Financial Crisis

[Naam]

Ok good point, there maybe an extent to which asset prices reflect overly optimistic assumptions about growth and possibly there are maybe 2 people in the US that believe growth will be so strong as to cause demand pull inflation.

OK i will come straight to the point

IMO the fallout from this mess may be to show that in a world based on entirely fictitious credit and very big numbers

( eg 600 trillion notional value of CDS ) we may find in due course that a considerable amount of our so called

" economic activity " over the past few decades has been no more than people shuffling bits of paper around.

notwithstanding the irrelevant mentioning of 600tr existing derivatives i would like to point out that "shuffling bits of paper around" provided for a lot of people a very comfortable life style. in my case it surely did and it will do so [insha'allah] in the future.

I don't know how you can say that derivatives are irrelevant. The way banks "fix" interest rates on mortgages is through derivatives so just wait and see what happens when everyones 30 year "fixed" rates start blowing up.

Do people actually think that their "fixed" interest rates are written in stone ?

i don't care a flying fàck about mortgages, how banks fix their interest rates and especially not about 30y mortgages which (to the best of my knowledge) exist only in two or three countries on this planet. the same (flying fàck) applies to any unemployment numbers in the Greatest Nation on Earth™, quantitative easing in the U.S. and/or U.K., banks going belly-up in Little Rock, Arkansas or Duluth, Minnesota, the FDIC running out of cash, Michelle's vegetable garden at the back of the White House, tax payer's money to bail out banks those they can dole out hundreds of millions bonuses, global warming and melting of polar ice caps (i pity the next generations in Bangla Desh), double pricing in Thailand for Farangs, the price of beer, the 150 Baht ATM fee when foreign credit cards are used...

shall i go on?

[flying]

i don't care a flying fàck

shall i go on?

Ok nothing more to see here folks move along

PS: I didn't know Michelle was planting :D

Edited November 11, 2009 by flying

[AlexLah]

The only cuntry in ze world without debt.............................Zimbabwe!

http://news.goldseek.com/AlfField/1257923520.php

[midas]

i don't care a flying fàck about mortgages, how banks fix their interest rates and especially not about 30y mortgages which (to the best of my knowledge) exist only in two or three countries on this planet. the same (flying fàck) applies to any unemployment numbers in the Greatest Nation on Earth™, quantitative easing in the U.S. and/or U.K., banks going belly-up in Little Rock, Arkansas or Duluth, Minnesota, the FDIC running out of cash, Michelle's vegetable garden at the back of the White House, tax payer's money to bail out banks those they can dole out hundreds of millions bonuses, global warming and melting of polar ice caps (i pity the next generations in Bangla Desh), double pricing in Thailand for Farangs, the price of beer, the 150 Baht ATM fee when foreign credit cards are used...

shall i go on?

Oh liar liar pants on fire

If you really didnt care.......like most people you would not even have clicked your mouse once to return to

this site............instead of 10,000 posts of nothing

[flying]

If You Thought the Housing Meltdown Was Bad…

Every part of the sector – from multifamily apartment buildings to retail shopping centers, suburban office buildings, industrial facilities, and hotels – has accumulated a huge amount of defaulted or nonperforming paper. It’s an impossible, swaying structure that cannot long stand.

Continued at link above

Edited November 11, 2009 by flying

[hhgz]

"The only cuntry in ze world without debt.............................Zimbabwe!"

Woohoo, their economy is going like gangbusters without any debt.

[jazzbo]

One thing is for sure, if you can read about the collapse of Commercial R.E. here and on Howe Street (Vancouver?), the smart money has already discounted it and is on to something else...just like Hooker (Robert Redford) says in The Sting about the vice cop Snyder:

Aw Christ, it doesn't make no difference now. If Snyder knows about it so does everybody else. He never gets anything first..

[12DrinkMore]

The IMF has recently published a paper on stimulus exit policies.

http://www.imf.org/external/np/g20/pdf/110709.pdf

It is not particularly fascinating reading. But one paragraph caught my eye.

Higher inflation should be eschewed as tool of adjustment. This would be ineffective in reducing debt and would damage growth and equity in income distribution.

Wonder if Bernanke has read that?

(I am beginning to hate this word, "stimulus", it is merely a euphemism for "stealing from the poor and giving to the finance industry. A process which the banks have been doing themselves since Adam bit into the apple, but now has full and explicit government support and action")

Alan "Bubble Blower" Greenspan came out with an enlightening comment this week.

http://www.bloomberg.com/apps/news?pid=new...id=aCyPFlcZdck8

Through stocks comes a “wealth effect” from realized capital gains, he said.

Well quite, blow us a bubble and we're all better off, well, all of us except those that don't own stocks, don't own property, don't have a job and don't work for GS.

I would, however, disagree that a "frothy" stock market does, in fact, represent real growth and prosperity because it is not "wealth" that can be spent in any substantial way. If a large number of the stockholders feeling "wealthy" started to make good the gains, then the whole Ponzi scheme would collapse.

Isn't it interesting how easy it is to get rampant exuberance in an electronic casino with vast amounts of fake cash, but seemingly impossible to infuse the same enthusiam in creating real jobs in the economy? And don't you wish that Bernanke could put a bubble into the number of employed workers? But no, that demands much more time and effort to make a profit. Far easier to sit in front of a few screens using software to make the decisions. Maybe taxes should be abolished on all manufacturing industry and massive taxes raised on all bankers' profits?

A major result of Ben "The Inflator" Bernanke bank bailout plan has been the devaluation of the USD. Now Tim "Two Speak" Geithner is once again stating that a strong USD is the policy.

http://www.bloomberg.com/apps/news?pid=206...B1wTA&pos=3

“I believe deeply that it’s very important to the United States, to the economic health of the United States, that we maintain a strong dollar,” Geithner told reporters in Tokyo today.

Again Geithner "talks the talk" I wonder when, if ever, this man will do the walk?

If you, like me, have ever questioned the paradigm of constant growth, and this is fundamentally the altar on which we are now being sacrificed, this is quite entertaining. Takes about an hour or so to get through it all.

Edited November 11, 2009 by 12DrinkMore

[flying]

It is not particularly fascinating reading. But one paragraph caught my eye.

Higher inflation should be eschewed as tool of adjustment. This would be ineffective in reducing debt and would damage growth and equity in income distribution.

Wonder if Bernanke has read that?

This one caught my eye from the previous link I posted.

In both yours & mine the cure is nothing to look forward to but neither is the alternative

Rock, meet hard place. Let all the troubled banks fail, and the consequences will range from some excruciating but short-term pain, to a plunge into full-bore depression. Prop them up with yet more newly printed fiat money, and anything from high to hyperinflation will inevitably result, along with the possibility of extending the problem well into the next decade.

Both are frightening prospects. We don’t want either, but realistically, we’re going to get one or the other. Let’s be clear, it won’t be the end of the world. However, it will be the end of the world as we know it. That makes it imperative to prepare for the new one that’s coming.

[midas]

I wonder what people that worship money ( like Naam ) have you got to say about this.?

Mother of dead Afghanistan soldier attacks Gordon Brown over equipment failings

Jacqui Janes, the mother of Jamie Janes, a soldier killed in Afghanistan, has criticised

Gordon Brown over the lack of military equipment which could have saved her son's life.

Mrs Janes asked why it was possible to save the banks but it was not possible to provide

the materiel that could save soldiers' lives.

http://www.telegraph.co.uk/news/newstopics...t-failings.html

[AlexLah]

Dangerous subject Midas as another question could be what her son was doing there in the first place.

The rabbit hole goes deep........

[midas]

Dangerous subject Midas as another question could be what her son was doing there in the first place.

The rabbit hole goes deep........

That goes without even saying Alex

And as you would expect these days it has nothing to do with the reasons governments give for their actions

http://centurean2.wordpress.com/2009/08/05...il-pipelines-2/

[Naam]

I wonder what people that worship money ( like Naam ) have you got to say about this.?

Mother of dead Afghanistan soldier attacks Gordon Brown over equipment failings

Jacqui Janes, the mother of Jamie Janes, a soldier killed in Afghanistan, has criticised Gordon Brown over the lack of military equipment which could have saved her son's life. Mrs Janes asked why it was possible to save the banks but it was not possible to provide the materiel that could save soldiers' lives.

what's the alcohol contents in your blood Midas to ask that irrelevant question? my heart goes out not only to the british mother but to all who have loved ones endangered by unjustified invasions and wars and to the innocent people in these countries who suffer because of these wars whether it is Afghanistan, Iraq or elsewhere. all instigated by people whom i hate as much as you hate them. the latter seems to be our only common denominator.

for the record: i do not worship money, but having grown up as a poor boy in an extremely poor environment of a devastated country i appreciate very much having and making ample money. i am also aware that money can't buy happiness but money can buy personal FREEDOM and spending a part of the money i am making for good purposes (as required by my faith) results in some sort of mental satisfaction for which i lack the words to describe.

[Naam]

If you really didnt care.......like most people you would not even have clicked your mouse once to return to

this site............instead of 10,000 posts of nothing

i am working hard 10-12 hours a day. in between i need to relax and require some entertainment and diversion when my dogs are taking one of their half a dozen daily naps. that's when i click on "Financial Crisis". as simple as that.

[12DrinkMore]

More abysmal news from the UK, now possibly the country with the worst outlook in the world. With increasing optimistic signs of recovery from Asia and other countries, and discussions and indeed actions on removing the damaging stimuli we have had shoved up out bums, Merv "The Mad Printer" King is about to devalue the GBP even further "in the interests of a recovery".

http://www.bloomberg.com/apps/news?pid=206...zN6t4&pos=1

Nov. 11 (Bloomberg) -- Bank of England Governor Mervyn King said the U.K. economy faces a “hard path” back to health and he has an “open mind” on further bond purchases, signaling officials aren’t ready to withdraw stimulus yet.

A hard path back to health. On dear, oh dear. Predictably forecasts of a falling GBP are coming out

http://www.bloomberg.com/apps/news?pid=206...7p9Lo&pos=4

The U.K. currency will fall and gilt yields rise over the next six months, according to respondents in the Bloomberg Professional Global Confidence Index. The 1,558 participants remained optimistic about the global economy for a fourth consecutive month.

And here's another pessimistic/realistic forecast for the UK.

http://www.telegraph.co.uk/finance/comment...-UK-wealth.html

I fear we have reached, merely, the end of the beginning of an extremely difficult period in our history, when living standards plunge, our public finances deteriorate further and enterprise stagnates. And as a UK citizen and taxpayer, I write that with a very heavy heart.

I wonder just how far the UK and the US are prepared to destroy their currencies in the name of this fuc_king stimulus? Where is the bottom?

[Abrak]

It is not particularly fascinating reading. But one paragraph caught my eye.

Higher inflation should be eschewed as tool of adjustment. This would be ineffective in reducing debt and would damage growth and equity in income distribution.

Wonder if Bernanke has read that?

This one caught my eye from the previous link I posted.

In both yours & mine the cure is nothing to look forward to but neither is the alternative

Well a little history here. The IMF economic policies are designed to make sure that countries repay their external debt - usually dollars - and not for the benefit of crummy second and third world inhabitants. In fact they are specifically designed to make sure these crappy countries stop borrowing dollars (a privilege that is almost exclusively reserved for the US (just as well really, they need so much of it, there aint much leftover.)

So for instance in the face of collapsing GDP after a baht depreciation caused by over borrowing Thailand was lent US$14.3bn based on a letter of intent which committed Thailand to no fiscal deficit and 15-17% interest rates. Theory being that such intelligent a response would collapse the economy (not a huge problem as at the end of the day because there really isnt a huge difference between a second and third world economy). Their theory being that if inflation causes your currency to go down deflation will cause you currency to go up. What actually happened was that it reduced real GDP so much that the debt/GDP ratio went up while the cost of servicing it as a percentage of GDP (we are not talking big figures here say 150%, hardly a decent night out in the US) also went up to such an extent that the currency went down on the basis that if you dont get paid 15% of nothing, it approximates to about zero (rough figure, no calculator.)

Luckily Thailand has learnt that the best people to run the country should not be left up to say some ignorant electorate but you should rely on those with good pedigree and decent UK education (preferably from Cambridge, like Anand Panyachurun) (obviously nowadays we are reduced Oxford for PM & FM but at least one went to Eton and the other was headboy). So MR Chatumongkol Sonakul came into the BOT and immediately threw the LOI into the bin (I wouldnt of thought he would have bothered reading it) because he knew (one of the questions they ask you on the application form to uni to check if you are sentient is whether you can deflate your way out of a debt/GDP problem) and reduced interest rates very rapidly which actually led to currency stabilisation and a semblance of recovery.

From the US/IMF position they may have screwed up the policies but the lesson was learnt by the peasant - dollar borrowing is pretty well exclusively for the US and that the US is especially keen to be borrowing off Thailand. (And I hope you have learnt your lessons about good lending practices, corporate governance and trying a totally ridiculous debt fueled growth theory.) So here we are 12 years later, Thailands economy is shrinking 3%, but in the second quarter there was a budget surplus and the entire 9% of GDP current a/c surplus and more is being spent buying other peoples debt to finance their huge deficits. Just in case people dont get that the current a/c has gone from 0 to 9% surplus. So what Thailand has effectively done is reduce its domestic investment and consumption by 12% so that it can use 9% of its GDP to finance the US or whatever so that their GDP only falls 3%. This was not Korn's policy.

Anyway the really important point is that when the US collapses, IMF rules do not apply because the rules are designed to be for the benefit of the US. Now Thailand had this 150% debt/GDP problem and the IMF solution was to have no budget deficit and tighten monetary policy - I am not a great fan. But even if you are, you should recognize that when you have say a 300% debt/GDP problem (lost count sometime ago) the US solution was to quadruple the size of the fiscal deficit to over 10% of GDP and to reduce interest rates to zero. I mean the simple concept of the IMF solution is so totally ludicrous GDP has fallen 3% without the fiscal deficit 13% with another 10% interest rate 30% which we might round up to 50% with 7% price deflation. Within two years the debt repayment alone would totally wipe out GDP.

Anyway the US policies have the added benefit of achieving what IMF policies are designed to avoid namely a default on their debt through the US$ depreciation. However, the good news is that the IMF must still be feel pretty good about Taiwan (sorry Thailand you only remember who you lend money to not from). Having shown the cost of overborrowing are a very deep and sharp recession, Thailand has now generated US$132bn of reserves over 50% of GDP (I think higher as a percent than China) and at a mere cost of 4% growth per annum thereby subsidizing their growth at low rates all although they havent exactly lossed a ton in terms of debt default/depreciation it is only a matter of time. Ultimately the cost of rebalancing the world it economy may be higher than the Asian crisis in 1997.

So it is very simple the whole concept of hegemony is based on hypocrasy. The Ruler gets his priests to preach sacrifice,self sufficiency, suffering (but you will have your rewards in next life/heaven) so he can finance one huge party. So the IMF will preach not to increase inflation while the US inflates (actually they will come up with some fancy new word for inflation - probably call it 'cash deflation') it way out of its debt crisis and defaults via a US$ depreciation. And I do realize that Thailand has already been screwed twice it borrowed to grow. It deflated its GDP to repay its debts through exports. It is now lending out 10% of the GDP and generating a huge surplus will only eventually lead to a revaluation (v. the US$) that is effectively a default on its lending. And when it is all sorted out, hopefully within 5 years, that silly woman from Alaska who will then be President will turnaround and say she has being doing God's work.

But it is going to take longer than 5 years...China lending 180% of GDP financed by more corporate savings than consumer savings. Try and resolve that disaster in a pleasant way.

[AlexLah]

12 be positive, maybe in a few years it will get very cheap to spend a nice holiday in your once glorious Kingdom. Hopefully you have listened to various advice given in this and many other fred's so you will be able to spend your smartly invested money which allows to hire a presidential suite in one of the luxurious hotels in lundun. When going out you most likely need a bulletproof rented vehicle to watch the peasants suffer in search for food by scrapping out waste bins. Oh yes crime will surge in those areas that were once the very best examples of where financial innovation was practiced. Make sure you make pictures of the utter misery observed and report back on this very forum so we can sit back and type in responses like, told you before this was going to happen and stuff like that. Be glad you live in the beauty full Kingdom of Thailand where you have access to high speed Internet and can watch the destruction almost live whilst reading your favorite on line news magazine for free and eating your daily dose of not too spicy som tam. We are fortunate to be witnesses to an historical event unfolding before our very eyes.

Take care 12, it's not as bad as it seams I mean a long time ago we thought of another (world) war in the make.

[sokal]

Naam is very very touchy about this matter

Woooaaah Naam.............VERY VERY BIG numbers here .......be afraid

derivatives have been discussed and explained ad nauseam in this forum. those who still don't understand the purpose of derivatives and that the lion share of them are necessary to conduct certain financial transactions are either ignorant, not interested or use deliberately their sum to spread doom&gloom and prophesy apocalyptic times. i am as afraid of derivatives as i am afraid of the bogey man, the Texas chain saw murderer and Dracula the vampire

Yeah right.

The funny thing is that regardless of the derivative comet that could hit earth, the economy is still completely fuct.

[12DrinkMore]

12 be positive, maybe in a few years it will get very cheap to spend a nice holiday in your once glorious Kingdom. Hopefully you have listened to various advice given in this and many other fred's so you will be able to spend your smartly invested money which allows to hire a presidential suite in one of the luxurious hotels in lundun. When going out you most likely need a bulletproof rented vehicle to watch the peasants suffer in search for food by scrapping out waste bins. Oh yes crime will surge in those areas that were once the very best examples of where financial innovation was practiced. Make sure you make pictures of the utter misery observed and report back on this very forum so we can sit back and type in responses like, told you before this was going to happen and stuff like that. Be glad you live in the beauty full Kingdom of Thailand where you have access to high speed Internet and can watch the destruction almost live whilst reading your favorite on line news magazine for free and eating your daily dose of not too spicy som tam. We are fortunate to be witnesses to an historical event unfolding before our very eyes.

Take care 12, it's not as bad as it seams I mean a long time ago we thought of another (world) war in the make.

Thank you Alex for those kind reassuring words. I wonder if this thread will still be active after the apocalypse. Luckily there are many fully laden papaya trees growing here, they grow even faster than the combined eating capacity of the females from Isaan.

But wait! There is a glimmer of optimistic news coming out of the UK. Against a background of bailing out the bankers with hundreds of billions of Quid, Mandelson is about to launch a major UK initiative to increase the number of qualified graduates.

"We need engineers to lay the cables to expand access to high-speed internet, skilled people to build the electric vehicles of the future, and technicians to develop the medicines that will save lives," said Lord Mandelson.

So how many billions is in this budget, well, maybe a few hundred million, eh, Mandy? Go on tell us....

Business Secretary Peter Mandelson announced plans to establish 1,000 new scholarships – worth up to £1,000 a year

WHAT! A measly million in the technology of the future? That's only slightly more than Fred the Shred pockets himself for wrecking RBS.

1,000 Quid/year scholarship, that is 50,000 Baht. Wouldn't even go very far in Thailand.

And I bet Lord Mandy can piss that much up the wall on a tax payers' paid for night out with the lads.

http://www.independent.co.uk/news/business...st-1819023.html

Yes, the UK is definitely making substantial steps in the right direction.

[12DrinkMore]

I wonder what people that worship money ( like Naam ) have you got to say about this.?

Mother of dead Afghanistan soldier attacks Gordon Brown over equipment failings

Jacqui Janes, the mother of Jamie Janes, a soldier killed in Afghanistan, has criticised

Gordon Brown over the lack of military equipment which could have saved her son's life.

Mrs Janes asked why it was possible to save the banks but it was not possible to provide

the materiel that could save soldiers' lives.

http://www.telegraph.co.uk/news/newstopics...t-failings.html

Well, Midas, what do you think about this then?

looks like everybody wants to get on the "bonus" train, just for doing their jobs.

Civil servants at the Ministry of Defence have been paid £47 million in performance bonuses this year, it can be disclosed.

And guess how many jobsworthies there are?

There are 85,000 civil servants at the MoD, one for every two active troops. Around 50,000 of them will get a performance bonus this year.

So we have 50,000 civil servants doing an excellent job and deserve bonuses? And every active soldier has a backup team of two paper pushers?

What a staff bloat. At least they are thinking about it.

Ministers have promised to cut the number of officials at the MoD head office by a quarter. The Conservatives say they will reduce MoD bureaucracy by a third

Why the delay? Just sack these jobsworthy burdens on the tax payer. Just do it.

http://www.telegraph.co.uk/news/newstopics...in-bonuses.html

[flying]

[flying]

[AlexLah]

Something positive, at least when you live in the US.

http://www.youtube.com/watch?v=yQNvdKNTZUg

\0/

[12DrinkMore]

Something positive, at least when you live in the US.

I thought that was pretty creative, but I was surprised at all the negative comments. It is not as though she was getting away with doing something that they couldn't. Maybe they are all just jealous and frustrated with their own lack of imagination.

[AlexLah]

Yeah I see some negative comments made, maybe those people do not understand that the food she gets for free is already paid for or will be reimbursed I guess. So basically these coupons have a similar function as the fiat money we are using now and a while ago I run into this article which tells about a barter system now getting a bit more popular in Holland but is something banks apparantly do not like. Have a read:

http://www.henrymakow.com/dutch_barter_sys...angers_ban.html

[lannarebirth]

S&P Makes High Ratings ‘More Difficult’ to Receive

By DIANA GOLOBAY

November 4, 2009 10:58 AM CST

Recent changes among ratings criteria at Standard & Poor’s represent “significant” repercussions for collateralized debt obligations (CDOs) and residential mortgage-backed securities (RMBS), according to the ratings agency.

The changes will make high ratings on securities in sectors troubled by poor credit performance “more difficult” to receive, S&P said. The changes aim to enhance the comparability of ratings on these securities with ratings on credits in other sectors.

The ratings agency also updated the corporate CDO criteria to add both qualitative and quantitative tests to a default simulation model already in place. The model addresses the loans or bonds backing a CDO from a mathematical framework, calculating probably behaviors and statistics. The tests added to the model addresses the “model risk” inherent in a probability-based model, S&P said.

“In addition, we recalibrated the simulation model to achieve stresses based on Depression-era experience,” S&P added. “The calibration method that we used makes it easier and more transparent for investors to understand our ratings and to relate them to their investment objectives.”

http://www.housingwire.com/2009/11/04/sp-m...ult-to-receive/

[jazzbo]

Anyway the really important point is that when the US collapses... WHEN? Care to pick a date, Nostradamus?

[jazzbo]

M*A*S*H (short for Mobile Army Surgical Hospital, an Army medical unit type first activated in the last month of World War II) ran on CBS from 1972 to 1983, seven years longer than The Korean War during which it takes place.

So, which will last longer, the Financial Crisis (assuming there still is a crisis) or this Forum topic

[quiksilva]

Easy, this forum topic.

When the recovery gets under way, there will be those who will deny it and claim that the world will end, and will keep posting links in here to youtube etc until such time passes as another downturn gets under way at some distant point in the future.

[midas]

M*A*S*H (short for Mobile Army Surgical Hospital, an Army medical unit type first activated in the last month of World War II) ran on CBS from 1972 to 1983, seven years longer than The Korean War during which it takes place.

So, which will last longer, the Financial Crisis (assuming there still is a crisis) or this Forum topic

Seven years is nothing.............Japan has bee suffering for 20 years and we havent seen the climax yet

http://www.telegraph.co.uk/finance/comment...ot-America.html