Financial Crisis

[lannarebirth]

One thing people always miss about the problems in the USA. In order for US to improve it's fiscal situation, it need only STOP doing many of the extravagant things it does that are wasteful. Other governments need to give MORE than they are presently to heal their problems. That hurts. US also has more taxing authority available (by present first world global standards) than do other major governments. We'll see.

[flying]

meh......only 2988 more banks to go

Not to worry though as they are all small to mid sized banks

[samuibeachcomber]

I don't think they are going to bail out any countries to any great degree. I think the Euro is falling, not because of the PIGS, but because the core major governments are only months away from having their own problems. Hey, look what the Fed did!

All Cores

Greece loses EU voting power in blow to sovereignty

Britain at risk of worse deficit crisis than Greece

Greece is Irrelevant Compared to Whats Unfolding in the US

i say bring it on,let the pigs wallow in the mire.2010 will be a good year.Have really had enough of all this corruption and moral bankruptcy too.The smell is getting very smelly indead.Sorry nothing to add to this topic from any financial knowledge,about the only thing i do know is how to save money and get some interest.Chok dee to everyone.

[Abrak]

One thing people always miss about the problems in the USA. In order for US to improve it's fiscal situation, it need only STOP doing many of the extravagant things it does that are wasteful. Other governments need to give MORE than they are presently to heal their problems. That hurts. US also has more taxing authority available (by present first world global standards) than do other major governments. We'll see.

The US has no plans to balance his budget for the foreseeable future although there is a vague commitment to a balanced primary budget in 2015. So it is totally irrelevant what the US 'can' achieve when they are not even trying to achieve it.

[lannarebirth]

One thing people always miss about the problems in the USA. In order for US to improve it's fiscal situation, it need only STOP doing many of the extravagant things it does that are wasteful. Other governments need to give MORE than they are presently to heal their problems. That hurts. US also has more taxing authority available (by present first world global standards) than do other major governments. We'll see.

The US has no plans to balance his budget for the foreseeable future although there is a vague commitment to a balanced primary budget in 2015. So it is totally irrelevant what the US 'can' achieve when they are not even trying to achieve it.

Yes, I know that. they are profligate spenders and mismanagers, no question. Seemingly, they had no plans for a Dept. of Homeland Security and a TARP bailout either, but in this age of "crisis" governing, big changes happen suddenly and are "imposed" rather than reached through consensus or public will or accepted constitutional means.

Edited February 19, 2010 by lannarebirth

[Abrak]

Yes, I know that. they are profligate spenders and mismanagers, no question. Seemingly, they had no plans for a Dept. of Homeland Security and a TARP bailout either, but in this age of "crisis" governing, big changes happen suddenly and "seem" to be imposed rather than reached through consensus or public will.

i agree changes happen under duress.

But that duress will not appear while people feel that the US is financing the third world that just because it can balance its budget it might do. It has clearly stated its intention to abuse its reserve currency status for the foreseeable future. The US has no intention of actually paying its interest on its debt, it is simply going to borrow more. I just dont really understand how a country like Thailand can generate surpluses and use them to finance US debt. It just seems so irresponsible to me.

[lannarebirth]

Yes, I know that. they are profligate spenders and mismanagers, no question. Seemingly, they had no plans for a Dept. of Homeland Security and a TARP bailout either, but in this age of "crisis" governing, big changes happen suddenly and "seem" to be imposed rather than reached through consensus or public will.

i agree changes happen under duress.

But that duress will not appear while people feel that the US is financing the third world that just because it can balance its budget it might do. It has clearly stated its intention to abuse its reserve currency status for the foreseeable future. The US has no intention of actually paying its interest on its debt, it is simply going to borrow more. I just dont really understand how a country like Thailand can generate surpluses and use them to finance US debt. It just seems so irresponsible to me.

It's not charity work. They do it to keep their currency/exports/workforce/manufacturing sector competitive with China. All these countries are symbiotic parasites of each other.

That, and to forestall more of this:

Edited February 19, 2010 by lannarebirth

[midas]

why do we tolerate these double standards?

There is clear evidence Goldman Sachs deliberately conspired to hide the true extent of an EU government's debt. That's abetting fraud, plain and simple. Jeffrey Skilling, former CEO of Enron, is sitting in jail today for that very offence. By contrast, Gary Cohn's boss, Lloyd Blankfein, just received a $9m bonus.

God forbid that Congress should antagonize one of its main funding sources.

http://www.creditwritedowns.com/2010/02/wi...all-street.html

and this could be exactly the stick that Pres. Obama needs to hit GS with. I believe that since he's found out that he's been lied to, he's fallen out of love big time and USG could be about to enter into a protracted covert warfare with Bankfiend & Co - expect the Fed to side with the street and not DC. This could be a real chance for Obama to try to get back in touch with 'we the people' despite the huge wedge driven between him & them by his blind support of The Fed, the street and GS during his own particular game's first quarter......

alternatively this could be the banana skin that he trips over and never gets up from........

" This could be a real chance for Obama to try to get back in touch with 'we the people "

I just don’t believe he will do that…………

Naam and some others in this thread have repeatedly mocked the idea of world government as a conspiracy theory ………… but it sometimes feels like we already have world government – i.e. Goldman Sachs Worldwide whose influence and ability to rise above the laws seem to have no boundary.

You may may as well come to terms with where the real power lies and totally forget about this charade of electing “ representatives “ in Congress and the Senate and make Lloyd Blankfein World President. Think about the money that could be saved ?

[Abrak]

Yes, I know that. they are profligate spenders and mismanagers, no question. Seemingly, they had no plans for a Dept. of Homeland Security and a TARP bailout either, but in this age of "crisis" governing, big changes happen suddenly and "seem" to be imposed rather than reached through consensus or public will.

i agree changes happen under duress.

But that duress will not appear while people feel that the US is financing the third world that just because it can balance its budget it might do. It has clearly stated its intention to abuse its reserve currency status for the foreseeable future. The US has no intention of actually paying its interest on its debt, it is simply going to borrow more. I just dont really understand how a country like Thailand can generate surpluses and use them to finance US debt. It just seems so irresponsible to me.

It's not charity work. They do it to keep their currency/exports/workforce/manufacturing sector competitive with China. All these countries are symbiotic parasites of each other.

That, and to forestall more of this:

Dont get me started on China. It abuses the principle of a pegged currency and capital controls to undervalue its currency, so that speculation falls on Thailand. Look at the BOT's balance sheet, they have spent US$60bn going long dollar short baht to try to stop the currency appreciating.

And Lanna, when you are paying a country to buy your products you are basically being screwed. I like symbiotic parasites but it is simply mutually destructive.

[sokal]

Yes, I know that. they are profligate spenders and mismanagers, no question. Seemingly, they had no plans for a Dept. of Homeland Security and a TARP bailout either, but in this age of "crisis" governing, big changes happen suddenly and "seem" to be imposed rather than reached through consensus or public will.

i agree changes happen under duress.

But that duress will not appear while people feel that the US is financing the third world that just because it can balance its budget it might do. It has clearly stated its intention to abuse its reserve currency status for the foreseeable future. The US has no intention of actually paying its interest on its debt, it is simply going to borrow more. I just dont really understand how a country like Thailand can generate surpluses and use them to finance US debt. It just seems so irresponsible to me.

That is only because the rest of the world is still using misguided keynesian policies like devaluing their own currency, when the rest of the world wakes up and stops using keynesian policies then the US dollar is done.

You didn't see the US trying to devalue its currency when it was the biggest creditor export nation in the world, they where doing just the opposite, they where settling trade in gold. That is where the 8000 tons came from

[lannarebirth]

Yes, I know that. they are profligate spenders and mismanagers, no question. Seemingly, they had no plans for a Dept. of Homeland Security and a TARP bailout either, but in this age of "crisis" governing, big changes happen suddenly and "seem" to be imposed rather than reached through consensus or public will.

i agree changes happen under duress.

But that duress will not appear while people feel that the US is financing the third world that just because it can balance its budget it might do. It has clearly stated its intention to abuse its reserve currency status for the foreseeable future. The US has no intention of actually paying its interest on its debt, it is simply going to borrow more. I just dont really understand how a country like Thailand can generate surpluses and use them to finance US debt. It just seems so irresponsible to me.

That is only because the rest of the world is still using misguided keynesian policies like devaluing their own currency, when the rest of the world wakes up and stops using keynesian policies then the US dollar is done.

You didn't see the US trying to devalue its currency when it was the biggest creditor export nation in the world, they where doing just the opposite, they where settling trade in gold. That is where the 8000 tons came from

Treasure your intellectual gifts now sokal. They say genius often fades after the age of 25.

[Abrak]

That is only because the rest of the world is still using misguided keynesian policies like devaluing their own currency, when the rest of the world wakes up and stops using keynesian policies then the US dollar is done.

You didn't see the US trying to devalue its currency when it was the biggest creditor export nation in the world, they where doing just the opposite, they where settling trade in gold. That is where the 8000 tons came from

Treasure your intellectual gifts now sokal. They say genius often fades after the age of 25.

Look you cant go around blaming Keynes for everything when you have readily admitted that you really dont have a clue what he said.

Anyways there is competitive advantage in financial irresponsibility or simply devaluing your currency. We are on a fast race to the bottom. It is in noones interest to exit the game and it will accelerate. If policies were going to be more responsible then it is all over for gold. 8000 tonnes of gold wouldnt even finance the average deficit.

As things stand it looks to me as though everyone will get increasingly irresponsible until we have a level of inflation that is destructive. But who knows? Just how low do you set the bar that Bernanke is overseeing a strong currency. He must be embarrassed.

[flying]

Ah the hope of taxation smells the same everywhere

HIGHLIGHTS-Greek FinMin unveils tax reform, wage policy

ATHENS, Feb 9 (Reuters) - Greece outlined on Tuesday its public sector incomes policy and a tax reform bill, as part of an EU-endorsed plan to increase state revenues and reduce its huge deficit.

"From 1. Jan. 2011, every transaction above 1,500 euros between natural persons and businesses, or between businesses, will not be considered legal if it is done in cash. Transactions will have to be done through debit or credit cards"

Full article at link above

Edited February 19, 2010 by flying

[ding]

Check this out;

The Warning on PBS Frontline

The same team that let it all happen under Clinton is in charge of repairing the damage now under Obama. This film is about a whistleblower that tried to prevent the financial crisis and who was silenced. Of course the Bush team was fully in favor of it all. The topper is Greenspan admitting he was wrong his entire career to believe that the free market would solve everything. He's a crushed man acknowledging that his faith in Ayn Rand and her libertarian theories was absolutely wrong.

hahaha, are you serious ?

The Feds control of interest rates is not exactly what I would call a libertarian policy.

You may get something out of the flick. Those laughing may not have seen it. He decided he would be more effective in promulgating Ayn Rand styled libertarianism from the inside. He agreed to swallow his pride and follow the law. Those laughing need to see it and decide whether or not I should be embarrassed. The film expounds on the ignorance of arrogance.

So, how has that all that free market, laissez faire ideology worked out anyway? A couple bad apples, miscalcs maybe?

[flying]

He decided he would be more effective in promulgating Ayn Rand styled libertarianism from the inside.

Ron Paul's book End The Fed

Has a whole chapter devoted to conversations with Greenspan.

Interesting read.

[Naam]

Treasure your intellectual gifts now sokal. They say genius often fades after the age of 25.

can something fade that does not exist?

[Naam]

Stupid? It's brilliant!

Well maybe the stupid customer is actually Germany.

Exactly! The thing people need to understand about these "mai bpen rai", "no worries mate" cultures, is that it's not that they don't recognize a problem; they're just not going to make their own problem.

To be honest the Greeks have been very upfront about their abuse of the euro. They would argue that any accusation of bad faith was made on an assumption of good faith.

I just want to know how many countries Germany is going to bailout before they realize that if you cant see the sucker you are the sucker. Whether their political commitment or financial discipline goes first.

Some people argue that Greece should be bailed out because it could bring down the Euro. I hope they realize that if that is the case then it simply isnt worth preserving in the first place. To be honest I feel bad for Germany they are about the only honest major economy and they are about to realize how futile that has been.

Gentlemen,

it's not only a matter of bringing down the €UR but a matter of bringing down not only €URo-Land but markets globally to a similar or most probably worse chaos we saw in autumn 2008. EU banks, miscellaneous financial institutions and insurers hold repo-leveraged (by ECB and national CBs) government bonds issued by the PIIGS in excess of 1 billion (= 1 american trillion) . if Greece falls the CDS speculators will jump immediately on the other PIIGS and drive refinancing rates to unsustainable heights. for sure there will be a solution c[r]ooked by the polititians even if it means that generations will bear the tax brunt.

the best case scenario would be multilateral EU guarantees for EU countries in trouble which actually do not cost a single penny and i am sure "they" think already about it and don't need my advice.

[churchill]

Moody's downgrade otw ?

Moody’s does δομημένη χρηματοδότηση

http://ftalphaville.ft.com/blog/2010/02/19...1;ση/

[AlexLah]

An opinion posting from here:

http://ampedstatus.com/the-economic-elite-...-america-part-i

(Midas you should read this one for sure).

[Abrak]

Gentlemen,

it's not only a matter of bringing down the €UR but a matter of bringing down not only €URo-Land but markets globally to a similar or most probably worse chaos we saw in autumn 2008. EU banks, miscellaneous financial institutions and insurers hold repo-leveraged (by ECB and national CBs) government bonds issued by the PIIGS in excess of 1 billion (= 1 american trillion) . if Greece falls the CDS speculators will jump immediately on the other PIIGS and drive refinancing rates to unsustainable heights. for sure there will be a solution c[r]ooked by the polititians even if it means that generations will bear the tax brunt.

the best case scenario would be multilateral EU guarantees for EU countries in trouble which actually do not cost a single penny and i am sure "they" think already about it and don't need my advice.

Best case scenario is they hand the whole of Euroland over to the Germans to run.

It seems to me the reason that it is increasingly difficult to allow Greece to fail is that the ECB gives credibility to their feeble plans to reduce the deficit and that credibility will be lost when it has to be bailed out. Greece is insolvent, corrupt banana republic that has shown so much bad faith to the Euro. It should have been allowed to go and multilateral loans should have been reserved for countries that may have erred but have tried to respect the spirit of the Euro and that have a solvent public sector. Ultimately I believe that interest differentials should be restored to reflect the divergence of fundamentals - this might restore some discipline but I guess it cannot happen. More guaranteed cheap finance for Greece is obscene. Admittedly allowing Lehmans to go bust brought down the financial system, the cost of eliminating moral hazard can be very high. Kick Greece out and multilateral guarrantees to other countries. Would it be that disastrous?

[Naam]

Best case scenario is they hand the whole of Euroland over to the Germans to run.

It seems to me the reason that it is increasingly difficult to allow Greece to fail is that the ECB gives credibility to their feeble plans to reduce the deficit and that credibility will be lost when it has to be bailed out. Greece is insolvent, corrupt banana republic that has shown so much bad faith to the Euro. It should have been allowed to go and multilateral loans should have been reserved for countries that may have erred but have tried to respect the spirit of the Euro and that have a solvent public sector. Ultimately I believe that interest differentials should be restored to reflect the divergence of fundamentals - this might restore some discipline but I guess it cannot happen. More guaranteed cheap finance for Greece is obscene. Admittedly allowing Lehmans to go bust brought down the financial system, the cost of eliminating moral hazard can be very high. Kick Greece out and multilateral guarrantees to other countries. Would it be that disastrous?

- not all is gold that shines in my home country!

- if you mean by "allow" that Greece would like to leave, the answer is no.

- i fully agree with you. and no, it would not be disastrous (except for Greece). but to the best of my knowledge none of the EU-regulations provide a basis that any member country can be kicked out.

[ding]

He decided he would be more effective in promulgating Ayn Rand styled libertarianism from the inside.

Ron Paul's book End The Fed

Has a whole chapter devoted to conversations with Greenspan.

Interesting read.

Thanks for the link.

I can barely afford to retire young in Thailand, let alone live well anywhere on earth. If I were independently wealthy I would certainly ascribe to libertarianism. From my weak economic position, I still like Ron Paul's libertarianism much better than corporate welfare for the banksters. I agree we have economic interventionism and feel that's wrong just like Ron Paul does. I agree, the fed is too secretive too.

But I know I'd get crushed if libertarianism was the paradigm to organize society.

[Abrak]

- not all is gold that shines in my home country!

The bar is set extremely low - all one asks is a vague commitment to financial stability. And it is only fair as it appears likely that Germany will move from a position of guaranteeing monetary policy to guaranteeing fiscal policy

- i fully agree with you. and no, it would not be disastrous (except for Greece). but to the best of my knowledge none of the EU-regulations provide a basis that any member country can be kicked out.

None of the EU regulations provide a basis for a country to be bailed out barring Natural disasters.

Yes it was never envisaged that a country could have a 13% fiscal deficit and public debt ratio of 120%. This was not considered possible. No currency union should accept 20% deficit countries - so the rules must change

Well it isnt the end of the world for greece, transfer all their debts into new drachmas devalue 50% and inflate your way out of it. Probably better than deflating its economy by 40% over 10 years to become vaguely competitive and actually defaulting. Obvious a multilateral guarantee of all their debts could underwrite a 20% fiscal deficit. In point of fact it really would be irresponsible not to take advantage of it.

The decision to underwrite profligacy with multilateral guarantees of countries is essentially exacerbating the core problem of the Euro. It will destroy the Euro because any financially responsible Government should not be a part of it and will ultimately destroy political commitment of a country like Germany - in fact the concept of political commitment to the Euro is ridicilous to any other country than Greece. Obviously the other option is simply to become irresponsible. A rather strange outcome might be that fiscal control is taken out of the hands of individual countries. Essentially the Euro would be a total farce.

[Naam]

"No currency union should accept 20% deficit countries - so the rules must change"

the problem is that basic rules can only be changed unanimously. this is in my [not so] humble view the biggest scheisse flaw the EU setup contains

[sokal]

Check this out;

The Warning on PBS Frontline

The same team that let it all happen under Clinton is in charge of repairing the damage now under Obama. This film is about a whistleblower that tried to prevent the financial crisis and who was silenced. Of course the Bush team was fully in favor of it all. The topper is Greenspan admitting he was wrong his entire career to believe that the free market would solve everything. He's a crushed man acknowledging that his faith in Ayn Rand and her libertarian theories was absolutely wrong.

hahaha, are you serious ?

The Feds control of interest rates is not exactly what I would call a libertarian policy.

You may get something out of the flick. Those laughing may not have seen it. He decided he would be more effective in promulgating Ayn Rand styled libertarianism from the inside. He agreed to swallow his pride and follow the law. Those laughing need to see it and decide whether or not I should be embarrassed. The film expounds on the ignorance of arrogance.

So, how has that all that free market, laissez faire ideology worked out anyway? A couple bad apples, miscalcs maybe?

The number one cause of the financial crisis was GOVERNMENT CONTROL OF INTEREST RATES.

The number two cause of the financial crisis was GOVERNMENT SPONSORED MORTGAGE INSURANCE (FANNY MAE AND FREDDIE MAC.)

And the future currency crisis in the making will be caused GOVERNMENT INSURED BANK DEPOSITS (FDIC)

Does this look like free market, laissez faire ideology to you ? because it sure as hel_l doesn't look like it to me.

[Naam]

"The number one cause of the financial crisis was GOVERNMENT CONTROL OF INTEREST RATES."

governments do not control interest rates, the market does.

by the way, i finally found the "ignore" button to prevent me from dirty grinning all the time.

[flying]

"The number one cause of the financial crisis was GOVERNMENT CONTROL OF INTEREST RATES."

governments do not control interest rates, the market does.

In the US the FED sets the interest rate...albeit in reaction to the market

At least that is my understanding

[Naam]

"The number one cause of the financial crisis was GOVERNMENT CONTROL OF INTEREST RATES."

governments do not control interest rates, the market does.

In the US the FED sets the interest rate...albeit in reaction to the market

At least that is my understanding

your understanding is wrong. the FED (and that applies to most central banks) sets short term interest only. the rates for any time period beyond that is determined by the market, i.e. offer and demand. example: auction of government bonds. having said so, of course short term interest influence up to a certain degree market interest too.

[flying]

"The number one cause of the financial crisis was GOVERNMENT CONTROL OF INTEREST RATES."

governments do not control interest rates, the market does.

In the US the FED sets the interest rate...albeit in reaction to the market

At least that is my understanding

your understanding is wrong. the FED (and that applies to most central banks) sets short term interest only. the rates for any time period beyond that is determined by the market, i.e. offer and demand. example: auction of government bonds. having said so, of course short term interest influence up to a certain degree market interest too.

I thought.....

The Federal Reserve

The Bond Market

Multiple Forces in The Economy

Perhaps I have order & influence misunderstood...

[Gambles]

Only speculation but ..

What Is Hedge Fund King John Paulson Doing in Greece?

"News of Paulson's fund taking large positions against Greek debt has barely risen above rumor in the English-language press, despite this article in a Greek daily, which says that Paulson is "orchestrating the pressure on Greek government bonds and the Euro," and reports that Paulson has a team of 20-30 traders focused on Greece."

continued ..http://blogs.alternet.org/speakeasy/2010/02/15/what-is-hedge-fund-king-john-paulson-doing-in-greece/

He is there for the same reason why George Soros was in Thailand in 1997

I understood that it was pretty universally accepted now that Soros was actually betting against devaluation in the region at the time of the crisis? Happy to be proven wrong but I thought that Mattahir used Soros as a bogeyman but the evidence has always contra-indicated and today this is only kept alive as just blog conspiracy theory?