Aces High Bulletin Board
General Forums => The O' Club => Topic started by: ghi on March 17, 2008, 08:31:31 AM
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The central bank approved a cut in its emergency lending rate to financial institutions to 3.25 percent from 3.50 percent, effective immediately, and created a lending facility for big investment banks to secure short-term loans. The new lending facility will be available to Wall Street firms on Monday.
http://biz.yahoo.com/ap/080317/fed_credit_crisis.html (http://biz.yahoo.com/ap/080317/fed_credit_crisis.html)
Global markets tumble on JPMorgan's rescue of Bear Stearns
http://news.yahoo.com/s/ap/20080317/ap_on_bi_ge/world_markets (http://news.yahoo.com/s/ap/20080317/ap_on_bi_ge/world_markets)
Japan's benchmark 225 index sank 3.7 percent to close at 11,787.51 points, its lowest in more than 2 1/2 years. Hong Kong's Hang Seng index fell 5.2 percent to finish at 21,084.61.
Across the Asia-Pacific region, all major stock indexes were down, including markets in Australia, China, South Korea, Indonesia and the Philippines. India's Sensex dropped 5.1 percent in afternoon trading.
"""European stocks fell in morning trading. The U.K.'s benchmark FTSE 100 dipped 2.3 percent to 5,503.6 while France's CAC 40 slid 2.7 percent to 4,468.28. Germany's DAX slipped 3.3 percent. ...."
""The euro rose to a record high $1.5903........."
"....sweet crude for April delivery spiked to a record $111.80 a barrel ..."
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I have said it several times before. They are pushing the rate the wrong direction. The US doesn't make enough items any longer to be a viable exporter and we only basically produce housing which is in the toilet because of the rates being cut so much for the last several years.
Get rid of the FED and we get rid of most of our financial problems. Just my unfounded opinion with no basis other than the US Dollar falling against all other worldwide currency.
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This could get interesting, I think the problems are beyond the federal reserves capability of control.
shamus
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It is far worse than that. People need to start using the word economic DEPRESSION, not recession. Even some of the more optimistic "recession" folks have been saying that this recession is becoming so bad, it could last for a full two years. Well, the reality is that it can easily get far worse, with many more financial investment firms failing like Bears Stern did. And this can start happening at many banks too, if investors start to bail out of them and start selling off all of their stock, just like what happened to Bears Stern last week.
The only way that JP Morgan Chase was able to buy out Bear Stearns for the ridiculously low amount of only $2 / share was by getting an emergency $30 Billion loan from the United States Federal Reserve.
On top of all of this, the Hong Kong stock market has this morning dived over 1,100 points, losing over 5 percent of its value in one single day:
(http://graphics8.nytimes.com/images/2008/03/17/business/17asiastox.600.jpg)
You can imagine how all of this bad news is going to affect the US stock market this morning!
Here are more details from this morning's news:
http://www.nytimes.com/2008/03/17/business/17fed.html?bl&ex=1205899200&en=e0949ec94f152e85&ei=5087%0A
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This could get interesting, I think the problems are beyond the federal reserves capability of control.
Not only can they not fix it they shouldn't try. Bear was one of the major reasons for the mortgage hedge fund crisis. Corporate executives justify their exorbitant salaries by saying they create so much wealth for shareholders. And they want the government to stay out of their business by the way of regulations.
But when their stupid decisions force the company to go tits up, they go running to the Fed for support. The CEOs probably end up losing their job, but with multimillion dollar golden parachutes.
The market, especially the subprime mortgage crisis, needs a correction. You can't stop that. The more the federal government tries, the worse it's gonna be when it's all said and done with.
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Be kinda funny to do a search and find out all the people who were saying how healthy the US economy was about a year ago (because the stock market was trading at record levels) and who poo pooed any suggestions that the policies at that time had dire consequences.
Also would be interesting to see who claimed that the US economy was just that...the US economy...and non Americans have no business commenting on it.
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Not only can they not fix it they shouldn't try. Bear was one of the major reasons for the mortgage hedge fund crisis. Corporate executives justify their exorbitant salaries by saying they create so much wealth for shareholders. And they want the government to stay out of their business by the way of regulations.
Oh I wholeheartedly agree, but if you can privatize profits and lay off losses on the public, I guess it would be human nature to do so.
shamus
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I was thinking if the world economy would work without stocks as source of capital, only with loans and get rid of sensitive virtual global stock markets working as heart of economy?
We need jobs,goods and services daily. If tomorrow i can't buy milk and toilet papper because those companies colapse due to a stocks buy/sell game, that doesn't mean peoples don't need their products/services.
Looks like this economic system centralized around stock markets won't work in a globalized economy, it"s going to colapse soon, openig the way for Illuminati and "Novus Ordo Seclorum" , "666" bio chips on our foreheads to buy and sell, and the Antichrist.
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John Adams said privately owned banks are more dangerous to America then a standing army, and the Federal Reserve is privately owned.
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Looks like this economic system centralized around stock markets won't work in a globalized economy, it"s going to colapse soon, openig the way for Illuminati and "Novus Ordo Seclorum" , "666" bio chips on our foreheads to buy and sell, and the Antichrist.
If that is gonna happen, I better go buy a lot more ammo for all of my guns fast!!
My current supply that I have in my house might not last that long in case of all out anarchy. This is all that I have on hand presently:
(http://photos.imageevent.com/avangorder/guns/coloradopdoghuntingtrip/large/DSCN1700.jpg)
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one little "accident" sig, and your stockpile is worthless.......to you :t
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one little "accident" sig, and your stockpile is worthless.......to you :t
Fortunately, I am a non smoker. I would hate to have a fire in my house.
The fire department might not even respond.
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I see that all of the major European stock markets got hit bad today too.
United Kingdom: Down 2.7 %
Germany: Down 3.6%
France: Down 3%
We are all doomed!! :cry :cry :cry :cry :cry :cry
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Just another indication that the globe and the major nations are all economically interlinked. It's proof that no one major industrialized nation can stand by itself in full self sufficiency any longer. In fact it has been that way for quite a long time.
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The world economy has been here before though. We (the world) will recover. The hardest hit will be those baby boomers who are about ready to retire, or currently retired.
Those US banks that over extended on sub prime really screwed our economy.
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If that is gonna happen, I better go buy a lot more ammo for all of my guns fast!!
My current supply that I have in my house might not last that long in case of all out anarchy. This is all that I have on hand presently:
(http://photos.imageevent.com/avangorder/guns/coloradopdoghuntingtrip/large/DSCN1700.jpg)
Better be careful Sig....hope no ATF agents frequent this site. Not that you are doing anything wrong. Just that they have shown an amazing ability to make up reasons :huh
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Be kinda funny to do a search and find out all the people who were saying how healthy the US economy was about a year ago (because the stock market was trading at record levels) and who poo pooed any suggestions that the policies at that time had dire consequences.
Also would be interesting to see who claimed that the US economy was just that...the US economy...and non Americans have no business commenting on it.
Would do no sense if they couldn't see what was happening then, they wouldn't understand how it has caused the mess this country and the world are now in.
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The world economy has been here before though. We (the world) will recover. The hardest hit will be those baby boomers who are about ready to retire, or currently retired.
Those US banks that over extended on sub prime really screwed our economy.
But would it be right to let all of these banks go bankrupt? Think of all of the innocent people who will get hurt.
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But would it be right to let all of these banks go bankrupt? Think of all of the innocent people who will get hurt.
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Good question. I think the Feds are going to cut out those banks who gambled and lost. Not sure if that's right or wrong, but its apparent they're leaning that way.
The BBC had a good article of the state of the banks here>>>
http://news.bbc.co.uk/2/hi/business/7300182.stm
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But would it be right to let all of these banks go bankrupt? Think of all of the innocent people who will get hurt.
The problem is that if you remove the possibility of failure, there's no disincentive for mangers to make increasingly risky decisions in order to try an maximize their rewards because if they fail, they don't get hurt. That just increases the behavior that leads to failure in the first place.
If you're going to have a free market, you're going to have winners and losers. I know that's hard to accept these days (every kid gets a trophy) but if you're gonna reward risk when someone makes good decisions you have to punish them when they make bad decisions.
Besides ... where does it stop? I could have bought Google at $85. I decided not to and lost a bunch of money, or at least didn't make any. Where's my bail out?
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Yup i think we _may_ facing a global recession, and i dont think throwing government money at it will do anything but push problems ahead. Some people have used more money than they had, and the banks have allowed it to happen. Would be better in the long run to let banks that has done this and the people go belly up and take the losses. There is a limit to what reduced rates can do, and in a worst case scenario it only leads to more people that currently is safe will use the lower rates to borrow and put themselves in the same situation.
Rather than calling it a recession, I would say its a hard but much needed adjustment. Spending and consuming on credit is never a good thing.
I havent owed a $ in over 10 years. It means that i havent always been a "good" consumer i guess but id rather sleep at night.
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I have said it several times before. They are pushing the rate the wrong direction. The US doesn't make enough items any longer to be a viable exporter and we only basically produce housing which is in the toilet because of the rates being cut so much for the last several years.
Get rid of the FED and we get rid of most of our financial problems. Just my unfounded opinion with no basis other than the US Dollar falling against all other worldwide currency.
US exports to china are 20 billion a year, somebody in the poor USA must be making something.
the US is tied with japan for second place in world wide steel production.
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I have said it several times before. They are pushing the rate the wrong direction. The US doesn't make enough items any longer to be a viable exporter and we only basically produce housing which is in the toilet because of the rates being cut so much for the last several years.
Get rid of the FED and we get rid of most of our financial problems. Just my unfounded opinion with no basis other than the US Dollar falling against all other worldwide currency.
US manufacturing output has gone up. The number of jobs required for that output has gone down. That's just technology and lean manufacturing methods. Nothing wrong there.
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US manufacturing output has gone up. The number of jobs required for that output has gone down. That's just technology and lean manufacturing methods. Nothing wrong there.
Fundementally the US "spends" more than it "earns".................has been so for some years now.
just look at the national debt per capita........... which is OK if your currency is the global standard and you are the primary market for raw materials.....
But as others (read now India and China) are creating massive demand for those raw materials which (due to the dropping value of the dollar) is getting cheaper for them as those same raw materials get more expensive for the US then we have a double whammy which should be (but for ther FED) inflationary to the US .....
Then ask yourself what happens when you lend expensive money you have not got to folk who will not be able to pay it back..............
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Fundementally the US "spends" more than it "earns".................has been so for some years now.
What do you expect from a nation that barrages 18 year olds with credit cards? :huh We have problems, but people need to stop perpetuating the lie that our manufacturing has disappeared. It has grown, and with a weakening dollar, people are more likely to buy our exports. It's all cyclical anyways. We'll be "down" for a few years, then we'll be "up" for a few years, rinse & repeat.
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What do you expect from a nation that barrages 18 year olds with credit cards? :huh We have problems, but people need to stop perpetuating the lie that our manufacturing has disappeared. It has grown, and with a weakening dollar, people are more likely to buy our exports. It's all cyclical anyways. We'll be "down" for a few years, then we'll be "up" for a few years, rinse & repeat.
Whether we barrage a nation with credit cards or not is not the issue. That the parents of those imbeciles who abuse credit cards never taught them basic spending control is the issue at hand.
We as a people need to start taking more personal responsibility for our actions. Stop blaming others for our problems and realizing that our own actions affect how we live and eat.
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Whether we barrage a nation with credit cards or not is not the issue. That the parents of those imbeciles who abuse credit cards never taught them basic spending control is the issue at hand.
You can only give people the radio station Dave Ramsey is on. Can't make them listen to it.
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If that is gonna happen, I better go buy a lot more ammo for all of my guns fast!!
My current supply that I have in my house might not last that long in case of all out anarchy. This is all that I have on hand presently:
(http://photos.imageevent.com/avangorder/guns/coloradopdoghuntingtrip/large/DSCN1700.jpg)
Well ... ya kinda scare and worry me a bit but at least I know a specific place I can come if my own supplies are lacking. ;)
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Posted 5 years ago: Are you spending your way to disaster?" covers the credit card conversation many of us saw happening.
http://bbs.hitechcreations.com/smf/index.php/topic,98428.0.html
For the record<< 1 house payment, 1 vehicle payment and 0 debt on credit cards. (We use the Alaska Airlines credit card for just about all purchases, than pay the balance at the end of the month, thus earning air miles.)
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Not sure I would state Global Recession, US yes if not already. Worlds economies aren't as hitched to the US as much as they once were.
<S>...-Gixer
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Not sure I would state Global Recession, US yes if not already. Worlds economies aren't as hitched to the US as much as they once were.
<S>...-Gixer
I'm not quite sure how you deduce that. We're more connected than ever considering a good chunk of our workforce has been outsourced to external workforces outside the U.S. If the companies outsourcing the work collapse, those jobs overseas go away, and affect their respective economies. Its a ripple effect.
Now, I understand how there is alot of countries that WISH their economy wasn't associated with the U.S., but fantasy differs from business reality.
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Posted 5 years ago: Are you spending your way to disaster?" covers the credit card conversation many of us saw happening.
http://bbs.hitechcreations.com/smf/index.php/topic,98428.0.html
For the record<< 1 house payment, 1 vehicle payment and 0 debt on credit cards. (We use the Alaska Airlines credit card for just about all purchases, than pay the balance at the end of the month, thus earning air miles.)
It's too damn bad that they do not teach personal spending responsibilities any more.
The situation might be different if they did.
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It's too damn bad that they do not teach personal spending responsibilities any more.
The situation might be different if they did.
That works with the loan officers of Banks, and Bank execs that were driven by greed to go after sub-prime markets. :furious
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That works with the loan officers of Banks, and Bank execs that were driven by greed to go after sub-prime markets. :furious
I don't agree. If people had more fiscal responsibility then the sub-prime markets would have not been an issue. Do we need more government intrusion into common sense? Personally, I think this federal buyout to JP Morgan that finances Bear Stearns is a crock of crap. If more people took an interest into what their actual investments were doing instead of the bottom line, then this would never have been an issue. They (the investors) need to learn to pay better attention and it seems that them losing a fair chunk of cash might be the only way to do it.
Unfortunately, you and I get to subsidize that little lesson. I don't like it one bit. :furious
This sub prime loan crap has been a long time in coming. Just look at foreclosures over the last two years, especially in the sub prime market. They have been rising. Those sweetheart bags that continued that practice of extending credit to people that either had a horrible credit rating (or were so over extended they could not afford it) should have boinking known better. Instead, these people continued giving out credit while closing their eyes to the obvious. Well duh... the real estate market crashed because they fed it more crap than it could ever handle. Add to that all these jerk off builders slapping together the worst built homes ever, and you have a glut that is going to take years to recover from.
I am major peeved about this whole situation, more so that my tax dollars are going to give these investors a break, that these investors created. :furious
Oh, and before you ask; Yes, I do invest, but I research what I invest in before I commit any money. I also never invest more than what I can afford to lose.
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The stock of my bank just dropped 12.75% today. GULP!! Guess I am going to have to move my money tomorrow. They are now projecting $2 Billion in losses from the home mortgage crisis per quarter for the next year. That is $8 Billion!!
You had best check how your bank is doing in this crisis too.
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Not sure I would state Global Recession, US yes if not already. Worlds economies aren't as hitched to the US as much as they once were.
<S>...-Gixer
Who will the Chinese sell their products to, if the USA stops buying them???
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The stock of my bank just dropped 12.75% today. GULP!! Guess I am going to have to move my money tomorrow. They are now projecting $2 Billion in losses from the home mortgage crisis per quarter for the next year. That is $8 Billion!!
You had best check how your bank is doing in this crisis too.
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If it's FDIC insured, just make sure you don't have more than $100,000 per account and you're covered if the bank folds up.
If it's not, WTF are you doing giving those people your money in the first place?
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Who will the Chinese sell their products to, if the USA stops buying them???
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this will have an impact on everyone,
look, germany still #1 export nation, but with the fast growing €uro this could
end very quick, who will pay that expensive stuff in the future?
On the other side, in this difficult times i preffer a strong €, because thats where my money sits ;)
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If it's FDIC insured, just make sure you don't have more than $100,000 per account and you're covered if the bank folds up.
If it's not, WTF are you doing giving those people your money in the first place?
But if banks start folding, where will the Federal government get all of the money to cover this mess??? Just print more money? What will happen to the value of the American dollar then???
I think I will move the funds tomorrow to another bank. Apparently they put a lot of money into the California Real Estate Market, and that is now coming back to haunt them. It seems that a lot of Californians are in danger of losing their homes this year.
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Back when I was a kid banks wouldn't loan you money if you couldn't afford to pay it back.
These people that gave loans and these people that took loans that were very high risk deserve what they get.
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I just wish I had some extra cash to start buying real estate, then sit on it.
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I just wish I had some extra cash to start buying real estate, then sit on it.
/Sub Prime Loan lender on
"How's your credit? Bad? No problem...I can get you a loan to buy that real estate..."
/Sub Prime Loan Lender Off
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/Sub Prime Loan lender on
"How's your credit? Bad? No problem...I can get you a loan to buy that real estate..."
/Sub Prime Loan Lender Off
LOL.
That's why I said "if" I had extra cash. :) I like to pay for what I buy.
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US manufacturing output has gone up. The number of jobs required for that output has gone down. That's just technology and lean manufacturing methods. Nothing wrong there.
Hey Indy, where did you get your info from, btw?
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Recession is a good and necessary part of the economic cycle. Business should go on with as little Govt interference as possible. The more the govt tries to bail us out of the recession the harder the economy will land when it hits rock bottom. This is very simple economics. The business world should be, and is for the most part, Darwinian.
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Recession is a good and necessary part of the economic cycle. Business should go on with as little Govt interference as possible. The more the govt tries to bail us out of the recession the harder the economy will land when it hits rock bottom. This is very simple economics. The business world should be, and is for the most part, Darwinian.
This is not your typical recession. It is going to be far worse than anything the USA has experienced since WWII.
The government should have regulated these businesses more closely.
We are seeing more and more things take place that have not happened since the Great Depression. These are all extremely bad signs.
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Not only can they not fix it they shouldn't try. Bear was one of the major reasons for the mortgage hedge fund crisis. Corporate executives justify their exorbitant salaries by saying they create so much wealth for shareholders. And they want the government to stay out of their business by the way of regulations.
But when their stupid decisions force the company to go tits up, they go running to the Fed for support. The CEOs probably end up losing their job, but with multimillion dollar golden parachutes.
The market, especially the subprime mortgage crisis, needs a correction. You can't stop that. The more the federal government tries, the worse it's gonna be when it's all said and done with.
The flip side of this arguement is a repeat of 1929 if the Feds don't bail out the banks to a degree.
http://www.econreview.com/events/banks1929b.htm
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This is not your typical recession. It is going to be far worse than anything the USA has experienced since WWII.
The government should have regulated these businesses more closely.
We are seeing more and more things take place that have not happened since the Great Depression. These are all extremely bad signs.
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I tend to agree with you. Bank/stock market deregulation took out some of those rules which were put in after having learned the lessons' of the Stock market crash of 1929, and the following Great Depression.
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This is not your typical recession. It is going to be far worse than anything the USA has experienced since WWII.
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I've read the same articles. Personally I think we have been in a recession for a while now. I don't see your point though. Recession is good for the economic cycle.
If it's atypical in that it lasts longer it's only because the govt interefered and didn't let things take care of themselves.
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I mentioned in an earlier thread that the idea of bailing out firms like Bear-Stearns can be a slippery slope. It's not part of the Fed's original mandate. Whereas the Fed was created as a lender of last resort to help banks maintain minimum reserve requirements. And create liquidity for savings institutions in the event of a panic which had created 2 depressions in 50 years. The idea was to give banks a clearinghouse for the exchange of ready cash in the event of an unexpected demand. Within reason.
The system works. Every nation (to my knowledge) maintains a central bank and they all pretty much function the same way with regards to providing liquidity. The problem with this bailout is that the assistance is being provided in order to maintain an organization that flagrantly violated the principles it was founded upon. Bear-Stearns is an investment house. They portrayed themselves as a bastion of level headed, sober custodians of they're clients assets. When in reality they were nothing more than opportunists hiding behind the facade of august, responsible, and conscientious money managers. Nothing but prostitutes eager for some quick gravy and turning every trick in the book to get a taste.
They behaved like carnies, not bankers. They embarked (with our blessing) on a course of grossly irresponsible conduct fueled by the capitol entrusted to them by their clientèle. Abolishing themselves from accountability by virtue of a few paragraphs on their account applications.
And we let them do it. We stepped up to the plate and validated their conduct through our silence. Now it's hit the fan and everybody has an opinion. WTFG American consumer. We already know we can't trust people who have no incentive to behave responsibly, we already know we cannot rely on government oversight, we already know (or should) that there's no free ride but just like the willing victims of a pigeon drop, we're all mortified by what we eagerly took part in and now have to pay the price.
Bear-Stearns is not a bank, it's a brokerage. Granted they own a bank but that's not their fundamental business. They make money selling opportunity. That's it. The opportunity for whatever reason didn't pan out. That's it. The Fed is not supposed to be supporting operations that swung and missed. They are there to underwrite the normal, justifiable capitol needs of member banks that played by rules every other member has to follow.
It's nothing but cronyism, pure and simple.
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I've read the same articles. Personally I think we have been in a recession for a while now. I don't see your point though. Recession is good for the economic cycle.
If it's atypical in that it lasts longer it's only because the govt interefered and didn't let things take care of themselves.
Tell that to all of the employees at Bear Stearns that are now unemployed. Or to all of the stockholders of Bear Stearns stock.
Do you realize that the company was sold for only 1% of the value that their stock had just a couple of weeks ago? Heck, the Bear Stearns headquarters building alone is said to be worth 3 and a half times the price of what JP Morgan Chase paid for the entire company. All of those stockholders have seen their investment go almost completely down the drain. How many Mutual Funds or Pension Plans had Bear Stearns stock as part of their portfolio??
For 99% of the value of a major US financial corporation to disappear in a couple of weeks is pretty frightening. That sort of thing has not happened in recent recessions.
Most analysts that I have listened to say the current recession technically started in November last year. If true, that would mean that we have been in a recession now for the past 4 months.
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Hey Indy, where did you get your info from, btw?
Robert Z. Lawrence is Albert L. Williams Professor of International Trade and Investment, a Senior Fellow at the Institute for International Economics, and a Research Associate at the National Bureau of Economic Research. He served as a member of the President's Council of Economic Advisers from 1998 to 2000. Lawrence has also been a Senior Fellow at the Brookings Institution. He has taught at Yale University, where he received his PhD in economics. His research focuses on trade policy. He is the author of Crimes and Punishments? Retaliation under the WTO; Regionalism, Multilateralism and Deeper Integration; Single World, Divided Nations?;andCan America Compete? He is coauthor of Has Globalization Gone Far Enough? The Costs of Fragmentation in OECD Markets (with Scott Bradford); A Prism on Globalization; Globaphobia: Confronting Fears About Open Trade; A Vision for the World Economy; and Saving Free Trade: A Pragmatic Approach. Lawrence has served on the advisory boards of the Congressional Budget Office, the Overseas Development Council, and the Presidential Commission on United States-Pacific Trade and Investment Policy.
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Tell that to all of the employees at Bear Stearns that are now unemployed. Or to all of the stockholders of Bear Stearns stock.
Do you realize that the company was sold for only 1% of the value that their stock had just a couple of weeks ago? Heck, the Bear Stearns headquarters building alone is said to be worth 3 and a half times the price of what JP Morgan Chase paid for the entire company. All of those stockholders have seen their investment go almost completely down the drain. How many Mutual Funds or Pension Plans had Bear Stearns stock as part of their portfolio??
For 99% of the value of a major US financial corporation to disappear in a couple of weeks is pretty frightening. That sort of thing has not happened in recent recessions.
Most analysts that I have listened to say the current recession technically started in November last year. If true, that would mean that we have been in a recession now for the past 4 months.
I'm not going to dispute your premise that we are in a recession as I tend to agree with you there. The severity is another issue and only history (after it's over) will be able to fully quantify it.
The issue I have is with the earlier portion of your post. Are you implying that the govt. has the responsibility to make sure a publicly held company (as in commercial operation non governmental in nature) does not go under? Does the govt. have the responsibility to insure commercial companies stocks like they do bank accounts?
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Tell that to all of the employees at Bear Stearns that are now unemployed. Or to all of the stockholders of Bear Stearns stock.
Do you realize that the company was sold for only 1% of the value that their stock had just a couple of weeks ago? Heck, the Bear Stearns headquarters building alone is said to be worth 3 and a half times the price of what JP Morgan Chase paid for the entire company. All of those stockholders have seen their investment go almost completely down the drain. How many Mutual Funds or Pension Plans had Bear Stearns stock as part of their portfolio??
For 99% of the value of a major US financial corporation to disappear in a couple of weeks is pretty frightening. That sort of thing has not happened in recent recessions.
Most analysts that I have listened to say the current recession technically started in November last year. If true, that would mean that we have been in a recession now for the past 4 months.
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Again, you make no point. Bear Stearns employs 0.0000461% of the US population. Am I supposed to panic over that miniscule fraction of our populace losing their jobs? Bear Stearns failed because there were poor leaders at the helm. People who invested there took risks, they lost. It's the way things work, the way it should work.
I'm an average guy, unexceptional from just about anyone else on the street, yet I was smart enough to see this coming and moved my money from stocks to gold and wheat. Same thing with the housing market. Almost two years ago I stopped flipping houses because the end of the boom was looming. If a simple guy like me can figure this out, why am I supposed to worry about those who could not? If there were no risk in investing your money, everyone would be millionaires. I fail to see your point.
We've been in a recession for four months.... ok. I've already said something to the same effect.
Again, recession is a necessary and beneficial part of our economic cycle. People like you who run around screaming "the sky is falling" are panicking needlessly and doing nothing beneficial for anyone. It's a recession, so what? We needed one.
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Isn't a recession defined as "two concecutive quaters of negative growth"? If so have we had that?
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Tell that to all of the employees at Bear Stearns that are now unemployed. Or to all of the stockholders of Bear Stearns stock.
OK. Hey, all you Bear employees, start updating your resumes. You'll probably need to start looking for another job soon. You know, like millions of other people each year who lose their job because their position is now done by a machine or someone overseas. Or because their industry is going through a down turn. Or because, as in your case, the company they worked for is run by idiots who drove the business into the ground.
And hey all you Bear stockholders. You win some, you lose some. Anytime you give your money to someone else, there's a chance you won't get it back. If you can't deal with that you shouldn't be in the market in the first place. Fortunately you can use your losses to offset capital gains and if not, at least you can still deduct up to $3000 against your other income. And if you were stupid enough to bet your entire retirement on one stock ... better start updating your resume.
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yet I was smart enough to see this coming and moved my money from stocks to gold and wheat.
Dunno about wheat, but if you look at the numbers for gold, it's very bouncy. I believe it's only a 4% return over the last 50 years. You'd probably get better performance out of a mutual fund that has/had a small portion of Bear Stearns in its holdings, rather than abandoning it for a precious metal (tin scare anybody?). Just my 2 pennies.
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The government should have regulated these businesses more closely.
Interesting.
I would have thought you were dead set against any form of government intervention.
The real crimminals in this debacle in my opinion are the rating agencies who stamped the packaged up debt with a AAA rating so it could be easily sold. The banks and mutual funds who bought the junk were just fish who snapped up the bait.
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I'm not quite sure how you deduce that. We're more connected than ever considering a good chunk of our workforce has been outsourced to external workforces outside the U.S. If the companies outsourcing the work collapse, those jobs overseas go away, and affect their respective economies. Its a ripple effect.
Now, I understand how there is alot of countries that WISH their economy wasn't associated with the U.S., but fantasy differs from business reality.
Just what percentage of jobs in total outside of the U.S are from American companies? Would hate to guess, under 10%? For an example company I work for is U.S based. Totaly employees around 40,000 number outside of the U.S probably around 4,000 where is it going to hurt more if it collapses? Me, if they said I was fired I know I could walk into another job the same day.
U.S isn't the worlds number on economy anymore, it's Europe and I wouldn't think Asia was that far behind. So there are plenty of companies other economies outside U.S to keep the world ticking over.
I just don't believe in this sneeze, world gets a cough. Maybe in years past after the war but not now.
<S>...-Gixer
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Who will the Chinese sell their products to, if the USA stops buying them???
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Errrr, the rest of the world? China has trillions in surplus and plenty of markets I don't think they will be worried.
<S>...-Gixer
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Dunno about wheat, but if you look at the numbers for gold, it's very bouncy. I believe it's only a 4% return over the last 50 years. You'd probably get better performance out of a mutual fund that has/had a small portion of Bear Stearns in its holdings, rather than abandoning it for a precious metal (tin scare anybody?). Just my 2 pennies.
keep your pennies. What gold has done in the last 50 years has nothing to do with me. You might want to check what it's done in the last two years as that is how long I've been in... that will tell you whether or not I did the right thing. So no, I wouldn't have done better with the mutual fund you are suggesting.
When the markets rebound and are less volatile, I'll move the money again as this will be about the same time gold slows down or even flattens.
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This is not your typical recession. It is going to be far worse than anything the USA has experienced since WWII.
The government should have regulated these businesses more closely.
We are seeing more and more things take place that have not happened since the Great Depression. These are all extremely bad signs.
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Exactly it's up to the government to regulate, banks/finance are like any other business they are going to lend under the rules set by the Fed, it is up to the government with the Federal/Reserve bank to set monetary policy. If they say to banks they can use Shares as security they are going to do it. Any blame for recession falls on the government.
<S>...-Gixer
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Any blame for recession falls on the government.
<S>...-Gixer
This is utterly incorrect. Certainly the govt can and has exacerbated recessions but they are not responsible for the cyclical nature of a capitalist economy.
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Dunno about wheat, but if you look at the numbers for gold, it's very bouncy. I believe it's only a 4% return over the last 50 years.
4% where did you get that figure from? Was it calculated to about 2002,2003? As then gold was around $200 to $300 an ounce (going from memory) now it's over $1,000 an ounce, gold is a great indicator of peoples confidence. Great time to be selling metal detectors.
<S>...-Gixer
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4% where did you get that figure from? Was it calculated to about 2002,2003? As then gold was around $200 to $300 an ounce (going from memory) now it's over $1,000 an ounce, gold is a great indicator of peoples confidence. Great time to be selling metal detectors.
<S>...-Gixer
Good call. :aok
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This is utterly incorrect. Certainly the govt can and has exacerbated recessions but they are not responsible for the cyclical nature of a capitalist economy.
Cyclical nature of a capitalist economy? Since when was it within cycles to bail out a bank with tax payers money? I can't recall, 70 years ago? The depression? Far outside any normal cycles.
I wouldn't go as far to say U.S is headed for a great depression, but it is a recession and far outside any normal cycles. The entire U.S financial structure is a chain, once one major bank goes under the rest will eventually follow. The Fed didn't put money into Bear Stearns to save it as a company, they couldn't care less about Bear Stearns. They did it to save the financial chain. I would guess they probably weighed up strongly whether to stay out of it and see if the financial chain could ride it out, but end of the day they were too scared to find out. Hence the bail out.
At a heavy price though, doing so weakens the U.S economy even further dollar value,markets,etc.. I doubt they will be able to repeat that process again for another big bank. Politcally it looks bad as you are seen to bail out Wall Street but not Joe Blogs with his mortgage.
<S>...-Gixer
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This is utterly incorrect. Certainly the govt can and has exacerbated recessions but they are not responsible for the cyclical nature of a capitalist economy.
By the way I was going with the cyclic nature and rough patch for the markets theory as well. Right until they did that injection of billions into the market a few weeks back. Then you know it's outside normal cycles, and again bailing out a major bank is another nasty indicator of bandaid monetary policy.
<S>...-Gixer
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4% where did you get that figure from? Was it calculated to about 2002,2003? As then gold was around $200 to $300 an ounce (going from memory) now it's over $1,000 an ounce, gold is a great indicator of peoples confidence. Great time to be selling metal detectors.
<S>...-Gixer
Should be up to a pretty recent date, but I can't remember off-hand. I'll have to dig the source back out. I'll freely admit I'm biased against anything short-term (I'm 27, all the time in the world). Too many spazzes running around yelling the sky is falling, and it just never works out that way since you can't quantify human ingenuity. Tin is a good historical example of why. It's like freaking out about oil prices... great for now, but it won't last, and unless you time getting out well enough, it's just a waste of effort.
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It's like freaking out about oil prices... great for now, but it won't last, and unless you time getting out well enough, it's just a waste of effort.
It won't last? Well unless demand drops off dramatically (global depression) or someone discovers a new miracle supply of cheap fuel I'm affraid it only has one direction to go and that's up. Then again ironically to this thread the fall in U.S economy and lower U.S dollar has helped over past months to keep it under $100 a barrel but even that barrier is now broken.
<S>...-Gixer
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the Bear Stearns employees are not unemployed. They were sent a msg telling them to report to work as usual, they would now be employees of JP Morgan Chase.
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Most of Bear's employees are expected to lose their job as the firm is restructured. Also, about 1/3 of the company's shares is owned by employees
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Just what percentage of jobs in total outside of the U.S are from American companies? Would hate to guess, under 10%? For an example company I work for is U.S based. Totaly employees around 40,000 number outside of the U.S probably around 4,000 where is it going to hurt more if it collapses? Me, if they said I was fired I know I could walk into another job the same day.
U.S isn't the worlds number on economy anymore, it's Europe and I wouldn't think Asia was that far behind. So there are plenty of companies other economies outside U.S to keep the world ticking over.
I just don't believe in this sneeze, world gets a cough. Maybe in years past after the war but not now.
<S>...-Gixer
Well, you might want to pass your carefree attitude onto the Chinese Premier because he understands world economics and how they are woven together like a rug alittle bit better than you.
http://news.xinhuanet.com/english/2008-03/18/content_7813673.htm
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Bear Stearns wasn't "bailed out". The company which was worth $160 a share 1 year ago was bought out for $2 a share, and no longer exists. We only guaranteed the money for the investors via J P Morgan---everyone who had anything to do with running Bear Stearns, including their stockholders, are fediddleed. And we only did THIS to forgo millions of people getting scared and yanking their money out of their respective banks
<their big no-no was having 15 cents per owed-dollar on hand in liquid cash---most investment firms have 35+ cents per dollar---when the endless short-term loans which they used to finance their LONG term loans to customers dried up, they ceased to exist>
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Golly..Curval is being mighty generous :lol
I do notice that retorts about pink shorts and scooters are somewhat lacking tho :rofl
shamus
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Bear Stearns wasn't "bailed out". The company which was worth $160 a share 1 year ago was bought out for $2 a share, and no longer exists. We only guaranteed the money for the investors via J P Morgan---everyone who had anything to do with running Bear Stearns, including their stockholders, are fediddleed. And we only did THIS to forgo millions of people getting scared and yanking their money out of their respective banks
I call BS. US Government cash is going to guarantee the investors investment. They should have had a more keen interest into what their money is doing.
Where was their guarantee when I invested in Delta, and it tanked?
Where was their guarantee when people invested in other investments and they tanked.
This is just guaranteeing rich peoples money... which is a crock of crap.
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Since when was it within cycles to bail out a bank with tax payers money?
read what I wrote, not parts of it I also said:
Certainly the govt can and has exacerbated recessions
you said you blame the govt for recession. Please explain to me how this recession is the govt's fault.
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I call BS. US Government cash is going to guarantee the investors investment. They should have had a more keen interest into what their money is doing.
Where was their guarantee when I invested in Delta, and it tanked?
Where was their guarantee when people invested in other investments and they tanked.
This is just guaranteeing rich peoples money... which is a crock of crap.
Yah, it DOES look like an S&L bailout, but the reasons for doing so were mostly to prevent a run on banks causing a 1929-ish domino effect, which would have cost heap much MORE money
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Dunno about wheat, but if you look at the numbers for gold, it's very bouncy. I believe it's only a 4% return over the last 50 years.
You really don't have any idea do you? Be honest. Here's a hint: Since 1975 gold has gone up over 400%.
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The US doesn't make enough items any longer to be a viable exporter and we only basically produce housing which is in the toilet because of the rates being cut so much for the last several years.
Well, the US does also produce and export vast amounts of dollars. I guess the product's value has declined due to excess supply.
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You really don't have any idea do you? Be honest. Here's a hint: Since 1975 gold has gone up over 400%.
Sounds pretty much level with the inflation. Unfortunately I don't have inflation charts dated back that many years, but it should be close.
Found an inflation calculator at: http://www.westegg.com/inflation/infl.cgi
What cost $100 back in 1975 would've cost $416.12 in 2007. I had my "guess" pretty much on the spot. Indy is quite correct.
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Sounds pretty much level with the inflation. Unfortunately I don't have inflation charts dated back that many years, but it should be close.
Found an inflation calculator at: http://www.westegg.com/inflation/infl.cgi
What cost $100 back in 1975 would've cost $416.12 in 2007. I had my "guess" pretty much on the spot. Indy is quite correct.
Nice try but he mentioned nothing about inflation adjusted numbers.
Edit: I'll play along though. In the last 50 years, inflation has gone up 755%. Gold has gone up over 1300% :aok
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Nice try but he mentioned nothing about inflation adjusted numbers.
Well, I don't really know what the discussion is about, but the difference since 1975 doesn't really mean anything else than that the gold will keep up with the inflation (unsurprisingly), but doesn't give much real profit.
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Well, I don't really know what the discussion is about, but the difference since 1975 doesn't really mean anything else than that the gold will keep up with the inflation (unsurprisingly), but doesn't give much real profit.
Well he mentioned the last 50 years.. here I'll play along with you , using his time period.
In the last 50 years, inflation has gone up 755%. Gold has gone up over 1300%
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It won't last? Well unless demand drops off dramatically (global depression) or someone discovers a new miracle supply of cheap fuel I'm affraid it only has one direction to go and that's up. Then again ironically to this thread the fall in U.S economy and lower U.S dollar has helped over past months to keep it under $100 a barrel but even that barrier is now broken.
<S>...-Gixer
Patience is a virtue. It's not something that will happen overnight, but it happens to every commodity.
Well he mentioned the last 50 years.. here I'll play along with you , using his time period.
In the last 50 years, inflation has gone up 755%. Gold has gone up over 1300%
Year to the 31st - Gold Price (adjusted to 2006 dollars)
1910 - $421.84
1920 - $208.79
1930 - $249.04
1940 - $500.00
1950 - $335.42
1960 - $248.30
1970 - $195.83
1980 - $1567.73
1990 - $654.01
2000 - $318.68
2005 - $529.41
2008 - $790.40
Nothing about that says long term stability.
Keep gambling Steve. I'll play the safety :)
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Well he mentioned the last 50 years.. here I'll play along with you , using his time period.
In the last 50 years, inflation has gone up 755%. Gold has gone up over 1300%
And the average annual return on rare coins was more than 400% greater than the return on gold. WGAS.
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Nothing about that says long term stability.
Keep gambling Steve. I'll play the safety :)
Yes,. actually, it screams long term stability. Do you know anything about investing?
Investment is gambling... what's your point? My return on gold the last 2 years is almost 80%. I made a killing in the housing market. Ask Nuke on this board, I split a deal with him. You go ahead and play it safely, I'll make money.
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The value of gold remains the same, it's the dollar that changes because it's a figment of the Federal Reserves imagination. The dollar has no foundation whatsoever, and in reality is worthless. Woodrow Wilson stated he destroyed America when he signed the Federal Reserve into law.
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The value of gold remains the same, it's the dollar that changes because it's a figment of the Federal Reserves imagination. The dollar has no foundation whatsoever, and in reality is worthless. Woodrow Wilson stated he destroyed America when he signed the Federal Reserve into law.
please send me all your "worthless" dollars, i will dispose of them at no cost to you.
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please send me all your "worthless" dollars, i will dispose of them at no cost to you.
Is that anything like when FDR made it a law that all Americans had to hand over their gold to the Federal Reserve or be imprisoned?
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[quote author=Ripsnort link=topic=230099.msg2795168#msg2795168 date=1205783547
For the record<< 1 house payment, 1 vehicle payment and 0 debt on credit cards. (We use the Alaska Airlines credit card for just about all purchases, than pay the balance at the end of the month, thus earning air miles.)
[/quote]
For the record, I am a bad American.
Home paid for; Mortgage = 0, shop I am building paid for, car paid for, credit cards paid off monthly.
Total debt = 0
Dow up 420 yesterday
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sheesh crack me up... the neo-cons sure did run the empire and its fiat currency into the dirt rather quickly... not to mention they used a chinese credit to do it.
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Oh yeah :rolleyes: neo-cons.
Neo-cons: nominated for the most overused term of the last 50 years.
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true they're just right wing socialists... but that's a dirty word in the empire. :D
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And there is not one liberal out there who conributed to this via Mastercard or a bad mortgage.
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Yah, it DOES look like an S&L bailout, but the reasons for doing so were mostly to prevent a run on banks causing a 1929-ish domino effect, which would have cost heap much MORE money
A Bear bankruptcy would have been a mess no doubt (think Enron). But it would have been very beneficial by publicly exposing all the actions that led to this mess in the first place.
Instead, the Fed (in other words taxpayers) has put up $30 billion with a "b" in guarantees so JP Morgan can buy Bear, although it's closer to steal. By Friday, the fed was convinced they had to have a deal to avoid Bear bankruptcy before the markets opened Monday. JP Morgan went into the negotiations with what you always want -- the ability to walk away. The fed felt they had to have a deal and JP Morgan knew it. And Jamie Dimon rolled them up. He got Bear's best assets, including a $1.5 billion building and the taxpayers are on the hook for any future losses.
Meanwhile the message to everyone else is, If the going get's tough, it's OK to panic. The taxpayers will bail you out it you do.
Over the long run this is going to cost us much more than a Bear bankruptcy ever would.
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I hate the idea of this bailout....
...but the national credit is so rickety right now that if B&S had bluescreened the way it appears it would have unassisted, by midday monday the entire credit system would probably have completely frozen. Trillions of dollars in value lost overnight, the entire country might even have collapsed.
The market will find stable positions without interference, but the situation w/ B&S was already so rotted from the inside because of decades of government fiddling that it could have destroyed our banking systems. With respect to the distinguished gentleman with the ammunition, that should be the contingency plan for when things go tango uniform. But avoiding the TU situation should come first if possible.
The long term strategy is to divorce the government from the market in a structured fashion so that the economic machine can do what needs to be done.
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For the record, I am a bad American.
Home paid for; Mortgage = 0, shop I am building paid for, car paid for, credit cards paid off monthly.
Total debt = 0
Bastige! :furious I still have 9 years left on the house. Then I retire 3 years later.
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A Bear bankruptcy would have been a mess no doubt (think Enron). But it would have been very beneficial by publicly exposing all the actions that led to this mess in the first place.
Instead, the Fed (in other words taxpayers) has put up $30 billion with a "b" in guarantees so JP Morgan can buy Bear, although it's closer to steal. By Friday, the fed was convinced they had to have a deal to avoid Bear bankruptcy before the markets opened Monday. JP Morgan went into the negotiations with what you always want -- the ability to walk away. The fed felt they had to have a deal and JP Morgan knew it. And Jamie Dimon rolled them up. He got Bear's best assets, including a $1.5 billion building and the taxpayers are on the hook for any future losses.
Meanwhile the message to everyone else is, If the going get's tough, it's OK to panic. The taxpayers will bail you out it you do.
Over the long run this is going to cost us much more than a Bear bankruptcy ever would.
Well said Myelo. Well said.
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Oh yeah :rolleyes: neo-cons.
Neo-cons: nominated for the most overused term of the last 50 years.
And to think ... last week I thought you all voted that "chickenhawk" had that honor. I suspect "traitor" and "patriot" were certainly in the running. :)
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But it would have been very beneficial by publicly exposing all the actions that led to this mess in the first place.
:aok