Financial Crisis

[midas]

He did such a good job in the UK- now he will tackle the USA

Gordon Brown brings economic optimism to US Congress

He said that people would cast off their anxieties to create twice as many opportunities for business, twice as much prosperity and the biggest expansion of middle-class incomes and jobs the world had ever seen.

In a strikingly upbeat speech in Washington he suggested that the world economy would double in size over the next 20 years as people in the Third World became consumers of goods produced in the West.

How................with what .............?

http://www.timesonline.co.uk/tol/news/worl...icle5847407.ece

[Naam]

People are angry and ready to riot, enough is enough. But there will not be enough yet, we need millions and millions of people more in order to bring down "The Elite"

a more realistic and feasible alternative is to put a rubber sheet on the mattress to protect it from the proceed of wet dreams.

[midas]

People are angry and ready to riot, enough is enough. But there will not be enough yet, we need millions and millions of people more in order to bring down "The Elite"

a more realistic and feasible alternative is to put a rubber sheet on the mattress to protect it from the proceed of wet dreams.

Well it does seem something will happen in London when the G20 meet.

And for how many weeks can people go on reading this kind of stuff- week after week.......

its not possible for people to keep absorbing this without expressing themselves somehow ?

Major City frauds uncovered by police

A spate of Bernard Madoff-style scams that threaten to bring misery to thousands of investors is being investigated by police and the Serious Fraud Office, The Independent has learnt. Bogus investment schemes have been uncovered by investigators focusing on crime resulting from the credit crunch.

Mr Alderman said the "ripple effect" of credit-crunch fraud was bringing misery to thousands. His organisation is investigating a range of financial crimes and is shortly expected to announce developments in cases involving investments, mortgages and fraudulent trading

http://www.independent.co.uk/news/uk/crime...ce-1637707.html

[quiksilva]

lamenting over and over things that can't be changed is the outlet of the weak, clueless or desperate ones. for others the saying applies "when it's going to get tough, the tough get going".

QFT

Plus a new signature to mark this spark of sanity in this thread.

Edited March 5, 2009 by quiksilva

[AlexLah]

Naam you keep saying there is nothing we can do about it but history proves we can.

The public weapon is to protest, protests have brought down governments, political leaders and stopped having nuclear rockets in someones backyard.

And for those of you that are interested in the size of the derivatives market you could go here: http://www.bis.org/statistics/derstats.htm

Edit: What is QFT?

Edited March 5, 2009 by AlexLah

[midas]

preparing for the crisis is not done by lamenting or pointing fingers, nor is it done by decrying completely irrelevant situations or asking silly questions with the tenor "i have morals, what about you?" lamenting over and over things that can't be changed is the outlet of the weak, clueless or desperate ones. for others the saying applies "when it's going to get tough, the tough get going".

So because we are now in tough times you suggest the only solution is to " get going " ?

Does this mean even more tougher business in the form of potentially even more dishonest practices

and even more greed -every man for himself attitude ? Because to be quite honest

I can really no longer tell who I will be able to trust in business and I'm sure

I'm not the only one out there. Shouldn't this provide an opportunity for people

to stop and take a long hard look at what we are doing to ourselves ?

I suggest it is not an even tougher mentality that is needed - it is

being able to prove I can trust people in finance once again

Edited March 5, 2009 by midas

[midas]

Naam you keep saying there is nothing we can do about it but history proves we can.

The public weapon is to protest, protests have brought down governments, political leaders and stopped having nuclear rockets in someones backyard.

Many in the USA are now comparing the anger building up with this :-

The French Revolution (1789–1799) was a period of political and social upheaval and radical change

Financial crisis

Louis XVI ascended to the throne amidst a financial crisis; the nation was nearing bankruptcy and outlays outpaced income. Necker realized that the country's tax system subjected some to an unfair burden He argued that the country could not be taxed higher, that the nobles and clergy should not be exempt from taxes, and proposed that borrowing would solve the country's fiscal problems. Sound familiar ?

http://en.wikipedia.org/wiki/French_Revolution

Edited March 5, 2009 by midas

[AlexLah]

Yep, that's why I mention many times to look at history.

These things have happened/been orchestrated before and many times ended up with a bit of violence or even war.

[ronz28]

Notional values don't measure the problem .... that's just one of the factors in calculating how much, if any, that one of the parties owes to the other on settlement. Fair market values are meaningful but then again .... derivatives are usually hedges so it doesn't mean the party has a total gain or loss as it probably is totally offset by the price movement of the owned item or other position hedged.

The problem is specific to an entity that misjudges risk and isn't properly hedged. Also, there are too many opinions on how to actually calculate the fair value of a specific derivative prior to settlement date to use as a value in financial reporting or even to settle up early in case of default, etc. Regulators never should have let banks get so involved in this and should have severely restricted those that could use non-exchange traded derivatives to limit counter-party risk. It takes a lot of analysis of the terms of specific instruments that an entity holds to determine if there is a problem and only CPA firms and government regulators get that access when they aren't wearing their blinders to finish the audits early and claim their managers are so efficient.

That mess is as bad as the private mortgage backed securities that list the same mortgage in multiple securities. Some people have refused to pay their mortgage because they are being billed by multiple mortgage companies each claiming to hold their mortgage as a part of the security they are servicing.

We can start holding the crooks and regulators accountable.

[flying]

Many in the USA are now comparing the anger building up with this :-

The French Revolution

So funny you mention that.

Yesterday I started to post but deleted it.

When I saw someone (jokingly?) say

it makes no sense that i worry about additional 6.8 billion of people.

I thought it should also say let them eat cake

[AlexLah]

I say get your money out while you still can.

http://www.bloomberg.com/apps/news?pid=was...id=alsJZqIFuN3k

[flying]

I say get your money out while you still can.

http://www.bloomberg.com/apps/news?pid=was...id=alsJZqIFuN3k

Bad timing for those of us traveling

Although I have prepared quite a bit already I am hoping the big

failures dont start for awhile yet.

But I have said from back when the FDIC raised the limit to 250K that it was just a ploy

to calm. They are on the edge like everyone else.

Now the banks dont want to pay the new increased FDIC fees.

I still believe there is time though as the govt will continue to bail for awhile yet.

Edited March 5, 2009 by flying

[Carmine6]

I say get your money out while you still can.

http://www.bloomberg.com/apps/news?pid=was...id=alsJZqIFuN3k

No time like now to open a beer bar. A year from now when everyone is complaining about the money lost in banks, a story about losing money in a beer bar in Thailand is going to be a winner.

[PeaceBlondie]

Sorry to break into this most arcane discussion of lines of credit, interest rates, deficits and debts, but we have a breaking news bulletin:

Asparagus monsters have broken past the Van Allen asteroid belt and are headed earthwards with leveraged derivatives of subprime Jello.

[lannarebirth]

That's a little uncalled for isn't it Alex? C'mon.

This thread I believe was started to educate people about the ongoing financial crisis and hopefully use that information to better take care of themselves and their loved ones. You don't appear to have a grasp of the economic underpinnings of this debacle, so instead you choose to post your wacky theories. I've got some of my own, but sharing them would not serve the people reading this thread looking for valid information with wjich they can make better decisions. Why not start a new "Conspiracy" thread? I'll stop by and give you some to chew on.

Lanna we appreciate your consistent levelheaded and impartial approach. But take for example my question back in Post #535

which incidentally was actually specifically addressed to you after you submitted a very informative article from

http://www.villagevoice.com/2009-01-28/new...rld-s-economy/1

This was all new information for me and even today I don't think anybody can say definitively how much of the total

amount quoted in that article will ultimately remain a problem. But then look at the ridiculous way ( and very personal way ) Naam reacted

to my question to you ( in his subsequent Post #539 and Post #574 )

Everything has to be according to Naam's standards. We are expected to read his endless criticisms and his opinion of the world only

according to Naam - but he is not the moderator of this thread.

And with regards to the subject matter of that highly disputed figure ( 596 Trillion) I still don't see how he can so

arrogantly claim that just because he believes " in essence most derivatives are not lopsided debts " -

that this necessarily applies with this particular situation because the very murkiness attached to these instruments suggests

no one really knows for sure?

Actually midas, I totally agree with that statement.

Take my little corner of the derivatives world for instance, the front month SP 500 emini contract. Just yesterday over 2 million contracts (derivatives) were exchanged. Face falue at present about $35k/contract. Totally liquid and marked to market in every minute of every trading day (23 hours). Dozens more similar type derivative instruments, traded on exchanges all over the world, where members must meet certain finacial standards to ensure that they will make good their obligations. There is no systemic risk inherent in these markets, as all information is known to both contractual parties and that same informaion is disseminated to all market participants to weigh.

Now take these CDS's we hear so much about. Some (we don't know how many) are traded between parties (we don't know who), to cover certain events (we don't know what many of these are) for specific payouts ( we don't know how much). What we do know is that some underwriters of these instruments have required bailouts. We can only speculate about if there will be future bailouts and for how much.

Given this dearth of specifics regarding these instruments and given that asset prices are changing rapidly, many assume this will trigger payouts of ? to ?. We conjure up "worst case scenarios" and value the things we DO know about accordingly. We don't like not knowing things.

Now regarding Dr. Naam. He's German, an engineer/scientist, and he's got some Klingon mixed in there somewhere. It's a left brain trifecta. He analizes facts in evidence, and will not get drawn into hypothetical arguments that are not supported by those facts. He knows there are things we don't know, and he knows it is worrying, but he refuses to extrapolate outcomes based on insufficient data and thats a voice people need to hear. When the facts change, so will his views I'm sure.

[lannarebirth]

Notional values don't measure the problem .... that's just one of the factors in calculating how much, if any, that one of the parties owes to the other on settlement. Fair market values are meaningful but then again .... derivatives are usually hedges so it doesn't mean the party has a total gain or loss as it probably is totally offset by the price movement of the owned item or other position hedged.

The problem is specific to an entity that misjudges risk and isn't properly hedged. Also, there are too many opinions on how to actually calculate the fair value of a specific derivative prior to settlement date to use as a value in financial reporting or even to settle up early in case of default, etc. Regulators never should have let banks get so involved in this and should have severely restricted those that could use non-exchange traded derivatives to limit counter-party risk. It takes a lot of analysis of the terms of specific instruments that an entity holds to determine if there is a problem and only CPA firms and government regulators get that access when they aren't wearing their blinders to finish the audits early and claim their managers are so efficient.

That mess is as bad as the private mortgage backed securities that list the same mortgage in multiple securities. Some people have refused to pay their mortgage because they are being billed by multiple mortgage companies each claiming to hold their mortgage as a part of the security they are servicing.

We can start holding the crooks and regulators accountable.

Good post ronz. The part I highlighted I think is important. Not because taking punitive action will bring back even one dollar of lost valuations, but because it will restore some measure of confidence. Currently, trillions of dollars are going to who knows where for who knows what? The government, in trying not to shock the sensibilities of the public with large numbers is giving the appearance of complicity with the institutions that have benefitted from this fiasco. The government needs to at least give the appearance of being on the publics side in order to restore confidence in both government and markets.

[midas]

Now regarding Dr. Naam. He's German, an engineer/scientist, and he's got some Klingon mixed in there somewhere. It's a left brain trifecta. He analizes facts in evidence, and will not get drawn into hypothetical arguments that are not supported by those facts. He knows there are things we don't know, and he knows it is worrying, but he refuses to extrapolate outcomes based on insufficient data and thats a voice people need to hear. When the facts change, so will his views I'm sure.

Well of course I respect Dr Naam's specialist knowledge as a scientist and engineer

but I equally respect the opinion of people like George Soros who also has considerable

experience of markets - and he once said

The financial markets generally are unpredictable. So that one has to have different scenarios...

Surely isn't that what we are doing in this thread ? We are merely exploring different scenarios

because we don't know which one will actually come true. I feel at times Dr Naam should remember that

we are throwing many points for consideration into this melting pot and maybe his scientific Klingon approach

of saying this or that " will not happen " may not always be appropriate bearing in mind the number

of " variables " that we now have to take account of

Edited March 5, 2009 by midas

[AlexLah]

I dunno if any of you had a look at the statistical data on derivatives available here: http://www.bis.org/statistics/derstats.htm

For more detailed statistics just click on linky next page left bottom.

Here an example, perhaps some of the financial guru's can have a look and crunch the numbers.

Did someone switched on the fan here? It seems a bit cooler in the room.....

[samuibeachcomber]

I dunno if any of you had a look at the statistical data on derivatives available here: http://www.bis.org/statistics/derstats.htm

For more detailed statistics just click on linky next page left bottom.

Here an example, perhaps some of the financial guru's can have a look and crunch the numbers.

Did someone switched on the fan here? It seems a bit cooler in the room.....

Ha Ha!..............yes the temp. has dropped,but here on Samui its scorching hot,no doubt BKK same.

[Chaimai]

No, if I recall correctly it was started by 12Drinkmore to - understandably - venthis spleen against the idiots who have got us into this mess.

Now it has been hijacked by people like Alexlahlah who just want to promote their "the sky is falling in and and there will be world-wide rioting in the streets" postulations.

The thread is dead. Some have now stooped to personal insults which is out of order.

The thread is certainly not dead-it is vibrant and informative. You're not the moderator either Chaimai

even though you have continually tried to impose your personal standards throughout these postings.

Just because you are not interested in these issues I dont believe this gives you the right to deem that they are not

worthy of consideration by other TV members.

[Chaimai]

The thread is certainly not dead-it is vibrant and informative. You're not the moderator either Chaimai

even though you have continually tried to impose your personal standards throughout these postings.

Just because you are not interested in these issues I dont believe this gives you the right to deem that they are not

worthy of consideration by other TV members.

midas - you know nothing of my 'standards'. I, like you, am expressing a view. I certainly do not wish to be a moderator but a thread is dead when people have to resort to insults - like I think you are jumped up prick who is so far up his own ar5e that he cannot see the light of day - see, that achieves nothing.

This thread is not vibrant and informative, it is full of cutting and pasting and the latest financial news threads with the comment of "ooh, oohh Miss, look what I have found now".

I have a great interest in the financial crisis - finance has been part of my life for almost 40 years. I have no interest in wil speculation, in such a thread, about the return of revolutions, riots and the end of the world generally. Stick that sh!t in a topic called "The end of the world is coming and I predicted it first..."

What I hace learned is that Klingons appear to have more savvy than many posters on this thread (which now seems to represent about 10 out of 60,000 registered members )

Edited March 5, 2009 by Chaimai

[Chaimai]

I say get your money out while you still can.

http://www.bloomberg.com/apps/news?pid=was...id=alsJZqIFuN3k

Yes, a run on a bank/the banks is just what we need to get the revolution started.

Loose talk started a run on Northern Rock and caused the unnecessary commitment of £billions in support and the start of the fear/paranoia culture.

[samuibeachcomber]

I say get your money out while you still can.

http://www.bloomberg.com/apps/news?pid=was...id=alsJZqIFuN3k

Yes, a run on a bank/the banks is just what we need to get the revolution started.

Loose talk started a run on Northern Rock and caused the unnecessary commitment of £billions in support and the start of the fear/paranoia culture.

and some people just dont want to see whats coming,it is not a requirement of TV that anyone has to be a financial guru to comment on what began as a financial topic.For example i'll admit i am pretty clueless when it comes to the stock market,equities,derivitives,CDS etc,but i still enjoy an input,but it appears we are back to the vitriol of this a.m. after a cooling off.

[Chaimai]

and some people just dont want to see whats coming,it is not a requirement of TV that anyone has to be a financial guru to comment on what began as a financial topic.For example i'll admit i am pretty clueless when it comes to the stock market,equities,derivitives,CDS etc,but i still enjoy an input,but it appears we are back to the vitriol of this a.m. after a cooling off.

sbc, how do you know what's coming ?

There is so much fiction and speculation coming out the facts are being fogged. I agree that history is a good place to look for the liklihood of what might happen going forward - this does not include referencing events of 400 years ago. Modern history will suffice, particularly modern financial history.

Also, while there are a lot of idiots out there (governments down to bankers down to the press) I am still prepared to put some faith in the ability of some governments, some bankers and some people to help me to come through this. I can't do it alone, although I will work as hard as I am able to influence what is under my control, I have to have faith in unknown others to work to the same recovery agenda.

There, now see how easy that was to express a view without acerbic personal comment.

[midas]

The thread is certainly not dead-it is vibrant and informative. You're not the moderator either Chaimai

even though you have continually tried to impose your personal standards throughout these postings.

Just because you are not interested in these issues I dont believe this gives you the right to deem that they are not

worthy of consideration by other TV members.

midas - you know nothing of my 'standards'. I, like you, am expressing a view. I certainly do not wish to be a moderator but a thread is dead when people have to resort to insults - like I think you are jumped up prick who is so far up his own ar5e that he cannot see the light of day - see, that achieves nothing.

This thread is not vibrant and informative, it is full of cutting and pasting and the latest financial news threads with the comment of "ooh, oohh Miss, look what I have found now".

I have a great interest in the financial crisis - finance has been part of my life for almost 40 years. I have no interest in wil speculation, in such a thread, about the return of revolutions, riots and the end of the world generally. Stick that sh!t in a topic called "The end of the world is coming and I predicted it first..."

What I hace learned is that Klingons appear to have more savvy than many posters on this thread (which now seems to represent about 10 out of 60,000 registered members )

Chaimai I think your time would far better spent processing mortage

applications than writing this kind of waffle

[AlexLah]

Nah, it is not too bad, temp here still comfortable.

SBC, if you just want to have some basic idea how those 3 letter death certificates derivatives work there is some very easy to understand video's on YT.

Best ones are made by someone under the name Khan or kahn univerity or something linky was posted here a few times.

[samuibeachcomber]

and some people just dont want to see whats coming,it is not a requirement of TV that anyone has to be a financial guru to comment on what began as a financial topic.For example i'll admit i am pretty clueless when it comes to the stock market,equities,derivitives,CDS etc,but i still enjoy an input,but it appears we are back to the vitriol of this a.m. after a cooling off.

sbc, how do you know what's coming ?

There is so much fiction and speculation coming out the facts are being fogged. I agree that history is a good place to look for the liklihood of what might happen going forward - this does not include referencing events of 400 years ago. Modern history will suffice, particularly modern financial history.

Also, while there are a lot of idiots out there (governments down to bankers down to the press) I am still prepared to put some faith in the ability of some governments, some bankers and some people to help me to come through this. I can't do it alone, although I will work as hard as I am able to influence what is under my control, I have to have faith in unknown others to work to the same recovery agenda.

There, now see how easy that was to express a view without acerbic personal comment.

well done,so you can do it.

[midas]

and some people just dont want to see whats coming,it is not a requirement of TV that anyone has to be a financial guru to comment on what began as a financial topic.For example i'll admit i am pretty clueless when it comes to the stock market,equities,derivitives,CDS etc,but i still enjoy an input,but it appears we are back to the vitriol of this a.m. after a cooling off.

I find it quite fascinating that two people in particular who clearly don't seem to be interested in

discussing these fascinating issues choose to keep scornfully attacking our postings

instead of simply going somewhere else and reading something which maybe more suitable

for their mindset I don't know about you Samiu, but it makes me even more

determined to keep these issues alive

Edited March 5, 2009 by midas

[samuibeachcomber]

Nah, it is not too bad, temp here still comfortable.

SBC, if you just want to have some basic idea how those 3 letter death certificates derivatives work there is some very easy to understand video's on YT.

Best ones are made by someone under the name Khan or kahn univerity or something linky was posted here a few times.

yes thanks AL i did see a link explaining the cds thing and was a very good link,one i could easily understand,in my comment i was generalising,as there are others here who have a much better knowledge than i do.

[lannarebirth]

Now regarding Dr. Naam. He's German, an engineer/scientist, and he's got some Klingon mixed in there somewhere. It's a left brain trifecta. He analizes facts in evidence, and will not get drawn into hypothetical arguments that are not supported by those facts. He knows there are things we don't know, and he knows it is worrying, but he refuses to extrapolate outcomes based on insufficient data and thats a voice people need to hear. When the facts change, so will his views I'm sure.

Well of course I respect Dr Naam's specialist knowledge as a scientist and engineer

He has a great deal of experience as a global investor as well.

but I equally respect the opinion of people like George Soros who also has considerable

experience of markets - and he once said

The financial markets generally are unpredictable. So that one has to have different scenarios...

Bad example as far as I'm concerned as Dr. Naam offers relevant help and information to those who may not know and George Soros is lying. frontrunning creep.

Surely isn't that what we are doing in this thread ? We are merely exploring different scenarios

because we don't know which one will actually come true. I feel at times Dr Naam should remember that

we are throwing many points for consideration into this melting pot and maybe his scientific Klingon approach

of saying this or that " will not happen " may not always be appropriate bearing in mind the number

of " variables " that we now have to take account of

I can't speak for others, but what is apparent to me anyway, at this time, is you, me, Naam, everyone are on our own, financially speaking. Even people who have been heretofore prudent with their investments and expenses will have to make financial moves they'd rather not make just to stay ahead of the risk spread (if indeed it spreads). This kind of environment is likely to persist for some time.

Everyone has som kind of contribution to make. I present my often right, sometimes wrong technical analysis. Dr. Naam presents his insights based on decades of global investing, and also insightful information from sources not eberyone has timely access to. Others offer many good things and anecdotal accounts. It alll helps. What doesn't help is sniping at each other. What also doesn't help is when people present pure unadulterated bullshit. Some of us have a hiher tolerance for bullshit than others, but it is seldom helpful and almost always distracting.