Financial Crisis

[AlexLah]

But if that money is never created and never brought into the system, how could it cause inflation?

The only way I see it it could be done by further devaluation of the Pound.

[lannarebirth]

I'd say the Brits have been royally shafted.

they are entitled to Alex. after all it is "United Kingdom" but make no mistake! the shafting does not end at the channel. i believe that royal shafting by inflation is in for all those who don't have any means to prepare themselves. i don't believe the gurus who talk about deflation in the offing

I think we're going to get, r maybe already are getting, both. asset price deflation as most everything is hocked to the hilt at the lowest possible interest rates. Hard to see much upside in the industrialised economies for years out. The bargains will come when interest rates are HIGH, not low, for cash buyers. That said, I can't see the price of food and some other basic commodities falling too much further (at the retail level), producers may get less however.

[AlexLah]

Just for the record, I will explain later.

[lannarebirth]

Just for the record, I will explain later.

Alex, I assume you saw the low on the $SPX on Friday. I'll say no more, except W.D. Gann may have been the devil incarnate.

[AlexLah]

I can only say I know his name.

Numbers are connected with something.

My apologies for being so vague.

[flying]

female family members shall be sold to brothels in Abu Dhabi, Lumumbashi

Hate to break the news to you but the brothel is closed. They had a sign out front said closed Beat It

Then they went to the airport where they abandoned their Mercedes & its high monthly note

So you will have to sell them elsewhere

[12DrinkMore]

But if that money is never created and never brought into the system, how could it cause inflation?

The money is being created and spent by the UK gov. to buy illiquid assets such as bonds from the banks. This then allows the banks, through the use of the scam fractional reserve banking to make further loans up to some massive multiplier. So for the 150,000,000,000 Quid of newly created Pounds the banks can lend out 1,500,000,000,000 Quid, wowsers that's another 1.5 Trillion Quid running around.

The theory is that there will then be so much money chasing just a few assets that the price in assets has to rise. Zimbabwe here we come. And the theory then goes further that due to the shortage of goods, industry will be stimulated into producing more and then start employing more people, who will have more money to spend. And off goes the train again.

But it is a huge gamble.

- will the banks lend out the money or will they simply sit on it, buy UK government bonds or oh God, maybe buy foreign government bonds, invest it in Asia, or simply speculate the lot in the derivative markets again?

- will the UK population want to borrow the money, sinking deeper into debt?

How about the following scenario?

- The banks take the money and sell on the most illiquid and toxic assets they have (basically to the tax payer)

- With 0.5% interest rates and in a recession, they are hardly going to start lending out left, right and centre to Joe Public or Joe Business, as the prospects are likely to be that a good number default and the return on the risk is too low.

- So the banks may just plough the cash back into government bonds or invest where they see a future risk free return of the capital

- Joe Public, scared about the future, continues to stop all non-essential purchases and pays down his debts

- Joe Public, scared about further declines in the house prices, will be happy to rent, so the house prices will continue to fall to a sustainable level

This could end up as another massive bank bailout under the pretense of an economic stimulation, leaving the tax payer deeper in debt holding another load of toxic assets.

Quantitative Easing has never been proven to work and will probably not work this time. If they have any sense left, the UK population will hunker down, pay off debts and save money. To rush out and get deeper into debt to kick start the dam_n house prices so that equity can be released to buy more non-essential goods strikes me as being utterly stupid. Merely repeating the mess that caused the crisis in the first place.

The only way I see it it could be done by further devaluation of the Pound.

This will surely happen, as there will be no foreign investors interested in holding Pounds once Brown shovels them out on the streets.

[12DrinkMore]

http://www.ft.com/cms/s/0/8ada2ad4-f3b9-11...00779fd2ac.html

Describes Quantitative Easing.

But surely it is just pushing on a piece of string?

Unless the public have confidence in the future and the political party leading them there, why will people borrow more and spend more? It seems utterly crazy to use Quantitative Easing in the UK when Brown and his bunch are losing popularity day by day. He is seen as the idiot who got us here, so why should he suddenly become the saviour to get us out of the mess? We need optimism and inspiration. All we get is more doom and gloom (and not only from me).

A few times I have been asked the question, "why is the Pound worth 70(or now 50) Baht, and not 1 to 1?" or heard the statement "you get 50 Baht for each Pound, so you must be very wealthy". It is not easy to answer this.

But shift along the line a bit, and sooner or later you have to consider the "what if?" question.

What if Asia is producing the world's goods and food?

What if Asia has improved the standard of education to match that of the western countries (and I would argue that the average sales girl in the UK is not far off the intelligence level of the average sales girl in Thailand so why should they not earn the same)?

Asia is moving very fast in terms of improving educational standards. What is happening in the UK? Yep, the standards are being lowered to accommodate the lowest common denominator, the utter moron.

I am convinced that this global economic crisis is leading to a fundamental shift in prosperity from the West to the East. It is surely obvious that if you are in debt then you have an obligation and lose a chunk of freedom. If you are in debt up to you eyebrows then you have lost all your freedom. Who owes who?

[Lasic1]

Hello Friend, sounds like what you are advocating is more Unionism! Unfortunately, acts of rebellion will only make matters worse. This is a global economic crisis caused by too much loose credit and the inability of the lenders to pay back the loans. In my mind one of the worst things that happened was going to the global economy. All it did was shift jobs to cheap labor, lower wages in developed countries and transfer wealth from the middle class in the west to avaricious businessmen and workers in emerging markets. This one will take some time to work out so don't look for any quick fixes.

So, that's it. I've now reached the point where I am ready to join up.

Bring on the revolution. I have had enough of

Politicians - who were given the trust and responsibility to represent and protect us, paying themselves millions in the process.

Bankers - who accepted our money and gamboled it away, paying themselves billions in the process.

I have been through

- the denial phase (surely it will be over soon)

- the logical phase (move money around looking for somewhere safe)

- jesus phase (is it really now this bad?)

- acceptance phase (yes is dam_n well is)

so now I am in the Kill The Responsible phase.

Really, I am very angry about this.

These governments have presided over populations who they know are not always going to make the right personal decisions. That is why we have laws and politicians to make them, codes of conduct, FSA's to prevent your average George, Joe or John from himself. So what happened? They have FAILED.

Now I am one of the most passive people I know. But I am now very angry that my trust has been proven to be misplaced, and I have been let down.

If I now feel this way, then, once the immensity of what is about to hit the UK in particular, including all the 1,000,000 ex pat pensioners and their families, where will it lead to? The Icelandic government is besieged, in Greece there have been riots. The Brits can take a lot, but once they get riled then the fighting becomes very bitter.

[siamamerican]

I haven't posted on this site for months. I lost interest when the threads began be dominated by lunatics. This thread exemplifies why I left. See ya

[AlexLah]

I refuse to give up as I know the 6 and 7.

You have been exposed while eating the 9.

Your dirty litlle game is soon about to end as I keep watching, and reading your plan.

Reversing the 9 to 6 and the 6 to 9, you thought it whas all all OK?

You need to remember something.

And I think you do.

[12DrinkMore]

I refuse to give up as I know the 6 and 7.

You have been exposed while eating the 9.

Your dirty litlle game is soon about to end as I keep watching, and reading your plan.

Reversing the 9 to 6 and the 6 to 9, you thought it whas all all OK?

You need to remember something.

And I think you do.

Blimey Alex, if he has been eating the 9, then what on earth have you been consuming? Maybe you should leave out the odd numbers and tell us if you feel better.

[lannarebirth]

I refuse to give up as I know the 6 and 7.

You have been exposed while eating the 9.

Your dirty litlle game is soon about to end as I keep watching, and reading your plan.

Reversing the 9 to 6 and the 6 to 9, you thought it whas all all OK?

You need to remember something.

And I think you do.

Blimey Alex, if he has been eating the 9, then what on earth have you been consuming? Maybe you should leave out the odd numbers and tell us if you feel better.

My daughter revealed this plan to me a couple of years ago, while still in 5th grade.

"why is six afraid of seven?" she asked. Her facial expression surrendered not a clue to the deep mystery.

Frozen, by the profundity of the question, I racked my brain and couldn't put the pices together.

"Because seven "ate" nine, silly".

[flying]

I haven't posted on this site for months. I lost interest when the threads began be dominated by lunatics. This thread exemplifies why I left. See ya

Thanks for stopping by & clearing that up.......We thought you were kicked out & banned for your terrible posts....which were all removed

Bye Bye now

Edited March 9, 2009 by flying

[flying]

3 Videos

http://www.marketskeptics.com/2009/03/vide...ds-balance.html

I saw #2 & it was pretty good.

[midas]

This has been mentioned before..................could it happen ?

Disappearance of the financial base (Dollar & Debt) all over the world

Barack Obama, like Nicolas Sarkozy or Gordon Brown, spend their time chanting about the historic dimension of the crisis, but they are just hiding the fact that they fully misunderstand its nature in an attempt to clear their names from the future failure of their policies. As to the others, they prefer to persuade themselves that the problem will be solved like any normal technical problem, albeit a little more serious than usual. Meanwhile everyone continues to play by decades old rules, unaware of the fact that the game is vanishing from under their noses

In the United States, as in Europe, China and Japan, leaders persist in reacting as if the global system has only fallen victim to some temporary breakdown, merely requiring loads of fuel (liquidities) and other ingredients (rate drops, repurchase of toxic assets, bailouts of semi-bankrupt industries,...) to reboot it.

It is high time for the general population and socio-political players to get ready to face very hard times during which whole segments of our societies will be modified, temporarily disappear or even permanently vanish. For instance, the breakdown of the global monetary system we anticipated for summer 2009 will indeed entail the collapse of the US dollar (and all USD-denominated assets), but it will also induce, out of psychological contagion, a general loss of confidence in paper money altogether

There is only one very small launch window left to prevent this scenario from shaping up: the next four months, before summer 2009. Practically speaking, the April 2009 G20 Summit is probably the last chance to put on the right tracks the forces at play, i.e. before the sequence of UK and then US defaults begin.

Failing which, they will lose their capacity to control events, including those in their own countries for many of them; and the world will enter this phase of geopolitical dislocation like a "drunken boat". At the end of this phase of geopolitical dislocation, the world will look more like Europe in 1913 rather than our world in 2007.

http://inthesenewtimes.com/2009/02/18/coll...al-dislocation/

[12DrinkMore]

Wanna know why the numbers game is escalating up to the Trillions? Why Lloyds bank is screwed?

Well, it's all down to Blind Brown, who can only read large numbers and evidently couldn't read the liabilities of RBS that crippled Lloyds, and are now sitting on the laps of the Great British Tax payer.

http://www.timesonline.co.uk/tol/news/poli...icle5870513.ece

"Mr Brown's memos are said to be drafted in huge print and triple spaced while his own handwriting is getting larger."

Gordon Brown's speech to a party conference was put in jeopardy last week when he accidentally washed a contact lens out of his eye and it disappeared down a sink plughole.

a quick-thinking member of staff at the conference venue, Caird Hall, detached the pipe from beneath the sink and fished out the lens.

Hah! Maybe Caird should dismantle a few more pipes. Might just manage to find the UK economy down there as well.

:D

And here's a piece about quantitative easing.

http://www.telegraph.co.uk/finance/comment...ive-easing.html

So how is the Bank to judge whether or not the policy of QE is working? The first sign of success will be an increase in the broad money supply. If that doesn't happen, we haven't even got to first base.

But then what? If the broad money supply channel is working then you should expect to see asset prices rising. If the extra supply of liquidity is working then you should expect to see bank lending rising. If, after the three months which the Bank has set itself to complete its purchase of gilts, asset prices and lending are no higher, then the policy will not have worked and will not be going to work. So the Bank would have to increase the dose.

The policy will work eventually, simply because there is no limit to the amount of its own money that a central bank can create.

That sounds really bad. Three months is a long time to wait for somebody in a hurry, so I doubt if Blind Brown will be able to stop tinkering. And what are the asset prices mentioned. Oh god, please not the UK house prices? I wonder if Gordon is related to Gideon? Must be surely taking some advice there already about how to get inflation running.

Edited March 9, 2009 by 12DrinkMore

[Nouf]

Just to add some light humour, this dude nails the CNBS calls,

this is quiet funny, literally rips apart the crappy calls made by CNBS

http://www.youtube.com/watch?v=cTAk54c8tFQ...ref=patrick.net

For all you guys that belive in conspiracy

i was sent this link by an American friend of mine, it seems its doing the rounds, anyhow i nothing about the Website, but i did crack up when i read the post, the website is a little far out for me, but this article made me laugh

Sounds like major BS to me, but hey, if something good might actually come out of it, if the mainstream press picks up on it

http://www.huffingtonpost.com/robert-kuttn...l_b_172918.html

[samuibeachcomber]

I liked the youtube link particularly.what i dont understand is why people in the USA and UK are n't getting mad.this continually throwing money at these institutions(good money after bad).IMO these CEO'S and others responsible should be thrown out,salaries and bonuses immediately capped,and if these banking gurus threaten to go overseas to work,well let them,personally i dont think they'd get a job in finance again.

[flying]

That was great I loved that Bear Sterns & Lehman plugs

Thanks I loved it!

http://www.youtube.com/watch?v=cTAk54c8tFQ...ref=patrick.net

If nothing else it shows..............None of the so called experts know sh*t about it

They have never seen anything like it before & have no idea how to proceed much less repair it.

[robertberg]

After the Riots and Lynchings have subdued we'll have to start minding our own F***ing Business and develop some self interest and realise we are not a World Power anymore. A Bit of protectionism not unlike the Thais use wouldn't go a miss too.

Angry ? Me ? Too ******* Right.

Isolationism, appeasement and navel gazing didn't serve England too well when Chamberlain tried that route. Maybe the UK isn't a world power but it is in its economic and social interests to ensure that lunatics do not operate terrorist bases in Afghanistan and that it's energy suppliers in the middle east are not interfered with. As well, moral values are worth something. I wouldn't be too hard on the UK because it did the right thing at the time.

Protectionism? Bit too late for that. The house isn't just on fire, it burnt down in the 70's under Labour rule and the embers are cold. The British people gave up on their manufacturing industries years ago when they like everyone else in the west embraced the crappy but cheap goods that flowed out of asian and latin american sweatshops. I remember when I was a kid, my grandfather getting me a pair of oxfords and telling me that when he was a boy he had them and that the British made the best shoes in the world. Are there any shoe manufacturers left to protect now? I still have a woolen RAF scarf one of my family members used in WWII. Little bit worn and shrunk, but I doubt a chinese manufactured scarf would have lasted 65 years or so.

Chamberlain screwed up when he went to war too early against Germany, but isolationism did work prior to getting pally with the UN in Victoria's day. Britains gone downhill ever since.

Anybody who says Britain can't stand on its own two feet without Europe is either a traitor or misguided.

The Nowegians have managed it, so can Britain. It just takes a politician / leader with iron balls and vision. Which seems lacking in both parties.

The Thais can do it, and they have hardly any fuel reserves (gas aside)!!!

Britain can restart its manufacturing industry, its not like the switch stays turned off. One thing that we could start looking into is the hi-tech manufacturing industry - Medical equipment, precision parts etc.

There is a lot of opportunity but it needs bold deeds and actions. Not the bs same-old from the PTB.

[AlexLah]

I was first!

http://www.thaivisa.com/forum/Financial-Cr...tml&st=1025

Maybe you have heard about Maiden Lane, explains a bit about how those bailouts are constructed. In that article also a few other interesting links worth reading

http://www.talkingpointsmemo.com/archives/...down_on_aig.php

[eddiemonster]

Chamberlain screwed up when he went to war too early against Germany, but isolationism did work prior to getting pally with the UN in Victoria's day. Britains gone downhill ever since.

"Britains gone downhill ever since" for who......? the aristocracy?

[12DrinkMore]

Today is a day of deep despair.

All the headlines are doom and gloom.

- the EUR is going to crash

- The USD is going to crash

- Unemployment is going up

- Factories are closing

- The Euro zone is about to break apart

- The Asians are devaluing their currencies

- No one has a clue where the UK economy is heading

- The stock markets fell again

- AIG has warned/blackmailed that it cannot be allowed to fail because the financial system of the world would collapse

ITS ALL DOOM

http://www.bloomberg.com/apps/news?pid=206...&refer=home

I wonder when we will be told that we are officially in a depression? I am certainly there already.

http://www.bloomberg.com/apps/news?pid=206...&refer=home

:D

[AlexLah]

When will there be an end to this frikkin bail out show?

Check out the current market capitalization (the current value of all shares of a company) of Citigroup and AIG. Citigroup, despite having received $75 billion in taxpayer bailout money, is now worth $5.4 billion--which is less than Autozone, a chain of car parts stores, and less than H&R Block, the franchise chain of tax preparers. As for AIG, which has received an astonishing $180 billion in taxpayer bailout funds, its total market value today is less than $1 billion! All that bailout money has been lost into thin air, and the government today could buy both companies outright for about what it's blowing every month in Iraq.

[flying]

Today is a day of deep despair.

All the headlines are doom and gloom.

ITS ALL DOOM

All Righty then I will look for a snap rally to say the 7500 mark this week in the DJIA

Then of course business as usual with more plummeting to 5600 etc.

Or possibly a real rally back to say 10,00?

[12DrinkMore]

When will there be an end to this frikkin bail out show?

I too am getting very bored with all this bailing out.

Check out the current market capitalization (the current value of all shares of a company) of Citigroup and AIG. Citigroup, despite having received $75 billion in taxpayer bailout money, is now worth $5.4 billion--which is less than Autozone, a chain of car parts stores, and less than H&R Block, the franchise chain of tax preparers. As for AIG, which has received an astonishing $180 billion in taxpayer bailout funds, its total market value today is less than $1 billion!

The true market value is probably minus 6 billion trillion whatevers, as the liabilities are not fully known. The money bailed into AIG has gone directly back out to pay off the Credit Default Swap Insurance contracts these bastards gave out without having to hold a single USD to back them up. And who was paid remains a secret, as the US government are withholding the information.

But here a few possibilities

http://tpmmuckraker.talkingpointsmemo.com/...re_are_some.php

AIG are now holding the US to ransom

http://www.bloomberg.com/apps/news?pid=206...&refer=home

“What happens to AIG has the potential to trigger a cascading set of further failures which cannot be stopped except by extraordinary means,” said the presentation by New York-based AIG. “Insurance is the oxygen of the free enterprise system. Without the promise of protection against life’s adversities, the fundamentals of capitalism are undermined.”

Who then are the suckers now paying out the insurance claims?

Try looking in the mirror.

And don't expect that AIG has been given the last bailout, more is certainly to come.

[flying]

Who then are the suckers now paying out the insurance claims?

Try looking in the mirror.

That is what they are counting on.

But what if...............

[AlexLah]

What if whot?

Edited March 9, 2009 by AlexLah

[AlexLah]

Written 8 years ago by The Union..

Bush: 'Our Long National Nightmare Of Peace And Prosperity Is Finally Over'

January 17, 2001 | Issue 37•01

WASHINGTON, DC–Mere days from assuming the presidency and closing the door on eight years of Bill Clinton, president-elect George W. Bush assured the nation in a televised address Tuesday that "our long national nightmare of peace and prosperity is finally over."

"My fellow Americans," Bush said, "at long last, we have reached the end of the dark period in American history that will come to be known as the Clinton Era, eight long years characterized by unprecedented economic expansion, a sharp decrease in crime, and sustained peace overseas. The time has come to put all of that behind us."

Bush swore to do "everything in [his] power" to undo the damage wrought by Clinton's two terms in office, including selling off the national parks to developers, going into massive debt to develop expensive and impractical weapons technologies, and passing sweeping budget cuts that drive the mentally ill out of hospitals and onto the street.

During the 40-minute speech, Bush also promised to bring an end to the severe war drought that plagued the nation under Clinton, assuring citizens that the U.S. will engage in at least one Gulf War-level armed conflict in the next four years.

"You better believe we're going to mix it up with somebody at some point during my administration," said Bush, who plans a 250 percent boost in military spending. "Unlike my predecessor, I am fully committed to putting soldiers in battle situations. Otherwise, what is the point of even having a military?"

On the economic side, Bush vowed to bring back economic stagnation by implementing substantial tax cuts, which would lead to a recession, which would necessitate a tax hike, which would lead to a drop in consumer spending, which would lead to layoffs, which would deepen the recession even further.

Wall Street responded strongly to the Bush speech, with the Dow Jones industrial fluctuating wildly before closing at an 18-month low. The NASDAQ composite index, rattled by a gloomy outlook for tech stocks in 2001, also fell sharply, losing 4.4 percent of its total value between 3 p.m. and the closing bell.

Asked for comment about the cooling technology sector, Bush said: "That's hardly my area of expertise."

Turning to the subject of the environment, Bush said he will do whatever it takes to undo the tremendous damage not done by the Clinton Administration to the Arctic National Wildlife Refuge. He assured citizens that he will follow through on his campaign promise to open the 1.5 million acre refuge's coastal plain to oil drilling. As a sign of his commitment to bringing about a change in the environment, he pointed to his choice of Gale Norton for Secretary of the Interior. Norton, Bush noted, has "extensive experience" fighting environmental causes, working as a lobbyist for lead-paint manufacturers and as an attorney for loggers and miners, in addition to suing the EPA to overturn clean-air standards.

Bush had equally high praise for Attorney General nominee John Ashcroft, whom he praised as "a tireless champion in the battle to protect a woman's right to give birth."

"Soon, with John Ashcroft's help, we will move out of the Dark Ages and into a more enlightened time when a woman will be free to think long and hard before trying to fight her way past throngs of protesters blocking her entrance to an abortion clinic," Bush said. "We as a nation can look forward to lots and lots of babies."

Continued Bush: "John Ashcroft will be invaluable in healing the terrible wedge President Clinton drove between church and state."

The speech was met with overwhelming approval from Republican leaders.

"Finally, the horrific misrule of the Democrats has been brought to a close," House Majority Leader Dennis Hastert (R-IL) told reporters. "Under Bush, we can all look forward to military aggression, deregulation of dangerous, greedy industries, and the defunding of vital domestic social-service programs upon which millions depend. Mercifully, we can now say goodbye to the awful nightmare that was Clinton's America."

"For years, I tirelessly preached the message that Clinton must be stopped," conservative talk-radio host Rush Limbaugh said. "And yet, in 1996, the American public failed to heed my urgent warnings, re-electing Clinton despite the fact that the nation was prosperous and at peace under his regime. But now, thank God, that's all done with. Once again, we will enjoy mounting debt, jingoism, nuclear paranoia, mass deficit, and a massive military build-up."

An overwhelming 49.9 percent of Americans responded enthusiastically to the Bush speech.

"After eight years of relatively sane fiscal policy under the Democrats, we have reached a point where, just a few weeks ago, President Clinton said that the national debt could be paid off by as early as 2012," Rahway, NJ, machinist and father of three Bud Crandall said. "That's not the kind of world I want my children to grow up in."

"You have no idea what it's like to be black and enfranchised," said Marlon Hastings, one of thousands of Miami-Dade County residents whose votes were not counted in the 2000 presidential election. "George W. Bush understands the pain of enfranchisement, and ever since Election Day, he has fought tirelessly to make sure it never happens to my people again."

Bush concluded his speech on a note of healing and redemption.

"We as a people must stand united, banding together to tear this nation in two," Bush said. "Much work lies ahead of us: The gap between the rich and the poor may be wide, be there's much more widening left to do. We must squander our nation's hard-won budget surplus on tax breaks for the wealthiest 15 percent. And, on the foreign front, we must find an enemy and defeat it."

"The insanity is over," Bush said. "After a long, dark night of peace and stability, the sun is finally rising again over America. We look forward to a bright new dawn not seen since the glory days of my dad."