Trouble in Bank Land III

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Sat, 2008-10-04 18:30

Frustrated Mess Frustrated Mess's picture

quote:

Wall Street analysts, believe the addition of so many terms to the bill might deter potential participants.
One of the least attractive elements is a section designed to curb executive pay at banks that participate in the bail-out package. These include limiting stock-related pay and banning 'golden parachutes' for executives.
'I think this hodge-podge of regulations and rules will be enough to put many [chief executives] off participating,' Caldwell said.

[url=http://www.guardian.co.uk/business/2008/oct/05/wall.street.bailout]Now Wall Street may shun $700bn bail-out[/url]

Crisis? What crisis?

Sat, 2008-10-04 18:40

#53

Fidel

They want unconditional free love and socialism then?

Sun, 2008-10-05 09:19

#54

Wilf Day

[url=http://ap.google.com/article/ALeqM5jow3VAPRg_rNF9bT2XtUar0d9PeAD93KEOL80... banks being nationalized:[/url]

quote:

Belgian Prime Minister Yves Leterme said he aims to find a new owner for troubled bank Fortis NV to restore confidence in the company before the opening of markets on Monday.
Leterme told two media outlets that government officials were going over a takeover bid for Fortis' Belgian operations. The bank's Dutch operations were nationalized amid fears they could go insolvent.
British treasury chief Alistair Darling said that he was ready to take "pretty big steps that we wouldn't take in ordinary times" to help the country in weather the credit crunch.
In the past year the government has acted to nationalize struggling mortgage lenders Northern Rock and Bradford & Bingley.
Chancellor Angela Merkel said that no citizen should fear for the safety of their investments, speaking to reporters as her government held crisis talks on the collapse of a ballyhooed euro35 billion (US$48.4 billion) bailout of Hypo Real Estate AG, the country's second- biggest property lender.
Hypo Real Estate said Saturday that the rescue plan had fallen apart after private lenders withdrew support, a key element to the proposal that had already been approved by the EU earlier this week.

I just heard a BBC commentator saying this is the biggest crisis capitalism has faced since the 1930s. Unlike the Americans, when a European government bails out an insolvent bank, they call this socialism, and nationalize it. It has been confirmed in Ireland that their conservative government is going to appoint Directors to the Boards of the banks it is supporting.

[url=http://news.bbc.co.uk/2/hi/europe/7653551.stm]Belgium braced for general strike.[/url]

[ 05 October 2008: Message edited by: Wilf Day ]

Sun, 2008-10-05 10:09

#55

DrConway

Interventionism FTW. I want more of this.

Sun, 2008-10-05 17:11

#56

remind

quote:

European leaders emerged from crisis talks in Paris led by Nicolas Sarkozy with conflicting plans about how to save their country's banks as agreement on a continent-wide strategy eluded them.
Governments are widely intent on preventing further bank collapses after the failure of U.S. institutions caused shockwaves across the world. But they are divided and somewhat uncertain over how to achieve this goal as they confront corporate calamities for which no play book exists.
The discord comes as the deepening international crisis increasingly takes its toll on Canada, putting the country's banking system under strain and squeezing corporate loans.
The Bank of Canada has been forced to take escalating measures to improve liquidity by pumping billions into the country's financial network and agreeing to accept collateral from banks that no one else wants.

[url=http://www.financialpost.com/story.html?id=862233]http://www.financialpo...

Sun, 2008-10-05 17:23

#57

Wilf Day

[url=http://news.bbc.co.uk/2/hi/business/7653868.stm]Germany clinches bank rescue deal:[/url]

quote:

Germany's finance ministry has agreed a 50bn euro ($70bn; Ј40bn) plan to save one of the country's biggest banks.
The deal, reached with private banks, to save Hypo Real Estate is worth 15m euros more than the first rescue attempt, which fell apart on Saturday.
Germany earlier announced an unlimited guarantee for all private savings, a move followed later by Denmark.
Late on Sunday, French bank BNP Paribas confirmed that it had agreed to buy 75% of Belgium and Luxembourg holdings of the giant Fortis financial group, creating one of Europe's biggest savings banks.
The governments of Belgium and Luxembourg will in return take a minority stake in BNP Paribas.
The Dutch arm of Fortis has been nationalised by the Netherlands government.

Sun, 2008-10-05 19:42

#58

peskyfly1

I predict the markets will tumble on Monday.

Mon, 2008-10-06 02:03

#59

Doug

quote:

Originally posted by peskyfly1:
[b]I predict the markets will tumble on Monday.[/b]

And you would be correct.

quote:

European shares fell sharply in early trade on Monday, with banks worst hit after further measures to bail out major financial companies over the weekend, and following a decline on Wall Street on Friday.
Across Europe, Germany's DAX index fell 5.8 percent, UK's FTSE 100 index lost 6.14 percent and France's CAC 40 shed 6.2 percent.

[url=http://www.cnbc.com/id/27043866]Euro shares nosedive 6%[/url]

[url=http://www.cnbc.com/id/17689937/]Dow futures down 266 points as of now - 6 AM[/url]

Mon, 2008-10-06 10:54

#60

Fidel

[url=http://www.globalresearch.ca/index.php?context=va&aid=10459]Shock & Awe: Bi-Partisan Beltway Terrorists Launch Economic 9/11 on the American People[/url]

quote:

You've seen the news. You know the score. The House of Representatives has now completed the economic terrorist attack inflicted on the American people by the nation's elite.
The bailout bill -- or as Arthur Silber more rightly terms it, the "Extortion Bill" -- is already law, thanks to the Democrats in Congress, and to Barack Obama, who spent the day working the phones and twisting arms to make sure the $700 billion bonanza for the filthy rich passed without any more of the hiccups that held it up earlier this week.
The plan that Obama made his own -- despite its origins in the poison kitchen of the Bush White House -- is far worse than the version voted down on Monday. Every reputable economic expert says that the plan is unworkable; it will not solve the problems at the root of the current economic crisis, but will only make them worse. It entrenches many of the fraudulent practices that led to the meltdown in the first place, and rewards the perpetrators for their misdeeds with a gargantuan amount of public money, which they can now use to carry on largely as before, albeit with a few new toothless "oversight" mechanisms operated by their own Wall Street cronies, and their bribed-and-bought hirelings on Capitol Hill.

Mon, 2008-10-06 11:11

#61

Doug

Remember this? [img]biggrin.gif" border="0[/img]

[img]http://ecx.images-amazon.com/images/I/51CARCS0N6L._SL500_AA240_.jpg[/img]

Mon, 2008-10-06 11:32

#62

Fidel

quote:

Originally posted by Doug:
[b]Remember this? [img]biggrin.gif" border="0[/img]
[img]http://ecx.images-amazon.com/images/I/51CARCS0N6L._SL500_AA240_.jpg[/img...

It was supposed to be capitalism's swan song, said one proponent of the new laissez-faire. Ya right. Capitalism is a monumental failure.

Mon, 2008-10-06 11:45

#63

West Coast Greeny

Um, all you socialists rubbing thier hands with glee? I should probably remind you that alot of working class people have thier retirements and their kids college funds riding on the performance of stocks. No, no I'm sorry, an American recession is NOT good for the world.

America (wait, sorry, you all hate America, let me rephrase that) [i]Americans[/i] - [i]people[/i] living in the United States are going to suffer - badly -if this keeps up. That country doesn't have a social safety net, that country's treasury is swimming in red ink at a time when it really, really can't be. Its credit rating is going to come into question.

The United States government has been weakened, and has lost credibility. 90% of the populace thinks the country is running in the wrong direction, 90% of the populace disapprove of congress. Americans are panicing.

You think pulverising a nation's economy is the right way to make a government less hawkish? You think total inconfidence in the institution of government is healthy for democracy? Yeah, that really worked great in [url=http://en.wikipedia.org/wiki/Adolf_Hitler]Germany.[/url]

At least Obama's not Hitler. The problem is more than a few Americans think he is....

What are you socialists going to do? Start an armed revolution? No. Civil war won't work. Not in an age of nuclear weapons. We'd extinguish ourselves, very literally.

[ 06 October 2008: Message edited by: West Coast Greeny ]

Mon, 2008-10-06 11:47

#64

West Coast Greeny

quote:

Originally posted by Fidel:
[b]
It was supposed to be capitalism's swan song, said one proponent of the new laissez-faire. Ya right. Capitalism is a monumental failure.[/b]

Communism was a mass suc... oh wait.

Mon, 2008-10-06 12:07

#65

M. Spector M. Spector's picture

quote:

Originally posted by West Coast Greeny:
[b]Um, all you socialists rubbing thier hands with glee? I should probably remind you that alot of working class people have thier retirements and their kids college funds riding on the performance of stocks. No, no I'm sorry, an American recession is NOT good for the world.[/b]

Nobody said it was, and nobody is rubbing their hands with glee except the super-rich who are being bailed out of a situation caused by their own greed and the inexorable logic of the capitalist system that they - and apparently you - are so fond of. The rest of us don't get bailed out.

quote:

[b]You think pulverising a nation's economy is the right way to make a government less hawkish? You think total inconfidence in the institution of government is healthy for democracy?[/b]

Again, nobody said that. And it's the neocons, not the left, who want to undermine confidence in the institution of government.

The Germans didn't allow Hitler to take power because they had lost confidence in government. The main reason he was able to take power was because the left (which was huge and militant) was divided against itself and the German capitalist class took advantage of their confusion and weakness to crush them by installing a fascist regime.

quote:

[b]At least Obama's not Hitler.[/b]

Ooh, high praise, indeed!

quote:

[b]What are you socialists going to do? Start an armed revolution? No. Civil war won't work. Not in an age of nuclear weapons. We'd extinguish ourselves, very literally.[/b]

Translation: [url=http://en.wikipedia.org/wiki/TINA]TINA[/url]

[ 06 October 2008: Message edited by: M. Spector ]

Mon, 2008-10-06 12:25

#66

Fidel

quote:

Originally posted by West Coast Greeny:
[b]
Communism was a mass suc... oh wait.[/b]

Soviet communism never promised anyone higher pie in the sky dregalated kapitalism. Soviet communism lasted 70 years, and they went into deficit spending for a few measly billion dollars by 1989 after the Saudis began dumping oil on world markets in 1986. Then the U.S. interfered with democracy in the Soviet Union and propped up Boris Yeltsin's election campaign. Long-short, neoliberal capitalism failed in Russia as well as dozens of other countries where tried since 9-11-73 Chile.

And now the new laissez-faire is collapsing all around their ears on Wall Street. Shock and awe paving the way for extensive change again? We know what the results are already time and time again. Capitalism is a car constantly on blocks. It's broken again.

Mon, 2008-10-06 12:35

#67

Toby Fourre

What is glaringly obvious in all of this is that Bush Inc. has not cancelled SDI missile defense or closed down any military bases or called the Navy home from the Persian Gulf. Nor has Bush Inc. considered anything as [i]socialistic[/i] as the GI Bill to beef up the domestic economy starting at the bottom where it counts most.

Mon, 2008-10-06 14:48

#68

Doug

I think more is made of the whole "this is people's retirements" thing than there is. If you happen to be far away from retirement, this market crash is an opportunity more than a disaster since you can use what savings you have to buy stock for long-term investment cheaply. People close to retirement should have had only a small part of their money in stock. Unless you were particularly greedy or stupid, the sky hasn't fallen. As trouble spreads to the real economy, *that* is where ordinary people start having problems.

Mon, 2008-10-06 16:11

#69

George Victor

quote:

I think more is made of the whole "this is people's retirements" thing than there is. If you happen to be far away from retirement, this market crash is an opportunity more than a disaster since you can use what savings you have to buy stock for long-term investment cheaply. People close to retirement should have had only a small part of their money in stock. Unless you were particularly greedy or stupid, the sky hasn't fallen. As trouble spreads to the real economy, *that* is where ordinary people start having problems.

Most "ordinary" folk I know have lost about one-third of their portfolio.

Maybe you have a different definition of ordinary, and clear distinctions of holdings to distinguish the "greedy and stupid", who may have been sold a bill of goods, from the virtuous?

Mon, 2008-10-06 17:42

#70

Doug

Most ordinary folk don't have much of a portfolio to begin with, and so things like the value of real estate are more important to their financial planning. That's why the US is relatively in such a mess because the real estate market has collapsed along with the stock market. That hasn't happened here (yet - but there's reasons to think it shouldn't be as bad).

[url=http://www.cbc.ca/money/story/2007/06/14/retirement.html]Most boomers aren't saving enough for retirement[/url]

Mon, 2008-10-06 17:56

#71

Brian White

I agree, I spoke to someone today in tears and shock because she lost 1/3 of her rsps.
Do not forget that that is savings that is lost. Money you COULD have spent over the years is suddenly gone. You get the misery twice over. The money is gone and you didnt get to spend it.
The lady in question had cancer and now has little to fall back on if it comes back.
You are told to save for a rainy day. Rainy day comes and POOF money gone!

quote:

Originally posted by George Victor:
[b]
Most "ordinary" folk I know have lost about one-third of their portfolio.
Maybe you have a different definition of ordinary, and clear distinctions of holdings to distinguish the "greedy and stupid", who may have been sold a bill of goods, from the virtuous?[/b]

Mon, 2008-10-06 19:04

#72

DrConway

Ok, explain to me how lying back and thinking the stock market will do all the heavy lifting for you is a good idea.

Rich people have sold a very good con game here, and while they make off with the $700 billion the US government handed them, people like that lady you talked to will blame anybody but themselves for being conned by Raygun and his successors into thinking a measly few bucks on a tax cut was doing anybody a favor but people like Bill Gates.

Mon, 2008-10-06 19:06

#73

Jacob Two-Two

quote:

I agree, I spoke to someone today in tears and shock because she lost 1/3 of her rsps.

Yes, that's very tragic, so let's not forget who's really responsible. All our lives we've been told to put our money into the casino called the stock market. But fear not, true believers! It's a special casino- a casino where everybody wins!

Sorry man, but there ain't no such animal. The truth was that we put the money in and the capital class took it out. Like any pyramid scheme, it all works fine as long as the money keeps coming in, but eventually you run up against a wall and those at the top grab what's left and run for cover while everyone realises that the money is all gone. There's no payoff.

This was easy to predict if you have the intellectual courage to accept that the norm of the historical blip that has been the last fifty years won't necessarily be the norm forever. And that's leaving aside equally obvious impending norm-shifts like the coming energy crisis and ecological upheaval. It was nothing but folly to assume that we had reached an "end to history", to borrow a phrase, and that if you'd invested in the current system it would always be there for you. Even when it's a matter of their own survival, most people can't take the trouble to question the assumptions of the world view they grew up with to see if they hold water.

But here I am blaming the victim. On the other hand, you seem to be shooting the messenger. Your friend has been robbed by the capital class, and they did it right in front of her by telling her to close her eyes and hold out her wallet and they'd show her a great trick. My advice to her is to radically downsize her expectations for retirement, cash in what she's got left and buy something tangible that the paper economy can't take away from her, because if she keeps that money in there she will lose a lot more of it. This isn't over by a long shot.

Mon, 2008-10-06 19:22

#74

Fidel

[url=http://www.ctv.ca/servlet/ArticleNews/story/CTVNews/20081006/economists_... economists predict: 'worse than a recession'[/url]

quote:

TORONTO -- Economists from Canada's Big Five banks expect little or no growth in the near future, warning Monday that the domestic economy's current gloom will deepen into something worse than a recession.
The word "recession" wouldn't describe the deep structural problems affecting everything from the U.S. housing sector to the Canadian oil industry, said Bank of Nova Scotia chief economist Warren Jestin.
"You have to invent a new word to describe what we're in now," he said after the banks presented their perspectives at the Economic Club.
"It's being driven through the financial markets into the real economy. All of those things suggest that it's entirely different than what you might expect from a typical recession."

We knew there was a reason Steve Harper broke his own election rules and called an early vote.

Mon, 2008-10-06 20:06

#75

DrConway

And the NDP will have to clean up Harper's mess and get no fucking thanks for it at all, because those assholes running the banks and the oil companies will keep financing the Conservatives in the hopes of being able to rob people like that lady who got told the stock market would do it all for her.

After the first wobbles of late 2000 and early 2001 when the NASDAQ went sideways and the Dow began to fall, that should have been the first clue to [i]anyone[/i] with a working brain that the paper economy can[i]not[/i] be relied upon for true prosperity.

First thing the NDP ought to do the day we take Parliament is pass a law nationalizing all the banks without compensation to anyone. The stock markets are already down the crapper so what's another few hundred points off the TSX between CEOs and their golden parachutes?

I wouldn't be surprised if quite a few CEOs are already shipping whatever they have that ain't nailed down into their private estates somewhere in Bermuda or San Marino or Monaco so they can skip town and stick the rest of us with the bill.

Mon, 2008-10-06 20:23

#76

Doug

Maybe this explains a thing or two if this is where London stockbrokers go for moral guidance.

[url=http://www.thisislondon.co.uk/standard/article-23564269-details/Chaplain... Market chaplain - Gay men should be forced to have warning tattoos[/url]

Tue, 2008-10-07 02:43

#77

Doug

[url=http://www.nbc.com/Saturday_Night_Live/video/clips/reliable-investments/... investments![/url]

This article certainly makes you want to do what the investment guy does in the video:

quote:

After yet another Monday horror show – the fourth in a row in which the Dow Jones industrial average dropped at least 300 points – every one of the world's major equity markets has shed at least one-quarter of its value so far in 2008.
In Europe, stocks are down by a third. Holland's main index has plunged nearly 40 per cent. Ditto for Hong Kong's. You don't even want to know about mainland China and India.
On the bright side, when it's this bad, how much worse could it get?
Much, much worse, says one of the few investors who has prospered in the meltdown.
“Stock markets are not down 50 per cent in Canada or the United States from their highs. They've got a long ways to go down before that happens,” says Prem Watsa, chairman of Fairfax Financial Holdings.
Uh-oh.
“We think there's a significant recession coming, long and deep. It's going to spread all across [the world] … It's very difficult to not be caught by it.”

[url=http://www.reportonbusiness.com/servlet/story/RTGAM.20081006.wdecloet100... before it gets better[/url]

Also, one bank executive got what's coming to him, amazingly enough.

[url=http://www.businessandmedia.org/articles/2008/20081006150152.aspx]Lehman Bros CEO decked at the gym[/url]

[ 07 October 2008: Message edited by: Doug ]

Tue, 2008-10-07 04:30

#78

George Victor

quote:

Ok, explain to me how lying back and thinking the stock market will do all the heavy lifting for you is a good idea.
Rich people have sold a very good con game here, and while they make off with the $700 billion the US government handed them, people like that lady you talked to will blame anybody but themselves for being conned by Raygun and his successors into thinking a measly few bucks on a tax cut was doing anybody a favor but people like Bill Gates.

You'll find in Richard Parker's biography of John Kenneth Galbraith the gee whiz moment when U.S. conservatives came to the understanding that sucking the average American into the investment cycle also made them believers in the capitalist system. And Dubya almost made social security dependent on the investment acumen of the individual, just four years ago. Close call.

But I suppose you are simply saying, here, that the RRSP should always be put into GICs? In hindsight, clearly so...although ethical investments should make more sense in your super-rational world.

If only a majority of people read newspapers like the Globe (certainly not the Post or Sun).

If only. If only.

If only most New Democrats could get over that tendency to yearning, read the business pages, come to understand something of the workings of the market and the appeal of the Harpers of this world among the greedy and the great unread, we would in fact be able to bring about Tommy's "New Jerusalem" through the democratic process. Tomorrow, if not sooner.

If only cancer patients understood not only the machinations of the marketers but also how to hermetically seal themselves from the environmental conditions that caused their illness.

Tue, 2008-10-07 04:52

#79

Agent 204

quote:

Originally posted by West Coast Greeny:
[b]Civil war won't work. Not in an age of nuclear weapons. We'd extinguish ourselves, very literally.[/b]

Actually, civil war in the US wouldn't necessarily increase the risk of a nuclear war. As long as they're fighting with each other, they don't have the time or resources to attack anyone else (and thus antagonize other nuclear powers). And nuclear weapons wouldn't be much use in a civil war, for obvious reasons.

Where the situation would get dangerous, of course, is if some Rapture nuts were actually win and seize control of the US government. Then the danger of nuclear war would be substantial, again for obvious reasons.

Tue, 2008-10-07 10:41

#80

Fidel

quote:

Originally posted by Agent 204:
[b]
Actually, civil war in the US wouldn't necessarily increase the risk of a nuclear war. As long as they're fighting with each other, they don't have the time or resources to attack anyone else.[/b]

There was little mention of the civil unrest and ethnic conflicts which broke out across the former Soviet Union after Yeltsin and Kravchuk illegally dissolved the USSR. People in the west were led to believe that there were few social supports for millions of people under Soviet communism, and that people there longed for free markets and western style democracy. Hawks did mouth concerns that phony terrorists desired to gain possession of nuclear weapons strewn throughout the former USSR, and that Soviet scientists impoverished by capitalist reforms would sell nuclear secrets to rogue nations and Islamic Gladios created by the CIA, Brits, and Saudis since the 1980's-90's. One high-ranking U.S. official is rumored to have deliberately handed nuclear weapons technology to Pakistan, a country ruled by U.S.-backed military dictatorship in the 1980's and 90's.

Tue, 2008-10-07 11:51

#81

Frustrated Mess Frustrated Mess's picture

The DOW, as of this writing, is down another 400 points and down to 9500. Meanwhile ...

quote:

The Federal Reserve's decision today to buy U.S. commercial paper came after money-market mutual funds fled the market, cutting off a vital source of short-term corporate funding and pushing the economy closer to a recession.
Money-market funds, the biggest buyers of commercial paper, reduced holdings of the highest-rated debt by $200.3 billion, or 29 percent, in the final two weeks of September, according to data compiled by IMoneyNet Inc. of Westborough, Massachusetts. Managers unloaded the debt to meet a surge in investor redemptions and to shift assets to Treasuries, which can be sold more quickly if withdrawals persist.
The funds' retreat helped drive the cost of issuing commercial paper to its highest level in eight months, squeezing companies, banks and public institutions that rely on the market to raise cash for expenses such as payroll. Combined with a pullback in bank lending, the commercial-paper freeze threatens to choke the economy.
``If you can't fund yourself, you can't run a company,'' Robert Kelly, chief executive officer of Bank of New York Mellon Corp., said yesterday in a speech to steel-industry executives in Washington. ``Credit availability is the main issue facing the world right now.''

[url=http://www.bloomberg.com/apps/news?pid=20601087&sid=apN0dqws1jxU&refer=h... meltdown continues[/url]

Tue, 2008-10-07 11:54

#82

Frustrated Mess Frustrated Mess's picture

[url=http://www.bloomberg.com/apps/news?pid=20601087&sid=araFtj3EAFFw&refer=h... this just in [/url]

quote:

Borrowing by U.S. consumers unexpectedly fell in August by the most on record as banks shut off access to loans, a report from the Federal Reserve showed.
Consumer credit fell by $7.9 billion, the most since statistics began in 1943, to $2.58 trillion, the Fed said today in Washington. In July, credit rose by $5.2 billion, previously reported as a $4.6 billion gain. The Fed's report doesn't cover borrowing secured by real estate.
Consumer spending, the biggest part of the economy, is likely to keep faltering as banks hoard cash, job losses mount and property values drop. The decline in borrowing underscores why Fed policy makers today announced they will create a special fund to purchase commercial paper in a bid to open the flow of credit to the nation's businesses.

Tue, 2008-10-07 12:05

#83

Frustrated Mess Frustrated Mess's picture

[url=http://money.cnn.com/2008/10/07/news/economy/retirement_meltdown.ap/inde... it keeps piling on.[/url]

quote:

Americans' retirement plans have lost as much as $2 trillion in the past 15 months, Congress' top budget analyst estimated Tuesday.
The upheaval that has engulfed the financial industry and sent the stock market plummeting is devastating workers' savings, forcing people to hold off on major purchases and consider delaying their retirement, said Peter Orszag, the head of the Congressional Budget Office.

Tue, 2008-10-07 13:04

#84

Frustrated Mess Frustrated Mess's picture

Not at all surprisingly, the management of the bailout package has been handed to a free market ideologue, protege of Paulson's, and Goldman Sachs insider. I kid you not ...

quote:

Yesterday U.S. Treasury Secretary Henry Paulson appointed him as interim assistant secretary of the Treasury for financial stability, to run the new Office of Financial Stability and administer the government's Troubled Asset Relief Program.
The job would be daunting for someone twice Mr. Kashkari's age or with many times more experience. But the 35-year-old - who came to the Treasury from Goldman Sachs and has been there for just over two years - mainly as an adviser to Mr. Paulson

[url=http://www.truthout.org/100708B]There can't be a greater nation of suckers ever in recorded history.[/url]

Tue, 2008-10-07 13:16

#85

Fidel

Nobel Laureate Solution
[url=http://www.cnbc.com/id/15840232?video=874100965]http://www.cnbc.com/id/1...

Stiglitz says this bailout isn't likely to work. It's "trickle down."

[ 07 October 2008: Message edited by: Fidel ]

Tue, 2008-10-07 13:38

#86

Catchfire

[url=http://www.guardian.co.uk/business/2008/oct/07/banking.economy1]Government's Ј50bn bid to save UK banks[/url]

quote:

Gordon Brown will announce plans tomorrow to use up to Ј50bn of taxpayers' money to take major stakes in the high street banks in a last-ditch attempt to restore confidence in the financial system.
Precipitous collapses in the share prices of Royal Bank of Scotland and HBOS forced the government to accelerate plans to partially nationalise the banking sector, which teetered on the brink of collapse today.
After another tumultuous day, Brown summoned the Bank of England governor, Mervyn King, and Financial Services Authority chairman, Lord Turner, to Downing Street for emergency talks earlier this evening about the future of Britain's banking system.
They also discussed concerns that UK customers of the collapsed Icelandic bank Landsbanki risked losing thousands of pounds of savings.
The Treasury is racing to hammer out a rescue package for the high street banks and holding high-level negotiations with the Icelandic authorities about the payouts for 300,000 customers of Icesave, an offshoot of Landsbanki, who have a total of Ј5bn saved with the bank.

Tue, 2008-10-07 14:15

#87

Doug

It's amusing to watch New Labour nationalize what Old Labour never dared.

[img]http://data.moneycentral.msn.com/scripts/chrtsrv.dll?symbol=INDU&E1=0&LP...

What a great roller-coaster! [img]tongue.gif" border="0[/img]

[ 07 October 2008: Message edited by: Doug ]

Tue, 2008-10-07 16:06

#88

peskyfly1

I've been working on a new theory. What if tax cuts (large corporate tax cuts) were actually a big part of the cause of the easy money-money supply-boom-pop that we have witnessed? What if the Conservative economic mantra was the cause of the meltdown?
If you understand what I'm saying...that a rapid increase of capital in private/corporate hands ballooned the credit/money supply creating a economy-wide bubble. That's why we have the business cycle...because of Conservative ideology being effected into public policy.

Tue, 2008-10-07 17:34

#89

Agent 204

So it looks like our own government is [url=http://www.cbc.ca/money/story/2008/10/07/bond-delay.html]holding off on the sale of Canada Savings Bonds[/url]:

quote:

Sales of one of the country's favourite investments, Canada Savings Bonds, will open Friday after Monday's scheduled start was delayed amid worldwide turmoil in credit markets.
The bonds, a Canadian tradition since 1946, are backed by the government and promoted as a foolproof way for small investors to save. They are put on sale each fall.
Late Tuesday, the Department of Finance's website posted the date and the interest rates.
Earlier in the day, Finance Minister Jim Flaherty said he hoped to have them on sale Wednesday.
"We were setting the rate, and there's been some fluctuations in market rates, as you know, recently," he told CBC News on Tuesday afternoon in explanation of the delay.
"So we wanted to make sure that the rate set for Canada Savings Bonds would be a reasonable rate that would make them attractive."

Oh, is that the reason? Well, maybe not:

quote:

Margaret Koniuck, a financial planner in Winnipeg, said the delay may also be tied to the coming federal election.
The government may be trying to avoid any negative criticism of the way it is dealing with a global financial crisis, she said.

One of the comments to the story offers a bit more detail:

quote:

Canada Savings Bonds are part of the federal government's debt. When you buy them, the government is able to retire some older, higher interest debt instrument in favour of the bond. At least, that's the case when the government is in surplus, but since the feds are probably currently in a deficit the new bond issue will help to cover that. But since the government doesn't want to reveal their current account deficit until after the election, they don't want to start bond sales until then (since this affects the interest rate they would pay). At least, that's my theory.

It has a certain ring of truth to it, but I don't know enough about the subject to judge this.

Tue, 2008-10-07 18:26

#90

DrConway

Aside from nitpickiness over terminology ("current account" is usually not used to mean government budget deficits), I'd say the article is prolly right. Though selling lots of CSBs would be a cheap way to cover any budget deficit that does result; I figure the Canadian government could easily borrow up to $10 billion domestically (If 10 million Canadians all bought $1000 worth of CSBs...), and pay it off a year or two down the road when the bonds are redeemed.

Easy cake.

It still looks politically bad when the Harpoids and their predecessors in spirit were the ones constantly banging on and on and on about the deficit to the point of no return. Now they shall reap the inability to borrow without looking bad.

I know one thing I'm going to do ASAP is pay off my credit cards and pray the NDP wins so they'll possibly be moved to cancel all outstanding student loan debt. [img]tongue.gif" border="0[/img]

[ 07 October 2008: Message edited by: DrConway ]

Tue, 2008-10-07 23:24

#91

Doug

Looks like more tanking markets this morning.

quote:

Global markets continued to plunge Wednesday as credit fears intensified, selling snowballed and authorities around the world scrambled to find ways to contain the crisis.
The UK government announced a rescue package for banks under which at least 200 billion pounds ($350 billion) will be made available to financial institutions, plagued by bad debts and a crisis of confidence.
But it is unclear what can soothe investors. Sellers drove the Nikkei down 9.4 percent, its biggest one-day percentage fall since the crash of October 1987.
Markets in Tokyo and Hong Kong plummeted 5 percent to 7 percent, and Jakarta tumbled 9 percent, after another gloomy session on Wall Street that saw the Dow Jones industrial average notch its biggest five-day points fall ever.
European markets opened sharply lower, with Germany's DAX down 2.7 percent, the French CAC 40 falling nearly 4 percent and the FTSE 100 2.3 percent lower.

[url=http://www.cnbc.com/id/27078725]http://www.cnbc.com/id/27078725[/url]

Wed, 2008-10-08 04:49

#92

George Victor

This morning's estimates: U.S. investors have lost $2-trillion in savings (aside from the losses in the value of housing).

Your guess on the impact on retirement savings in the land of "sound fundamentals." [img]smile.gif" border="0[/img]

[ 08 October 2008: Message edited by: George Victor ]

Wed, 2008-10-08 12:42

#93

SwimmingLee

It seems like the faster the stock markets fall, the faster the discussion grows. Almost like a mathematical relationship (America needs a President who can spell mathematical !)

I have a feeling that we'll be up to "Troubles in Bank Land 10" this year, at the rate things are going. It seems like Babble caps threads at about 100 posts.

Wed, 2008-10-08 14:25

#94

Agent 204

It looks like [url=http://www.time.com/time/world/article/0,8599,1848379,00.html]Iceland[/url] is in deep doo-doo:

quote:

As banks across the world teeter amid the market meltdown, Americans and Europeans watch their governments intervene to stave off catastrophe. But for the 301,000 citizens of Iceland, the slide is more like a free-fall, as the tiny country finds itself engulfed by massive debts that have spun out of control in a matter of weeks. Iceland's currency, the krona, has [b]plunged about 30% against the euro in just 10 days[/b] — and has lost more than half of its value over the past year. The declining krona has caused sharp spikes in the price of essential food and fuel imports to the remote nation, with the country's dwindling foreign exchange reserves and the collapse of some of its key banks raising questions about Iceland's ability to service its foreign debt.

In the land of thin aluminum headgear, there's a long [url=https://www.kitcomm.com/showthread.php?t=24585]thread[/url] posted by an Icelander on the subject. It's interesting, actually, that although the Kitco folks are mostly libertarian in their outlook, some of them are expressing opinions that are closer to what lefties like us would say:

quote:

DO NOT UNDER ANY CIRCUMSTANCES PRIVATIZE YOUR GEOTHERMAL ENERGY INFRASTRUCTURE. Nationalize it.... NOW....You at least have this... Do not give it away to the New World Order privatizer freaks---- or else they will charge you outrageous amounts to heat your own homes with power plants built by your people, running off YOUR magma. You will be poverty stricken.

I can't disagree with that, and interestingly nobody there seems to either.

Wed, 2008-10-08 22:32

#95

Doug

[url=http://www.cnbc.com/id/27093617]US considering part-nationalization of banks[/url]

I wonder if I'm not really asleep reading a dream-version of CNBC. [img]biggrin.gif" border="0[/img]

quote:

Having tried without success to unlock frozen credit markets, the Treasury Department is considering taking ownership stakes in many United States banks to try to restore confidence in the financial system, according to government officials....The Treasury plan, still preliminary, resembles one announced on Wednesday in Britain. Under that plan, the British government would offer banks like the Royal Bank of Scotland, Barclays and HSBC Holdings up to $87 billion to shore up their capital in exchange for preference shares. It also would provide a guarantee of about $430 billion to help banks refinance debt.

Thu, 2008-10-09 12:25

#96

SwimmingLee

I think Ford & GM are about to default on their debt, partly because their stock is behaving like Washington Mutual's was before it got seized/ went BK/Bankrupt.

Ford has $260 billion debt, stock market cap of $5 billion.

Ford has $190 billion debt, stock market cap of $3 billion.

What banks will be affected if/ when Ford & GM go bankrupt ?

Thu, 2008-10-09 13:20

#97

Doug

[url=http://sadguysontradingfloors.tumblr.com/]A collection of the finest in sad trader photos![/url]

Thu, 2008-10-09 17:25

#98

GreenNeck

Well, DJIA dropped another 700 points today, most of it in the last hour.

Guess that bailout is working real good, eh?

Amazingly there are still folks out there who say there is no problem, the 'fundamentals' are good. Go visit Small Dead Animals for a sample.

Nothing to see here, move along...

Thu, 2008-10-09 19:27

#99

DrConway

The Canadian dollar is going funny against the US, and I can't figure out why. The US economy is due to tank, while we're still selling oil like it's going out of style. Is there something the speculators know about that we don't?

Thu, 2008-10-09 19:36

#100

remind

The sale of oil world wide is done in US dollars.

When the price of oil drops, as it has been. so does our dollar compared to the USA's. The sale of oil inonly US dollars over inflates the US dollar compared to ours.

Fri, 2008-10-10 01:52

#101

West Coast Greeny

The bailout will take a couple of weeks to kick in. No government buybacks have been performed yet.

I think... and I'm being brutally serious here, the bottom for the Dow is somewhere in the 7000s. Not worse than 7000. Thats still 60% off this time last year. We aren't plunging into depression, at least I hope not, because I don't have the money to fucking survive one!

Ahem.

[ 10 October 2008: Message edited by: West Coast Greeny ]

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