Thai Stock Index Plummets, Hits lowest since 2003

[Johpa]

Government response reaches dramatic new level: U.S. will take 80% stake in nation's largest insurer to prevent global financial chaos

The chaos would have been mostly felt by the upper 1% of the income ladder and for those of us below the upper 10% of income the chaos would simply have been a little more belt tightening. So I imagine chaos is defined as having some of the very wealthy losing a substantial part of their wealth for having made foolish investment decisions, such as investing in hedge funds that invested into voodoo derivatives, and thus then perhaps falling into the upper brackets of the upper middle class, a fate clearly worse than death and thus requiring the use of the tax dollars of the masses to intervene to protect them from such an undignified calamity. Sort of like the Baat collapse in Thailand a decade ago when the chaos of the time really had little bearing on the vast majority of the population: they were poor before the collapse and they were poor after the collapse.

Alas, there is still plenty of economic doggy doo doo to hit the fan as the American version of cowboy capitalism, titularly founded by Ronald Reagan and his overseas cowgirl Maggie, has always been a big pyramid scheme that is only now beginning to unravel. Amway is the American way.

[The Mask]

Ironic that we should discuss this point this morning since it now appears that HBOS will be bought by Lloyds TSB. So the shorters win and the losers are the many thousands of people who will lose their jobs as a result.

We short the investment banks because we know that they are corrupt, lying thieves who have been stealing investors money for years. You can only sweep so much under a carpet before eventually someone trips and breaks their neck.

You mentioned that HBOS is a sound financial institution despite the fact that their shares have plunged over the last three days and they are now being bailed out by Lloyds TSB. I find it ironic that only a few hours after you posted an idiotic comment about the stability of HBOS we find out they are being saved by Lloyds further illustrating how little you know of this subject.

If you want to educate yourself please study Jim Rogers...

[nickh]

UK to lose 110,000 finance, business jobs -

By Olesya Dmitracova LONDON, Sep 17, 2008 10:54am

(Reuters) - Financial and business services companies in Britain expect to shed around

110,000 jobs in total in the year to next April

http://www.reuters.com/article/rbssFinanci...H69616020080917

[roamer]

Ironic that we should discuss this point this morning since it now appears that HBOS will be bought by Lloyds TSB. So the shorters win and the losers are the many thousands of people who will lose their jobs as a result.

We short the investment banks because we know that they are corrupt, lying thieves who have been stealing investors money for years. You can only sweep so much under a carpet before eventually someone trips and breaks their neck.

You mentioned that HBOS is a sound financial institution despite the fact that their shares have plunged over the last three days and they are now being bailed out by Lloyds TSB. I find it ironic that only a few hours after you posted an idiotic comment about the stability of HBOS we find out they are being saved by Lloyds further illustrating how little you know of this subject.

If you want to educate yourself please study Jim Rogers...

HBOS is far from sound and its not difficult to see why. Halifax was not only the biggest player in the UK mortgage market, it was also one of the more reckless, or shall we say less cautious, in its lendings. It needs to borrow heavily in the wholesale markets to meet its commitments. Given that the UK property market is on a rapid downward spiral that could easily see a 30% decline in values, the highest rise in unemployment for 16 years announced today, you have to wonder what the value of HBOS assets would be in a years time. And of course thats not even taking into account the dodgy...junk..US paper they have.

And personally if that bespectacled midget called Howard that fronts their ads gets the bullet I'm all for it. :D

[LaoPo]

Fed in AIG rescue - $85B loan

Government response reaches dramatic new level: U.S. will take 80% stake in nation's largest insurer to prevent global financial chaos.

http://money.cnn.com/2008/09/16/news/compa...sion=2008091622

LaoPo

Update:

Greenberg, His Firms Lost $5.8 Billion in AIG Shares This Month

By Hugh Son and Thom Weidlich

Sept. 17 (Bloomberg) -- American International Group Inc. former Chief Executive Officer Maurice ``Hank'' Greenberg saw the value of the AIG stake he controls plunge by about $5.8 billion this month as the insurer struggled to survive.

The U.S. government yesterday reversed its opposition to a takeover of AIG, and provided the insurer with an $85 billion loan to avert the worst financial collapse in history. The Federal Reserve may take an 80 percent stake in AIG and has the right to stop paying dividends to the company's investors.

AIG managers ``presided over the virtual destruction of shareholder value built up over 35 years,'' Greenberg said yesterday in a letter to the company.

Greenberg, 83, controls 11 percent of AIG shares through two investment firms and personal holdings, according to Bloomberg data. He said yesterday in a regulator filing he may consider taking control of the insurer through a proxy fight or buyout. The value of the stake shrank to $698.9 million today from $6.53 billion at the end of August.

AIG declined $1.45, or 39 percent, to $2.30 at 1:37 p.m. in New York Stock Exchange composite trading today.

Greenberg ran AIG for 38 years until he was forced to retire in March 2005 amid state and federal probes into the company's accounting and sales practices. He denies any wrongdoing in the case, which is still pending. Then-New York attorney General Eliot Spitzer dropped portions of the lawsuit in 2006 that included four other allegations tied to the investigation.

Martin Sullivan replaced Greenberg as CEO and was followed by Robert Willumstad, who took over in June. As part of the government takeover, Willumstad, 63, will be replaced by former Allstate Corp. CEO Edward Liddy, 62.

Greenberg runs C.V. Starr & Co. and Starr International Co., two closely held firms once linked to AIG. C.V. Starr diversified its stake and sold some of its AIG shares, Greenberg said in an interview with CNBC yesterday. He didn't say how many.

Glen Rochkind, a spokesman for Greenberg, didn't return a call seeking comment.

--Bloomberg

LaoPo

[chiang mai]

Ironic that we should discuss this point this morning since it now appears that HBOS will be bought by Lloyds TSB. So the shorters win and the losers are the many thousands of people who will lose their jobs as a result.

We short the investment banks because we know that they are corrupt, lying thieves who have been stealing investors money for years. You can only sweep so much under a carpet before eventually someone trips and breaks their neck.

You mentioned that HBOS is a sound financial institution despite the fact that their shares have plunged over the last three days and they are now being bailed out by Lloyds TSB. I find it ironic that only a few hours after you posted an idiotic comment about the stability of HBOS we find out they are being saved by Lloyds further illustrating how little you know of this subject.

If you want to educate yourself please study Jim Rogers...

And if you want to educate yourself go read the reports on HBOS - their takeover results from a crisis in confidence whilst having a fundamentally sound balance sheet, idiot.

[LaoPo]

AIG update: -96% YTD

AIG Falls (-45%) on Concern Shareholders Will Be Wiped Out

Sept. 17 (Bloomberg) -- American International Group Inc. fell 44 percent on speculation the government's takeover will ultimately wipe out shareholders.

The U.S. plan to save AIG, the nation's largest insurer by assets, may give the government an 80 percent stake in return for an $85 billion loan, and dividends may be halted to common and preferred stockholders. The U.S. reversed its opposition to a loan after private efforts collapsed and the Federal Reserve concluded that ``a disorderly failure of AIG could add to already significant levels of financial market fragility.''

The ``punitive'' interest rate on the two-year loan ``makes it extremely clear that this is not a subsidy extended to keep the company afloat but rather a stranglehold that makes AIG unviable while ensuring that its obligations will be met,'' said Marco Annunziata, an analyst at UniCredit SpA, in a note to clients. ``This is to all extents and purposes a controlled bankruptcy.''

AIG unraveled as the worst housing crisis since the Great Depression led to more than $18 billion of losses in the past year. A meltdown could have cost the financial industry $180 billion, according to RBC Capital Markets, because AIG provided insurance on more than $441 billion of fixed-income investments held by the world's biggest institutions, including $57.8 billion in securities tied to subprime mortgages.

`Systemic Risk'

``It's an enormous relief,'' said David Havens, credit analyst for UBS AG in Stamford, Connecticut. ``Nobody really knows what it would have meant if they would have been allowed to fail, but there was an enormous amount of systemic risk. The problem was, nobody really knew how bad it could have been.''

The agreement will give the company, which sells insurance in more than 130 countries, time to sell assets ``on an orderly basis,'' AIG said in a statement. The credit line, secured by AIG's assets, is 8.5 percentage points above the three-month London interbank offered rate, or a current rate of about 11.5 percent.

Chief Executive Officer Robert Willumstad, 63, will be replaced by former Allstate Corp. CEO Edward Liddy, 62.

AIG declined $1.70 to $2.05 at 4:15 p.m. in New York Stock Exchange composite trading. The insurer has plunged 96 percent this year.

AIG's $2.5 billion of 5.85 percent notes due in 2018 fell 1.75 cents to 43 cents on the dollar in New York after earlier rising 14.25 cents, according to Trace, the bond-price reporting system of he Financial Industry Regulatory Authority.

The debt yields 19.2 percent, or 15.8 percentage points more than similar-maturity Treasuries, Trace data show.

Credit Downgrades

The survival of the 89-year-old insurer fell into doubt when Standard & Poor's and Moody's Investors Service cut its credit ratings on Sept. 15. The reductions threatened to force AIG to post more than $13 billion in collateral when the company was already short on cash. AIG couldn't raise money by selling shares after the stock plunged to less than $4 a share from $70.11 in October of last year.

The $85 billion loan will give AIG time to sell units, New York Insurance Superintendent Eric Dinallo said in a Bloomberg Television interview. ``There is absolutely no solvency issue'' with AIG, he said.

The loan ``greatly exceeds any near-term needs for liquidity,'' S&P said in a statement today.

The Fed's loan doesn't require asset sales or the company's liquidation, though these are the most likely ways AIG will repay the Fed, central bank staff officials told reporters on condition of anonymity. Blackstone Group LP advised AIG on the transaction.

Markets Unprepared

The Fed doesn't have an expectation of whether AIG will be smaller, nonexistent or similar to its current form at the end of the loan's term, the staffers said.

The Fed or Treasury will end up holding the AIG stake, the staffers said. The Fed bailed out AIG while refusing aid to Lehman Brothers Holdings Inc., which collapsed earlier this week, because financial markets were more prepared for a Lehman failure, a Fed staff official said.

The Fed stepped in after JPMorgan Chase & Co. and Goldman Sachs Group Inc., which were brought in to help assess AIG, failed to come up with a solution, according to a person familiar with the talks. Liddy is currently on the board of Goldman, the company Henry Paulson ran as CEO before becoming the U.S. Treasury secretary in 2006.

Hank Greenberg

Willumstad, the former Citigroup Inc. president who left the bank in 2005 to seek a CEO position, was named to AIG's top post in June. His predecessor, Martin Sullivan, was chief for three years until being ousted after two record quarterly net losses. Maurice ``Hank'' Greenberg reigned at AIG for almost four decades until he was forced to retire in 2005 amid regulatory probes.

Greenberg, who remains one of the company's biggest stakeholders, said the company needed a bridge loan instead of a plan that put the company under government control. An investor group led by Greenberg said in a federal filing hours before the rescue was announced it might want to buy the company or some units or make loans to AIG.

``Why would you want to wipe out shareholders when you just need a bridge loan?'' Greenberg, 83, said in an interview before the announcement. ``It doesn't make any sense.'' Greenberg declined to comment after the Fed announcement, spokesman Glen Rochkind said.

Unit Sales

Businesses that may be sold by AIG include American General Finance Corp., the division that makes home and auto loans, said Citigroup analyst Joshua Shanker. The unit generated $2.89 billion in revenue last year, about 2.6 percent of AIG's total. Other candidates include AIG's U.S. variable-annuity business, and a 59 percent stake in reinsurer Transatlantic Holdings Inc., he said.

Asset manager AIG Investments, with 5.1 percent of AIG's revenue, could also be sold, said Gary Ransom of Fox-Pitt Kelton Cochran Caronia Waller.

American General Finance's price could be more than $6 billion if the unit sold for twice its book value. AIG Investments could fetch more than $3 billion if it sold for 2.5 percent of clients' assets under management. The Transatlantic stake is worth about $2.3 billion, based on yesterday's share price. The variable annuity results aren't broken out, making an estimate difficult, said Shanker. AIG acquired the business a decade ago when it bought SunAmerica for $19.7 billion in stock.

Aircraft Leasing

AIG's aircraft-leasing unit International Lease Finance Corp. may be bought by investors led by the unit's founder, Steven Udvar-Hazy, the Wall Street Journal reported, citing unnamed people. Udvar-Hazy has been in discussions with potential investors since Sept. 14, the Journal said.

AIG may find buyers for life insurance businesses outside the U.S. where competitors including Hartford Financial Services Group Inc., MetLife Inc., Prudential Financial Inc., and Canada's Manulife Financial Corp. have been adding customers.

``In developing insurance markets around the world, the growth rates are, on average, twice what the growth rates in the U.S. are,'' MetLife Chief Financial Officer William Wheeler said Sept. 10. ``When properties come up for sale around the world, it's very competitive.''

Auto insurers are also consolidating, making AIG's car unit a takeover candidate. Liberty Mutual Group Inc. agreed in April to buy Safeco Corp. for $6.2 billion, the U.S. industry's biggest transaction since 2004.

A Different Look

``AIG has yet to communicate broadly to shareholders on the company's intentions,'' Wachovia Corp. analyst John Hall said in a note to investors. ``Whatever plan the company may have AIG will look decidedly different in two years.''

AIG rejected a bid for a joint investment by Allianz SE and J.C. Flowers & Co. on Sept. 14, said two people with knowledge of the offer.

Allianz, Europe's biggest insurer, and Flowers, the New York-based private equity firm run by J. Christopher Flowers, proposed the cash infusion to help AIG fend off a liquidity crunch, the people said.

Sabia Schwarzer, an Allianz spokeswoman, declined to comment. Flowers and Nicholas Ashooh, an AIG spokesman, didn't return calls seeking comment.

--Bloomberg

LaoPo

[nickh]

And Now The Russia Meltdown"

Luke Harding in Moscow* The Guardian,*

Thursday September 18 2008*

Oil price fall and global crisis force suspension of Russian stockmarkets*

Russia yesterday suspended trading on its two main stock exchanges after shares

plummeted for a second day, forcing the central bank to intervene.

http://www.guardian.co.uk/business/2008/se...kets.regulators

Wonder whats in store for Asia when markets open in a couple hours

[sriracha john]

18 Sept 2551 @ 12:31:59

SET 574.42 -30.72

[Jai Dee]

Global stocks plunge with investors' intensified panic

Thai SET composite index plunged 5 per cent at noon and local gold prices rose Bt850 per baht weight in one day amid global panic in credit market which reach historic intensity on flight to safety.

Stock investors in Asia have fled equity market on concern more global financial firms will collapse after teh US government took over American International Group Inc, and Morgan Stanley was said to be seeking a buyer. Shares in the two largest independent US investment banks left standing after recent collapse of Lehman Brothers, - Morgan Stanley and Goldman Sachs - fell 24 per cent and 14 p er cent, respectively.

The SET index was closed at 574.42 at first trading session with trading value of Bt8.54 billion, while stock markets across Asia also dropped into red zone. As of 12.52 pm Hong Kong's Hang Seng fell 7.38 per cent to 1,636.14, while Indian stock market, Mumbai Sensex dropped 4.31 per cent 12,691.11. Other Asian markets fell around 1.8-4 per cent. Japanese stocks fell toward a four-year low.

Investors short equities and dollar-denominated assets to avoid all types of risk and shift for safer assets like gold, bonds, and cash.

Local gold bar jumped significantly from Bt12,850 closed yesterday to Bt13,700 this morning and Bt13,550 at noon.

Source: The Nation - 18 September 2008

[Jai Dee]

Thai Market Poised For Positive Correction

The Thai stock market has finished lower now in four straight days and in seven of the last eight sessions, on Thursday dipping below the 600-point level intra-day for the first time in four years before recovering slightly. Now analysts say that the Stock Exchange of Thailand is overdue for a positive rebound when it kicks off trade on Friday.

The global forecast is generally optimistic on reports of the U.S. Federal Reserve is in the process of putting together a rescue package for the financial sector in terms of bad debt. A late retreat in the price of crude oil pulled it back under $100 per barrel, and better than expected economic news out of the United States also added to the positive sentiment. Those factors were enough to send Wall Street sharply higher, and the Asian bourses - many due for a correction through bargain hunting - are expected to follow suit.

The SET finished modestly lower on Thursday, but far from the daily lows in the morning. The market was down more than 5 percent before lunch, but then the bargain hunters were able to erase most of those losses. For the day, the index shed 4.76 points or 0.79 percent to close at 600.38.

Among the actives, Bangkok Bank and Kasikornbank both finished higher, as did coal miner Banpu and PTT Exploration and Production. Energy giant PTT was unchanged.

Wall Street offers a broadly positive lead as the markets staged a late day rally on Thursday, sending the Dow up more than 400 points. A report that the government may create a repository for bank's bad debt prompted investors to take back nearly all of the losses posted in the previous session, when the Dow closed down more than 450 points.

The markets got an earlier boost when the U.S. Federal Reserve along with five other central banks in Europe enacted plans to deal with the elevated pressures in U.S. dollar short-term funding markets. Among the efforts, the Fed provided an extra $180 billion to the other central banks involved via its temporary reciprocal currency arrangements or swap lines, valid through January 30, 2009. This increased capacity is intended to provide dollar funding for both term and overnight liquidity operations by the other central banks.

Washington Mutual (WM) and Morgan Stanly (MS) have both come under extreme pressure as of late amid continued credit worries. Media reports have tied both companies to potential mergers - Washington Mutual to Citigroup © or Wells Fargo (WFC) and Morgan Stanley to Wachovia (WB). Nonetheless, the late day rally followed a CNBC report that suggested the Federal government might create a repository for banks' bad debt, similar to the Resolution Trust Corporation that was formed in the 1980s after the failure of the savings and loan banks.

Meanwhile, the Federal Reserve Bank of Philadelphia released its report on activity in the Philadelphia-area manufacturing sector. In the report, the Philly Fed said that the sector unexpectedly expanded in the month of September, with the Philly Fed Index climbing into positive territory. The index of current activity rose to a positive 3.8 in September from a negative 12.7 in August, with a positive reading indicating growth in the sector. Economists had expected the index to come in at a negative 10.0.

The major averages moved sharply higher in the final hour of trading, ended the day just off of their session highs. The Dow closed up 410.03 points or 3.9 percent at 11,019.69, the Nasdaq closed up 100.25 points or 4.8 percent at 2,199.10 and the S&P 500 closed up 50.12 points or 4.3 percent at 1,206.51.

In economic news, Thailand will on Friday distribute foreign reserves data through September 12, with analysts looking for an annual increase of 100.5 percent. That's down slightly from the 101 percent expansion in the previous reporting period.

Source: NASDAQ - 19 September 2008

[ubonjoe]

Thai shares open 2.03 per cent higher

Thai stocks gained 12.17 points or 2.03 per cent when the market was open for trading Friday morning.

The composite index of the Stock Exchange of Thailand rose to 612.55 at 10:08 am with a trading volume of Bt2.358 billion.

The blue-chip SET50 rose 9.90 or 2.36 per cent to 429.09.

The Nation

[ubonjoe]

Asian stocks soar on possible US rescue package By JEREMIAH MARQUEZ, AP Business Writer

35 minutes ago

HONG KONG - Asian stock markets soared Friday as a news of a U.S. government plan to rescue banks from risky mortgage debt brought hope of a letup in the world's worst financial crisis in decades.

ADVERTISEMENT

Japan's Nikkei 225 average advanced 3.2 percent to 11,859.75, while Hong Kong's Hang Seng Index shot up nearly 7 percent to 18,836.90.

Full story: http://news.yahoo.com/s/ap/20080919/ap_on_...F1oE0_5O1eyBhIF

[ding]

Government response reaches dramatic new level: U.S. will take 80% stake in nation's largest insurer to prevent global financial chaos

The chaos would have been mostly felt by the upper 1% of the income ladder and for those of us below the upper 10% of income the chaos would simply have been a little more belt tightening. So I imagine chaos is defined as having some of the very wealthy losing a substantial part of their wealth for having made foolish investment decisions, such as investing in hedge funds that invested into voodoo derivatives, and thus then perhaps falling into the upper brackets of the upper middle class, a fate clearly worse than death and thus requiring the use of the tax dollars of the masses to intervene to protect them from such an undignified calamity. Sort of like the Baat collapse in Thailand a decade ago when the chaos of the time really had little bearing on the vast majority of the population: they were poor before the collapse and they were poor after the collapse.

Alas, there is still plenty of economic doggy doo doo to hit the fan as the American version of cowboy capitalism, titularly founded by Ronald Reagan and his overseas cowgirl Maggie, has always been a big pyramid scheme that is only now beginning to unravel. Amway is the American way.

Bingo!

And the future looks like a continuum. McCain is amazingly even with Obama in the US polls. If Thailand is going to avoid a capsize in this hurricane I hope they have a real captain at the helm, not another rich and powerful hack delivering more of the same.

Long live the King. Seriously.

[ubonjoe]

Thai shares surge, riding Asian recovery crest

Shares at the Stock Exchange of Thailand rose 4.07 per cent Friday in tandem with an international rebound of bourses around the world. The SET index ended at 624.83, up 24.45 points.

Full Story: http://www.bangkokpost.com/breaking_news/b...s.php?id=130789

[JaiDamJungLoei]

The chaos would have been mostly felt by the upper 1% of the income ladder and for those of us below the upper 10% of income the chaos would simply have been a little more belt tightening. So I imagine chaos is defined as having some of the very wealthy losing a substantial part of their wealth for having made foolish investment decisions, such as investing in hedge funds that invested into voodoo derivatives, and thus then perhaps falling into the upper brackets of the upper middle class, a fate clearly worse than death and thus requiring the use of the tax dollars of the masses to intervene to protect them from such an undignified calamity. Sort of like the Baat collapse in Thailand a decade ago when the chaos of the time really had little bearing on the vast majority of the population: they were poor before the collapse and they were poor after the collapse.

Alas, there is still plenty of economic doggy doo doo to hit the fan as the American version of cowboy capitalism, titularly founded by Ronald Reagan and his overseas cowgirl Maggie, has always been a big pyramid scheme that is only now beginning to unravel. Amway is the American way.

Not true. If Bear Sterns had been allowed to collapse around 2 million people would have lost some or all of their pension. With AIG the number is much higher, probably close to 20 million. Not so much from the loss of AIG itself, but AIG is the biggest insurer of bad debt in the US. They have already paid out over US$25 billion in insurance claims on defaulted loans, and owe at least that much. If AIG had failed, many banks and investors would have gone under, removing pensions as they fall.

When you see phrases like "hedge funds" and "mutual fund", think "pension plan financiers" and you'll be correct most of the time.

You got it right on Reagan, his economic policies started this bubble 20 years ago.. But, the problem now is due to US gov policy changes in the early 90s. At that time the US economy started to overheat, and the US government. instead of raising interest rates to slow the economy, started to alter their tracking data (particularly the CPI) to make the economy look OK and keep the bubble going. Using the 1990 CPI criteria, inflation in the US has been running at 10 to 12% for the last 6 years. Which mean interest rates should have been much higher for a long time.

[robee]

My wife insisted that I buy insurance for the whole family. Those that you pay them annually for 10 years, and get the money back plus benefit on year 15. So far a lot of dosh have been deposited. If AIA/AIG go down, what will happen to my dosh?

5 questions: Why AIG matters to you

I have insurance through AIG. How worried should I be about the problems at the company?

http://money.cnn.com/2008/09/16/news/compa...sion=2008091612

Thanks. I get now sleep better, at least in the short term.

Bail out the companies that insured bad

Loans. top execs new of these bad loans and that repayment would not happen. Their should be indictments, and prison formthose involved. Instead just us taxpayers getting bill. 80s all over.

[robee]

Ironic that we should discuss this point this morning since it now appears that HBOS will be bought by Lloyds TSB. So the shorters win and the losers are the many thousands of people who will lose their jobs as a result.

Meet the new boss. Same as the old boss. Beards have all grown longer overnight...

[AlKing]

I hope you people learn your lesson well. Never play the stock market, especially one from an undeveloped country.

[Jai Dee]

GPF adjusts strategies to tackle repercussions from global financial crisis

The Government Pension Fund (GPF) has announced its investment strategies to address possible consequences, resulting from global financial crisis. By new strategies, GPF will hold more cash, delay their investments and follow up investment situation closely.

Mr. Wisit Tantisunthorn (วิสิฐ ตันติสุนทร), the GPF Secretary-General, says the GPF’s new investment strategies are rolled out in line with current economy conditions, and GPF has refrained itself from additional investments in both Thai and foreign stocks. He says GPF will likely invest its money in fixed income segment as inflation pressure has decreased.

Mr. Wisit says the decline of inflation pressure has resulted in the decrease of interest rate, which will become a positive factor to bond markets, adding that GPF needs to closely observe and see further investment movements. In terms of investment port, he says GPF has invested 68.5 percent of money in fixed income markets, 9.5 percent in domestic stock markets, 14 percent in foreign bourses, 4 percent in property markets and another 4 percent in other segments.

In terms of impacts from the US’ recent financial deficits, Mr. Wisit views financial institutions won’t be directly affected since not many investors from Thailand are involved in the business of bankrupt financial institutions in the US. He says financial institutions in Thailand may receive only slight impacts from the crisis in line with the sluggishness of global economy.

Source: Thai National News Bureau Public Relations Department - 22 September 2008

[Flapman]

Ironic that we should discuss this point this morning since it now appears that HBOS will be bought by Lloyds TSB. So the shorters win and the losers are the many thousands of people who will lose their jobs as a result.

We short the investment banks because we know that they are corrupt, lying thieves who have been stealing investors money for years. You can only sweep so much under a carpet before eventually someone trips and breaks their neck.

You mentioned that HBOS is a sound financial institution despite the fact that their shares have plunged over the last three days and they are now being bailed out by Lloyds TSB. I find it ironic that only a few hours after you posted an idiotic comment about the stability of HBOS we find out they are being saved by Lloyds further illustrating how little you know of this subject.

If you want to educate yourself please study Jim Rogers...

And if you want to educate yourself go read the reports on HBOS - their takeover results from a crisis in confidence whilst having a fundamentally sound balance sheet, idiot.

But where does this lack of confidence come from? No smoke w'out fire, right? I thought a large part part of HBOS's problems stemmed from it's off-balance-sheet funding vehicle, Grampian? I understand this is where HBOS off-loaded all it's debts to clean up its b-s and thus keep the CDS rate low, and so able to borrow cheaply in the wholsale markets. A bit like stuffing bad USA housing debts into the Frannies.

[larvidchr]

Please don't get angry with me, I freely admit that I don't know very much about these things and that the following therefore properly will seem stupid to the ones in the know but bear with me please.

I have been getting increasingly upset by the resent economic events in the world and don't understand how it could go so far, now with the billions and billions of dollars that not only the American central bank but also central banks all over the world ( tax payer money ) have to use to save essentially private investment company's from a dodgy property investment scheme (sub primes) originating from some ( to clever now it seems) investment people in the US.

All you hear is how it is essential for us taxpayers to save those private investment banks who when everything was okay wouldn't have given you the time of day if you had walked through their doors and asked for a free handout because you at present was in a bit of a pickle.

But at least me I don't hear a lot about who really is responsible for this whole catastrophe, no names seems to go through the news networks all over the world, no persons seems to be singled out as the real responsible and nobody seems to have to bear some judicial responsibility.

So my questions are:

Who is the originator of the sub prime idea?

Who initially allowed this investment scheme?

Did US investment banks peddle this scheme to European investment banks like UBS from day one, or did they first do that when they got worried that maybe the whole thing wasn't so smart after all and tried to get rid of the risk?

Is heads rolling in a substantial way in the investment world?

Will anybody go to jail because of this?

In my country stock brokers are called "hysterical bitches" you know, a small dog is run over on lets say Fifth Avenue and imidiately after Pedigree Pal stocks fall on Wall street, sell sell sell, the brokers scream on the exchange floor, this example is exaggerated of cause, but the stock brokers get commission on stock movement so the more they sell and buy the more money they make, so they have really no interest in a stable and calm market. Is this correct understood by me?

I now hear on television that specially something they call "short selling" is contributing to making the problems bigger. Why do our Governments allow those people to hurt our country's economy just so they can make a fast buck?

I am absolutely no communist, but should there not be some mechanisms put in place to regulate the hysterical behaviour of stock brokers so that artificial, exaggerated and unnecessary sell/buy situations cant be created by them?

What about putting stock brokers on a fixed Government income, or introducing a sort of cool of period from you announce your intentions of buying or selling till the sale actually goes through sort of like buying a gun in some States of the US, everybody gets a chance to calm down?

Why do we allow private companys who manage peoples pensions to be involved in high risk investments? and why dont we demand that they have redundency 100% that they cant tuch to safeguard peoples pensions? so even if they go bankrupt the pension monies would still be there?

Finally, is those financial institutions we now all help save with our tax money going to pay us back with a percentage of their profits?

I hope some Thai Visa members can help me understand all this better and maybe answer some of my questions.

Regards

[AlKing]

I loss more monet today.

[steveromagnino]

I loss more monet today.

that's alright, tonight I might go find a little somethin' somethin' at Renoir.

God bless the Impressionists.

[Spee]

Who is the originator of the sub prime idea?

Who initially allowed this investment scheme?

I'm not fully educated on all of this, but here is my layman's explanation. Unfortunately, it is also very political, so I hope this isn't viewed as an attempt to thread hijack or turn the topic political. The fact is that no one can correctly discuss this business debacle without also looking at the underlying politics, because they are so closely intertwined.

The roots go all the way back the Carter administration in 1977, and it has to do with socialization of the American housing and mortgage industry. In a sense, it is the next step from government subsidized housing (aka Section 8 housing) to government compelling banks to grant mortages to people who would not ordinarily qualify for them.

This whole business was made worse during the Clinton administration, where the programs were expanded so to allow people to gain mortgages without even being minimally vetted (e.g., verification of employment). Of course the greed factor kicked in because the lending institutions were able to charge exhorbitant interest rates to presumably make up for the higher foreclosure risk.

So essentially what you have is government and private business getting too close and when this happens, there is inevitably corruption, mismanagement and eventually failure. If anyone still has any doubt whatsoever that the government/business cronyism in Thailand is bad, all they have to do is look to this example in the US and see that it is just as bad there.

To pull out my old tired homemade cliche', governments should be in the business of governing, not in the business of governing. Whenever governments and businesses get too close, bad things happen and taxpayers and investors get the shaft.

Did US investment banks peddle this scheme to European investment banks like UBS from day one, or did they first do that when they got worried that maybe the whole thing wasn't so smart after all and tried to get rid of the risk?

Mortages were then bundled up into securities and sold on the open market, both in the US and abroad. Some were all good, some were a mix of good and bad and some were all bad. The chink the in armor is that the investment was sold as a sure way to make money. In reality, when it came time to pay the piper, some of the investment banks had only a few dollars in liquidity for every twenty or thirty dollars in risk, which is extraordinary. This is precisely what happened with Lehman Brothers. Essentially the margin calls came in and they had grossly insufficient reserves to weather the storm.

At the same time, there is no accountability in the industry. All the salesmen were interested in were commissions and bonuses, which are typically paid annually. So there was this big push to generate sales, reap the bonuses, and hopefully not be left without a chair when then music stopped playing. Obviously, Lehman was one of those companies with no chair.

Is heads rolling in a substantial way in the investment world?

Will anybody go to jail because of this?

IMHO, heads should roll and people should be going to prison over this, just as people were prosecuted and went to prison in the wake of the WorldCom and Enron scandals. Some lefties will no doubt take this as a neocon attack, but here is the reality of the situation.

Former Clinton administration staffers are ubiquitous throughout this scandal. Here are two examples:

Google Frankline Raines, the former Clinton budget director who went on to be the CEO of Fannie Mae. This guy lined his pockets to the tune of almost $100M dollars, while running this company into the ground. Instead of being prosecuted for malpractice, he is now an economic advisor to the Obama campaign.

You could also Google former Clinton White House counsel Jamie Gorelick who, despite having absolutely zero experience in the economics of the home mortgage industry was appointed by Franklin Raines to be Vice Chairman of Fannie Mae and was paid in excess of $20M in salary and bonuses while the business was being run into the ground by Raines & Co.

Needless to say, these people should be at the top of the list for investigation and prosecution, but the chances of this happening are almost nil. Why you might ask? Because the politicians have all been paid off. For example:

Several key Democrat and Republican Congressmen have received large payments from Fannie Mae and other lobbyists. All of the key Democrat cronies are right in the middle of this, including Christopher Dodd, Barney Frank et al.

And while we're at it, let's take a look at Barak Obama. The guy is already known to have a past history with convicted felon real estate hustler Tony Rezko from his days in the Chicago Democrat political machine.

Now, Obama has only been a US Senator for less than 4 years, and has been campaigning full time for President for about half that time. Yet even in this little amount of time, Obama is at the top of the list for the amount of money received from the Fannie Mae lobby, approximately $120,000 if memory serves me right.

To be fair, many Congressmen have received Fannie Mae money, with Christopher Dodd at the very top (and also getting favorable lending rates). But let's compare Obama with McCain. Obama has received more than $120k in just a few years. McCain has only received about $20k although having been in Congress for more than 20 years.

Now if you ask the Congress, they will say the problem is the lack of oversight throughout the last 8 years of the Bush administration. But the fact is that former Democrat cronies were in collusion with the Democrat run Congress to prevent proper oversight. Contrary to popular opinion, the Bush administration recognized the potential problem in 2003, tried to step in a halt the expansion and insert additional oversight, but was rebuffed by the Democrat Congress.

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To conclude, at the root of this entire debacle is 30 years of failed government social programs combined with collusion between government and corporate representatives and a massive quest for greed by quick buck artists.

Personally, I have no doubts that this debacle will be laid at the feed of the US taxpayers and the Congress will once again "rob Peter to pay Paul." In other words, they will raise my taxes and decrease the social security retirement benefits that I've been forced to pay into for my entire working life and would normally be entitled to.

[LaoPo]

But let's compare Obama with McCain. Obama has received more than $120k in just a few years. McCain has only received about $20k although having been in Congress for more than 20 years.

That's not too bad if you're married to a very wealthy and privileged wife and philantropist, Mrs. Cindy Hensley McCain, and you don't even know if you own 7 or more Villas....I like John McCain, but to put him here as a poor man who received less money than his opponent is a bit too much, Spee !

I'm curious though: are you a Republican or Democrat.......or is that a very stupid question ?

This is a nice graph to study a bit as a balance between Rep's and Dem's although I'm afraid I make the same mistake as you:..it's completely OFF TOPIC.

LaoPo

[Spee]

But let's compare Obama with McCain. Obama has received more than $120k in just a few years. McCain has only received about $20k although having been in Congress for more than 20 years.

That's not too bad if you're married to a very wealthy and privileged wife and philantropist, Mrs. Cindy Hensley McCain, and you don't even know if you own 7 or more Villas....I like John McCain, but to put him here as a poor man who received less money than his opponent is a bit too much, Spee !

This debate has nothing to do with personal wealth. Obama is also a multi-millionaire, very wealthy by most peoples' standards. The debate has to do with accepting lobby payoffs for political favors. In this instance, it is clear to see who has taken the payoffs.

I'm no huge fan of McCain, although my hopes are raised a bit with his VP selection. Obama on the other hand is a corrupt, dirty politician, who has been bought and paid for since his political birth. And McCain is scary too. He wants to appoint Andrew Cuomo to head the Securities & Exchange Commission (SEC). This is the same Cuomo who was head of the Housing and Urban Development (HUD) administration under Clinton, which gave birth to what eventually became this current debacle.

I'm curious though: are you a Republican or Democrat.......or is that a very stupid question ?

I'm not affiliated with either party. I've already said in other posts that I'm a small government, free market, fiscal conservative. The current Republican leadership is neither conservative nor small government. The Dems never have been this way.

The whole current national political scene in the US disgusts me now, just as it did for the second half of the Clinton administration. There are just as many corrupt Republicans as there are Democrats. Bush's fiscal policy over the past few years has been horrendous. The House and Senate are led by complete incompetents (Pelosi and Reid, respectively).

This is a nice graph to study a bit as a balance between Rep's and Dem's although I'm afraid I make the same mistake as you:..it's completely OFF TOPIC.

This is such a tired misleading argument that I cannot even say it qualifies as a "nice try."

I would instead ask you to view these two graphs and read this article from which they are copied:

http://www.heritage.org/Research/Budget/bg1820.cfm

I would also add the following. The President can recommend fiscal policy through influence and through executive control of the Treasury. But the President has absolutely ZERO authority to spend money. This authority lies solely in the Congress. With respect to the graph you submitted, it is worth noting that federal spending has been rampant and out of control during times of Democrat-controlled Congress, and decreased significantly during the Clinton years because of a Republican-controlled Congress.

But all this is a digression from the post to which I originally responded. This current debacle has its roots in government/corporate collusion rising from failed government social programs, the resultant corruptions and conflicts of interest, followed by the inevitable quest for greed. Those at the forefront of the debacle should be held accountable, be stripped of their ill-gotten gains, and be prosecuted to the fullest extent of the law.

As I final response to the poster to which I originally responded, I would recommend reading these articles:

http://www.villagevoice.com/content/printV.../541234%3C/p%3E

http://www.bloomberg.com/apps/news?pid=206...id=aSKSoiNbnQY0

http://newsbusters.org/blogs/noel-sheppard...-bush-or-mccain

http://www.ibdeditorials.com/IBDArticles.a...306632135350949

As a quote in the Bloomberg article suggests, (the debacle) "It is a classic case of socializing the risk while privatizing the profit."

Back to Thailand, I would again state that this current debacle goes all that much further to show how bad things can get when governments and corporations get too close. The ultimate result is always cronyism, corruption, and a few corrupt elites lining their pockets at the expense of the general population. The preferred solution has always been clear and defined lines between governments and the free market, and prevention of obvious conflicts of interest such as taken place in the Fannie Mae collapse.

Edited September 23, 2008 by Spee

[larvidchr]

Thank you for your very interesting reply Spee, it was nice to see some names be put on some of the major players in all this, and I was very surprised to see that this started as far back as 1977, I can see from your answer that this is highly political and not restricted to the going ons in financial circles.

In the end I hope that other than us the tax payers will be made to pay the piper so this kind of thing wont happen again.

LaoPo it seems you are from the other camp, it would be interesting to see your take on all this and not just only a graph all though the graph tend to point in a certain direction.

And maybe you are right it is a bit of topic but not that much since all this is having strong influences on the exchange rates around the world and all money matters in general at the moment, so I hope the OP is patient with me

[larvidchr]

Now I just finished reading all the links Spee so kindly have provided and if any of this stands to be the truth it is really explosive stuff especially coming from American press who normally would approach ethnic minority issues with great caution, I don't know the different commentators from the links and I know next to nothing about American journalism and their different affiliations, but that the sub prime crisis essentially is being blamed on left-wing politicians White/Black sucking up to the minority votes + pressure from same minorities to be given mortgages without really qualifying all in the name of equality, is a very serious and dangerous conclusion, I am in no position to know if this is true or not, but the ramifications could be very strongly increased negative polarisation around the world, if the facit is to be that the whole world is on the verge of economic collapse ( as some undoubtedly would choose to phrase it) "just because of the special interests of the extreme left Democrats (Carter) and the blacks in America". + The greed of a few big finance company's.

If I was living in America and any of this is true Mr. Obama could shoot a "white " stick after my vote, I am courious to the fact why this is not more widely publicised in the press at large, maybe Spee could tell if this is only the opinions of a very few? economic/political analysts.

Edited September 23, 2008 by larvidchr

[Steely Dan]

Now I just finished reading all the links Spee so kindly have provided and if any of this stands to be the truth it is really explosive stuff especially coming from American press who normally would approach ethnic minority issues with great caution, I don't know the different commentators from the links and I know next to nothing about American journalism and their different affiliations, but that the sub prime crisis essentially is being blamed on left-wing politicians White/Black sucking up to the minority votes + pressure from same minorities to be given mortgages without really qualifying all in the name of equality, is a very serious and dangerous conclusion, I am in no position to know if this is true or not, but the ramifications could be very strongly increased negative polarisation around the world, if the facit is to be that the whole world is on the verge of economic collapse ( as some undoubtedly would choose to phrase it) "just because of the special interests of the extreme left Democrats (Carter) and the blacks in America". + The greed of a few big finance company's.

If I was living in America and any of this is true Mr. Obama could shoot a "white " stick after my vote, I am courious to the fact why this is not more widely publicised in the press at large, maybe Spee could tell if this is only the opinions of a very few? economic/political analysts.

I would if I may add my own twopenneth worth. The UK has the same sub-prime loan problem as the U.S but the problem has never been politicized in the same way. Sub-prime loans were seen as a way of enabling those with a poor credit history, or without a decent downpayment to get onto the housing ladder. There was never to my knowledge any ethnic lobby campaigning for these mortgages, simply the greedy banks and lax regulation let the problem develop.

We are six weeks away from a U.S election and there is the real prospect of America having their first ever black president, so a lot of political mudslinging is inevitable. For what it's worth I pray Obama does not get in because the present government has already pumped $1.8 trillion dollars of taxpayers money into the financial system to stop it collapsing; this by my estimate amounts to $8,500 per U.S taxpayer, and amounts to the biggest poison pill in history. God please don't let him win and face a backlash from bigots when the U.S economy collapses like 1929, as it surely will.