allowed to continue to operate Ocean Finance which it owns since 2006, when it made Paul Newey quite a rich man.
I think that if Ocean Finance has money trouble, it will not be good for Mr & Mrs Middle Class England? She spends all afternoon watching the TV adds and seduces man into restructure of family finance with subliminal flashes of structure of family assets when he comes home from work.
When the American Joe understands that British banks are to cash in on the $700b rescue pack, there will be voter trouble? The election could hang on that. Obama is seen as friendly to Europe - but he is protectionistical.
McCaine - who is his financial adviser? He needs one.

Wiley
26th Sep 2008, 05:41
Does this whole bailout "plan" ring a (very old) bell? Aesop's Fables, by Aesop; The Ant and the Grasshopper Page 1 (http://www.pagebypagebooks.com/Aesop/Aesops_Fables/The_Ant_and_the_Grasshopper_p1.html)

Richard Taylor
26th Sep 2008, 07:21
Couldn't Ocean Finance not just give themselves a loan? Very favourable terms, they keep telling us! :hmm:

Perhaps I should get out my "End of The World is Nigh" sandwich board.

Credit Crunch
Financial Institutions collapsing
Russia behaving like the old USSR
North Korea & Iran still developing nuclear technology
Pakistan (who have nuclear technology) becoming more lawless every day

Not much to worry about there then...:eek:

SpringHeeledJack
26th Sep 2008, 09:01
Perhaps whilst we have been making fun of them, they will have the last laugh after all....

BBC NEWS | World | Europe | French hold out against credit crunch (http://news.bbc.co.uk/1/hi/world/europe/7635327.stm)

It would seem as if our neighbours are more parsimonious than me, myself and I :hmm:


Regards


SHJ

Jetex Jim
26th Sep 2008, 09:22
G-CPTN Wartime Sterling currency production in Germany

Excellent stuff, thanks for posting that.

Effluent Man
26th Sep 2008, 09:31
The opposition to the Bush rescue plan appears to be coming from a group of hard line Republicans.My fear here is that we are seeing an economic ideological objection.Ideology at this level is best kept for the textbooks.No rescue plan is going to be perfect and I too fear the "golden parachute" scenario for those who have already grabbed most from the current problems.

However if the alternative is ruin for millions of innocent hard working people then as objectionable as it is it just has to be done.I hardly dare mention it on such a forum but maybe the answer is a wealth tax levied at for example 10% per annum on sums above £1million with the first million exempt.So for example someone worth £1.5 million would pay £50k.