Just when you think this crisis can’t get any worse, the next day comes along. And there’s a feeling that it’s all beginning to get closer to home. We’ve decided to forego focusing on one element of what’s happening and simply open the blog and the phone lines for your comments, questions and concerns. No subject is off limits. Questions coming up include…
Do you think Iceland should pay back money lost in its bankrupt banks?
Should America part-nationalise its banks?
Is the US bail-out package large enough?
How can pensions be protected?
Is this beyond the control of governments?
Could China play a more constructive role?
Our business editor Robert Peston’s blog is a very good place to follow what is happening.
Speak to you later.
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BBC World Have Your Say 
It still hasn’t hit me at all… The fear is still creeping in though, its an uneasy feeling, but I haven’t been directly affected by it so far.
JUMP! MANAGERS JUMP!
I would suggest many of the culprits should jump from the tops of their buildings as in the 30’s. At least then, the bosses had some moral fibre and responsibility.
The negative synergy between the Asian and western markets has built up its own circular momentum, with each reacting to the other on the spiral downward. The U.S. bailout package’s size was never really an issue–it was, in these early stages, a psychological gamble designed to shore up investor confidence by demonstrating the proactive involvement of the federal government during this situation. The Dow has spent the rest of the week essentially proving that move insufficient.
The Icelandic Prime Minister’s reaction to Chancellor Darling is understandably infuriating, but also one of pragmatism–there may be very little his government, indeed most governments, can do at this point to contain the crisis–perhaps the best individual states can do is mitigate the damage to their own people. Prime Minister Gordon Brown said on Wednesday that his government would do “whatever it takes” to protect the British banking system and thereby the British economy; with today’s global market shelling, many more nations may be adopting those same words in lieu of global cooperation that seems stillborn.
If the G7 is unable to produce a meaningful, forceful response today, rather than bureaucratic waffling–I don’t think anyone wants to contemplate that. This is the last trading day of the week; depending on the G7 and the Dow and FTSE’s closes, the weekend will be either a time to cool off and calm down, or an incubator for even greater panic next Monday.
Re: Rory, October 10, 2008 at 2:13 pm
I agree!
At the same time seppuku or harakiri should be temporarily made legal. At least the Japanese consider it an honourable way to die!
Once all those who’re responsible for this mess whether they’re from the financial sector, or the legislative side or the banking sector or property sector or whatever sector have chosen the honourable way the laws can be changed back to the original.
It would be fitting for their last act in life to be an honourable one!
The current crisis is likely to have an impact worldwide even for countries not needing bailouts to save their banks and other financial institutions.
For Morocco, it is a country that depends on foreign investments, remittance from its migrant population which yearly channels billions of dollars as well as tourism and agricultural exports to the EU. In view of the current crisis, it is likely to be hit or to have many of its development projects at halt, not to mention an increase in workers’ salaries which will be postponed.
What can save Morocco is a rainy season, at least for those with a very limited income not to suffer further increase in food prices.
The good news for those with deposits at banks, they have little to fear as banks are semi-public sector. But the state is likely to feel the pinch as reduced investment means job cuts and and a reduction of job creation in other sectors.
Ride it out! Let the stock market crash. It’s going to hurt in the short term, but let’s get back to a point where money actually represents something tangible. Everyone should have seen this coming. The market was completely bloated, and it didn’t represent real world assets anymore. Now that everyone can’t get a loan, let’s wait for the housing prices to drop, so that responsible people, who couldn’t afford the prices of yesterday, can actually afford a decent house.
We’re in uncharted waters now. I’d like to believe that governments could do something about it but I don’t have that much faith. Bernanke and Paulsen model their strategies on studies of the Great Depression, but in 1929 we didn’t have globalization and 6 billion people to deal with.
And it isn’t just the economics, it’s the knowledge that the 1930’s generated some of the nastiest and most lethal political movements ever seen – Nazis, Facists, Maoists, etc.
We’re free-falling in the dark, and if the markets keep going the way they are for another week I’m going to get seriously scared.
Ros, I know I’ve been a pain in the ass over the years and you’ve’ gotten a lot of cynical emails in the past. I as well as many others have been saying that the US and now the world will look like every company Bush ever worked at. That is to say bankrupt or failing. How could people not see this coming? Like many others, I am now watching all of the funds I prudently put aside for my retirement disappear. There’s nothing I can do to even stop it. I drive a car with 240K miles, served my country, do not buy things I can’t afford and try to teach the kids the value of a dollar. Now all of these things have been proven to antiquated and meaningless in the wake of the new “something for nothing” culture fostered by this administration. I would love to know if Bush, Cheney, etc are watching their assets vanish as well or are they somehow immune and protected? Can we find out? That would make it easier to swallow. We’ll see how tough the “bring it on” crowd is. The truth is that these people will walk away from this carnage without even a glance over their shoulders.
GB/OB
but in 1929 we didn’t have globalization and 6 billion people to deal with
Yes and that little fact seems to be lost on the smart(?) people who got the globe in this mess and are now desperate to get themselves out of it.
Maybe even the money under the mattress will not help out now!!
I know nothing of economics, but one major issue I see that is completely unaddressed in any media reports I’m hearing is this: Amongst the people I work with our medical insurance costs rose 25 cents per hour this year, and raises were 15 cents an hour. So everyone is effectively making less this year than last…yet gas and food costs have increased.
So amongst us little folks we all of us have less to spend on neccessities, and there’s no change in sight. The heck with credit, we don’t have as much CASH to live on.
So regardless of the bailout, regardless of “investor” confidence or fear, regdarless of interest rates dropping…us working folks in Michigan are hurting and will continue to do so.
You can call it a recession, depression, ‘slow’ economy…all just words…bottom line to me is that the average working person has less to spend, so even if the gamblers/investors get more chutzpah and Wall Street recovers and banks start lending more to each other again, us folks down at the bottom will be worse off.
And it seems to me that if this continues, that nothing any government can do will change this, and we’ll be in for some extremely interesting (or scary) times ahead.
Pensions aren’t protected if you are in your young and have a high risk portfolio even if it’s diversified. Many of my friends in their late 20s yearly 30s have all seen their saving completely disappear. It almost makes you regret being responsible.
We laughed about over dinner yesterday, we thought of all the things we could have done with the money instead of saving it for a raining day… because in NYC it’s pouring and fat cats in wall street stole my umbrella. Maybe if I had the memories of that vacation I wanted to take instead of saving for retirement, I wouldn’t care that I don’t have an umbrella and am standing in the rain.
The one thing that is certain, the financial industry should be held accountable and brought to justice. This is costing tax payers around the world trillions of dollars.
China is likely to use the current financial crises to defend its economic policies based on direct state interventions in key economic areas. But now as its economic activities are largely based on external exchange mainly with the USA and the EU channelling hundreds of billions of dollars, it is likely to have itself a slowdown in its economy.
This means giant economies from China, India and G8 should have common policies to deal with the current crisis. If each country tries to have its solutions, this can lead just to temporary easing of the crisis, but structurally, the economy will still be exposed to negative fluctuations.
if there is any good news for the poor around the world, it is that the rich can’t afford their customary luxuries they way they used to. Now they will have to think twice about them, they way the poor think twice about buying basic commodities to balance their dismal budgets.
Maybe it is time for the rich to consider their excessive greed and speculations are the fundamental cause of their downfall which will be catastrophic for all, rich and not so rich.
@ Roy
“JUMP! MANAGERS JUMP!”
LOL, I can suggest some buildings in NYC. Better yet, make it a bridge. Less mess to clean up…
If I wanted to go on a rollercoaster ride I would have gone to an amusement park.
If I wanted to go on a rollercoaster ride I would have gone to an amusement park.
It would have been a whole lot cheaper too 😉
Greg makes some excellent points wherein the money that we worked all our lives for and put away for our retirement is gone.
Bush will come away a multi-millionaire. The Wall Street tycoons walk away multi-millionaires. You have no idea how angry I am at the moment.
It would be wonderful if we all banded together, marched on Wall Street to hold accountable those Wall Street tycoons.
To stem the crisis we needed a leader that could make a public pronouncement and inspire confidence. Bush has NONE of those qualities and his leaning across the podium snickering and saying “hey…hey” further pisses me off.
This is going to get a lot worse.
“Brother can you spare a dime”…..the renewed motto of America’s workers.
How much money will I ever allow my child to put into a stock market?
I have felt the effects directly and indirectly. My friends and I have seen the values of our 401Ks/IRAs erode sharply over the past year and precipitously over the last couple of weeks. We’ve changed our spending habits – don’t shop quite as much, don’t go out drinking/partying quite as much nor do we eat out as much. I shudder to think what it might be like if I actually had children to provide for…
All the experts keep saying cash is king now which is true now but wasn’t for our demographic up to a few months ago. But, if you had been prudent and invested/saved for your future most of your savings would or should have been tied up in investments – stocks, mutual funds and the like. I don’t feel foolish but the level of visceral panic is of great concern to me….the wave of nationalizations, the threat of corporate and personal defaults and bankruptcies, rising unemployment etc.
I don’t think “the sky is falling” but the picture will likely be pretty grim for the next two years, at least. I don’t foresee any easy solutions around the bend…but chin up folks because this too shall pass.
@ Julie P and Bret
“If I wanted to go on a rollercoaster ride I would have gone to an amusement park.
… It would have been a whole lot cheaper too.”
It would have also been safer.
“Is the US bail-out package large enough?”
Are you kidding me? It should have NEVER been approved in the first place. What did it to to help the economy, nothing! Oh, wait it sped the decline on the market.
@Jessica,
“If I wanted to go on a rollercoaster ride I would have gone to an amusement park.
… It would have been a whole lot cheaper too.”
It would have also been safer.”
Not really, someone lost their head at one near me this year, probably like some of these high rollers who gambled with our future should.
Definitely legalise suicide for bankers and dealers ….
I think Iceland is sort of looking for a bailout perhaps we
could get a deal on free cod for the next 1000 years.
…In the end I think it will come to nationalisation of the banks ,and investors ( sorry to my folks) will just have to lump it …..and at best just get a nominal return .
Whoever thought Gordon brown would actually have to do something ‘socialist’……to say nothing of Bush ….eat your heart guys!!!
Having seen the value of my stocks decline, I have decided to take advantage of the situation in a slightly unusual way. I have decided to invest more money in buying stocks of choice companies that are very cheap now. This crisis can’t last forever and at some point in the future, things will get better and the value of the stocks will appreciate.
“Nothing to fear but fear itself”
At this point, panic is eating the financial markets. There are plenty of things that are fundamentally wrong with the economies–too many poor people in rich countries, too many poor countries, speculators playing dice with people’s savings, too much debt, too many complex financial instruments nobody understands, too little sensible regulation of the markets. But those things have been wrong for years; they do not explain what’s happening on the financial markets today.
We need to build real economic security by building prosperity from the bottom up. That’s not a quick fix.
So, at the moment, in my 60’s I’m watching the prospect of retirement fade away. And trying not to join the panic. After all, right now, unlike many people, I’m OK: I have a (rented) roof over my head, food to eat, clothes to wear, family and friends. The future comes later.
I think the best thing I can do for the economy today is… take a walk in the hills, taking time to look deeply at the beauty of the changing seasons.
GB
This will definitly pass but in the process will wipe out peoples lifetime savings.
You may be young enough to earn more money but what about those about ready to retire who are devastated.
Look how many decades did it take us to recover from the Great Depression?
@Nelson
You are a very wise man, and exactly right. I hope you are also a young man, because it might take a while for the stocks to recover, but if you chose the right “choice” companies, you did the right thing. (I say this in general, not knowing the companies or even the exchanges of course.)
@Julie~
What–an amusement park decapitation, and you don’t supply a video link?
@Everyone
We ARE in an amusement park. Ya didn’t see the sign?
S peculation Beyond Control!
U nderhand Sales Tactics.
B rainwashed & /or Bribed Legislators creating Lousy Legislation.
P revaricating Pigs in charge of Pension Funds.
R apacious securitization in its premeditated intent.
I ncompetence which beggars belief!
M anipulation of home buyers & markets.
E xtreme example of the Cardinal Sin of Greed.
C heating Cabals.
R egulate the Regulators, Legislators & Markets.
I nept & Ineffectual Regulation.
S ecuritisation of Shady Debt!
I ncredible! ‘Hedge’ in Hedge Funds is a synonym of prevaricate!
S hysters in Suits!
Bring on McCain & Palin! I am a glutton for punishment! Yee-Haw!
I personally think the Banks have been over lending without realising their return on capital. Besides the US is still demanding out there from some borrowers. But one would also ask these question – Is’nt strange for the US to go into a financial crisis yet they are the biggest lenders and policy makers? who dictates what and when on the financial sector?
For everyone who took out their money and are not sure what to do with it, here is what you can invest in:
-Guns
-Water Purifier
-Back up generator
-Flour, water, salt
-Gas reserve
-Batteries
-Water Proof Matches
-First Aid Kit
-Thermite
Best investment for your money 🙂
-Anthony, LA, CA
@Jessica~
You do know that the “bailout” hasn’t begun yet, right?
Also, don’t worry about your retirement funds. That’s exactly the money that you don’t have to worry about, even in something like this, provided you’ve got some years left before you retire. And provided that you’ve got some asset allocation going, or at least diversification, so that you’re spreading your exposure. (Pardon my language.) Take it from this voice of bitter experience, you don’t want to be too concentrated in one asset class, one industry, or worst of all, one company. Stocks have the highest return over time, but the highest volatility (duh), which makes them ideal for the portfolio you won’t need to touch for a while.
Feel better? Cold comfort, but these are cold times….. 🙂
I think the answer is clear and has remained so throughout this crisis:
Governments MUST tax the rich- significantly. The liquidity crisis has occured because of Reagan Thatcherism which mimicked Calvin Coolidge’s deregulatory orgy in the 20’s.
The western world went into overdirve in terms of switching from a manufacturing based economy (post depression America up until the Reagan years) into a consumer based economy.
We are now like fat mice. Indeed, Pixar’s “Wall-E” got it right. We’re fat and bloated and the we’ve been called home to roost.
It is now time for the west’s millionaires to start repaying the rest of us for the years of hard work we have given them. The rich have starved the beast and the beast will not die without taking everyone with him.
TAX THE RICH NOW~!!
Jessica~
The short version of that is: Your stuff should recover and far surpass, by the time you retire.
It would be interesting to see what the non economic outcomes of this crash are. The depression in the 30’s contributed in part to the raise of the extreme right in Europe and then to WW2. Which political philosphy is hiding out there which will use these recent events to their own advantage, and what outcomes will that have on the world.
In the US this negative feedback loop works more efficiently because of lack of social security:
Rising unemployment leads to more people in the US defaulting on their mortgages which means more bad loans the banks have to deal with, which leads to higher interests rates, which in turn makes it more difficult for companies to lend money and then you get even more unemployment.
@ Roof Jumping.
I agree. In past times, when men screwed up as badly as these fellows have they’d throw themselves on their swords. Blood washes out shame.
Luckily instead of swords, these days execs have the Fifth Amendment.
There will be a congressional committee formed to explore the cause (with the ultimate purpose to assign blame) and, just like with the SFCB scandal, the CEOs will plead the fifth and get off with their golden handshake while the rest of us wallow in the muck.
Re: Count Iblis, October 10, 2008 at 4:43 pm
A VERY interesting analysis and a FACT!
As the DI hits 7999/8000 this will be the bottom, not the scraping the mud of the floor bottom, but it will level out at 8000 with a slight increase over the next few weeks as the “bail-out” kicks in.
That will be the stabilising factor. When the DI hits 8000 – start to think about buying into companies ;). November 6th/7th/8th – IF Obama is elected you will see a rise albeit modest, in the markets – and then wait for the regulation legislation be enacted in the US Congress – stabilisation is what is needed – but until the markets know that a Republican isn’t going to get into power – it is going to be as erratic as John McCain.
@ Will
What’s your rationale for thinking 8000 will be the floor? A year ago people were saying 10 000 would be the floor.
That whistling sound you hear is the economy in freefall.
I guess it’s not such a bad thing that I haven’t bothered starting a 401k yet… (I’m 27)
We must remember that the stock market is not a driving force. These are speculators. They drive the price up with their buying and down with their selling. We do have a real ficancial crisis but it needs to (and will) run it’s course. Those of us not directly involved can see that all the manuevering of the Bush administration are to serve the Bush administration. None of the programs that this administration are pushing will help. They are going to continue to shore up the system until it falls on the next administration and (just like the Iraq war) they will tell us a new lie everyday until we get tired of listening. The bottom line is the stock market will recover. These people make their living by manipulating the market. They are not going to go home. When we have reached a sustainable level then all will return to business as usual. In the meantime it is up to us individually to cover our own *ss. We know the current gov’t is not on our side they are on the side of the financiers and that is who they will help. All we can do is hope they don’ do too much more damage before they go home.
We might also remember that the banks are hoarding (doesn’t help anything but themselves) and the speculators are short selling (doesn’t help anything but themselves) and the “Fed” is introducing plans that help the banks and financial institutions. Why should we expect anyone in that loop to cure the problems that are affecting me and you.
Shaun –
I think that the tank floor could be about 7500 IF the irrational sellers still sell – the stabilising figure will be 8000.
That will be, I believe, 50% stock drop. We are at 40% over the year now. Without going into the indices.meridian,mean, and all the economic speak – the market is now getting rid of the over-inflation that was built into it – the market has seen this coming for months – they KNEW the share price was way off kilter. What triggered all this?
A simple number – 10 trillion. Once the US debt reached that – it was time to bail, that was the water coming over the brow and sinking the ship fast.
I really don’t think you will see the 8000 point figure rise much in the next year. There has to be a debt replacement over that year and the national debt has to be brought down with a bump. Credit will be tight for a year at least.
And if people are thinking about getting into 401k, IRAs, pensions – do it when the floor is hit at 8000, when it comes to retirement you will be well off. If you have time – high yield for the first 15 years, then medium risk for 5 and low risk for the remainder.
Free advice for ya! 😉
@ Jonathan
I do realize the bail out has not happened, but it also did not restore confidence in the market that it was suppose to. At least that’s why the politicians in Washington DC said it would do when they spent my tax payer dollars.
How will the confidence be stored? It seems like that is the question that needs to be answered or people will keep pulling their money and start hiding it their mattress. Personally, my confidence will not be restored until the CEOs and exec are held accountable and the government puts measures into place to protect me. Right now, I’m having a hard time not laughing while thinking of words “trust” and “politicians” as being in the same realm of reality.
Thanks for the encouragement, I will try to think of it like you and be more positive while I enjoy a welfare martini tonight. 😀 bad joke?
@ Will, the wise one
“…but until the markets know that a Republican isn’t going to get into power – it is going to be as erratic as John McCain.”
I believe and have confidence in that kid of change. 😉
——–
@ Julie P
I’d still take my chances on the head decapitating rollercoaster over the market. It’s a safer bet, because 1) I like them 2) the chances of me getting my head cut off are 1 in a zillion. (Also, I remember that story. Wasn’t the person an engineer who was standing underneath in a danger spot when the rollercoaster killed him?)
@ Dan
I hear you and I certainly don’t mean to sound unsympathetic. If I’d continued waxing poetically I would have noted that I am also very afraid for those people who recently retired and those nearing retirement. I can scarcely imagine what it must be like for those who also added the burden of unemployment to their personal calamity (and what all this lost productivity and tax revenue will mean for all of us collectively, particularly those of us in the US where we have mortgaged our children’s future for lower, albeit non-progressive, taxes).
I think we have a long painful haul ahead of us and I’m not sure any of us will really escape unscathed.
@Will
Sounds about right. You looking at any sectors in particular, to like or to avoid?
Now would be a good time to negotiate a new fishing treaty with the Iceandic government .
Ironically, a person I know, who lives only on the basic UK state pension went to London yesterday to meet up with a couple of friends who had flown in from abroad, especially to spend time with one of their daughters who was “off work due to a stress related illness”,where did this woman work?, at one of those investment banks in the City of London.A pauper commiserating with a millionaire.
yes i agree this is a lifetime event and a “financial genocide”
but it would be wrong to blame banks and financial institutions completely because the base of any economy is finance and financial institutions are probably the most important part of this base
@ Roy
If only I were in your shoes – you are pretty perfectly positioned to enter the market assuming you can spare the cash.
@Jessica~
This week, there are no bad jokes. Enjoy your martini.
Jon –
One to avoid is housing, lol.
If you are looking toward mid-term I would speculate on renewables such as manufacturing of the very things the US needs – and do remember these companies are going to get a massive subsidy, so I would look at small company investments and start ups if you really want to be risky – you can lose a chunk there. But when it pays off it will pay off big. And go LOCAL!
Many States will be balancing the budget so it will be the 700Bn that will stabilise on the mid/short but not long term. In about a year I would look at automotive and then construction as big investors. Many of the banks will be going into solid investments to start off and, thankfully, cash. Look for the rise in the USD – that will be the main indicator.
The events unfolding in Western Europe and North America are distant and don’t really make any kind of impression on the average Indian, pretty much like 9/11 or the war in Iraq ,the country is quite insular.
For example yesterday in North India there was holiday called Dusshera(a bit like Guy Fawkes,in the UK) which celebrates the triumph of good over evil ,all you heard on the news was about the festival and Oh the stock market fell a few points.
I heard an interesting comment on the radio this morning from an economist, describing the situation as a computer generated herd mentality. Basically all the traders use software with similar logic and design assumptions. At the moment the result of the declines is that all the programs are telling traders to sell, which reinforces the decline further. The logic for this software is designed for normal market conditions, it is being used outside of its boundaries and will now simply push the market down and down further as that is the most logical course of action for it to do.
Fundamental of human being….is to work and be productive collectively….God rewards human who are productive & contribute positively to humanity… the basis & concepts of capitalist aren’t derive from virtue, they are stem from transience utopian cattle & sheep’s’ wickedness of competition/survival depending on your social status (privilege club – prefer dividend lovers).
May God bless this New World Order & Its bankrupt fantasy land (lla la land) financial systems.
In only God I trust
Sincerely
Ex-Gatekeeper of the lost free world,
Like Hitler’s SS , Dividend lovers are the true tyrants of this Bankrupt New World Order.
There just isn’t any way for me to express the frustration that I feel with the ‘masters of the universe’ legally. The temptation to go on an actual Wall Street ‘witch hunt’ for halloween is just too large. These are the people who smugly told us that if we fell off the bus due to illness, poor luck, bad choices in marriages, jobs or parents if we fell in the streets; tough luck.
Tough luck to all you sick and poor and unlucky. We’re bailing out the super-rich. They’re still going to crash the economy, take cruises and ponder why they are only half super-rich with government money and hire thugs to beat you if you protest. If you invested wisely using their advice; tough luck.
Pretty stupid aren’t we? To believe that they really would share a tiny portion of the wealth with us.
Will~
You talk as if someone were actually in control of this.
If there were such a solid floor as you suggest it would be common knowledge among those who trade for a living and there would be no panic.
If you are the type to be frightened of new things, then prepare for mind-numbing fright. New things are coming. The crisis of ’29 started as a financial one, and evolved into a crisis for every sector of the economy. The event teaches a simple lesson: Profit isn’t evil; it’s just not self-regulating. In the aftermath of the great crash, most of the fundamental productivity of the US economy remained intact. Every person, whether they harvested, or mined, or manufactured, or served, or accounted, or managed, was still up to the task. Without funds or demand, this productivity languished – until Hitler came along. World War II provided ample evidence of the usefulness of productivity. It may be correctly stated: The war was won not by superior valor, but by superior productivity.
So, we’re here again. Greed once again has failed to be self-regulating. The market “Fall down go boom,” as a toddler might say. But; we’ve been Nixonized, and Reaganized, and Bushized twice, and every time, a bit more manufacturing was shipped off shore and a bit more service was made a vital ingredient in the income of every family. So what? One may ask. Any accountant will say the answer: Service is always a cost item on the books. It produces no National wealth. Good thing we’re not facing a big war with anybody. Maybe we could serve ’em to death.
g
@Will
I think it’s clear that the failure of Lehman Brothers triggered this monster. It was “too big to fail” but the gov’t let iit fail, I assume to be tough and show the rest they can’t count on bailouts.
If it had been the debt, would people have so enthusiastically plunged into Treasury bonds? And I’m sure the national debt won’t be brought down next year, with or without a bump; that’s the last thing you’d want in a recession, even a less scary one. Recessions are when you want to be loose-fisted and run deficits and debt, to prime the pump. Or are you not a Keynsian? Tight money was a big factor in the 1930s Depression, or so I understand.
If you are a dividend lover & have influence on how this New World Order’s ideologies are spread you are no better that Hitler’s SS, you are a tyrants & evil.
Today, the collapse of the derivatives market is crushing the international financial system, as the speculators fight to save the fictitious “profits” through the largest bailout attempt in history. We stress attempt, because the bailout is not working, and can not work–there isn’t enough money in the world to cover all these funny-money bets, and the efforts by the central banks to print that money, is fuelling a hyperinflationary bomb which will wipe out not only the remnants of financial system, but also the governments, national economies and the means of existence for most of the world’s population. Hyperinflation will destroy the value of the dollar itself, wiping out pensions, savings, bank accounts, stock portfolios, and all other monetary values, bankrupting households, businesses and governments, leaving the nation destroyed, and, effectively, no longer a nation. We have barely scratched the surface of the horrors that will come, if we continue down this path.
We (our ancestors) have created this New World Order, until we (human not cattle) start thinking in sense of virtue instead of transience ideologies only than we (human) will succeed collectively and overcome earthly issues to create heaven on earth instead of hell on earth as some in this New World Order’s high positions have been cultivate & train to treat humanity.
May God Bless this Bankrupt New World Order
In only God I trust
Ex-Gatekeeper of the lost free world
Dividend lovers are the true tyrants of humanity
When the body goes into shock blood rushes to the vital organs ,and this is no different .instinctively governments have to rush in with cash . Whose going to back this cash is another question . They will end up having to nationalise all finance in the major capitalist countries if they are to really stabilise this .
so organically sociaism arrivesout of neccessity but we should kick the existing elites out and replace them with managers that act on what we need collectively . Not what suits the opportunist speculator .
perhaps then americans will loose a stone or 2…our kids will eat descant and real food . we’ll have a roof over our heads and we’ll work together across nations to fix all the other looming problems that are on their way as in global warming and energy.
Only small investors lost every thing still corporate’s are on hunt with big time money to invest.
Excessive housing investment with out knowing Job market & security of advances may not happen if Govt monitors have ability to understand & stop them at initial stage.
Infact Mr. Bush political statement’s that ” every American owned House” been abused by Money Lenders, in other words political & Financial agends leads to USA towards Economic collapse though Marshall & Global political agenda are supportive element.
I feel like the financial managers are extorting the governments (citizens) of the world to give the institutions money, to solve the fiasco caused by their high stakes gambling.
Why doesn’t Prime Minister Gordon Brown as the son of a protestant preacher go on TV and give a sermon,something along the lines ofwe have all sinned but from now on this is the way it is going to be,then he has to outline his gameplan so everyone can understand.
Now that he has all the stake holders undivided attention he can shape the economy anyway he chooses,it is a great opportunity .
My solution would be to fix one rate for everybodies mortage .
Cap credit card interest rates eg max twice base.
Cap mortgage repayments and credit card re payments ie renegotiate the debt
Increase the base rate so that money will come to the UK .
The myth of the ‘stable’ floor. Oh my what a silly lot we are when we don’t realize that with the exception of food, clothing and some repair materials for our houses virtually the entire economy rests upon a foundation of fragile and unneeded garbage. Go into a WalMart and try and find just the items that your grandmother would recognize. Then look at the rest of the store.
Americans are stupid enough to base their economy on nail salons, giant SUV’s and sandwich machine sales. Our food mostly isn’t food but packaged, processed food-like items. Our houses are of a size suitable for storing hay and cattle. Our cars are frequently massive trucks purchased as pedestals for our egos.
This pile of flashy plastic exchange we call an ‘economy’ has a long way to go before it hits bottom.
The broker’s have been telling you it’s a good time to buy all along. Look it up for yourself. The were telling you to buy at the top of the market and they’ve told you to buy every day of the collapse.
Buy!! fools, Buy!! You’re pretend money can buy you pretend ownership in businesses that pretend to provide value to customers. Good luck with that.
With the credit freeze of these banks holding too much in mortgage backed securities, are there no banks out there who decided not to hold the risky investments? It seems to me there is an incredible opportunity to make good money offering short term lones to companies who need them, when no one else is willing to.
Governments in a panic to save and retain systems based on ideas flawed to their very cores. A public convinced and/or brainwashed to think that system and idea is the pinnacle of reason and justice.
In other words, universal self-delusion propping up universal corruption.
Everyone’s a winner!
’nuff and all said.
Maybe it’s time to question the economic “theories” that have allowed the wealth of the planet to be transferred to such a small number of people. Even now the only solutions being offered are to make sure that the wealthy don’t loose their wealth.
Credit card companies are allowed to charge me 33% interest (like most Americans, I use credit cards too much – although not for the last year). How about we truly “Level the playing field”. We all need bail outs.
How about we change from producing only debt to producing solar panels and wind panels and real items that might save the economy while we try to save the planet.
………….The problem is that America and many other countries have been living off “projected” profits for a long time.
Even the bailouts are based on that principle. There is no 700 billion dollars…it doesn’t exist. This disaster was a long time coming
and it’s time to change our perspectives and way of life. Mark to market accounting has caused this problem and no-one seems to be talking about it.
My husband and I are blue collar people in small-town Ohio. This week my husband lost thousands. My 94 year old grandmother says that the last month has brought back the collective fear she felt throughout the 1930’s.
I think this whole thing is a break in confidence. The bail out is changing the rules in the middle of the game. No one knows what is next and the average person knows they can’t trust our government, irregardless of the party they belong to, they are just covering their own positions.
Why didn’t we get a jobs program, a rebuilding of infrastructure, investments in the people and let that trickle up instead of this incessant trickle down theory. That puts more money and power in the hands of the people who created this mess. Why can’t a bad bank fail. The failure to let failures fail can be fatal to all.
Now we are being asked to help out the bankers who created the system that is self destructing and buy down the mortgages from those who can’t pay their loans. Are they going to share their profits also? How is the system every going to find it’s natural place if we don’t let assets, ie housing, and banks find their real value. Propping up their values only perpetuates the down turn.
We have been renting because it was clear it was not a good idea to buy. We pay our debts in a timely fashion. There is nothing in this for people who have been responsible but a lesson that we were fools for not overextending ourselves.
The true rescue would be investment in jobs and infrastructure, with what we have now we must include public ownership in the systems and equities, we with our tax dollars are paying, so we can have more transparency to know what is going on before it gets so far.
Could the volatility in the stock market be partly due to the large numbers of baby-boomers that are retiring or are about to retire pulling money out to save their retirement funds? I think not only does the government need to take steps to calm the markets but individual investors need to take a step back and realize that if they keep taking money away from the system that it will only get worse. People need to take in to account the big picture rather than just their own pocketbooks.
i still have the feeling that this an orchestrated failiure. i am seriously worried. i will be out of my job in a couple of months and there is simply no money available for research, and all my savings have fallen through the floor.
i am feeling sick to my stomach virtually 24/7 and cannot sleep.
In recent weeks, we’ve heard a lot about two aspects of human nature: GREED and TRUST. Unfettered greed leads to the “law of the jungle,” resulting in wealth being concentrated in the hands of a few at the expense of everyone else; and trust breaks down
completely. [The current crisis is a classic example.]
The neat thing about (successful) capitalism is that it balances greed and trust. Greed is inherent; but realization of trust requires well-defined rules and a mechanism for their enforcement:
TRANSPARENCY and REGULATION.
The important thing is to design the right kind of rules for a fair and stable system.
How are we going to change the rules? And who’s qualified to do it?
Learn more about the ties your current representative in the U.S.Congress has with the very firms being bailed out with your tax dollars. Then vote them out of office.
@Vijay
Well NOTHING is going to get in the way of those Indian festivals!
But India’s economy is a different matter. A lot of India’s recent success is built on supplying support services to American companies, and less business from them will mean less business for you. Let’s hope it doesn’t get too bad.
It seems obvious that we need more liquidity and to get the credit system going again.
However, isn’t the root of the problem that mortgage companies “created money” in the form of sub-prime loans, but when it came to getting the money out of the people that these financial instruments it wasn’t there.
Isn’t the current solution of governments using money that will later be raised from the people in the form of taxes cause an even bigger version of the same problem once the government try and pull in that tax money from people with low-employment and low housing and stock assets.
ok its official the country i live in i. e singapore slides into recession
that is 2 quaters of contraction
2/5th of the world is suffering and weeping over the credit-crunch.
3/5th of the world is still living in dire poverty. So what do we
do? We save our own. $700Bn is enough to lift everyone out of
poverty, 2 times over.
i still have the feeling that this an orchestrated failiure.
What do you mean? Bush and his crowd taking the last drop before they leave?
The current global financial crisis is simply further confirmation of an inter-connected world that is becoming ever more unpredictable. “Black swans”, the shocking unpredictable events we now see, will increasingly become the norm.
The advice to keep your money in the bank is simply NOT enough.
We must do what NASA did before going to the moon.
Get resilient at all levels of complexity!!
We can prepare for the unexpected!
In the United States, at least, even though the markets are falling, millions and millions of people will continue to put money into the stock market through their 401k’s.
I believe in previous financial crises cash flow into the markets dried up.
What impact will this continued influx of money have on the financial situation, if any?
@ Marco~ Too many fleas will kill the dog. What else do you need to know about this situation. All the dances the fleas do on the dogs skin will do nothing to erase the damage that their existence and feeding create.
selena,
pretty much that is the sinking feeling i have. just think about it there was money and now it is suddently gone…….look at it that way many of the security banks have true collateral, but are worth nothing……apparently.
So that was the 105,869th time I’ve heard “If you can’t afford it, don’t buy it” on WHYS.
-Anthony, LA, CA
Good Hello:
For me, the current mess being made of the financial crisis here in the States is little more than insult added to injury — especially after so many of us, myself included, were added to the ranks of the unemployed. All I see are efforts to medicate the financial industry, but no serious effort to help the unemployed return to the workforce full-time. What’s wrong with this picture?
This is a sign that perhaps it’s time to start discussing alternatives to a world monetary system which bases the value of money on debt. Let’s seize control of our economies from the reckless bankers and restore value and sustainability to the foundations of these economies. I say let this current system fail! It is unequitable, destructive and absurd.
Talking about confidence. I know that 8 of Glitnir´s managers were enjoying a champagne lunch at one of Reykjavik´s posh hotels today. I have lost all confidence in human decensy. How can these people, responsible for the destruction of 300.000 lives be able to so shamelessly celebrate their achievements? I vote socialist and have nothing to do with this! I thank god I´m not a homeowner or need to pay more than my student loans back.
We have spent a lot of time, lives and resources trying to make the rest of the world free, democratic, and capitalistic. The problem is that as we have done it succesfully, we have created our own market competition. This has been the root cause of our economic problems.
Is there an endless source of money to “pay” for this???
I would like to add that in many of these markets such as China, India, and South America we have created producers but not fellow consumers.
Dear BBC:
1. Governments are to blame, not the banks. They are the regulators. Even JS Mill insisted that the government must take a strong hand in terms of regulations and standards.
2. George Bush has zero credibitlity and should shut up. He is the lamest of lame ducks, and every time he reassures the markets, they drop five percent.
3. The crisis is being dealt with from the top down. It should be faced fromt he bottom up. Instead of guaranteeing banks the should go the way of Lehman brothers, and governemtns should guarantee:
4. Stop the nonsense and moralising about greed– human nature is human nature. This is a crisis caused by underregulation.
wages
jobs
pensions– public and private
The real motors of the real economy are those who produce (remember the workers!), and the consumers– which include pensioners. If a depression is to be avoided, the whole focus has to shift immediately– and not start a new Tennessee Valley Authority in three years after millions have been thrown out of work.
If the US Congress was able to again work for the American people they would pass a law that made the Wall Street Tycoons that made hundreds of millions perhaps billions, put all of their money back into the Stock Market today.
They would also see to it that the Taxpayers are entitled to any profits with the Tycoons liable for the capital gains taxes.
Yes, “Bush and his crowd taking the last drop before they leave”. What else do you think is going on? The banking and investment people are some of the smartest (and greediest) in the world. If they are not responding to what the Fed is doing then why would anyone believe that what the Fed is doing is right? Sure seems like another snow job to me.
Hello all, I am a 22 year old Opera student in central California, who is driving home today to set up a trust with inheritance money. Is the last gift from a dear loved one safe in CDs or a trust?
I just three days ago got my first credit card, to build credit, but now I wonder what good credit will do me in this crisis!
–
“To Love another person is to see the Face of God”
While the market goes through it’s woes – no one seems to mind that large corporation CEO, CFO’s and Board of Directors seem to escape all this unscathed. The only ones really loosing are the commoners. If the US government really wants to establish market security, then arrest or at the very least impound ALL the CEO’s, CFO’s, and Board of Directors assets, including their homes, furniture, cars, etc. If I defaulted on my loans, there would be droves of people reclaiming everything I own – so why are they treated differently? This difference in treatment is one of the major driving factors that maintains the insecurity in the market. If we enforce the same ethics laws, bankruptcy requirements to everyone evenly, then people will feel more confident in investing their money in other companies.
andrew,
how would the 700 billion lift everybody two times out of poverty….?
A pertinent Jack London quote
“Manuel had one besetting sin, which made his damnation certain, faith in a system.”
-Call of the Wild, London 1903
In Ukraine foreign currency became more expensive and prices are rising.
We should define Financial Crimes Against Humanity and set an army of Trial Lawyers on the tracks of American Conservative Republicans like unleashing the Hounds of Hell and bring them to the Hague, The International Criminal Court, and every other available court!
Outlaw Conservatism in the World just like Germany outlawed Nazism after World War Two!
Elie Wiesel hunted down Nazis, and we need to do the same to bring American Conservative Republicans to justice.
it’s kind of sad
anyone semi-intelligent paying attention to people trying to explain this crisis have heard how much of it is a matter of “confidence”
and in explaining how that works, the explainers have had to expose that sometimes you just have to outright lie
and now those same people have to come on the news and say “it’s going to work”
how can any of them be believed?
According to some, since the DOW is now at 8,016 all this will start to turn around in just a few minutes…
1. Fed takes over ALL home mortgages, today.
2. Fed cuts interest rates of all mortgages in half.
This will eliminate worry. This will infuse spending money into the market.
If you are a citizen of this planet and don’t want your hard earned money thrown away by the same people who caused this problem then go to this website and sign the petition. Please don’t hesitate and tell all your friend’s!
http://www.avaaz.org/en/global_public_rescue/?cl=136278366&v=2270
It’s so important. don’t let governments waste your money and enslave us forver!!
well,
with zero percent credit offers, it does make sense to take the loan…….
@Jonathan
Or you could say that if American companies have less money to spend thay will spend it where they get more for their money ie India.It is still cheaper to pay Indians than Americans.
The larger a countries population the greater the insularity.
Dear World have your say,
The best advice is to leave your money in the bank or there will continue to be a run on banks as took place in the 1930 depression.
We in NZ have a banking system where the house mortgage is constructed and owned by the bank and not able to be on sold to others as is the case in USA. The USA are wrong to do that.
The German Federal Govt have regulations to set out a minimum of 20% for a deposit for a loan for a house. That is a good idea.
The people involved with making money from Sub Prime type instruments must bear the brunt of the criticism and USA Government must ensure that Sub Prime never exists again. Take that away for good.
Also stop making your house interest on your mortgage income tax deductable as it is not so in New Zealand or Australia. When you do that then genuine home owners are protected from rampant house price increases.
Finally all of these problems stemming from USa are subject to political control because the lack of those are now costing honest folk from owning their own home which is the corner stone of the family unit for stability. A very good programme today as usual from BBC.
Hi,
I have two questions.
1.
Normally when a country is in trouble its currency drops. I am totally puzzled the way the US currencies are moving up against all almost others when the country is in trouble. Who is driving this up? It does not make sense. Can someone highlight what is happening?
2.
If the Govt starts buying up toxic assets, will it only help to drag this crisis longer? Would it be better to allow the market take its medicine and allow the system corrects it self? Why when a country like Indonesia, Thailand, Korea etc faced trouble and they help to rescue their banks, they are criticised. But when US and the West does the same now it is OK? In fact everyone is supporting this move. Why the difference in approach?
The “Free Market” has turned out in reality to be the Anarchy Market”!
Humans need to live by rules and regulations and markets do also.
Stomp out “Free” market ideas like stomping on a poisonous snake because they have caused our current crisis.
Sheesh!
What will happen when the $1 trillion plus in Credit Card debt goes bad???
The problem has been identified as confidence in the future as shown primarily by the stock market. So I think if the stock market went really low everyone would be confident it could only go up and banks would begin loaning again, etc. The goal should be how to manage this drop in the stock market drop with the least destructive effects and most fairness to promote successful policy for the future.
I also see economist talk about the benefits of a free market economy, but this lacks credibility based on current events. They would make a stronger case in talking about the government, legislative and other requirements that are required and were not met for a free market economy to avoid this sort of situation. Should we not see legislative bills for regulation with economic analysis predictions attached to their passing or failure so we can see if they really work? I want to hear from an economist who published a paper 3 years ago predicting this scenario and use their wisdom to recover.
I would like to see the government offer assistance for fuel and food and let individuals use the offset to pay their mortgages. I would also like to see tighter credit card lending rules and caps on credit card interest rates. One of the reasons many people took out second mortgages on their homes was to pay off high interest credit cards. An exhortation to the populace to pay off their credit cards could help as well.
Now might be a good time for younger people to invest in the stock market. Over the long term they are bound to see good rates of return.
john,
well early in the day we were well below 8000
@Gene
Until markets calm down my vote is CD’s but never more than $90,000 in any individual CD and I believe in only 6 month CD’s for now.
As for credit cards use them as charge cards paying complete balance each month or never allow the unpaid balance to exceed 10% of credit limit.
Normally when a country is in trouble its currency drops. I am totally puzzled the way the US currencies are moving up against all almost others when the country is in trouble.
I have been wondering about this also. Very strange!
My stock portfolio’s value is 40 percent down, but I still have
confidence in the long term, if we don’t have confidence what we get
up for every morning?
My advice is to work hard, if you don’t have a job try hard to find
one. Don’t spend more than you earn, use money left at the end of the
month to pay down high interest debt and invest the rest in the stock
market. I am not afraid to say that I don’t know what the stock market
is doing in the short term but the long term is up.
@ that one
I just had a chilling thought.
You know how some people will move heaven and earth to get you, if they think they have done them wrong?
Maybe the Bush cabal is getting its revenge for the way people are treating them. 🙂
The various Governments around the world must stop forever the construction of Sub Prime type financilly irresponsible instruments from ever being in vogue ever again. They were inflationary, put up house prices at an unprecedented rate, suited speculators and to the detriment of those who attempted to create thier own home a very worthy desire all around the world. The home is the cornerstone of a Family unit by creating stability for our people and thier children. The right to a house, followed by employment are critical pillars of society worldwide. The United States Administration caused this crisis not only with Sub Prime but by Collaterilised Debt Obligations sold world wide and that paper never was any good and never will. The Bank should construct and own the mortgage instrument which cannot be onsold to another party to create stability for the home owner. That is how the banking system works in New Zealand and we are with a very large Australian owned bank who do not have sub prime problems at all. Also Financial Industry advisors, brokers etc should not be putting people into or recommending the sub prime type scenario at all. Stop the rot by removing the game at the outset. We need quality Finanial Instruments to create quality sustainable employment and Trade Worldwide for all to benefit.
Dear Team,
Let’s be poor, but ethically poor.
For years I have felt that moderation was important in globalisation and that excessive consumer activity was plainly wrong!
Without returning to a Gandhian village model – Is it better to be anti-globalisation and sustainably poor and not consumer mad and bust?
So many facets to this – I’m also concerned about the outsize compensation awarded to senior management of companies and particularly outraged by ‘golden parachutes.’ We should consider something akin to the IOC’s drug testing system wherein they may re-evaluate an athlete’s sample up to 8 years after the initial test. There is no reason (although I can imagine a ton of opposition) why we could not require that packages beyond a certain level be paid in stock that does not vest until a certain number of years later (after offer date or separation date). I also think we could consider allowing companies to seek repayment of monies paid to executives who commit malfeasance or who preside over the devaluation of their companies before departing as was the case for Robert Nardelli who received a $210 million severance package from Home Depot.
The real tools available to the Government extend far beyond Fiscal and Monetary policy.
To stem fear in the market the governments and media urgently needs to reassure and educate the public that the world markets have wiped off upto 50% of the worlds total wealth. In reality, one can see that the vast majority of global businesses have not lost 50% of their factories, staff, customers or markets. Its clear that fear has grossly oversold good companies, real industries and therefore we are grossly overreacting.
The real villin in this world scenario is accounting and reporting policy for public companies. Public companies are pressured by analysts to report future earnings, profit forecasts that are impossble to maintain and are used to price up assets.
Yours Sincerely,
My greeting to all world have your say , I want to point rather a optimistic view I think world is going to have a period of 1 year or so of financial crisis but once this crisis is over we will see a new innovation a new innovative idea for this world.
Pensions can be saved if the rich pay their fair share. In America, people pay social security taxes only on the first $102,000 of income, at the rate of 6.2%. Beyond that they pay nothing! So, a person making a million dollars a year pays no social security (pension) tax on 90% of his/her income!! Incredible but true.
If this were changed, and they had to pay the 6.2% on their entire income, then there would be enough money in the fund to last into the 22nd century.
What part of this does the average working person (especially republicans) NOT understand?? If you are a working, wage-earning republican, why aren’t you pressuring your Congressional reps to change this system? Why do you let Bush and his cronies get away with the suggestion to do away with our present social security system. Do you really like inequitable systems, or do you enjoy misery? Do you really believe that the rich should enjoy such tax breaks? Do you want to lose your social security so that a rich guy can buy another yacht?
Bush and his devotees wanted to privatize social security. But it takes a tremendous amount of savvy and professional know-how to understand how to wisely invest money in the stock market, even in the best of times. Now the stock market has crashed, and if we had already had such a privatized system, we all would have been much bigger losers than we already are.
When John McCain says he understands (or cares about) the woes of the middle class, he’s jiving you.
SLLim,
Question 1) All thing are relative. The reason US currency took a dive is because as jobs were off shored to other countries, the US currency dropped. Less people in the US had money and the trade deficits grew. Then as Americans could no longer afford the products since they were unemployed, the other economies also tanked. The US economy didn’t get better, the other economies and by extension dollar values, have dropped.
Question 2) The problem is that the elected official like their job. If they “let markets take its medicine” it will mean lots of people loose their jobs, homes, cars, and level of living they have become accustomed to. The idea of growing their own food and eating it for a week straight in the US is not appealing at all. If people are forced to do it they are often compelled to vote out the people in office at the time it happened. Ask John McCain how being a republican is going.
What amazes me is the fact that everybody is amazed at what is happening! The fundamental flaw with the capitalist system is that it depends totally on infinite expansionism, which is impossible to achieve with finite resources. What on Earth are councils and charities doing investing money. When I give to Oxfam I always assumed I would be feeding starving people.
Ros …
thanks for the air time but you went off taking what i said not as I meant it ….and really my contribution was next to useless.
You are really going to have to let this alternative economic perspective have some real air time …you owe it to all of us the vast majority who will end up being the real victims of this .
What we are experiencing at the moment is a natural transformation…just like a mother giving birth…or a volcano erupting .
Keeping it simple, production has actually just burst through the limitations of finance capital. production now neccesitates finance and continuing supplies of it but also it now has to finance consumption .take it out of one then the other falls .
money has to become a means of effficient exchange of your energy ..my energy and not get clogged by the speculator or credit card company that wants to feed off us without really creating anything .
In chinese medicine if the blood becomes stagnant or blocked then the body becomes ill.
Society is a natural organism ,but what economists are telling you and us is that its got to go ‘back’ to something .
reality has just made a beautiful if terrifying shift ,whch so far the response is tantamount to telling a mother whose about to give birth …no its got to go back !!
Already governments are making organic reflex reactions …they are socialisng money and money supply…albeit against what nonsense has filled their heads for the last 30 years.
If we dont do this and other things besides ..it will be war over resources.
The real world has just changed but our heads havent
yes i think that america should [part nationalise] its banks. considering the fact that the bail out plan the government gave was to pay for the bad debts of these banks,which if then there was government intervension would’nt have been so serious.now, it is at the point of the government to rescue the economy [which shows the importance of a part nationalised banking system for the u.s].
ps …dont make me cut this back …I cant make it any shorter
xxxxx John
Definately yes, this is beyond the gov’t. It wasnt there when these loans where being given out & i dont see any reason why it shd be there to absorb the shock. Besides, the gov’t doesnt control consumer confidance, its you & me
The market is going to dive until we see a period of sustained job security in the US and a majority of the worlds trading economies. That will not be sufficient.
There will also have to be stable monetary values respective to food and energy supplies.
There will have to be an elimination of crushing debt burdens.
People without stable jobs, without stable energy and food prices and burdened by crushing debts are not going to trust their money to wild stock markets.
The whippings will continue until morale improves.
Throwing money at this problem does not work. Printing up a bunch of money doesn’t work. I say just stop throwing money and let the financial world balance itself out. We can’t keep paying for facials and spa treatments for executives.
selena,
bush got so far all he wanted……some just feel entiteled
Why did Warren Buffet invest these dollars? Do any of your guests have an accurate honest answer to that? Is it patriotic or protecting his own gigantic positions? Knowing this type of information is important to the “little people”
It should not be forgotten that Warren Buffett invested in Goldman Sachs SPECULATING that there would be a bailout thereby increasing his chance for profit on taxpayers backs.
Do not make his efforts selfless, this was profit driven.
The very best advice I may give anyone at any time, now or in times of economic prosperity: Do not retire. Do not worry about it. Do not plan for it. Don’t think, “Oh, won’t it be fun.” Plan to work and think and love and struggle for that in which you believe, right to the very second you die. In this way you can insure enjoyment of every day, every hour, every second.
@ that one
Dear that one,
Been there, done that, so to speak. If you are well-educated and imaginative enough to do research in any area, you’ll be OK. My recipe for a stomach ill from worry is always the same: a bunch of good friends, good food, drink and some good tunes.
g
For investors holding on to funds- provide incentives such as “Every dollar invested will be matched by…”, For threatened homeowners, an absolute assurance for remortage rates. Ask those who have benefitted most by the profits & golden parachutes to invest as their patriotic duty.
A symbolic day could be called forth calling all people to invest whatever they can that day to restore confidence “Invest Your Dollar for the World Today”. At the very least, it may shake the paralization & generate unity.
Panama doesn’t have a Central Bank that fixes interest rates, which are exclusive market responsibilities. Since 1970 Panama occupies the first and second world place in the Fraser Institute index for monetary strength. Their average inflation since 1986 is 1%. The private management of the interest rates has resulted on a very solid financial system while their Stock Exchange went up by 1.74% so far in 2008 up until the 2nd of October, when the average of the global Stock Exchanges went down by more than 30%. Could you please comment!
Hi World Have Your Say,
I would like to hear from the discussion how Default Credit Swaps have added to the problem of the Financial Crisis in the USA. We need to bail out AIG because there are so many businesses backing AIG at full bond price that it literally cannot fail. It cannot be paid.
We have voted to allow the Credit Default Swap market to be unregulated. This was a horrible decision, and our politicians need to be accountable. We need transparency in this market so the banks know how much debt are on each other’s books. This way they will lend.
My two cents…
Rubbish. The world cannot support more consumers. If we want to make this world work we need to lower overall consumption, and redistribute what wealth we can generate around the planet. The earth is a finite place and the old economics of more, more, more growth is not feasible.
We need new economic thinkers.
I would look at the point “We are living beyond our means” slightly differently. I think the other side of that coin, is that we are not paying people enough to live in their means. Consumption is certainly something that we need to look at. But also distribution is very key. In America, businesses have over time moved manufacturing out of this country and eroded the working class and the middle class, but yet want to sell their products to those very same people. It is the race to the bottom.
@Dan
They’ve raised the bank deposit insurance to $250,000 per bank, and there’s talk of removing the cap entirely, probably soon. Until then, though, it’s $250 K per BANK, not per CD!
@Singapore SLLim and Selena~
I think the paradoxical strength of the dollar just now is because in times of trouble, money (from other countries) rushes into US Treasury bonds, considered rock-solid safe–the safest instrument on earth. Might not seem fair, but it’s fortunate, especially if we reduce interest rates, as we have and surely will again.
Buying toxic assets might not be the best route, but it will get some liquidity back into the credit market, which has jammed since the failure of Lehman Brothers. Good news though: I just heard something about Lehman CDS (credit default swaps) priced at 92 cents on the dollar, which is excellent. I think that should make things much more cheerful.
Free market is now putting those same countries into poverty. So does it really work?
Banks have changed their mission from helping the small people save to raping the small people as much as possible.
Today’s Quote
An ounce of action is worth a ton of theory.
-Friedrich Engels
BBC:
Simply put, all greedy, out-of-control capitalists (at any level) are to blame!
Remember, Capitalism is simply a euphemism for Survival of the Fittest!
Mark is the quintessential gluttonous example of the ugly AMerican when he says , “other countries should consume more” as part of the solution to our current economic problems.
Americans consume 10 times more than the rest of the world. At the current rate of consumption we need 6 more earths. We cannot sustain this amount of “consumption”. Mark does NOT represent many of us progressive GREEN Americans.
@ that one ……. arent you missing out on something there ????
you should note that some of the callers who talk about “changing the system” and “not living beyond our means” really are saying they are in favour of return to agrarian societies and low impact living – and the next point not yet mentioned is global warming etc. they will not say it openly at this point, wanting first to get a hook on the main argument that the system must be changed.
this is a way for some to throw out the baby with bath water – so to speak – and orient the debate towards much more radical ideas than currently envisaged by anyone near the levers of power.
I am terribly sorry my email got sent accidentally before I had typed my message. All I wanted to say was that I found your coverage of the Bank crisis of the world was very useful and instructive. I wish to say a ‘Big Thank You!’
The financial crisis is a sign that we need to live within our means. In 1992 after the Goldenburg financial scandals, Kenya was broke.
The US economy will bounce back. Its intellect being overwhelmed by greed & consumerism. Lets embrace flip flop optimism.
@selena~
Wow, so you mean if we stopped trashing George Bush, the recession, credit crunch, and stock market crash might turn around?
Hmmmm…. [thinks about it for a while]….
Nah, not worth it. I’m having such fun kicking him, and there’s so little time left to enjoy it. We can pick up the pieces later…. 🙂
Selena~
Bummer! Here I was thinking this election was gonna be Return of the Jedi and it turns out be Revenge of the Sith!
John and Jonathan I’m blushing! 🙂
my Idea is to agree that president Bvsh to set the US stock market as stabilise well thanks.
john,
missing out on what?
Gary,
I am reasonably well educated, and have worked in a wide variety of biological research. the problem is that currently little grant money is available and all my research is grant dependent. i am actually looking to do research in industry. at least there is a mission to achieve something
@Jonathan
That is a TEMPORARY $250,000 but you may be right as it might be per bank and not account. Do you really think the Gov’t will keep it there?
However, unless one is rich there are enough banks at $100,000/account to satisfy security.
patty,
even green consumption is consumption, in fact plenty of green products are more expensive. the entire green movment is actually a way of rebuilding our economy, since many of the cheap labour countries are way behind in terms of green products.
nature is saying load and clear ..youve go to limit it boys ..or else your out of here.
not to sure what your getting at ?…@ phil the expat
nature is saying loud and clear ..youve go to limit it boys ..or else your out of here….and thats another problem Brown just goes on about ‘growth ‘….. we need growth in a different way
not too sure what your getting at ?…@ phil the expat
@ Anthony
You are so right about sepdning you money on a generator and supplies.
And eventually guns.
I grew up in ZImbabwe. Guess what? The head of Lehman reminds me very much of Robert Mugabe. Corrupt, lack of service to those he is supposed to serve- and fabulously rich while Aid agencies(our money) support his starving masses.
Mugabe and his killer government are unrepentant. Did you feel a similar echo when you saw the hearing of the manager of Lehman Bros?
There is a message there…..
We have allowed it of course- and we must own up to that – but, we thought we could trust those in charge. Silly us!
And as another comment outlined- just as when the Uk was in a dire situation- go to war. Falklands- WW2.That will reinvigorate the economy.(LOL)
And watch what happens to findamentalist right wingers. It was the thirties that spawned Nazi Germany.
Ah well- history….. aided and abetted by the greed of a a rather intellectually challenged US President who presided over business disasters throughout his checkered life. Jump Managers Jump! At least we will feel your had SOME dignity. And that nasty man from Lehmans with a helicopter and a hundred million mansion andf other funds- you lead the way- and take Mugabe with you!
Rule of thumb:
When we hear someone say “growth is not feasible,” or “live smaller,” stuff along those lines, it’s a safe bet that we’re hearing from someone who doesn’t miss a whole lot of meals. Or have any children to support.
John in Scotland~
I think I can see where phil was going with that.
It’s the old idea that overpopulation will eventually trigger some kind of natural mechanism to restore the balance.
I suppose it’s possible… a global economic meltdown would have political repercussions that could get pretty hot.
But in any case it’s pretty much out of our hands at this point – that speed limit sign was 10 miles back and last time I checked we were doing about 100 mph.
And watch what happens to findamentalist right wingers. It was the thirties that spawned Nazi Germany.
Only problem with that theory, Rory, is that the Nazis were not “fundamentalist right wingers.” They were National Socialist Party left wingers.
@that one
chocolate! …what else would it be !!!!????
while I.m at I forgot to say that if we don’t crack heads on this one we ,,ll be going along with smashing it all up to start again …just to start again…
…………..not very green
@ john in Salem
hi john right get what you mean …one thing capitalism has been very ‘successful ‘ at is changing nature into commodities….and of course all this activity means increases in co2. so you . …hence the’ hockey stick affect’ .
One simple syllogism that is true ,is….’the seeds of success are also the very seeds of destruction.’.
the Chinese say . yang eventually turns into Yin..
We tend to forget in the euphoria of our’ specist .success that all things die .
If we look at our culture we can see the spooky synchronicity of things that are whispering …your f….ed…….your f…ed!
I’m sure there is nothing wrong with my comment at 8:18 pm. Perhaps a moderator could resuscitate it and post it?
The United States has to be honest enough with itself to realise that the western World is reliant upon the health of that economy and the present credit crisis has affected innocent folk worldwide unneccesarily. The USA MUST NOT return to the set of circumstances which have created this crisis ever again and frankly should consider they are facing an Economic War and should act accordingly. There are Pacific Nations such as New Zealand and Australia who fought alongside the U.S.A. in two World Wars and we are reliant again with the USa to ensure they are able to create circumstances that will endure and not disestablish wealth. We do not need any shift in financial control to the East so this is up to the USA to repair for good.
@ John~ It’s not the speed that kills you; it’s the sharp smack as you hit something that does it.
@ ray clarke
hi Ray …dont really get that one .nothing can remain static or fixed . competition and the free market are what cause centres of production to shift and economies to fail……blame your own speculators and corporations for shiftinhg out of America and giving rise to China.( remember Nixon??)
.but also dont forget yourself when you buy the cheaper option because your wages are buying less.
Trouble with what your saying is that this sort of sentiment can lead to a critical mass that thinks the logical answer is war
@ Bryan
@ Rory
It don’t matter much which wingers the nazi’s were. The whole is a circle and only the center holds. The right and left fringe merge in sesspool of insecurity, intolerance, xenophobia and violence.
g
On the subject of the markets, I would agree, that something needs to be done about the way the markets function. These huge swings that occur daily, that no supply-demand curve can explain needs looking at. Does nothing for confidence.
Also, since the injection of liquidity into the system, there is much uncertainty and baks are still not lending. I wonder what would happen if governments, instead of putting money into Institutions, would help guarantee the mortgages of “eligible” home-owners. This would still cause money to flow into the system from the bottom- up.
@ bert
trouble with money coming fromthe bottom up is’ they’ cant charge ‘ you ‘ interest on it .
you see bert your paying for this crisis not them …unless we decide otherwise
RE “”I wonder what would happen if governments, instead of putting money into Institutions, would help guarantee the mortgages of “eligible” home-owners “”
——————————————————————————————————–
——— You’d have to get McCain elected for that to happen.
That suggestion was the only new policy offered by the two candidates after weeks of unrelenting crisis.
Of course, Obama could be elected and adopt the idea, but McCain is the kind of guy who would make heads roll down the corridors of wall street and government in order to implement this plan. Obama’s style more mooted, perhaps less sure this is the direction he wants to go and more open to compromises with Wall Street.
Still, if the banks won’t lend to each other, most business will remain largely frozen. Could be world wide disturbances, crimes, riots, looting, minor wars leading to major wars, dissolution of states. Depends on how long the finance ice age lasts.
You can say goodbye to this forum and most of the internet.
Roberto ~
I am completely bewildered by the John McCain proposal of buying up bad mortgages. Why would we want to buy up someone else’s poor business decisions? I’m not sure I understand the plan he has been proposing or if any further details have been given at this point. From what I can tell I certainly wouldn’t have my “good” mortgage bought up and renegotiated with better terms so that I have more money in my pocket. How is that fair? I have had more than $20k in pay cuts in the last 2 years; where’s my financial guarantee for not increasing my own personal debt and responsibly paying my own bills?
Can anyone enlighten me regarding this proposal? I would also like to know what the definition of “eligible” homeowners “ would be. It seems the explanation used for the last few years has been slightly flawed…just a tad….
I see your point John(Scotland) but I would think that one would be trying to get “cash circulation” in the economy for a start. Trying to move to break even point. Not to be looking for profit, at this time.
What I find most annoying is that governments will be using already “taxed dollars” from the populace, give it to an Institution to lend it back to the original tax payer to be taxed(interest rate) a second time! All because some people got greedy. Is this someone’s idea of a joke ?
What we might have here is a massive paradigm shift from one sense of value to another. The values that underly our monetary system have been dealt a severe blow; possibly a death blow. The unspoken contest now is what we will decide is the fundamental value set that the ‘trust notes’ we call money will use as a foundation.
The most common call is for a return to a gold standard but a simple calculation as to the availability of the metal and the needs of commerce render that impossible. There are other suggestions that money be based upon a base value of labor or a stated value of energy supplied but they are thinly subscribed to.
At some point the world will have to make up it’s mind. What is your time worth. What is the energy that supplies your life worth. What is a house worth. Most importantly how do we exchange between these unlike things?
RE “” I am completely bewildered by the John McCain proposal of buying up bad mortgages “”
—————————————————————————————————-
——– Don’t claim to understand everthing behind the bailout because nothing written in stone. It’s open ended.
The bailout is specifically going to buy out bad mortgages regardless of who is elected. What McCain proposes is to buy them and renegotiate new terms at the reduced value and sell back to owners.
Thus far the bailout is intended to buy the mortgages from the bank and hold them indefinitely until the crisis stabalizes and new buyers found, probably foreign real estate speculators.
Surely you can see the difference.
The government should take full responsibility for the Financial/Bank disaster and ensure that the public who has made savings in banks do not suffer.
At least now USA and Britian would realise that one of the major cause is their war in Iraque and Afganistan.
Roberto,
This was originally posted earlier this morning at 7.15am, but disappeared for some reason.
I made several responses to your sarcastic comments, firstly re. 9/11, these being my replies: posted on Oct 7th at 8.44pm, then the misunderstood reference to nuking Afghanistan on Oct 8th at 4.13am and 4.15am, Oct 8th 2.57pm, a general comment upon yourself. I would appreciate a reply to each, as you automatically assume the position similar to a dog with a bone, normally.
Just out of interest I want to check out your “Fount of all Knowledge” in all things geographical; having already bestowed upon yourself the mantle and self-appointed title that so easily befits your cranium, is wholly intact or otherwise. If you’re not averse to me posing a particular question. You seem game and not someone much likely to hide their light under bushel so to speak, by all accounts.
I look forward to hearing from you…
There is nothing new about bubbles popping. The 1990’s dot.com being the most recent. Same characteristics which preceded the current pop: soaring share prices, wild speculation, get-rich-quick schemes which cost “nothing” blah blah blah. Simple economics tells you that if you continue to sell goods and services to people without getting paid for them within the correct timescale, the chickens will come home to roost sooner or later. Add to that the soaring cost of gigantic military spending in The Middle East and the mind boggles. Boom and Bust have always been the main characteristics of such an economic practice and they always will be. We are now in Bust and have been for months despite the usual denial syndrome by ‘insider people’ who should know better. Many will be “burned” (as they say on Wall Street) for probably two years at least. That term is the other side of Slash and Burn which is another feature of the economic practice which leads to Bust. This current Bust will only be resolved the way the previous ones were: phoenix from the ashes.
:@ PANGOLIN-CALI
YOUR RIGHT …SOMEONE WITH A LITTLE SENSE …PLEASED TO MEET YOU.
Yes the point is that money supply is just to keep the weels turning at the mo . trouble is withthe very nature of capitalist production …production and consumption organically becomes finance dominated ..ie credit.
The media has been really bad at explaining the bigger picture here .. last night s newsnight for example goes from merely describing events one niight.to then offering up last night a Mr taleb who ‘ predicted the crash’ who was right to say economist theories have consistently been hocus pocus …to then offer us that in the end it is all ‘unknowable…and when he wakes up in the morning all he knows is he doesnt know …..so from on f…… lunatic to another !!
This is really shameful stuff ……
i was onto my parents investment banker the other week ( whom I had told 8 years ago this was going to happen so I wanted the trust to not have all its eggs in one basket )..he thought I was a fantasist then ….saying we would have safe guards in place if anything happened .. last weekthe guy was completely unable to put anything forward on the subject ..hasnt got a clue whats going on ..and you guessed it NO SAFE GUARD PLAN..Being a trust it is completely out of any of our hands todo anything about it….They stand to loose millions . But that I think is going to have to be part of the lesson we need to learn .
what is real is the Earth the water The sky….we could probably learn more from a scruffy little native american in a shack than this shower . in fac i shall put ona fav quote of mine when I can find it …good to talk to you
……..stalu.!…….(cherokee for’ be strong ‘)
@John in Scotland:
Not versed in economics, but as regards your references to the media’s cycle of doomsaying on the situation: it’s possible that the media worldwide are contributing to this ‘snake-eating-its-tail’ phenomenon wherein the global markets are chasing each other down as quickly as possible. Marketwatch.com, for example, is a fine source for business news, but feeds on the placement of extreme headlines (in a huge font) for dramatic impact. As an extension of the Wall Street Journal network, MW is widely viewed and rightly respected–but also weak at explaining the intricacies of the global economic malaise in the rush for “breaking news.”
Al-Jazeera had a great program not too long ago about the financial media’s reporting on the situation. You might check it out:
http://english.aljazeera.net/programmes/listeningpost/
@ kelsie
hi kelsie good to hear from you . Yes no suprises there .trouble is the vast majority of them are schooled in a form of cartesian economics ….I wont go into that…..but in short its akin to a cardiologist who just does hearts .
The trouble is you can only understand this if you have a more dynamic general theory that ties it together …and they dont .
So what happens is that when they “explain” something to you it actually begs a further question . so in effect they are really only “describing ” a set of surface activities ….ie this does this and this then does this …blahh blahh.
a bit difficult to get your head round but when you begin to see it …it all just zippps into place ..
i shall check out the al ja zeera site..sounds really interesting and thanks for your birds eye view in America …we dont rerally see what your seeing …but its clearly the same old stuff …predictably.
PS..if you knew the weird and wacky formulas and theories these guys have come up with ( margaret thatcher had a machine in her basement which she had made, to try and give “mechanical” credibility to her theories…did you know that ????
Its the word mechanical that is the giveaway …mechanical thinking produces mechanical conclusions ……..the world is not reduceable to mechanics and the thinking on it is dialectical ( holistic if you like) not linear .
@ hi Bert
sorry part of my earlier post was to you …yes i think your right .
One of the quotes i had in mind which I kind of think sums all this up is one by john trudell a native Sioux
in the film ThunderHeart…he says :
” We know the difference between the reality of freedom and the illusion of freedom..there is a way to live with Earth and a way not to live with Earth.
……..we choose the way of Earth.”
(Kind of wasting my time now as I think this conversation is probably closed …oh.well)
@ John in Scotland~ There are plentiful opportunities on the stock market if there was money available to attack them. Solar, wind and geothermal heat-pumps are going to be promoted by governments worldwide as a means of putting people back to work and not ending up with a total loss on outlay.
Solar panels on a roof put energy (money) back into the economy every day the sun shines. Wind turbines free utility consumers from fluctuating fuel prices and put jobs in rural areas. Geothermal heat pumps displace heating oil and natural gas use and bring deficit trading in fuels back towards balance.
All of these investments produce popular results as well as being labor intensive. Wink, wink, nudge, nudge.
@ John~ ” We know the difference between the reality of freedom and the illusion of freedom..there is a way to live with Earth and a way not to live with Earth.
……..we choose the way of Earth.”
Ah, another advocate of Cob houses. You should visit some of those when you are in the British Isles.
http://en.wikipedia.org/wiki/Cob_house
@:Bryan
Hmmm… it makes one wonder what right and left are….. OR are they both extremists?
That was my point.
Cheers
@ pangolin … absolutely ..couldnt all happen at a worse time ..just like my aunt dying last month and watching here million and a half will go up in smoke …kind of makes you sick
Just when we need to invest in a whole load of new energy infastructure it dries up sods law hey.
Neccessity being the mother of invention they are really going to have to stabilise this by injecting huge amounts of cash….ie printing loads of paper.
This is really an organic transformation into socialism and we should all run with it and not get caught up in some bull that means we go backwards .
If we can design clever materials to do what we want ..we can design society and economy do as we want ….the problem is in the “we”
Of course by giving it to the banks and not us ( Russell Crowe had a good idea …make every American a paper millionaire…it would be cheaper) we’re not only going to give them it instead the vast majority won,t see the use of it and the others will pay heavy interest for the priviledge of it.
Here…..their saying with the drop in oil and its price to industry ..they;ll shelve all those priojects to produce energy by other means ….we,ll have to see .
There is actually more sense in what Russell Crowe puts forward than even he might think …but that would be a hard one for me to get over at 11.oo night time.
thanks for the links though …i’ve already been doing bio diesel for 7 years ..straw bale house later if pos
@ rory @ bryan …question …if your in an exttreme state but you dont really know it… what does extreme left or extreme right become .?
Is it that extreme right becomes a balancing point or does extreme left become the balancing point
Hence one of them therefore not being “extreme” at all.
.
@ rory @ bryan …question …if your in an eXtreme to start off with …as in some people with so much money they dont know what to do with it and a majority that doesnt even have water on tap what does extreme left or extreme right become .?
Is it that extreme right becomes a balancing point or does extreme left become the balancing point
Hence one of them therefore not being “extreme” at all.
funny guy hey…strange how that didnt pop up before !!
Extreme people have to watch out because the more extreme they get the more they are in danger of bumping into one another back to back.
well theres a certain amount of truth in that Bryan …but you havent answered my question
May i make a comment
They all went along with the corrupt and greedy system, now when its to late, they start throwing our, the tay payers money in the hole. $400,000 have been spent by managers for a party, after the end. How dirty, greedy and possibly criminal can some of them get?. Just goes to show- are we sure that the suggested control systems will stop them, no, we listen to the political rambles and have no alternative but to beleive. Its our money that they are giving away to save who?. Us, I cant beleive it.
How about you out there, can you?…………So many highly qualified people warned the politicians as to what was going on, none listened, Ok maybe some but they were not strong enought to count. There is nothing we can do-How long will it be before the old takes over form the new again.
Have a nice evening.
John in Germany.