SRL Archive - Discussions & Debates

We are in times of economic crisis.

In August 2007, many banks stopped offering low-rate mortgages, they didn't want to lend so riskily anymore. They started calling it the "credit crunch".

Around November 2007, the British bank Northern Rock was given an emergency load from the Bank of England, it almost collapsed as people rushed to withdraw their savings. After a week or so, the British government ended the run on the bank by saying that savings in every bank would be guaranteed for up to £15000.

An American bank called Bear Stearns was given an emergency load from the Federal Reserve Bank of New York, very similar to the Northern Rock situation, except Bear Stearns only does investments, so there was no run on the bank.

The price of crude oil rose to about $150 per barrel.

The bank Merrill lynch has been slowly sold off these past few months, its now owned 80% by Chinese people.

A few weeks ago, the mortgage guarantors Fannie Mae and Freddy Mac were nationalised by the American government to stop their collapse. Their combined debt is worth around 3 Trillion USD.

A week or so ago, the 3rd largest travel company XL collapsed, leaving many people stranded in foreign countries, and many more losing their holidays.

And just now, the bank Lehman Brothers has collapsed.



Loads of stuff costs a bit more, especially food and petrol.
I fully expect every government in the world to change, in times like these, people always blame the government. Like in UK, the prime minister Gordon Brown is getting the shits of it, and the American Republican party seems to not be doing too well either.

Edit from 17/09/08:
News just in, the American government just nationalised another big bank, AIG has been given $85 billion in return for 80% of the company. AIG controls a large number of pensions and

In Britain, the company HBOS which controls the Halifax and the Bank of Scotland appears to be very close to bankruptcy, it is in talks with Lloyds TSB, it looks like Lloyds will buy it out.
The media is saying its a merger, but its obvious that Lloyds is in control here, its a buy-out, not a merger, if it wasn't for Lloyds, HBOS would probably collapse.



post here any idea/suggestions/theories/misconceptions you have.

in england its shit atm, the pound is down to the $ and now most ppl are not as rich as they ust to be.

It's what people get for letting their money going to their head.

Lets stop being so reliant on Oil and see what happens then.

all the middle eastens will go phsico.

Exxon had like a 3 billion profit margin a few months ago as far as I know.

And I thought we had it pretty bad…

From: bullzeye95
And I thought we had it pretty bad…

do you mind expanding a bit on that?


if you're talking about you=british, we=others, then the only reason it came out to do with british a lot is that i live there and i see more to do with british stuff

if i lived in america, it would probably be filled with american-related things that have gone wrong.

Me = American. I was saying that things haven't gotten that bad here yet as far as I know.

Me = German and the Xetra DAX is going downnnn… Bad times ahead. Oh well, luckily my the bank that has my $$ is insured. So it'll be the insurance company that takes the hit… which is probably in turn insured via other companies which will go down with it.
Man… you think about it, it's the financial domino effect. I guess it's just money playing mind tricks with us all.

Aus, it is just starting >.<

From: bullzeye95
Me = American. I was saying that things haven't gotten that bad here yet as far as I know.

are you serious?
over 1 MILLION homes have been forclosed on the dollar is declining, The job market sucks, our military is streched soo thin that if we get attacked we're fucked. Natural disasters raising gas prices… 14 refineries in houston have shut down becuase of ike shits so expensive the government had to GIVE us money to stimulate the economy becuase no one was spending money and to top it all off when i retire im not going to get any of my social security money :( one thing that will never loose its value is GOLD get as much gold as you can

From: wired16
are you serious?
over 1 MILLION homes have been forclosed on the dollar is declining, The job market sucks, our military is streched soo thin that if we get attacked we're fucked. Natural disasters raising gas prices… 14 refineries in houston have shut down becuase of ike shits so expensive the government had to GIVE us money to stimulate the economy becuase no one was spending money and to top it all off when i retire im not going to get any of my social security money :( one thing that will never loose its value is GOLD get as much gold as you can

Well said about the gold part. 32 dollars a gram :o. And yes america is in shit atm.

Here in America CNN, MSNBC are panicking. Merril Lynch is bad news. At least the gas prices are going down bit by bit :D

Cut em2 it

Edit: I say start buying other currency other than the US Dollar because it's failing like hell and we should stop importing lead-painted crap from China.

From: bullzeye95
Me = American. I was saying that things haven't gotten that bad here yet as far as I know.

Bear Stearns was given an emergency load from the Federal Reserve Bank of New York, very similar to the Northern Rock situation, except Bear Stearns only does investments, so there was no run on the bank.

The bank Merrill lynch has been slowly sold off these past few months, its now owned 80% by Chinese people.

A few weeks ago, the mortgage guarantors Fannie Mae and Freddy Mac were nationalised by the American government to stop their collapse. Their combined debt is worth around 3 Trillion USD.

And just now, the bank Lehman Brothers has collapsed.

Those are all American companies i'm 95% sure.

The price of crude oil rose to about $150 per barrel.

Just under $100/barrel now I believe.

From: [-jesus-]
Those are all American companies i'm 95% sure.


Just under $100/barrel now I believe.

Yes your right. The mortgage companies are all getting screwed. Although the mortgage rates dropped below the 6% mark, we are still headed to bad times, as this market drop on wall street showed.

Cut em2 it

Alright, yeah, now that I read it again, I see I was maybe/probably wrong. I hadn't payed attention to the names of the companies, and had just assumed that they were British. And the way yakman typed it made me go "omgbad".

Im not much up on my economy facts but @Wired16 the social security thing is because of a flawed system (one more thing liberals failed at) we are going to pay into it all of our lives and get absolutely nothing from it…

@The Oil issue, one more reason to drill in ANWR, the only natural disaster that happen there are blizzards, but hell they may make it almost completely automated. Although it was refineries, i know Katrina effected the price of gas because it hit some drills…

Also another reason why socialism fails, our government is slowly getting more and more socialist, with Fanny Mae and Freddy Mac, the government bailed them out (so to speak) and sure people would have gotten skrewed out of money, but a lot of times you can see when a company is gonna go under, and so the government took from everyone else to give to them and therefore make us FURTHER in debt and me having to pay that for the rest of my life…

Im sure america will soon over throw the government soon enough…. shits hitting the fan….i say 50 years

From: wired16
our military is streched soo thin that if we get attacked we're fucked.

Who would even want to attack you?
Why do you guys always thinks someone wants to attack you…?

It's more that we want to be protected if someone were to attack us.

From: Wizzup?
Who would even want to attack you?
Why do you guys always thinks someone wants to attack you…?

noticed i used IF never said anyone wants to attack us i was just saying IF they did we'd pretty much be screwed

From: bullzeye95
It's more that we want to be protected if someone were to attack us.

exactly.. wizzup what if 2/3 of your country's military were thousands of miles away and another country decided to attack you?

From: wired16
noticed i used IF never said anyone wants to attack us i was just saying IF they did we'd pretty much be screwed


exactly.. wizzup what if 2/3 of your country's military were thousands of miles away and another country decided to attack you?

The fact is, that will not happen… You are chasing some ghost war.
The only ones actually starting wars is America…

From: bullzeye95
It's more that we want to be protected if someone were to attack us.

Reverse psychology is not a good basic assumption, you will only get attacked (in the current political state of the world), if you strike first.
You guys keep going Bonaparte-style.

From: Wizzup?
The fact is, that will not happen… You are chasing some ghost war.
The only ones actually starting wars is America…

So… wait… Saddam Hussein was not a dictator? He did not help terrorists?

From: Wizzup?

Reverse psychology is not a good basic assumption, you will only get attacked (in the current political state of the world), if you strike first.
You guys keep going Bonaparte-style.

So we are taking over countries? Have we ever in the history of the United States conquered a country?

From: sirlaughsalot
So we are taking over countries? Have we ever in the history of the United States conquered a country?

Iraq.
Afghanistan.
thats only in the last 5 years,

your idea of America being a saintly good nation is a misconception.
what I've learnt seems to be that every big organisation (like a country) always has some shit in its closet (to use the american expression for it)
no-one is 100% good.


anyway,
you do release that the foreign american-lead wars contributed to this crisis because they wasted massive amounts of money.

although to be fair to them, they went to war to get oil, probably in the hope that they'll stop a crisis like this happening.
Didn't work, did it


EDIT: just want to add to this so its not a double post.

"The pen is mightier then the sword"

it seems a lot of Americans here haven't heard that, they are convinced that the only way to be successful is to have a large powerful military.

That attitude has gone out of fashion in the middles ages.
When the merchants became more powerful then the soldiers, that was the birth of capitalism.


I think the real power these days lies in economics, not in military. Look at China, it has America by the balls right now.

The idea doesnt catch on of course, because military and wars are interesting and fun to watch, but economics is some boring maths and logic, which the masses sadly don't seem to understand.
So its easy for some American leader to say "We should build a powerful army because it will make us great!"

From: Yakman
Iraq.
Afghanistan.
thats only in the last 5 years,

your idea of America being a saintly good nation is a misconception.
what I've learnt seems to be that every big organisation (like a country) always has some shit in its closet (to use the american expression for it)
no-one is 100% good.

We arent occupying them, its a lot like what happened with japan, while we are not killing the iraqi people or afghani people, we are helping them to become better, and look at what happened with japan, the big difference here though, is when we were helping japan we didnt have people fighting us in masses still and trying to take Japan back over… Also we arent 100% good because we have liberals in our country ;P

From: Yakman

anyway,
you do release that the foreign american-lead wars contributed to this crisis because they wasted massive amounts of money.

That isnt taking it from companies though (sure in taxes) but companies have their own profit margins, not ones with the government…

From: Yakman

EDIT: just want to add to this so its not a double post.

"The pen is mightier then the sword"

it seems a lot of Americans here haven't heard that, they are convinced that the only way to be successful is to have a large powerful military.

That attitude has gone out of fashion in the middles ages.
When the merchants became more powerful then the soldiers, that was the birth of capitalism.


I think the real power these days lies in economics, not in military. Look at China, it has America by the balls right now.

The idea doesnt catch on of course, because military and wars are interesting and fun to watch, but economics is some boring maths and logic, which the masses sadly don't seem to understand.
So its easy for some American leader to say "We should build a powerful army because it will make us great!"

I tend to agree with you about the economics stuff, but you mis-used that quote in my opinion, that is more talking about diplomacy, not economics, and personally i think people want to be rich… The only reason China would have "America by the balls" is because they have a cheap labor force, doesnt mean we are incapable of supporting ourselves though, the problem with people today is, even the unemployed people who want jobs a lot of the time say "I wont work for that" which is a wrong frame of mind, makes the dollar weaker and our companies are forced to outsource…

GODDAMNIT

If only I had read this before, my business class got extra homework cz we didn't know the bank that collapsed recently (AKA Lehman Brothers).

From: sirlaughsalot
We arent occupying them, its a lot like what happened with japan, while we are not killing the iraqi people or afghani people, we are helping them to become better, and look at what happened with japan, the big difference here though, is when we were helping japan we didnt have people fighting us in masses still and trying to take Japan back over… Also we arent 100% good because we have liberals in our country ;P

Forcing them to change to what you think is better is hardly helping them in my opinion.

From: GoF
Forcing them to change to what you think is better is hardly helping them in my opinion.

I see where you are coming from but the people over there want it to be what it is like over here (as far as not everyone being destitute), who doesnt? (cept for luxembourg but they dont count :p)…
But 80+ people a day dieing BECAUSE of Saddam Hussein is better?

From: sirlaughsalot
That isnt taking it from companies though (sure in taxes) but companies have their own profit margins, not ones with the government…

you cant separate it like that, all economies are one. If something hurts the US government, it will hurt companies, and vis-versa.

one example is, the government has less money to spend on whatever it needs to help people in this economic crisis.

if a government wants its people to be happy, it should take care of its companies.
It is defiantly in their best interests.

From: sirlaughsalot
But 80+ people a day dieing BECAUSE of Saddam Hussein is better?

100+ people die every day from AIDS, go help them.
300+ people die every day from starvation, go help them.
i could think of many more cases with a senseless waste of human life, and i could tell you go to help them.


i seriously find it hard to believe America went to war to help the people of Iraq. you guys went there for oil.

what i don't get is why your government didn't just tell you, "look guys, we don't like how an unfriendly government control the second-largest oil country, we would like to invade it and install a government friendly to us"

I'm sure the people will appreciate the truth being told.

From: Yakman
you cant separate it like that, all economies are one. If something hurts the US government, it will hurt companies, and vis-versa.

one example is, the government has less money to spend on whatever it needs to help people in this economic crisis.

if a government wants its people to be happy, it should take care of its companies.
It is defiantly in their best interests.




100+ people die every day from AIDS, go help them.
300+ people die every day from starvation, go help them.
i could think of many more cases with a senseless waste of human life, and i could tell you go to help them.


i seriously find it hard to believe America went to war to help the people of Iraq. you guys went there for oil.

what i don't get is why your government didn't just tell you, "look guys, we don't like how an unfriendly government control the second-largest oil country, we would like to invade it and install a government friendly to us"

I'm sure the people will appreciate the truth being told.

I dont understand how it will hurt the companies, i can understand the companies hurting the government (not getting taxes) but in any other way, i dont see how they should affect each other…

If it were true they would tell the people that… Its really not a big deal, people would prolly hate President Bush less if he said that, so why doesnt he? Because it is not true >_>

I don't think we have it that bad the euro is worth much? if i'm right.

From: sirlaughsalot
We arent occupying them, its a lot like what happened with japan, while we are not killing the iraqi people or afghani people, we are helping them to become better, and look at what happened with japan, the big difference here though, is when we were helping japan we didnt have people fighting us in masses still and trying to take Japan back over… Also we arent 100% good because we have liberals in our country ;P

America is not in iraq to help out the citizens there. Alot of people there say there lives were better before saddam actually died. I dont know if theres even such thing as a capital called bahgdad anymore, its fucked up-to the max. Were there clearly for the oil-donel. Were there to get rid of saddam (thats what everyone wants)-done. Were there to get rid of the saddam's nukes-done(actually isreal did this for us 20-30 years ago). Why are we still there? Why did we have to cost ourselves nearly 3k troops? What happened to Afghanistan, whats going over there? You see nothing of it on the news.

From: sirlaughsalot
I dont understand how it will hurt the companies, i can understand the companies hurting the government (not getting taxes) but in any other way, i dont see how they should affect each other…

one example is, if a company is about the collapse, the government can bail it out. The American government just did this with Fannie Mae and Freddy Mac, and they did it with Bear Stearns. Also the British government did it with Northern Rock last November.

also, the government can subsidize things, like can give people money so they spend it,
sometimes you hear in the media of "The government has just injected £3 million into the housing market"

also the government sort out the police, transport, phone lines and infrastructure that all companies need.

The government can't do any of that if it hasn't got enough money.
i think thats what happened with Lehman Brothers, the American government simply didn't have enough money to nationalize them, they had to let it collapse like that.



And since we're on the subject, Lehman Brothers was a very large and stable bank, a collapse on this scale is totally extraordinary! I'm not exadurating here, that bank had more power then some countries. Its like the government of Spain or Canada collapsing.
But Lehman's appears to have run up debts so massive that not even the American government can save them.

people have seriously lost confidence in investment banks.
You might have noticed how loads of share prices feel by loads today, i was just looking, the shares of the largest British investment bank HBOS fell by 40% in just a few hours today. Britain's biggest mortgage lender The Halifax has lost a third of its value.


I don't mean to make it sound like doom-and-gloom, but its really how i feel.

From: Yakman
one example is, if a company is about the collapse, the government can bail it out. The American government just did this with Fannie Mae and Freddy Mac, and they did it with Bear Stearns. Also the British government did it with Northern Rock last November.

also, the government can subsidize things, like can give people money so they spend it,
sometimes you hear in the media of "The government has just injected £3 million into the housing market"

But that is pretty socialist isnt it? What would the government get from it? overall wouldnt it be losing money? once again im not up on my financial district news so pardon me for all these questions…

it might be socialist but its happening,

nationalising two massive banks worth 3 trillion dollars is a very un-american thing to do.

and the american government has given people money just so they spend it

From: wired16
are you serious?
over 1 MILLION homes have been forclosed on the dollar is declining, The job market sucks, our military is streched soo thin that if we get attacked we're fucked. Natural disasters raising gas prices… 14 refineries in houston have shut down becuase of ike shits so expensive the government had to GIVE us money to stimulate the economy becuase no one was spending money and to top it all off when i retire im not going to get any of my social security money :( one thing that will never loose its value is GOLD get as much gold as you can

if they didnt do it, they believed the consequences would be much worse then some guy saying "oh no, its socialist!"

What would the government get from it? overall wouldnt it be losing money?

the government is rich! they have large reserves of cash or some bonds or something,
they have enough money to spend on times like this.

its worth losing money,
i guess the government paying for schools is losing money too, you spend $2 billion and you dont get a penny back.

its not the governments job to make money.

Talking about Saddam Hussein and deaths per day doesn't work for long, you see, Saddam Hussein was a dictator. Dictators rule alone, with maybe some supporters but even those are there just in hope of money.

Now, let's take Osama bin Laden, he runs an organization that has a thought, and people supporting his ideas, so if there would be some realistic deaths per day for these two, Osama bin Laden's one would live for longer.


Around the 9/11 incident, Bush stated that he will take care of oil prices staying down. Recently there was a spike in the oil price around Mexico, nearby one euro. Think of it, oil price hops an euro. So, the goverment kills people in the east for oil, but the oil price is in constant rise, and even spikes like the one above are possible.


For the above, they waste money. Lots of money is being spent on warfare, to 'settle the Iraq' problems, in other words, pump some oil, but they fail in it.


Sometimes I think that things would seriously make more sense if we'd live in the middle age…

updated first post with news from today, seems AIG went the same way as fannie-freddy

The main reason for this is that the market (uk) is made out of 3 factors:
1.Primary - raw materials
2.Secondary - makes something out of primary to sell to tertiary
3.Tertiary - sells to the public, a good or service
(4. Quaternary - computer related)

Now what happened after 1980 is that people who had gained much capital(money) had spent them on holidays, you may know that the holiday industry is booming even though excel went bankcrupt.

When people spend money on holidays the tertiary sector is worth more meaning no one wants to get a low paid job doing primary work e.g mining e.t.c. Now what happens now is that prices start to go up. People relalise their mistake and the holiday industry slumps, people go working for jobs which are worth more and much more in demand. This means the tertiary sector is worth less.

Overall I think that the market will never remain constant, prices will constantly go up and down.

i don't think its anything to do with that NaumanAhhlaQ.


I think its people getting into massive debt with credit cards and stuff. If you live in the UK you might have seen loads of adverts for "why not combine all your debts into one easy loan"

people were also taking out loads of high-risk mortgages, there was 100% interest where you only pay the mortgage interest, not anything of actual value.
people took out mortgages 10 times their salary.
this is all made of fail.

also the wars in Iraq and Afghanistan sapped western countries of money.


Its part of the natural cycle of boom and bust that capitalism creates.

From: NaumanAkhlaQ

Overall I think that the market will never remain constant, prices will constantly go up and down.

thank you Captain Obvious.

Yakman, also in Finland, you see a lot of advertises on TV about 'Quick loan', you can get loan with a text message, but it had usually over 30% interest, which gets loads of people into trouble naturally :(

From: n3ss3s
Yakman, also in Finland, you see a lot of advertises on TV about 'Quick loan', you can get loan with a text message, but it had usually over 30% interest, which gets loads of people into trouble naturally :(

In Estonia, this is a big problem, too.
"Beep, beep, and money is coming!"
Many, many people have got theirselves into trouble with that.
The interest is very big, too.
~Eerik~

From: Wizzup?
Who would even want to attack you?
Why do you guys always thinks someone wants to attack you…?

Us Americans are always paranoid. Something like Sept. 11 scares us to death. I don't think that someones going to attack us but I'm a little paranoid about russia… Russia's making noises that they want to take back their old territories, which are rightfully their own countries, russia doesn't deserve them, no offense to anyone russian, if there is anyone Russian here.

However my reason for saying this is that Russia could sever some of the pipelines that get us oil. I know that the prices of oil in Europe are already high.

Cut em2 it

I wish they did not bail-out AIG. That AIG company is a complete ass-hole.

Wouldn't it be surprising if someone fixed everything all of the sudden… Now what would be the chance of that?

The bailed out Bear Stearns because they thought if they could catch it early, it would stop the continual slide in stock prices that led to this crisis. Back in the late 80's there was a Savings and Loan crisis here in the US. If the government had intervened in 1986 it would have cost about $200 billion. They waited until 1988 when it cost $1.4 trillion to bail everyone out. The government took over all the bad loans that had been handed out, and actually ended up making a small profit over the long term. So a $1.4 trillion bailout doesn't mean it cost that much. That's how much money was "at risk".

If the government had known that bailing out Bearn Stearns for 29 billion wouldn't help, they would have let them go bankrupt. Not because the government can't afford it, but because it goes against the principles of capitalism.

Then there was Fannie/Freddy. That was a mess waiting to implode for over 10 years now. It was a quasi-government entity, which meant that stockholders made money on the profits, but the government had an implicit guarantee to cover the risks. In July Congress passed a bill to make that guarantee explicit. And then they eventually took them over. They did this primarily because of the government guarantee, but also because it was so large that if it failed it would have wreaked havoc on the entire world financial system. It was "too big to fail". The bailout protected many foreign countries that had invested in bonds. China has 10% of it's GDP invested in Fannie/Freddy bonds. The bailout kept China from losing all that money, which would destroy confidence in the US government and make the world financial system implode as trillions of dollars of US government bonds owned by countries around the world plummeted in price.

AIG was bailed out because they had insurance contracts to businesses around the globe. Another "too big to fail" company. If AIG would have collapsed, it would have caused a domino effect where hundreds or thousands of companies that relied on AIG insurance against credit swap losses suddenly had to realize their own losses, and would be forced into bankruptcy. The government will almost certainly make money on this $85 billion bailout, though, since it's a loan at about 15% interest which pretty much everyone expects will be paid back within 2 years.

They let Lehman Bro. go bankrupt on principle. They could have bailed them out too, but chose not to.

Despite all the doom and gloom, Warren Buffet, who is one of the richest men on the planet and an Obama supporter is now buying up companies as fast as he can. He had a large cash reserve, and while many are hoarding cash and buying gold, he's spending big time. That proves to me that he thinks this is a temporary crisis, and that now is a good time to get into investments while the prices are low.

From: Cut em2 it
Us Americans are always paranoid. Something like Sept. 11 scares us to death. I don't think that someones going to attack us but I'm a little paranoid about russia… Russia's making noises that they want to take back their old territories, which are rightfully their own countries, russia doesn't deserve them, no offense to anyone russian, if there is anyone Russian here.

However my reason for saying this is that Russia could sever some of the pipelines that get us oil. I know that the prices of oil in Europe are already high.

Cut em2 it

Oil is the new gold. If you control oil, you control the world. Now Russia is apparently sitting on a huge oil field with parts of it in surrounding countries. Now naturally by taking back these old territories, Russia is effectively giving themselves more power of the world.

I believe its the same thing with America and Iraq. Iraq also has large supplies of oil. By helping Iraq rebuild their country America ensures that they're partially in control of this oil and thus control of just a bit more of the world. Now perhaps there were many reasons that lead to the American invasion but controlling Middle Eastern oil was definately one of them.

Now back on topic… the Australian economy isn't doing as bad as the US or UK economies. This is mainly due to the Chinese demand for raw materials such as iron and other metal ores to fuel the Chinese economic boom. This boom has kept the Australian economy from sliding into a recession. However the rising fuel/food prices have caused a lot of hardship for people on low/no incomes recently. The cost of housing is still pretty high and interest rates were high for a while.

700 billion dollar bailout deal?

What do yall think of that.

they talked about it on friday 19th, its now next friday 26th.
shows how good the democratic system is for getting things done…

if they wanted to take this in a true capitalistic way, they would just let it all collapse.
but they are bringing socialist values into it, their old partner who they've turned their back on.

From: Yakman
they talked about it on friday 19th, its now next friday 26th.
shows how good the democratic system is for getting things done…

if they wanted to take this in a true capitalistic way, they would just let it all collapse.
but they are bringing socialist values into it, their old partner who they've turned their back on.

Well, goverment interference got us into this mess (I had my dad explain it to me). The democrat politicians in the Clinton years decided everyone should be able to get a loan, so they (basically) nationalised Freddy/Fanny and made the qualifications for loans go down dramatically and they took almost any applicant, so this off balanced the market because people would go to Freddy/Fanny and get a loan, so others had to lower their requirements as well, and it was a domino effect resulting in the powder keg it is now.

So the liberals in charge of it at the same time, imbessled LOTS of money, INCLUDING Barack Obama, who, has been in the senate for 3 years (2 of those he wasnt compaigning but still only voting "Present"), Barack was the 3rd(?) highest recipient of money from Freddy/Fanny over people who had been getting money from it for 10+ years…

IMO all the liberals call for investigation after investigation on stupid shit, when we have goverment officials imbessling money and no note of investigation has been raised…

The only thing that worries me about this $700 billion bailout package is that Paulson was talking about "market prices" versus "hold to maturity prices".

Right now the market price of bad debt is much, much lower than the hold to maturity price. Since so many of the loans are either already in default, or at risk of going into default, buying every loan for face value is utterly ridiculous. And if the slide in housing prices continues, more and more people will default, just because they don't feel like paying $300k for a house only worth $200k now, for example. They'd rather walk away and give it back to the bank.

If they plan to buy up all this bad debt for the maturity price, the taxpayers are going to get utterly screwed. If they buy it at market prices, they will probably make a profit.

One problem they face now is that if the Democrats tack on all sorts of punishments and regulations for taking government funds, and if the government only offers the company the market value for their loans, why would any company take it?

My guess is that the Dems will pass a bunch of feel good earmarks along with it, and then Paulson will buy up all the debt for double or triple what it's worth, so the taxpayer still gets screwed despite the extra junk added on for political reasons.

No matter what, this is BAD, BAD, BAD. I have very little hope that it will end well.

The whole problem and Yakman said it earlier in this thread (but apparently didnt see it as a bad thing) is that the politicians do not look at the government like its a buisness, instead, the dems see it as a way to get into power. So they use the taxpayers money (95% of the time it is pork) and use it on their areas and just spend as much as they want because they can just slap more tax on people and get more money… If the dems treated the government as a buisness then they would only do what is best for the country (financially at least), which 99% of the time is stay out of the market's buisness…

From: sirlaughsalot
Well, goverment interference got us into this mess (I had my dad explain it to me). The democrat politicians in the Clinton years decided everyone should be able to get a loan, so they (basically) nationalised Freddy/Fanny and made the qualifications for loans go down dramatically and they took almost any applicant, so this off balanced the market because people would go to Freddy/Fanny and get a loan, so others had to lower their requirements as well, and it was a domino effect resulting in the powder keg it is now.

So the liberals in charge of it at the same time, imbessled LOTS of money, INCLUDING Barack Obama, who, has been in the senate for 3 years (2 of those he wasnt compaigning but still only voting "Present"), Barack was the 3rd(?) highest recipient of money from Freddy/Fanny over people who had been getting money from it for 10+ years…

IMO all the liberals call for investigation after investigation on stupid shit, when we have goverment officials imbessling money and no note of investigation has been raised…

tbh, i disagree,

its the natural cycle of capitalism to have boom and bust,
goverment interference can accelerate or slow it down, but it cannot stop or start it.



no government operates like a business, if they did, there would be a conflict of intrests between it and its people, so eventually it would be ousted.

From: Yakman
tbh, i disagree,

its the natural cycle of capitalism to have boom and bust,
goverment interference can accelerate or slow it down, but it cannot stop or start it.

Thats true to a degree but i dont think mortgage companies ect have a whole lot of boom/bust as far as major companies crashing…

From: Yakman

no government operates like a business, if they did, there would be a conflict of intrests between it and its people, so eventually it would be ousted.

Not really, people (defined as taxpayers), love small government and if the government spent money on things that they should spend it on (defense/infrastructure) then i think everything would be better, i also dont think we should have tarrifs/unneeded taxes on things, sure some people may have a hard time, but if you have a farm, you can grow something to make money, i dont think that sugar grows where other things cant, what i mean by a "buisness" is to try not to put a whole lot of burden on the taxpayer, less socialism, smaller government.

What most people dont seem to understand is liberal politicians LOVE power, the majority of them, if given enough power would be dictators (it could happen to anyone, but the republicans/conservatives i believe would turn down the job) that is why they love big government and appeal to the minorities…

Its nice to finally actually be in a forum that isn't 95% liberals…

Bradford and Bingley are going down the drain, here is the bbc details

http://news.bbc.co.uk/1/hi/business/7639199.stm

Treasury in talks to secure B&B .

Officials from the Treasury and the Financial Services Authority are in talks with executives from Bradford & Bingley in a bid to secure its future.

A statement on its future will be made before the markets open on Monday, a Treasury spokesperson said.

B&B's share price has plummeted and it has announced plans to cut 370 jobs due to the downturn in the mortgage market.

A number of options, including the sale of B&B to another bank or nationalisation, are being considered.

"The Treasury, the FSA, and the Bank of England are working closely with Bradford & Bingley to consider the implications for their business of the recent financial turmoil," a Treasury spokesperson said.

Nationalisation followed by a swift sell-off of some of B&B's assets is a strong possibility, the BBC's political correspondent Iain Watson said.

The most likely bank to step in is Banco Santander, according to the BBC's business editor Robert Peston.

The Spanish firm which already owns Abbey and Alliance & Leicester has been looking at the British bank for some time.

Full nationalisation, which could well include merging B&B with Northern Rock, was very much the final resort if all else fails, Robert Peston said.

'Don't faff'

Liberal Democrat Treasury spokesman Vince Cable said it was imperative that whatever the solution for B&B, it must be decisive and there should not be a repeat of the delays following the crisis at Northern Rock.

"If the bank is in serious difficulty, the best option is if it were taken over by another bank and without any involvement by the taxpayer," he said.

"But the speculation in the national newspapers is that that won't happen and in which case it will effectively be nationalised, and that's what a takeover of Northern Rock actually means.

"I just hope this time the government doesn't faff around for four or five months getting this sorted out and just gets on with it."

'Strongly capitalised'

All three of the main credit ratings agencies have downgraded B&B's creditworthiness, citing its problems raising funds and the excessive exposure of its mortgage book to buy-to-let and self-certified borrowers.

But Richard Pym, the recently-appointed chief executive, insisted the bank was "strongly capitalised" and was "fit for purpose going forward".

And Mr Cable said depositors should not panic because their money would be guaranteed by the government under the Financial Services Compensation Scheme.

The first £35,000 of savers' money in each banking group is protected under the scheme.

The prime minister was asked about B&B during his visit to New York for a UN development meeting.

He said: "I wouldn't comment, and nobody would expect me to comment, on these speculative statements that are made in newspapers.

"I'm not going to comment on any individual company or building society."

Conservative leader David Cameron also refused to comment on the situation at B&B.

But he said the Bank of England needed new powers to rescue failing banks.

Details of the plan, which is designed to stave off the threat to B&B and prevent a repeat of the Northern Rock crisis, will be outlined at the Conservative Party conference on Monday.

Dutch AEX index:


Not so long ago it was 550.00, now it is just above 350.00. But the economic stuff is not affecting us, just the euro and inflation suck.

From: Brown
Its nice to finally actually be in a forum that isn't 95% liberals…

yeah, adding you on msn ;)

I wish i would keep more up do date with this economics stuff, but im gonna take an economics course next semester…

This "too big to fail" concept sucks balls, large companies need to know they can fail and have good buisness dealings instead of the government bailing people out left and right…

Holy crap…

Yesterday the dow went down 700 points. We're screwed. It's going up right now, but this 778 points really took a big hit on the market.

Seattle-based Washington Mutual is now being bought out by JP-Morgan Chase. Everyone has to just hang in here. It's not going to get any better before it gets worse….

Cut em2 it

From: Cut em2 it
Holy crap…

Yesterday the dow went down 700 points. We're screwed. It's going up right now, but this 778 points really took a big hit on the market.

Seattle-based Washington Mutual is now being bought out by JP-Morgan Chase. Everyone has to just hang in here. It's not going to get any better before it gets worse….

Cut em2 it

Were not skrewed… It started going down before the voting began, meaning investors did not like the bill… Personally i think that the bailout, is for one a temporary fix, and two, a free market will fix itself, and three it creates and open door for government control of our economy, and since when has the government been able to handle finances well?

We lost 7% yesterday. WOOT!

So yeah… gfg banks. Gov't shouldn't of released the policies on loans.

No matter what's happening to the market, I think this year's holidays are going to be a disappointment because people are worried about the market. Then it gets worse from there.

Cut em2 it

I heard the Asian and the European markets suffered yesterday.


DOW jones is back up 5% btw.

yea it rose 450 points today…
idk is this going to lead us to great depression?

It might. I believe that it's unforseeable wether this is just a little dip or a serious problem. My advice to everyone is to not sell, that just makes the market worse…

Cut em2 it

From: Cut em2 it
It might. I believe that it's unforseeable wether this is just a little dip or a serious problem. My advice to everyone is to not sell, that just makes the market worse…

Cut em2 it

I doubt there's a high amount of people that have stocks on these forums. lol

I do :p ETrade pl0x lol.

Anyways back on correct grammar:

I think that the U.S. economy is going to be hit the worst, if anywhere at all. However Washington Mutual is a bad thing, I almost put all of my savings in WaMu :S

Cut em2 it

From: Cut em2 it
I do :p ETrade pl0x lol.

Anyways back on correct grammar:

I think that the U.S. economy is going to be hit the worst, if anywhere at all. However Washington Mutual is a bad thing, I almost put all of my savings in WaMu :S

Cut em2 it

Its more or less a Global economy now. If one place hurts usually there's a domino effect and it hurts others as well.

True. Something is going to happen here in America and people are going to flock to world markets if those happen to be doing well.

Cut em2 it

Here's a nice video that sums up how it happened.

http://www.youtube.com/watch?v=1RZVw3no2A4&feature=iv&annotation_id=event_743112

It goes fast, you may need to pause a few times, but everything in it is fact.

From: Brown
Here's a nice video that sums up how it happened.

http://www.youtube.com/watch?v=1RZVw3no2A4&feature=iv&annotation_id=event_743112

It goes fast, you may need to pause a few times, but everything in it is fact.

Yeah, that's a very informative video. It's amazing to hear the Dems and especially the Congressional Black Caucus attacking regulators while praising the crooked CEO of Fannie.

Here's another very informative (and a little bit scary) video about our monetary system. It's 40 minutes, but it's entertaining and VERY worth watching.

http://video.google.com/videoplay?docid=-9050474362583451279&ei=gArjSOeQDpD8qAPCrqH8CQ&q=documentary

From: Narcle
I doubt there's a high amount of people that have stocks on these forums. lol

i have $29,000 of Shares.

Very interesting stuff on those videos. We're going to pull out of this, maybe it's going to get worse from here, or maybe it will get better, not really soon, but somewhere down the road.

Cut em2 it

From: Cut em2 it
Very interesting stuff on those videos. We're going to pull out of this, maybe it's going to get worse from here, or maybe it will get better, not really soon, but somewhere down the road.

Cut em2 it

The fact is, if you let the free market do its thing, it will fix itself, the economy wont collapse, the democrats simply wanted to fix this problem quickly so no questions would be asked about who was involved and what happened…

I heard that theirs a new plan in place for our tax dollars in America to go to a bail out program where china will bail us out. I cannot believe that people would even think of resorting to a foreign country to help us bail out. That's like selling us to the Chinese! How absurd for our tax dollars going to help get jobs for people in China, which is where our tax dollars would go. Sorry that's ridiculous.

We have to wait for the economy to fix itself and not take drastic measures to bail out some people that may have made some bad decisions….

Cut em2 it

those videos were quite interesting, although I'm wondering why they were not articles, books or essays. It took me 45 minutes to watch one video, in that time i could have read an article that contained twice as much information.

videos are slightly annoying, they say "…made by innovative minds", then they show a picture of a brain with a light bulb next to it, YES I KNOW WHAT AN INNOVATE BRAIN IS, THANK YOU

they also say "this was the foot in the door", then show a cartoon picture of a foot in a door… YES I KNOW WHAT A FOOT IN A DOOR IS



i knew a bit about the money not being real before i saw the video. you could see how people today don't seem to create any value, but just move money from pocket to pocket.
the same problem was addressed in the New Deal in the 1920 in America, the government made all the unemployed people work for their daily bread. They built bridges, roads, dug coal and cut wood. In other words, they created value, and did not just move value around. so with that, the country slowly moved itself out of depression, by creating new real value.

might happen after the current crisis too, if loads of people lose their jobs.


as for the first video, i find it hard to believe that a couple of laws passed can affect the stability of economy of the entire world. It smacks of the attitude of believing you're the center of the universe.
It might be a bit more believable if the video wasn't so bias against Obama, every sentence drips with the message DONT VOTE FOR HIM!!

From: Cut em2 it
I heard that theirs a new plan in place for our tax dollars in America to go to a bail out program where china will bail us out. I cannot believe that people would even think of resorting to a foreign country to help us bail out. That's like selling us to the Chinese! How absurd for our tax dollars going to help get jobs for people in China, which is where our tax dollars would go. Sorry that's ridiculous.

We have to wait for the economy to fix itself and not take drastic measures to bail out some people that may have made some bad decisions….

Cut em2 it

/Echos

Seriously, we cant have a "too big to fail" policy, we shouldnt bail out the humongous companies, I dont really know the reprocussions, i am not a financial expert by any means, but i listen to Rush Limbaugh (a liberals steak to the heart) and he has had several people on recently saying it is semi-artificial, and highly political, the democrats are trying to scrounge up some votes with this and i dont see how that is possible considering they got us into this mess in the first place! And i believe them, sure these companies are crashing, but it will not bring down the whole economy with them…

From: sirlaughsalot
/Echos

Seriously, we cant have a "too big to fail" policy, we shouldnt bail out the humongous companies, I dont really know the reprocussions, i am not a financial expert by any means, but i listen to Rush Limbaugh (a liberals steak to the heart) and he has had several people on recently saying it is semi-artificial, and highly political, the democrats are trying to scrounge up some votes with this and i dont see how that is possible considering they got us into this mess in the first place! And i believe them, sure these companies are crashing, but it will not bring down the whole economy with them…

Sorry, I'm not a huge fan of Rush Limbaugh. I do agree that when our government gets scared, the citizens get scared with them and the economy collapses. Just a domino effect from there. Such a fragile world….

Cut em2 it

From: sirlaughsalot
/Echos

Seriously, we cant have a "too big to fail" policy, we shouldnt bail out the humongous companies, I dont really know the reprocussions, i am not a financial expert by any means, but i listen to Rush Limbaugh (a liberals steak to the heart) and he has had several people on recently saying it is semi-artificial, and highly political, the democrats are trying to scrounge up some votes with this and i dont see how that is possible considering they got us into this mess in the first place! And i believe them, sure these companies are crashing, but it will not bring down the whole economy with them…

I love when people glare at me when they hear me listening to Rush…

God forbid they hear such heresy because they don't hear it on MSNBC…


Here's a good read about Obama's correlation to the crisis:
http://www.americanthinker.com/2008/09/barack_obama_and_the_strategy.html

they revoted and got passed now to the house hopefully it will pass.

I have mixed feelings about this whole bailout plan, I'm not exactly sure that I want it to pass, however I think that we need to bail out the economy.

Cut em2 it

let it burn i say
you capitalists love your free market economy, but when the inevitable crash comes, you try to bring very un-capitalistic ideas into it.

if you want to solve this in a capitalistic way, let it all burn. Stand by the ideals you've spent your lives living by.


write off all debts and start completely from scratch. This bailout plan will not solve the problem, only slow it down,

its like attaching a volcanic eruption with pickaxes and spades, its a worthy attempt, but the lava will still flow.

From: Yakman
let it burn i say
you capitalists love your free market economy, but when the inevitable crash comes, you try to bring very un-capitalistic ideas into it.

if you want to solve this in a capitalistic way, let it all burn. Stand by the ideals you've spent your lives living by.


write off all debts and start completely from scratch. This bailout plan will not solve the problem, only slow it down,

its like attaching a volcanic eruption with pickaxes and spades, its a worthy attempt, but the lava will still flow.

(very very condensed form)
This did not happen thanks to capitalism. I happened largely in thanks to liberal agenda which required banks to provide a certain amount of sub prime loans. These loans collapsed on themselves screwing over the economy.

Banks were being sued for being too "capitalistic", because they weren't offering the kinds of dangerous loans libs wanted.

any WHY was there this liberal agenda?
your explanation seems like a feeble attempt to blame one particular group of people.
reminds me of germany in the 1920s, and they blamed it on jewish people.


capitalism created the environment where the best way to make money is to give risky loans.

if someone didn't do risky loans, they would make less profit, and possibly go out of business.
so eventually the world is filled with banks which give risky loans.



similar to evolution in a way,
sometimes the environment makes it so the best way to spread your genes is to do something unsustainable, but then the environment is filled with copies of yourself, and your whole species might be driven to extinction.
thats just too bad if it happens.



its a bit like blaming an animal for eating your food.
its your own fault for leaving it uncovered/outside/unguarded in the first place


capitalism by its very nature creates cycles of boom and bust, this is just another link in the chain.

I agree with Yakman. In my opinion, this is just another bump in the road. We really shouldn't blame anyone. This is the way it works, and they were scared of going out of business so they decided to do these sub-prime loans. Hard times are inevitable in modern capitalistic society, so we just have to keep on rolling over the bump.

From: Yakman
any WHY was there this liberal agenda?
your explanation seems like a feeble attempt to blame one particular group of people.
reminds me of germany in the 1920s, and they blamed it on jewish people.


capitalism created the environment where the best way to make money is to give risky loans.

if someone didn't do risky loans, they would make less profit, and possibly go out of business.
so eventually the world is filled with banks which give risky loans.



similar to evolution in a way,
sometimes the environment makes it so the best way to spread your genes is to do something unsustainable, but then the environment is filled with copies of yourself, and your whole species might be driven to extinction.
thats just too bad if it happens.



its a bit like blaming an animal for eating your food.
its your own fault for leaving it uncovered/outside/unguarded in the first place


capitalism by its very nature creates cycles of boom and bust, this is just another link in the chain.

You dont seem to get it, I will repeat myself for about the 5th(?) time… In the years of good ol' Jimmy Carter he made it where "poor" people could get loans for houses, YIPPEY! Later on during the Clinton years he expanded that and said "you know what, if you dont give poor people loans we will penalise you" so, in order to avoid FURTHER taxes and paperwork the companies gave lots of poor people loans… Also, i do not know if you made a stance earlier in the thread or not, but im pretty sure you said to bail out the companies before, and now, when the stock market plummitted after the announcement (and in turn messed with the world economy) you want to say "dont bail the companies out"

From: Cut em2 it
I agree with Yakman. In my opinion, this is just another bump in the road. We really shouldn't blame anyone. This is the way it works, and they were scared of going out of business so they decided to do these sub-prime loans. Hard times are inevitable in modern capitalistic society, so we just have to keep on rolling over the bump.

"dont blame anyone"? I have said this before as well, the liberals want to burn every republican at the stake, but when it is one of their own who fucked up, absolutely NOTHING, it seems only republicans can see bad in their own, not to mention, they never seem to attack the liberals enough… Sure there are hard times but nothing like this, where the bailout wont fix the problem AND we get stuck with the bill of bailing out these companies, so we have to deepthroat it and take it up the ass…

i understood you the first time, you don't need to repeat yourself.

yes i change my mind a lot with this stuff, if i was a politician, they would say i was flip-flopping.
it just means iv had more time to think, thats all.


it would be easier to take you seriously if your post didn't sound like such a propaganda piece.

with phrases like ALL the other guys want to kill you, WE are the ONLY people who can put it right

my guess is that because its an election year, one party is trying to blame the crisis on the other guy.

i don't know what it is about elections that make people's critical thinking skills go out the window.

From: Torrent of Flame
It's what people get for letting their money going to their head.

Lets stop being so reliant on Oil and see what happens then.

oil doesnt have anything to do with bad loans, numbnuts

oil demand went down.

but now guys look, we went up 800+ points 2 days ago.

now we are going down again…
so bailout=phaiL? or whaaats going to happen
?
?
?

I haven't been keeping up with the news or anything, but here in Canada things have really stiffened up, spending wise and the unemployment rate is rising. I'm loving the lower gas prices, I think it's 90 cents a liter in Ottawa, still $1.15 here but better than the $1.34. Might as well enjoy it before it goes back up again. Lol, I think its funny how banks in the US were loaning out money to some people who didn't even have jobs. I briefly heard some people on t.v saying it's hard to predict whats going to happen, I think everything will return to "normal" in a year and a bit.

General Motors goes bankrupt today.

So, is it not true that the capitalism system forced people to take out debts etc, and now the banks are needing the money, so the capitalist government is resorting to socialist like actions to try and hold their "free market" concept afloat?

Discuss, recent developments have made this thread come alive in my opinion.

sooo many other companies went bankrupt over the past few months since i posted this.

GM is nothing new really, its big yeah, but apart from that…


gravedig, i should infract you :P

From: Yakman
sooo many other companies went bankrupt over the past few months since i posted this.

GM is nothing new really, its big yeah, but apart from that…


gravedig, i should infract you :P

But you luf me right?

Idk, this stuff is interested, regardless if I always understand it.

From: Nava2
So, is it not true that the capitalism system forced people to take out debts etc, and now the banks are needing the money, so the capitalist government is resorting to socialist like actions to try and hold their "free market" concept afloat?

The people pushing socialist actions aren't capitalists. They're trying to push their socialist actions to replace the free market, not to save it.

GM significant's USA. Now that goes bankrupt… which is quite really sad…. My parents from start bought Asia Cars(toyota(LEXUS/4runner)/honda(civic)…ect) So idc though it's still sad that thousands of employees are laid off and huge automobile company is gone.

BTW Hummer is bought by a Chinese company lol

From: bullzeye95
The people pushing socialist actions aren't capitalists. They're trying to push their socialist actions to replace the free market, not to save it.

you dont know that

From: Yakman
you dont know that

I do. If you push socialist actions, then you aren't a capitalist, plain and simple.

I saw a documentary on TV about this yesterday. The city Pittsburgh isn't in much trouble, while the nearby city Detroit is. It just depends on how the history of the cities/surrounding areas are.
This is what the documentary said, summarized: Before 1950, steel ruled the marked. It created lots of jobs, but in the '50s the steel market collapsed, leaving Detroit, where everything relied on the steel industry, ruined. Pittsburgh saw this coming, and built an Universitairy Hospital and some more good job-creators, not only relying on steel, but also on various other industries. Pittsburgh was hit by the "steel-crisis", but not as bad as Detroit. That's why Pittsburgh is better off in these times too.

From: bullzeye95
I do. If you push socialist actions, then you aren't a capitalist, plain and simple.

you dont know those peoples political beliefs unless they tell you, and iv heard from many of them that they are actually capitalists but are forced to go along with all this to save themselves.

to put it in other words, they like capitalism but they still have to eat and win electons.

From: Yakman
you dont know those peoples political beliefs unless they tell you, and iv heard from many of them that they are actually capitalists but are forced to go along with all this to save themselves.

to put it in other words, they like capitalism but they still have to eat and win electons.

They say they're capitalists. I say they aren't. Apparently (if I read that right) their definition of "capitalist" is someone who supports capitalism when it's popular, and supports socialism when it's popular.

From: bullzeye95
They say they're capitalists. I say they aren't. Apparently (if I read that right) their definition of "capitalist" is someone who supports capitalism when it's popular, and supports socialism when it's popular.

Don't forget, many people have other agendas than you see.

so, while they may support socialist means at the moment, they are more than likely working towards a capitalist society as they originally planned.

Frankly, yakman is right, they more than likely just have to grin and bear it.