Aces High Bulletin Board
General Forums => The O' Club => Topic started by: mg1942 on September 19, 2008, 03:52:57 AM
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September casualties...
Fannie Mae and Freddie Mac
- US mortgage lenders.
- Bailed out by US government to the tune of US$100 billion.
Merrill Lynch
- Investment bank
- Nearly collapsed, but saved by shotgun marriage to Bank of America, which will acquire it for US$50 billion.
Lehman Brothers
- Investment bank
- RIP
- Parts of its North American businesses will be acquired by Barclays.
AIG
- World's largest insurer.
- Rescued from brink of collapse by US$85 billion bailout from US Fed Reserve.
HBOS
- British mortgage lender.
- Lloyds TSB has just bought it at a bargain price of US$22.2 billion.
There are worries that Morgan Stanley (investment bank) and Washington Mutual (US savings bank) are next on the chopping block.
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The problems began with the steady deregulation of the US financial industry that started over 20 years ago.
At this point, most observers probably feel a smug sense of schadenfreude (http://en.wikipedia.org/wiki/Schadenfreude) while watching the mess unfold. The truth is, we are all equally to blame. The gigantic scale of the present problem could not have been caused by just a handful of greedy bankers or insurance salesmen alone. It was also caused by rampant consumer and corporate demand for liquidity created by secularization. Without the availability of free-flowing funds, the dot-com boom of the 1990s would not have been possible, for example.
In a very real sense, all of us are getting our long overdue comeuppance now. The entire system is at fault, because it had been built primarily on that most primal of human instincts — GREED :)
The US and British banking system had, quite simply, lost touch with the real economy. When all kinds of dodgy deals — ranging from "business models" written on the back of a napkin to sub-prime mortgages — can be packaged neatly into financial instruments that are then traded on the world market, we've created a system that progressively encouraged the original lenders to neglect due diligence.
In effect, banks and moneylenders enjoyed a situation where they could keep passing the buck, and make money out of it. Hence the temptation to create more such dodgy deals.
During the boom years of banking growth, US and Euro banks frequently called Asian bankers wussies for not leveraging up and getting "optimal" returns for their capital. Well, look who has the last laugh now. At a time when US and British financial institutions are trembling, Asian banks are standing steady on rock-solid foundations of deposits.
Even then, there is little room to gloat. The world economy is so tightly interconnected today that everyone will be affected sooner or later The cost of debt has suddenly shot up over the week, which means that credit has all but dried up for many individuals and businesses. That could, in turn, affect the real economy, as many companies might suddenly find it harder to manage their cash flow. That could, in turn, lead to recession and job losses, and if the situation gets out of hand, another Great Depression could materialize :uhoh
The only "good news" for now is that oil prices are falling, due to worries over slowing global demand :) Hopefully, that would drag down other commodity prices as well. It would be disastrous to deal with a recession at a time of cost-driven inflation.
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I've been following the Fannie Mae and Freddie Mac fallout since September 8 while you guys continue to talk about lipsticks, pigs, Palin, and The Anointed One :D
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You won't mind if I reject responsibility for this fiasco. I pay my bills, have no credit load and own outright my property. I pay my taxes, own a business and it is never encumbered. I run at a small but steady budget surplus. I don't believe in deficit spending.
Kitchen Table Economics.
This ain't my freaking mess, and I don't deserve any 'comeuppance', nor should I be paying for somebody else falling asleep at their switch. Mine's been manned.
Bastards. Screwed us again.
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It's a sad state of affairs indeed. How much is all this costing you guys in the long run?
Should the Government really be bailing out these institutions?
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It's a sad state of affairs indeed. How much is all this costing you guys in the long run?
Should the Government really be bailing out these institutions?
As I understand the US Federal Reserve is not really government, it has representatives of the US Government on it's board, but the money under it's control is capital contributed by private banks. So this whole "the US government is bailing the banks out with taxpayer money" we're getting at this end of the world isn't right. Anyone feel free to correct me if I'm wrong.
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You won't mind if I reject responsibility for this fiasco. I pay my bills, have no credit load and own outright my property. I pay my taxes, own a business and it is never encumbered. I run at a small but steady budget surplus. I don't believe in deficit spending.
Kitchen Table Economics.
This ain't my freaking mess, and I don't deserve any 'comeuppance', nor should I be paying for somebody else falling asleep at their switch. Mine's been manned.
Bastards. Screwed us again.
Ditto! It's bail out mania. Much of the housing woes here in he US originated in the 1990s when banks could be sued over not lending money to minorities. So they basically had to loan money no matter if the people could afford it or not.
This is how I see it. The government, the banks, and the folks who borrowed the money are to blame fannie mae and freddiemac.
As far as the other failed companies I don't know.
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You're kidding me right?
People were suing the banks because they were not lending money to people who couldn't afford to pay it back?
That's just plain and outright stupidity.
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I was thinking,
If the feds bail everyone out, I could dump my house and they would cover it! I'll keep an eye on it too.
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I've been following the Fannie Mae and Freddie Mac fallout since September 8 while you guys continue to talk about lipsticks, pigs, Palin, and The Anointed One :D
SSSSHHHHHHhhhhh....
Didn't anyone tell you that politics are more fun than economy?<oldrolleyessmiley>
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hang.. it is only about 1% of the people who bought homes that are causing the problem.. that is a lot tho.. most of the problem was with regulation.. they forced loan companies to lower standards to let in "low income" and minority people into the process..
the scum bags used the loopholes created by the government.
Just like forcing schools to take people based on color and to take illegals has ruined the school system..
lazs
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I've been following the Fannie Mae and Freddie Mac fallout since September 8 while you guys continue to talk about lipsticks, pigs, Palin, and The Anointed One :D
amen brother :pray
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It's a sad state of affairs indeed. How much is all this costing you guys in the long run?
Should the Government really be bailing out these institutions?
3.4 trillion is what i heard, and it'll go up from there... :furious
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My company's having a hard time. How can I get the government to bail me out?
If they won't, maybe I'll file a law suit.
The bottom line here is GREED. As I spoke of in previous post.
If the government doesn't hold Ceos and their cronies accountable for this mess,
They are fools.
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There will be more failures. We have not seen the end of this.
What I would like to know is how much the Ceo received for driving their companies into bankruptcy?
Why after the questionable accounting practices of Enron are we seeing questionable accounting practices again?
How many mega luxury jets these companies have.
What kind of compensation the boards get.
I would also like to know how well either of our candidates know these CEO's.
How much did these companies contribute to the campaigns?
How much did they spend on lobbyists?
From what I heard, AIG CEO (June 08-Sept 08) Got a 5 million dollar check. Nice. What did the old CEO get to drive this mega corp into the ground.
Why isn't the government breaking up AIG since it is obviously a danger to the world economy due to it's shear size?
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3.4 trillion is what i heard, and it'll go up from there... :furious
3.4 Trillion!! Add that too our 9 trillion debt. Most of our debt is owned by other countries. Our dollar is down to historically low levels. Its going to be a bargin sale on USA companies and infracstructure.
Every dollar we use to bail out pulls that much out of the money system. Which is why on tues(or wed) Britain and others where dumping loads of cash just to keep some cash flowing.
We shouldn't fire our politicians we should put them all in prison.
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hang.. it is only about 1% of the people who bought homes that are causing the problem.. that is a lot tho.. most of the problem was with regulation.. they forced loan companies to lower standards to let in "low income" and minority people into the process..
the scum bags used the loopholes created by the government.
Just like forcing schools to take people based on color and to take illegals has ruined the school system..
lazs
I knew you'd make this a race issue. It's like everything wrong with the world according to you can be laid at the feet of minorities. But no numbers or statistics to back up your ranting, just hate.
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As I understand the US Federal Reserve is not really government, it has representatives of the US Government on it's board, but the money under it's control is capital contributed by private banks. So this whole "the US government is bailing the banks out with taxpayer money" we're getting at this end of the world isn't right. Anyone feel free to correct me if I'm wrong.
wikipedia
http://en.wikipedia.org/wiki/Federal_Reserve_Act
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US Federal Reserve is not really government
The real criminal element of our financial institutions lies within the reserve. The founding fathers warned of this, actually was the most important reason for declaring independence, yet, in the early part of the 20th century, a few in government sold the collective soul of the nation to a group of world domination oriented sharks. From that point on, we bacame slaves to them and the rest is history.
:aok
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Bear in mind that things like the great depression from 1929 could actually form from nothing global. There was an "up" in the whole world. I lack the word for it, - maybe "teccnical"?
Anyway, it sucks.
BTW does anyone here know of a term described as the "pork wave"? (hope I have the right word for wave, - could be "swing" or "curve"). Anyway, there is something about that which....is.... :noid
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The variable house loan crap was for everybody. When I bought a House in Texas 2 years ago, the guy from Prudential told me:
- You qualify for two rates, a 6.25% fixed rate, or a 5.15% variable rate.
- What does variable means?
- That it can adjust over time?
- Does that means that I can become 20% next week?
- Yes, but it's very unlikely.
- But possible right, no garantee it's stay at 5.15% or close to it.
- Yes, but not for years.
- That doesn't make sense to me, I'll take the 6.25% fixed.
Murphy's law always applied to me, I guess my life experience saved my butt. Too bad many still believed in ferry dust sugarcoated handouts.
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The variable house loan crap was for everybody. When I bought a House in Texas 2 years ago, the guy from Prudential told me:
- You qualify for two rates, a 6.25% fixed rate, or a 5.15% variable rate.
- What does variable means?
- That it can adjust over time?
- Does that means that I can become 20% next week?
- Yes, but it's very unlikely.
- But possible right, no garantee it's stay at 5.15% or close to it.
- Yes, but not for years.
- That doesn't make sense to me, I'll take the 6.25% fixed.
Murphy's law always applied to me, I guess my life experience saved my butt. Too bad many still believed in ferry dust sugarcoated handouts.
That is called " A TURD ROLLED IN SUGAR "
I would add a ROFL here but I really dont see any humor much these days.
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The problem as has been said is greed....but on all levels. Everybody wants(sorry needs) this and that and the other, why.....just because. So here comes the financial sector...money, money come get your money...people flock great things happen to the economy due to the huge amount of spending. Governments,banks,lending facilities are all woohoo party time.....sometime later people have spent their -money and now have to pay back and obviously much slower than they received....oh no economy starting to slide not enough spending, quick let's consolidate peoples credit to help them and in the process give them a bit more so the spending can continue..this can only happen so much. I was only a naive young thing in the 80's but we managed to come back from that and put ourselves into this situation again. nothing new really. It's just this time most of us are in a different time with different needs in our life so has a bigger impact on us.
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As I understand the US Federal Reserve is not really government, it has representatives of the US Government on it's board, but the money under it's control is capital contributed by private banks. So this whole "the US government is bailing the banks out with taxpayer money" we're getting at this end of the world isn't right. Anyone feel free to correct me if I'm wrong.
The Treasury Dept. is borrowing money from the Reserve to bail out the companies. That money has to be repaid sooner or later. That means taxpayers will have to pay the bill.