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Destroyer of Ignorance
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2,988 Posts
Discussion Starter · #1 ·
Anybody check the Dow average for today? Down over 700 pts. Add that to yesterdays loss and there ain't much of that 900+ pt rally on Monday left. :eek:
 

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Watchin tha world go by
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8,151 Posts
it seems that the bailout isnt doing its job, the economic boat is still floundering in spite of the massive amount of cash infused into it. the problem s not credit, its that credit was used to build a false market value through debt.

Dow 8,577.91 -733.08 -7.87%
Nasdaq 1,628.33 -150.68 -8.47%
S&P 500 907.84 -90.17 -9.03%
FTSE 100 4,079.59 -314.62 -7.16%
DAX 4,861.63 -337.56 -6.49%
CAC 40 3,381.07 -247.45 -6.82%
Nikkei 225 9,547.47 +99.90 +1.06%
Hang Seng 15,998.30 -834.58 -4.96%
Straits Times 2,059.39 -68.92 -3.24%

the unsecured debt problem is sucking all the money they dump into it as the banks they give it to are using it to cover their losses,and balance their books not to increase liquidy/loans.

it seems the derivitives market (unsecured debt) may be 12 times world economy
http://seekingalpha.com/article/99674-coming-soon-the-600-trillion-derivatives-emergency-meeting
they are treating a symptom, and not the disease. the disease is unsecured leveraged debt. the total amount thrown at the problem, by the US,europe, and asia is equal to less than 1% of the leveraged debt worldwide. (estimated at 1,500T in derivitaves alone). and the fact that the american consumer (2/3 of GDP) is maxed out -- and avaliable credit does no good to those who cant afford to service the debt they have.
for both consumer and govt., the end of the rope has been reached. a recession and possibly depression is the logical end to 3 decades of unrestrained growth predicated by too lax a credit market.
it is time unfortunately to pay the piper and let it unwind.

the only way to erase this toxic debt system is with printed money -- and lots of it, or to let it fall of its own weight and then the markets will find their true value.

letting the debt default and allowing the market and economy to settle to its true value will be a painful remedy -- but the present course they have chosen ends at the same result -- only with high inflation added to exasperate any recovery. a world wide recession is here, i am afraid however that their inflationary medeling will turn it into a depression.


US indicators point to recession
http://biz.yahoo.com/ap/081015/wall_street.html
Retail sales fall 1.2%
http://biz.yahoo.com/ap/081015/economy.html
Germany on brink of recession
http://news.bbc.co.uk/2/hi/business/7669307.stm
Investors increasingly fear a global recession
http://news.bbc.co.uk/2/hi/business/7662572.stm
 

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Hiding in plain sight
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377 Posts
Anybody check the Dow average for today? Down over 700 pts. Add that to yesterdays loss and there ain't much of that 900+ pt rally on Monday left. :eek:
As much as i hate the financial pain normal people fell when the economy tanks, i must say that today was a fantastic day for me.

Also my targets for the Dow are 3000 on the possibly more realistic end, and 5500 and the more conservative side. For the S&P i have 350 on the possibly more realistic side, and 600 as more conservative.
 

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Destroyer of Ignorance
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2,988 Posts
Discussion Starter · #7 ·
I'd guess that there is not another person on this site who has lost more due to this economy than me. Yet, I'm glad to see it happen because it opens the possibility of getting my country back.
 

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212 Posts
Anybody check the Dow average for today? Down over 700 pts. Add that to yesterdays loss and there ain't much of that 900+ pt rally on Monday left. :eek:
I would not laugh... that was a $250 billion play on the roulette table which did nothing to stem the tide. That $250 billion happen to be part of the $700 billion bailout which you and I will have to pay over the next 30-years. :mad:

The 'bailout package ' is now effectively over $1.2 trillion dollars which is encumbered by each and every American from this day forward. :eek: For our sake we better pray the system tanks otherwise we will be brutally indebted for the remainder of our lives if these setup is saved. :taped:
 

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Watchin tha world go by
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8,151 Posts
50B-detroit, 85B+38B- AIG, 200B Mac & Mae (wild guess), 460B-bailout phase I,
120B -emergency war funding bill last year, 150B-pelosi's promised stimulus, 350B
bailout phase II, 18B disaster relief packages, 11.2B global poverty initiative,
405B debt service, ------- only budget item passed- defense/HS 608B

and the feds liquidity injections are not on book cause they are not a govt agency

all passed/promised by congress and not paid for this year
(not included are presidential candidates promised spending)
or SS, medicade, medicare, transportation, education, pork, welfare, unemployment benifits, agriculture, national parks ------ ya git tha picture

that is 1.99T commited from next years budget of 3.1T (3.6T w deficit) that they couldnt live within last year and more bailout money surely needed.

now with lower revenues from a slowing (tanking) economy ---how many of ya think ya will see tax cuts?

how many of ya think ya will see tax increases?

would make an intresting poll.
 
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Pursuing freedom.
Joined
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296 Posts
it seems that the bailout isnt doing its job, the economic boat is still floundering in spite of the massive amount of cash infused into it. the problem s not credit, its that credit was used to build a false market value through debt.

Dow 8,577.91 -733.08 -7.87%
Nasdaq 1,628.33 -150.68 -8.47%
S&P 500 907.84 -90.17 -9.03%
FTSE 100 4,079.59 -314.62 -7.16%
DAX 4,861.63 -337.56 -6.49%
CAC 40 3,381.07 -247.45 -6.82%
Nikkei 225 9,547.47 +99.90 +1.06%
Hang Seng 15,998.30 -834.58 -4.96%
Straits Times 2,059.39 -68.92 -3.24%

the unsecured debt problem is sucking all the money they dump into it as the banks they give it to are using it to cover their losses,and balance their books not to increase liquidy/loans.

it seems the derivitives market (unsecured debt) may be 12 times world economy
http://seekingalpha.com/article/99674-coming-soon-the-600-trillion-derivatives-emergency-meeting
they are treating a symptom, and not the disease. the disease is unsecured leveraged debt. the total amount thrown at the problem, by the US,europe, and asia is equal to less than 1% of the leveraged debt worldwide. (estimated at 1,500T in derivitaves alone). and the fact that the american consumer (2/3 of GDP) is maxed out -- and avaliable credit does no good to those who cant afford to service the debt they have.
for both consumer and govt., the end of the rope has been reached. a recession and possibly depression is the logical end to 3 decades of unrestrained growth predicated by too lax a credit market.
it is time unfortunately to pay the piper and let it unwind.

the only way to erase this toxic debt system is with printed money -- and lots of it, or to let it fall of its own weight and then the markets will find their true value.

letting the debt default and allowing the market and economy to settle to its true value will be a painful remedy -- but the present course they have chosen ends at the same result -- only with high inflation added to exasperate any recovery. a world wide recession is here, i am afraid however that their inflationary medeling will turn it into a depression.


US indicators point to recession
http://biz.yahoo.com/ap/081015/wall_street.html
Retail sales fall 1.2%
http://biz.yahoo.com/ap/081015/economy.html
Germany on brink of recession
http://news.bbc.co.uk/2/hi/business/7669307.stm
Investors increasingly fear a global recession
http://news.bbc.co.uk/2/hi/business/7662572.stm
And they gave some journalist the Nobel Prize for Economics last week. They should have looked up ole Goose.
 

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Destroyer of Ignorance
Joined
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2,988 Posts
Discussion Starter · #11 ·
I would not laugh... that was a $250 billion play on the roulette table which did nothing to stem the tide. That $250 billion happen to be part of the $700 billion bailout which you and I will have to pay over the next 30-years. :mad:

The 'bailout package ' is now effectively over $1.2 trillion dollars which is encumbered by each and every American from this day forward. :eek: For our sake we better pray the system tanks otherwise we will be brutally indebted for the remainder of our lives if these setup is saved. :taped:
Laughing is what keeps me off some roof top with a rifle and a crate full of ammo. When I laugh, people live.
 

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not a nut
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1,629 Posts
Yet, I'm glad to see it happen because it opens the possibility of getting my country back.
I think we will see this very soon, hang in there.
Laughing is what keeps me off some roof top with a rifle and a crate full of ammo. When I laugh, people live.
We will try and keep you laughing, don't forget to stop by the jokes and humor threads while your here

I found a smiley for ya to use.
 

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Registered
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772 Posts
3-4 Months ago before all this mess hit, I moved my stocks into short term bonds and have done quite well at a +1.5% return given that most stocks are down somewhere between 30-40%

I am just waiting for the real bottom to hit before I buy back in. I knew the 900 rally was just a head fake (in football terms). Study history and you can generally guage it close enough for nuclear war. :)

By the way, most analyst are now saying, and I tend to agree, that next year retail sales will be worse than this year...along with car sales. Credit card bubble will pop soon as well given that everyone is maxing them out to stay afloat right now...just a matter of time before they can't go any higher in debt and then....pop. Economy in for a rough ride so hang tight and for God's sake don't quit your job because before too much longer, some of us may not have one.
 

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Aquaholic
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4,905 Posts
Lots of people on here seem to be gleefully dancing because the economy is on the verge of tanking. If you think you and the people you love will escape unscathed because you have some rice and beans in the basement, you're sadly mistaken. Of you want a glimspe of what is to come should the "chickens come home to roost", go to Rwanda for a month.

When the infrastructure drops....it drops entirely. Roads, medical care, garbage disposal, water treatment, subsidized living, etc, etc. Nothing good will come from a collapsed economy, absolutely nothing. The posibility of 3rd world horrors such as rampant disease, invasion, starvation, are VERY real. the "I told you so" stance will be very hollow if a close family member dies from a simple medical condition like diabetes or burst appendix.
 

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Premium Member
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12,370 Posts
i dont know why people think the bailout was going to yeild instant results...they are still trying to figure out how to implement the thing...this problem is not some little bump in the road, the financial/credit sector of this nation has callapsed due to mismanagement it aint getting fixed in a year folks and yes it is going to effect everyone eventualy rich,poor,middleclass the world..........
 

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Registered
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212 Posts
Laughing is what keeps me off some roof top with a rifle and a crate full of ammo. When I laugh, people live.
I hear you. I laugh everyday at the 'experts' who are screaming market bottom, contagion, bear market rally, new stock floor, commodity bottom, credit thaw, capitulation, steepening yield curve, contracting TED spreads and every other stupid 'sign' its time to dump your savings back into stocks. They are showcased on CNBC as mavaricks... but strangely they are not invited back the following day to talk about their torched portfolio :whip:

I just simile and wait for someone with a clue.
 

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Watchin tha world go by
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8,151 Posts
why bailout wont work

long read but he has nailed it.

http://www.chris-floyd.com/componen...-the-real-monster-in-the-meltdown-closet.html

The myth has quickly taken hold that the global financial crash was caused by bad mortgages. This has allowed rightwing hatemongers to blame the meltdown on the "liberal" programs that encouraged home ownership among a small percentage of lower-income people (a poisonous canard that parts of the mainstream media have actually done a fairly good job of knocking down), while "progressives" of various stripes have denounced banks and other financial institutions for pushing over-easy credit on people who couldn't really afford it.

Unsustainable mortgages are a key factor in the global crash, of course. And many people (most of them white, by the way) did take out mortgages they would not be able to afford if the housing bubble ever burst, which it has, most spectacularly. And yes, it is undeniable that the financial services industry has been tempting people with easy credit like schoolyard pushers flashing reefers.

All of this was bound to end badly, and did. But this alone would not have been enough to threaten the destruction of the entire global financial system, nor cause the blind, screaming panic that has strangulated the financial markets, seized up the vital flow of money between banks, and caused the "free" market-worshipping governments of the Western world to carry out nationalizations and interventions that, in sheer numbers, dwarf anything ever seen following a Communist revolution. (As John Lancaster notes in the London Review of Books, the Bush Administration's takeover of Fannie Mae and Fannie Mac alone was "was, by cash value, the biggest nationalisation in the history of the world." And that was just the beginning.)

What has struck mortal fear in the heart of markets and governments is not bad mortgages, but the almost incomprehensibly huge and complex market for "derivatives," based in part on mortgage debt -- but also on a vast array of other sources that were "securitized," turned into tradable if ghostly commodities then sold off in a bewildering variety of increasingly arcane forms. This was accompanied by the expansion of yet another vast market in insurance mechanisms designed to protect these derivatives -- mechanisms which themselves became "securitized."

At the same time, the financial services industry used its paid bagmen in governments around the world to loosen almost all restrictions not only on securitization and the trading of derivatives, but also on the amount of debt that institutions could take on in order to play around in these vastly expanded and deregulated markets. For example, as Lancaster points out, UK's Barclays Bank had a debt-to-equity ratio of 63 to 1:


Imagine that for a moment translated to your own finances, so that you could stretch what you actually, unequivocally own to borrow more than sixty times the amount. (I’d have an island. What about you?)


The result of all this has been the construction of a gargantuan house of cards, based on next to nothing, and left alone in the shadow of building "perfect storm" of greed, deregulation and political corruption.

That storm has now struck. The house of cards has fallen down, and revealed a hole of derivatives-based debt that could not be filled, literally, by all the money in the world, much less by the mere trillions that national governments are frantically throwing at it today.

Yes, "mere" trillions. As Will Hutton explains in the Observer:


...the dark heart of the global financial system [is] the $55 trillion market in credit derivatives and, in particular, credit default swaps, the mechanisms routinely used to insure banks against losses on risky investments. This is a market more than twice the size of the combined GDP of the US, Japan and the EU. Until it is cleaned up and the toxic threat it poses is removed, the pandemic will continue. Even nationalised banks, and the countries standing behind them, could be overwhelmed by the scale of the losses now emerging.


Try to imagine that: a $55 trillion market now at risk of complete destruction. Even the derivative debt owed by individual institutions stands at nation-wrecking levels. For example, a single bank in Britain, Barclays again, holds more than $2.4 trillion in credit default swaps, the tradable "insurance" mechanism against securities default. This is more than the entire GDP of Great Britain. If all this paper goes bad, there are not enough assets in the entire country to pay it off. And that's just one bank, in one country.

Hutton gives the details:

This market in credit derivatives has grown explosively over the last decade largely in response to the $10 trillion market in securitised assets - the packaging up of income from a huge variety of sources (office rents, port charges, mortgage payments, sport stadiums) and its subsequent sale as a 'security' to be traded between banks.

Plainly, these securities are risky, so the markets invented a system of insurance. A buyer of a securitised bond can purchase what is in effect an insurance contract that will protect him or her against default - a credit default swap (CDS). But unlike the comprehensive insurance contract on your car which you have with one insurance company, these credit default contracts can be freely bought and sold. Complex mathematical models are continually assessing the risk and comparing it to market prices. If the risk falls, the CDSs are cheap; if the risk rises - because, say, a credit rating agency declares the issuing company is less solid - the price rises. Hedge funds speculate in them wildly.

Their purpose was a market solution to make securitisation less risky; in fact, they make it more risky, as we are now witnessing. The collapse of Lehman Brothers - the refusal to bail it out has had cataclysmic consequences - means that it can no longer honour $110bn of bonds, nor $440bn of CDSs it had written. On Friday, the dud contracts were auctioned, with buyers paying a paltry eight cents for every dollar. Put another way, there is now a $414bn hole which somebody holding these contracts has to honour. And if your head is spinning now, add the three bust Icelandic banks. They can no longer honour more than $50bn of bonds, nor a mind-boggling $200bn of CDSs....

While every bank tries to pass the toxic parcel on to somebody else, the system has to find the money. So will compensation for the near valueless contracts and thus now uninsured debt ultimately be made - and by whom? And because nobody knows - not the regulators, banks or governments - who owns the swaps and whether they are credit-worthy, nobody can answer the question. Maybe holders of insurance policies will get the cash due to them, but will that weaken somebody else? The result - panic.

This is the ultra-dangerous downward vortex in which the system is locked. It is why share prices are plummeting. As recession deepens, there will be defaults on securitised bonds and the potential collapse of more banks outside the G7 ring-fence. Nobody knows what proportion of the $55 trillion of credit default contracts that have actually been written will be honoured and who might bear losses running into trillions of dollars.

This is the beast in the dark that is haunting the feckless leaders of the developed world: $55 trillion of unaccountable debt, and no way of knowing how much of it is even now being flushed down the toilet, taking the global economy with it.

The massive interventions we are seeing might stabilize the markets temporarily, or at least arrest their free fall long enough to come up with some kind of massive restructuring of the global financial system. Or they might not. For it is by no means certain that the wisdom, and the political courage, to come up with a more viable system can be found among the world's political leaders -- all of whom, as we noted here the other day, have risen within the present system and, to one degree or another, owe their own power and privilege to the "malefactors of great wealth" and the extremist cult of market fundamentalism. There is no indication anywhere that the circle of collusion and corruption between governments and Big Money has even lessened, much less been broken, by the economic catastrophe. All of the various bailout plans and "coordinated actions" still have as their chief aim the preservation of the malefactors in their current state of wealth, privilege and domination. As Jonathan Schwarz notes:



Still, U.S. elites will try to impose as much of a structural adjustment as they can get away with, in order to make the bottom 80% of America pay the price for the elites' spectacular screw-ups. The Washington Post has already started writing about how the current crisis demonstrates that we must cut Social Security. Look for much more of this to come.

The only slim hope we have for any genuine reform -- even an imperfect, conflicted, compromised reform, which is the only kind we will ever have in this world, until the lion lies down with the lamb -- is that the sheer scale of the real problem -- the $55 trillion beast, the very real potential for the complete destruction of the global economy, and the state power that depends upon it -- might force some politicians to turn apostate, renounce the market cult, and bite the hands that have fed them for so long.

Absent this near-miraculous possibility, we will be left with yet another rickety house of cards, slapped together on the fly -- largely at the malefactors' direction and for their benefit -- while the beast gapes wide his ponderous jaws, and prepares to swallow us whole.
 

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Banned
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Lots of people on here seem to be gleefully dancing because the economy is on the verge of tanking. If you think you and the people you love will escape unscathed because you have some rice and beans in the basement, you're sadly mistaken. Of you want a glimspe of what is to come should the "chickens come home to roost", go to Rwanda for a month.

When the infrastructure drops....it drops entirely. Roads, medical care, garbage disposal, water treatment, subsidized living, etc, etc. Nothing good will come from a collapsed economy, absolutely nothing. The posibility of 3rd world horrors such as rampant disease, invasion, starvation, are VERY real. the "I told you so" stance will be very hollow if a close family member dies from a simple medical condition like diabetes or burst appendix.

Great post
 
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