Are we in the middle of a financial meltdown?

1,054 posts in this topic

 

It is not a LOAN FFS! It is a fund for the government to acquire high risk parts of banks and other financial institutions as a means to safeguard these institutions from being run into the ground. That is the government will actually own these in the same way as the British government currently owns Northern Rock.

I undertsand that it is not a loan... as I actually stated in my posts. What it is... is simply the forced purchase with public funds of company stocks that no idiot in their right mind would touch at this point. It is like pissing money up against the wall. Hey it is absolutely fantastic that they will own it</sarcasm>, but if it aint worth shit then why pay for it?

 

I understand that this is supposedly a rescue package to prevent us all going down the tubes... we will see in time the actual results it produces. Where are the punitive measures for the tools who manipulated this shit. Do you see any of them being brought in front of the public to explain their actions.

 

Once again in my opinion this is a manufactured event... and in terms of planning has been over 20 years in the making.

 

This shit is nothing but 1's and 0's floating around a bunch of electronic circuits. The fiat banking system is simply a tool for the control of the population.

 

 

"Give me the right to issue and control a nation’s money and I care not who governs the country.”

Meyer Amschal Rothschild

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Also, according to the polls majority of the American people are against this bail-out. Considering this is their money, this should count for something. Of course, the Congress representing their constituencies honestly is an idea the country is not ready for.

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Considering this is their money, this should count for something.

why do people always consider tax revenues to be somehow "their own money"?

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God knows I have no reason to defend GWB but on this matter there really was no option but for this fund to be created.

I would fully agree with that, but I think that the country should be taking a share in each bank worth the amount of the subsidy they are receiving by being paid above the market value for this debt. There is no reason for taxpayers to give these banks anything for free.

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BTC is right. This is not a "bailout" per se in that the assets are "bought" and the sellers run away with the money. Like the RTC during the savings and loan crisis, governments are stepping in to guarantee stuff that, were financial institutions to fail, would suck the rest of the financial system down with it.

 

This is exactly what was done in Germany after the war with all the byzantine cross-holdings that emerged. It wasn't about "enriching" anyone, it was about stabilizing the day-to-day transactional banking system. People didn't sit around debating whether A.H. leaving the country in ruins was a mistake ... they did what had to be done to rebuild the place into the world's third-largest economy.

 

As Gaberlunzi said earlier, which would be better: Let it all go bust, and then not only have people lose their homes but have comercial/residential lending sieze up completely (which neatly sums up the 1930s), or ring-fence all the bad stuff into a place where it could be watched and properly valued whilst the rest of the real world gets on with life?

 

None of this is new ... every financial wave crests in a frenzy of "financial innovation" that outstrips the ability of risk controls and regulators to keep up with it; then it must be reigned in, regulated and then it eventually becomes part of the furniture. Same way with drugs. In the 1960s and 70s, snorting cocaine was only available/affordable to the rich, and it remained under the radar from a controlled substances perspective because it didn't threaten to take society down with it (well, maybe except for pop music). Innovators came up with crack, which made it affordable to the masses and inner-city mahem ensued until it was (ahem) cracked down upon. All these derivative/structured finance products have been used for years, but it was only when it became metastasized into the fabric of everyday banking/insuring that it became a public financial health issue.

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why do people always consider tax revenues to be somehow "their own money"?

What does that mean? Are you saying that when the majority of people are against a move this controversial, it should just be ignored? The tax-payers should not have any say in where there tax money goes? They did it with the Iraq war and now they are doing it again... Maybe they redefined democracy while I was asleep...

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I undertsand that it is not a loan... as I actually stated in my posts. What it is... is simply the forced purchase with public funds of company stocks that no idiot in their right mind would touch at this point. It is like pissing money up against the wall. Hey it is absolutely fantastic that they will own it</sarcasm>, but if it aint worth shit then why pay for it?

You could not be more wrong.

 

The "company stocks" (and public debt) of the likes of Northern Rock, Lehman Brothers ($67 to $0.13 per share!), etc. are completely in the toilet. No one on earth has proposed that this be bailed out. Caveat emptor.

 

However, the stuff that you say "ain't worth shit" includes people's homes, their deposits, their retirement nest eggs, etc. That's worth a lot, (in fact, clearly more than mark-to-market fair value accounting often allows it to be carried on financial companies' balance sheets), which is exactly why that's the stuff that's being ring-fenced and guaranteed.

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What does that mean? Are you saying that when the majority of people are against a move this controversial, it should just be ignored? The tax-payers should not have any say in where there tax money goes? They did it with the Iraq war and now they are doing it again... Maybe they redefined democracy while I was asleep...

it means sure you can have a say by voting at elections, but essential tax money is the governments to do basically what it wants with. And if you don't like it enough then vote them out next time. Democracy doesn't mean having a direct say in every little piece of legislation. But my basic point is that tax revenues are not the taxpayers' money, they are government cash

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Once again in my opinion this is a manufactured event... and in terms of planning has been over 20 years in the making.

Care to explain who planned it and why? :unsure:

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Expaticus is right. Remember that the value of some mortgage funds is now well below the actual value of the housing stock that has been mortgaged. Even if every single mortgage holder defaulted and all the housing stock reverted to the mortgage company the actual value of what they owned would be considerably more than their current valuation. That is why long term investors like Warren Buffet are stepping in. But as Buffet himself acknowledges he does not have sufficient liquid assets to hoover up all these funds. And this is where the US government steps in. They *can* afford to take a long term investment and do have the liquid assets at their disposal now through this fund.

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So the German government takes action and the markets go into freefall again?

 

Anybody able to explain this one?

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The fact that german government and banks werent able to figure out the amount of the potential loss the first time, leaves a bad impression. Everyone starts to wonder what else they dont know yet. The fact that they felt it necessary to guarantee for deposits might make some suspicious too. There is an short but interesting german comment on "Spiegel-Online", where they compare the actions of the german government to what a "Bundeskanzler Helmut Schmidt" would have done. In summary they complain about the lack of leadership on Angela Merkels behalf.

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it means sure you can have a say by voting at elections, but essential tax money is the governments to do basically what it wants with. And if you don't like it enough then vote them out next time. Democracy doesn't mean having a direct say in every little piece of legislation. But my basic point is that tax revenues are not the taxpayers' money, they are government cash

Representitive Republic, actually. But yes, your point is right on. The expectations you have from voting for someone to what that someone actually does in office is usually quite different.

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The fact that they felt it necessary to guarantee for deposits might make some suspicious too.

Apparently, they will not legislate anything to that extent. The government clarified that this is a "political guarantee issued by Angela Merkel". Whatever that means. :unsure:

 

No extra safety for German savers (BBC News)

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why do people always consider tax revenues to be somehow "their own money"?

Then who's money is it?

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Can the Dow fall 20% in the next few months? If so, what is the forecast for recovery? If you believe Jim Cramer (Mad Money) the answers are yes and 5 years.

 

MSNBC Video

 

Cramer basically says pull your money out of equities, now. Didn't an earlier poster suggest buying farmland and guns? We might nearly be there.

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... Can the Dow fall 20% in the next few months? ...

Can happen within a few hours ...

 

Black Monday (1987)

 

 

... The Dow Jones Industrial Average (DJIA) dropped by 508 points to 1739 (22.6%) ...
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Then who's money is it?

the governments

 

memo for cinzia : dont trust hubby's trading ideas

 

quite a market "crash" today!!

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