Sub-prime Meltdown Hits Thailand With Force

[Hampstead]

Back on subject, other than the stock market, what has been the effect? The baht has finally weakened to take some of the stress off exporting companies. That likely outweighs the direct economic impact of any subprime debt or derivative paper held by any Thai banks. Per the OP, Thai banks haven't had to be very sophisticated in their asset holdings so mostly stayed away from this stuff. Hardly any Thais own shares in those banks so few will be impacted. For that matter, how many Thais own any stocks?

Money flowing out of the stock market isn't really money that was being used for economic development. (Short term I mean.) I don't think people are selling factories yet to take the money back home. The recently closed factories were shut in spite of the money flowing into the stock market. It was the baht exchange rate that was killing them.

Hits the SET with force - yes. Hits Thailand with force - ?

What are people in Thailand seeing right now?

Interesting post!

How many Thai own any stocks ? Hmmm...I don't think so many in a, still mainly poor, country like Thailand.

I agree also that in- and (later) out-flowing money wasn't used for economic development. It was pure because Thai stocks were undervalued and the big investors took advantage of that fact. That's the way it works.

I would like to add that it was not -just- the expensive Baht which wiped out a lot of factories; it was also short-sighted management who didn't anticipate to the changing circumstances and the fierce competition from regional countries.

Thailand is a changing economy, away from labor intensive products to IT/electronics- and automotive industries, as well as the service industry; leisure, tourism and wellness.

That, however, doesn't bing more rice (and money) to the Thai poor tables, since more than 50% of the same labor still works in agriculture...

LaoPo

there are roughly 400,000 trading accounts of which only 100,000 are active which means used in the last 6 months,

but what you will see are more of the high street banks set up trading and information booths to attract more account openings for all their own brokerage houses in the near future as thailand is looking to double this amount of trading accounts

[Hampstead]

armegedon, great depression OMG

always the same guys running around with their hair on fire, thinking the whole world will cave in, panicking

what you saw last week, was capitulation, its the final leg in the panic sellers running to jump of a cliff and dump every stock they have.

the dow on thursday had a low of 12500, and finished two days later over 13000, still only 6 % off its all time high,

markets around the world will become more volatile, and last week was certainly capitulation, but in no way is it an relation to the great depression, 1987, or the dot com bust.

Right on Hamstead! I guess that gold bugs the world over are the same, they are always seeing conspiracies and rooting for a depression or armageddon, because that is the only way that gold would rise from its current inflated levels. In reponse to the poster that brought up Countrywide financial as a possible BK candidate, I will let you know that Countrywide is fully capitalized through 2008 and in the event this current situation got worse and lasts longer than anyone imagines then Countrywide would become a takeover candidate not a BK candidate. Now I will let the gold bugs get back to their fearmongering and perenial pessimisim, as that seems to be the only thing that gives them hope since gold is a dead end

now countrywide will be activating the 11 billion dollar credit line it has in place with 2-3 us banks, if that doesnt workout ,

then for sure countrywide will become a prime takeover target, and as you say vegasvic, not a BK candidate, couldnt agree more

Edited August 19, 2007 by Hampstead

[merlion]

Is it the time to go into the stock mkt on Monday 20th aug? Since the dow has gone up quite abit last Friday? Any comments from stock experts?

[Hampstead]

you have to have the courage of your own convictions in any decision,albeit buy and sell on a stockmarket

if you are looking for mondays future indexes,

nasdaq futures, s&p futures, dow futures and spi(sydney) futures are all positive

nikkei futures are negative,

thailands market was up on friday in context to todays result,

trading volumes have been low due to the amount of holidays in august and monday in thailand is partly a holiday

[lannarebirth]

you have to have the courage of your own convictions in any decision,albeit buy and sell on a stockmarket

if you are looking for mondays future indexes,

nasdaq futures, s&p futures, dow futures and spi(sydney) futures are all positive

nikkei futures are negative,

thailands market was up on friday in context to todays result,

trading volumes have been low due to the amount of holidays in august and monday in thailand is partly a holiday

Really? the US futures market doesn't open on Sunday afternoon in NY anymore?

[Hampstead]

you have to have the courage of your own convictions in any decision,albeit buy and sell on a stockmarket

if you are looking for mondays future indexes,

nasdaq futures, s&p futures, dow futures and spi(sydney) futures are all positive

nikkei futures are negative,

thailands market was up on friday in context to todays result,

trading volumes have been low due to the amount of holidays in august and monday in thailand is partly a holiday

Really? the US futures market doesn't open on Sunday afternoon in NY anymore?

are you taking the correct medication lannarebrith?

who the hel_l said an index is open on sundays, its the next trading day, form friday showing the futures on mondays trading

you have to be some sort of moron to think anyone is saying the markets are open on a sunday

nasdaq futures up 35.75 points

dow futures up 161 points

s&p futures up 25.40 points

spi futures up 190 points

nikkei futures down 750 points

if you are one of those guys who gains his info by the media, then switch on a bloomberg and see for yourself

Edited August 19, 2007 by Hampstead

[RedQualia]

I think a moment of being curmudgeonly is called for. Even for the most idiotic and drooling fool of an investor or economist learns on day one that return is based on risk. More return absolutely must mean more risk. Less return does not always mean less risk but three minutes of due diligence will out it.

These CDOs were all high return, high risk. In the words of the immortal philosopher Homer Simpson, DUHHHHH! I really dont see what the fuss is all about. After all, what is the definition of high risk, I think its the possibility of losing your investment capitol. Emerging markets are another code word for high risk. Amazing what sheeple will do with their money and then bleet to high heaven when the wolves sweep in.

Let em fail I say, lets all relearn one of the few hard and fast rules of investing.

Not quite right, I'm afraid...

Most in the USA, at least, are investing courtesy of their 401K fund. You get a dozen or so funds in which to invest. My own include options to invest in small caps, mid caps, large caps, bonds, a couple of foreign investment options, bonds, and something called "Guaranteed Income Fund." The Guaranteed Income Fund, as it turns out, is heavily invested in mortgages. It is also uninsured, in any way. I should mention that I lost my ass on a Guaranteed Investment Fund a few years back. Well, not my ass... Just $17K, but at the time, it was quite a lot.

So "Joe 401K" has a lot on the line. They may choose the "safe" Guaranteed Income Fund, but it's far from guaranteed. The "safe" bet at present might actually be the high yield foreign investment funds. Sure... Maybe they'll stop yielding so much. But maybe they'll be there tomorrow. The only other reasonable choice appears to be large caps.

รัด

[fletchsmile]

There is nothing happening here that wasn't foreseen a couple of years ago when we had the thread "Get out of $dollars$ now".

We could see then that there would be trouble if folk in America went on buying houses and things that they couldn't afford with money they hadn't got.

Watch now to see if the carry trade unwinds. If that happens, some big hedge funds will collapse. They have gambled, big time, on the yen staying low.

Remember what happened to Baring's, when Jim Leeson gambled that the yen would recover, and it didn't?

There could be a lot of similar revelations.

And there could be a lot of anger and litigation.

UK pension funds are being hard hit, and people don't like it when they feel that their savings are vulnerable.

I note that there is already a class action being mounted in the USA against Moody's for rating dodgy CDO assets as suitable for investment.

Be wary of stocks on all exchanges, even for the longer term. As the 'baby boomers' start to retire, the pension funds will be selling stocks to provide monthly pension payments, and there is no sign that there will be enough buyers to keep the prices up.

Some good info in your post. On the Barings tho':

- it was Nick Leeson, not Jim

- he was playing with Nikkei (stock market) futures not yen currency

- likelihood of a repeat is very small. Leeson was a rogue trader, fraudulently trading within his company. After his initail punts went the wrong way, from there in on, they were not really gambles, more a desperate guy with very few alternatives. He felt he had no choice: For him it was hang in and hope the market moved favourably so he wouldn't be discovered. The only real alternative was to come clean and own up to his fraud within the company. He bypassed the risk management frameworks, so they were not conscious gambles by the bank. These days risk management frameworks in banks are stronger. Positions will be cut sooner, as part of legitimate activities in banks. Hedge funds are a different call.

Edited August 19, 2007 by fletchthai68

[A_Traveller]

On Leeson, the key issue was that he alone acted as both Trader and Settlements officer, that was an egregious failure by Barings' management and meant in effect there was no risk or compliance management in the Singapore operation.

Regards

[Carmine6]

Is it the time to go into the stock mkt on Monday 20th aug? Since the dow has gone up quite abit last Friday? Any comments from stock experts?

If you have a long term view, there are some real bargains out there. If you're trying to catch the bottom, it might not be here yet, but no one calls tops and bottoms except by accident. "Experts" are going to have different views which is how a market is made.

[Martin]

Yes, 'fletchthai68', it was Nick Leeson. It wandered into my aging mind yesterday that I had typed 'Jim", not 'Nick', but it was too late to edit the post. Also, his 'position' was in the stock market, not the currency one.

The thing that struck me was that either his seniors must have known previously that he was 'cutting the corners' to get his amazing results, or they were not up to understanding the workings of that part of the bank. So, as Nye Bevan said of Eden: "Either too evil, or too stupid ...."

I remember that Harold McMillan (a Conservative, forsooth) always used to refer to the deposit takers as "banksters", so am inclined to guess that they were 'evil', rather than 'stupid'.

What's the betting that we will move from "Would you buy a second-hand car from the man?" to "Would you trust your savings to a hedge fund that that man managed?'

I sometimes think that Arthur Dayley must have gone into academia, as his next 'nice little earner', and be teaching the construction of sophisticated computer models to Mathematics undergraduates.

[dunque]

Remember what happened to Baring's, when Jim Leeson gambled that the yen would recover, and it didn't?

Close, but it was Nick Leeson and he was betting on the Nikkei

[midas]

Yes, 'fletchthai68', it was Nick Leeson. It wandered into my aging mind yesterday that I had typed 'Jim", not 'Nick', but it was too late to edit the post. Also, his 'position' was in the stock market, not the currency one.

The thing that struck me was that either his seniors must have known previously that he was 'cutting the corners' to get his amazing results, or they were not up to understanding the workings of that part of the bank. So, as Nye Bevan said of Eden: "Either too evil, or too stupid ...."

I remember that Harold McMillan (a Conservative, forsooth) always used to refer to the deposit takers as "banksters", so am inclined to guess that they were 'evil', rather than 'stupid'.

What's the betting that we will move from "Would you buy a second-hand car from the man?" to "Would you trust your savings to a hedge fund that that man managed?'

I sometimes think that Arthur Dayley must have gone into academia, as his next 'nice little earner', and be teaching the construction of sophisticated computer models to Mathematics undergraduates.

Martin - yesterday I posted the following question regarding a possible failure of a major bank - can you give more details please ?

QUOTE(Martin @ 2007-08-18 10:58:23)

But some are reading into the Fed's words that there may be a failure of a major bank in the offing, and that there is a real danger of spiralling down through recession to a Great Depression. Also, it is just sinking in that the central banks are, effectively, merely printing the 'liquidity' that they injected in last week (i.e. inflating the amount of money in 'circulation'). That may turn out to have a similar effect to trying to quench a fire by pouring diesel oil on it.

Martin I would like to know more about this. Where did you read this

or where did you hear about this ?

[JaiGuru]

Is it the time to go into the stock mkt on Monday 20th aug?

Brinker says the market is a buy at S&P mid-1400.

I went all in last week and am down a percent or so, but I'm a long-term invester and expect this will turn around shortly.

[lannarebirth]

you have to have the courage of your own convictions in any decision,albeit buy and sell on a stockmarket

if you are looking for mondays future indexes,

nasdaq futures, s&p futures, dow futures and spi(sydney) futures are all positive

nikkei futures are negative,

thailands market was up on friday in context to todays result,

trading volumes have been low due to the amount of holidays in august and monday in thailand is partly a holiday

Really? the US futures market doesn't open on Sunday afternoon in NY anymore?

are you taking the correct medication lannarebrith?

who the hel_l said an index is open on sundays, its the next trading day, form friday showing the futures on mondays trading

you have to be some sort of moron to think anyone is saying the markets are open on a sunday

nasdaq futures up 35.75 points

dow futures up 161 points

s&p futures up 25.40 points

spi futures up 190 points

nikkei futures down 750 points

if you are one of those guys who gains his info by the media, then switch on a bloomberg and see for yourself

I might be a moron but that isn't relevant to this thread. Yoyu were talking about Mondays futures. I was merely pointing out that Mondays futures begin trading on Sunday evening in America. I think you must have meant Friday. I gain no information from media as it introduces bias. I use live feeds.

[TBWG]

Hi

Courtesy of The Times

TBWG

[VegasVic]

I think a moment of being curmudgeonly is called for. Even for the most idiotic and drooling fool of an investor or economist learns on day one that return is based on risk. More return absolutely must mean more risk. Less return does not always mean less risk but three minutes of due diligence will out it.

These CDOs were all high return, high risk. In the words of the immortal philosopher Homer Simpson, DUHHHHH! I really dont see what the fuss is all about. After all, what is the definition of high risk, I think its the possibility of losing your investment capitol. Emerging markets are another code word for high risk. Amazing what sheeple will do with their money and then bleet to high heaven when the wolves sweep in.

Let em fail I say, lets all relearn one of the few hard and fast rules of investing.

Not quite right, I'm afraid...

Most in the USA, at least, are investing courtesy of their 401K fund. You get a dozen or so funds in which to invest. My own include options to invest in small caps, mid caps, large caps, bonds, a couple of foreign investment options, bonds, and something called "Guaranteed Income Fund." The Guaranteed Income Fund, as it turns out, is heavily invested in mortgages. It is also uninsured, in any way. I should mention that I lost my ass on a Guaranteed Investment Fund a few years back. Well, not my ass... Just $17K, but at the time, it was quite a lot.

So "Joe 401K" has a lot on the line. They may choose the "safe" Guaranteed Income Fund, but it's far from guaranteed. The "safe" bet at present might actually be the high yield foreign investment funds. Sure... Maybe they'll stop yielding so much. But maybe they'll be there tomorrow. The only other reasonable choice appears to be large caps.

รัด

First of all Red you and every other 401K investor has the right (and responsibility) to see the prospectus of any of the funds offered in their 401K program so shame on you if you didn't know what your investment was in! I am not sure what fund group your 401K is dealing with, but I will say that the vast majority of 401K programs offer guaranteed income funds, and in every case that I am aware of these funds only invest in money market accounts and cash equivelents , these funds curently are earning between 3.5-4% which isn't much but as the name infers it is indeed guaranteed, meaning no to to go down. I think that if you look back and investigate you will find that your money was not in a guaranteed income fund but indeed a guaranted investment fund as you mentioned at the end of your post. Once again it comes back to reading the prospectus before you invest!

[Carmine6]

Is it the time to go into the stock mkt on Monday 20th aug?

Brinker says the market is a buy at S&P mid-1400.

I went all in last week and am down a percent or so, but I'm a long-term invester and expect this will turn around shortly.

I jumped the gun and started going in 2 weeks ago, but for the first time in my life I went huge (just about all in plus call options) on Wednesday and Thursday before the big pop. Normally I catch the downleg a bit before the bottom so take warning.

Am also a long term investor and expect my holdings to do very well but am so tempted to take profits and try to catch another dip. I should really go hide somewhere until my body fights off the trading bug.

[Hampstead]

for those interested

all asian markets are showing gains this morning

sentiment has certainly turned around for the nikkei, whose futures on friday were showing a negative point decrease

this morning the nikkei futures are showing a positive point increase

spi futures are still showing a positive point increase

these are spot checks at the time of 7.10 am bkk

Edited August 20, 2007 by Hampstead

[joeuk1]

for those interested

all asian markets are showing gains this morning

sentiment has certainly turned around for the nikkei, whose futures on friday were showing 750 point decrease

this morning the nikkei futures are showing a positive increase of 440 points

spi futures are still in positive showing an increase of 208 points

these are spot checks at the time of 7.10 am bkk

Just checked on my markets they are hanging in there , we had a fall of 7 percent on Thurs and and gain of 3 1/2 percent on Friday . The cannon fodder weak longs are out the positions are in stronger hands now and i hope we have a good last qtr .The bears have been misreading the markets for a looooooooong time they love a drama lets hope they all get themselves short the beartraps are out .

JB

[aznyron]

well I don't know any thing about this but I do know I lost over 5000 USD in the last year just in currency exchange and I did not buy one share of stock any were.

so is my goverment going to bail me out hel_l no

so why should my goverment bail out the fools who invested there money on a get rich scheme

hedge funds sub prime this is like gambling in las vegas casino when you lose you can't go to the pit boss and ask him for your money back they will call security and escort you out of the casino

so my USA goverment should do the same tell them to go F. off

[Martin]

For 'midas', re post #103:

I saw your post #59 on page 4, but the thread had moved on so far by then that I thought the information had been given by others, particularly by someone who posted the full FOMC statement.

I read the web versions of the UK papers:Financial Times, Times, Telegraph, Independent and Guardian.

I think it was a Guardian article, that quoted some spokespeople, that I summarised. (The Guardian is a bit lefty and touchy-feely in its offerings to the Social Worker types who take it, but it keeps a good standard in its business and financial side, in keeping with its roots as the Manchester Guardian serving the hard-nosed Lancashire businessmen.)

I guess it is Countryside's troubles that are being referred to. I hope so, because the alternative is nasty.

Countryside is no small potato. As the biggest mortgage lender in the USA, any hiatus in their operation would cause a lot of business to seize up, even if only temporarily.

The spooky thing seems to be the FOMC acting so soon after a respected official pooh-poohed the idea of the FOMC acting and said it would only act in 'a calamity'.

The FOMC's words "downside risks to growth have increased appreciably" and "adverse effects on the economy" are causing furrowed brows and pursed lips.

Here is the latest Guardian piece, by two very level-headed reporters:

http://business.guardian.co.uk/story/0,,2152172,00.html

It starts:

Turmoil expected to dent UK economy

· Evidence emerges of housing market slowdown

· Directors may be sued for failing to make checks

Phillip Inman and Katie Allen

Monday August 20, 2007

The Guardian

Turmoil in financial markets was predicted to spill over into the UK economy this week as evidence emerged of a further slowdown in the housing market and fears of job cuts and a clampdown on generous bonuses in the City.

Insurance brokers also warned that multimillion-pound legal suits against "negligent directors" were in the pipeline and could result in huge payouts to compensate for losses on "reckless" investments in the US sub-prime mortgage market.

In the US, the Federal Reserve is under pressure to wade in with an emergency interest rate cut as soon as this week as the credit crisis continues. Expectations of a cut were fanned last Friday when the Fed slashed the discount rate, at which it lends to commercial banks, and said the outlook for the world's largest economy had worsened.

Its next scheduled policy meeting is not until September 18, but money markets were betting last week that the Fed would cut rates before then.

"I wouldn't expect the situation to settle down any time soon and wouldn't be surprised if the Fed were forced to take more drastic action in the next two weeks," said one strategist.

Traders pointed out that the timing of this year's meeting of central bankers at the annual symposium at Jackson Hole, Wyoming, at the end of this month could prompt action sooner rather than later to pre-empt a volley of questions over why the Fed had not responded.

Others cautioned that central bankers should to be wary of being seen to bail out the risk-takers. Swiss central bank president Jean-Pierre Roth warned that policymakers should avoid trying to eliminate market volatility.

"We hope that volatility stays higher. What we had was not normal, namely, practically no volatility," he told newspaper Neue Zürcher Zeitung yesterday. "Markets cannot be a one-way street, or you will get excess."

Analysts have also questioned whether cutting borrowing costs is the right solution to the rapidly spreading credit crisis."

Those last words are another version of my "quenching a fire by pouring diesel oil on it."

People are noting that the whole problem comes from the Fed increasing liquidity ( by printing money) and other countries (particularly China) having to follow suit. So they are doubtful about the Fed pumping in yet more liquidity.

Personally, I am not a doomster on this. I think there will be a big lurch economically, but recovery will come far faster and better than it did in the 1930s, and it is better that we have the luch (or the pricking of the bubble) sooner rather than later.

[highdiver]

martin

I agree with you. its not over yet as the fundematals are still there.

in the UK the problem is a lot bigger.

volatility is still there.

[beammeup]

martin

I agree with you. its not over yet as the fundematals are still there.

in the UK the problem is a lot bigger.

volatility is still there.

Logical

[Hampstead]

for those of you who think you predicted this credit situation, then you should honour one of yor heroes

marc faber of the doom and gloom report

this guy has predicted this very event long before it happened

heres what he had to say after the first rounds of selling in late july, and his take on the present and the future situation

http://paul.kedrosky.com/archives/2007/07/...faber_on_m.html

when on the page, just click VIEW HERE under the title marc faber on markets 27 july 2007, and then press play as its a media player recording

for those who are interested in the volatility of the markets, the dow, nasdaq and s&p futures are marginally on positive points, but very flat so far in todays trading as of 1.50 pm bkk time

Edited August 20, 2007 by Hampstead

[Martin]

I hadn't come across that Kedrosky website, but 'Marc Faber' rings a bell. Is he one of that group in the States who have been flying a "Crash Alert" flag for at least a couple of years now?

"Infectious Greed" is a good summation of the underlying cause of the "Gambling Fever" to which the hedge funds have responded by developing their nostrums.

'Hedging', properly offered to and used by companies to reduce their vulnerability to currency movements outside their control, is useful.

It is its use as a gambling vehicle that is dangerous to stability.

Is there any sign of what provisions are being made towards coping with resultant losses?

HSBC made some big provision some months ago, before the picture was generally seen to look as bad as it does now.

The fear about the possibility that is taboo---a situation that creates a run on the banks---can't be far below the surface. Probably helpful that it is August.

[lannarebirth]

I remember Marc Faber pounding the table to buy Thai Militay Bank a couple of years back. I never folllowed it. I wonder how that worked out?

[Hampstead]

that was before the millitary decided to rape and pillage the bank for npl's over the last 12 months

for sure marc faber is one of the more pessimistic financial gurus around, but nobody can discount his take on the credit situation, he has got it spot on many months prior to the event happening

[VegasVic]

For 'midas', re post #103:

I saw your post #59 on page 4, but the thread had moved on so far by then that I thought the information had been given by others, particularly by someone who posted the full FOMC statement.

I read the web versions of the UK papers:Financial Times, Times, Telegraph, Independent and Guardian.

I think it was a Guardian article, that quoted some spokespeople, that I summarised. (The Guardian is a bit lefty and touchy-feely in its offerings to the Social Worker types who take it, but it keeps a good standard in its business and financial side, in keeping with its roots as the Manchester Guardian serving the hard-nosed Lancashire businessmen.)

I guess it is Countryside's troubles that are being referred to. I hope so, because the alternative is nasty.

Countryside is no small potato. As the biggest mortgage lender in the USA, any hiatus in their operation would cause a lot of business to seize up, even if only temporarily.

The spooky thing seems to be the FOMC acting so soon after a respected official pooh-poohed the idea of the FOMC acting and said it would only act in 'a calamity'.

The FOMC's words "downside risks to growth have increased appreciably" and "adverse effects on the economy" are causing furrowed brows and pursed lips.

Here is the latest Guardian piece, by two very level-headed reporters:

http://business.guardian.co.uk/story/0,,2152172,00.html

It starts:

Turmoil expected to dent UK economy

· Evidence emerges of housing market slowdown

· Directors may be sued for failing to make checks

Phillip Inman and Katie Allen

Monday August 20, 2007

The Guardian

Turmoil in financial markets was predicted to spill over into the UK economy this week as evidence emerged of a further slowdown in the housing market and fears of job cuts and a clampdown on generous bonuses in the City.

Insurance brokers also warned that multimillion-pound legal suits against "negligent directors" were in the pipeline and could result in huge payouts to compensate for losses on "reckless" investments in the US sub-prime mortgage market.

In the US, the Federal Reserve is under pressure to wade in with an emergency interest rate cut as soon as this week as the credit crisis continues. Expectations of a cut were fanned last Friday when the Fed slashed the discount rate, at which it lends to commercial banks, and said the outlook for the world's largest economy had worsened.

Its next scheduled policy meeting is not until September 18, but money markets were betting last week that the Fed would cut rates before then.

"I wouldn't expect the situation to settle down any time soon and wouldn't be surprised if the Fed were forced to take more drastic action in the next two weeks," said one strategist.

Traders pointed out that the timing of this year's meeting of central bankers at the annual symposium at Jackson Hole, Wyoming, at the end of this month could prompt action sooner rather than later to pre-empt a volley of questions over why the Fed had not responded.

Others cautioned that central bankers should to be wary of being seen to bail out the risk-takers. Swiss central bank president Jean-Pierre Roth warned that policymakers should avoid trying to eliminate market volatility.

"We hope that volatility stays higher. What we had was not normal, namely, practically no volatility," he told newspaper Neue Zürcher Zeitung yesterday. "Markets cannot be a one-way street, or you will get excess."

Analysts have also questioned whether cutting borrowing costs is the right solution to the rapidly spreading credit crisis."

Those last words are another version of my "quenching a fire by pouring diesel oil on it."

People are noting that the whole problem comes from the Fed increasing liquidity ( by printing money) and other countries (particularly China) having to follow suit. So they are doubtful about the Fed pumping in yet more liquidity.

Personally, I am not a doomster on this. I think there will be a big lurch economically, but recovery will come far faster and better than it did in the 1930s, and it is better that we have the luch (or the pricking of the bubble) sooner rather than later.

Martin, First of all the name of the company is Countrywide not Countryside, secondly it is a mortgage company not a major bank, thirdy it is in no danger of going under as a matter of fact it is fully funded and capitalized through 2008 no matter what happens in the real estate market, and finally even if the current situation gets worse by an exponential factor Countrywide would be bought out by a major bank, it would not go out of business. Now that the facts of this situation have been made clear to you, I expect that the next time you read some of those far left wing rags that are so prevelant in G.B. you might want to check your facts before you post. For years I thought that the U.S. media (both print and electronic) was extremely liberal and slanted to the left, that is until I visited G.B. and then I really found out what the meaning of left wing lunatic fringe meant it makes the U.S. media seem almost mainstream by comparison. The current situation is a market correction and a liquidity crisis (that is currently being adressed by the FED), it bears no resemblence to the great depression of the 1930's what so ever, so any comparison does indeed make you look like a doomster as you put it. I realize that you live in a rather gloomy world over there, but do youself a favor and try and have a nice day

[bingobongo]

the subprime/arm mortgage mess in the US is just starting, and no amount of liquidity is going to stop the amount of defaults.........say bye bye to the US consumer and consequently economies that are dependent on those US consumers......

#1 refers to January 2007, #8 is August 2007, #12 December 2007 all the way down the line on a monthly basis etc......

Edited August 21, 2007 by bingobongo