OT:Financial Crisis and us

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massiveheadpain
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Post by massiveheadpain » Thu Oct 09, 2008 4:23 am

hambone1 wrote:
arctic ranger wrote:I suppose I am benefiting from wall streets greed as well :lol:
It's not just Wall Street. It's our materialistic greed, too. Nobody forced us to live beyond our means.
+1

I would like to think that most people have the common sense to realize that they should not have bought a 300k home when really all they could afford 150K. It was greed and delusion of many people that caused this. We like to ignore our problems until it is too late

forge
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Post by forge » Thu Oct 09, 2008 4:32 am

massiveheadpain wrote:
hambone1 wrote:
arctic ranger wrote:I suppose I am benefiting from wall streets greed as well :lol:
It's not just Wall Street. It's our materialistic greed, too. Nobody forced us to live beyond our means.
+1

I would like to think that most people have the common sense to realize that they should not have bought a 300k home when really all they could afford 150K. It was greed and delusion of many people that caused this. We like to ignore our problems until it is too late
sadly a lot of the time it's because the house prices were so over inflated that a 150k home was too small and crap - I wouldn't say that's greed for the person wanting to house their family, probably more the estate agent

Dominik
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Post by Dominik » Thu Oct 09, 2008 4:39 am

fuck usa in the ass.
fuck it deep.
fuck it. :P
..and delete it from the world card.
bring the swing BACK to THIS germans!

hambone1
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Post by hambone1 » Thu Oct 09, 2008 4:41 am

It will all sort itself out. People are now unable to borrow beyond their means. Mortgages will once again be linked to your income. Credit card limits will be low and also linked to your income.

If you want something, earn the money and buy it. The days of irresponsible borrowing are over. I see that as a good thing.

Simbosan
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Post by Simbosan » Thu Oct 09, 2008 4:43 am

I took out a massive sub prime mortage on Live 7 and I'm having trouble with repayments. Helpppp meeeeeeee.

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forge
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Post by forge » Thu Oct 09, 2008 4:49 am

hambone1 wrote:It will all sort itself out. People are now unable to borrow beyond their means. Mortgages will once again be linked to your income. Credit card limits will be low and also linked to your income.

If you want something, earn the money and buy it. The days of irresponsible borrowing are over. I see that as a good thing.
I agree - kind of like resetting ourselves and remembering how much we actually NEED

there might be some painful times beforehand though

my partner came from a class she's doing telling me all about this old woman teacher she has who is fully freaking out about it, telling everyone in her class it's 5 times worse than the great depression, stock up on food and tents etc - I was laughing mostly at the panic, but the worrying thing about it is there are probably a lot of people around freaking out like that - and this is the biggest irony of the whole thing, this media driven fear frenzy is what will make everyone's worst fears happen because everyone seems to be too shit scared to just get on with their lives and resume trading etc

this fear is a self fulfilling prophecy

Dominik
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Post by Dominik » Thu Oct 09, 2008 4:49 am

usa is fucked.


for a german it is a great feeling you motherboardfucker.
:roll:
bring the swing BACK to THIS germans!

hambone1
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Post by hambone1 » Thu Oct 09, 2008 5:06 am

Dominik wrote:usa is fucked.


for a german it is a great feeling you motherboardfucker.
:roll:
Has your prescription run out again? :wink:

elxicano
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Re: OT:Financial Crisis and us

Post by elxicano » Thu Oct 09, 2008 5:11 am

Pasha wrote:Do you think this World Financial Crisis will set the premises to a lot of merge and acquisition between companies?
Do we have to expect that small companies be sucked into bigger ones?
Can our beloved small companies be doomed?
Let's share our feelings.

- Best
- Pasha

The WORLD financial crisis already has set the stage for merge and acquisitions of publicly traded companies.

Answering your other two questions is a little bit more complex, since a lot depends on what you consider as "small" companies.

If we're still talking about relatively smaller financial institutions being "sucked" into larger ones, then yes we we will continue to see this happen, but probably no more than usual. This has always been common place where the larger companies buy out the smaller competition, when the competition is successful. If they're not successful, then they might as well let the competition just fail as part of this economic meltdown.

If we're talking about mom & pop shops, then I'm not worried about companies buying them up, but instead I'm worried they'll end up closing due to rising energy costs and lower consumer spending. I truly hope many of these shops can remain open through this because I don't want to imagine the many places in NY all bearing the names of McDonalds and Starbucks. The many unique neighborhoods are all about cultural identity and that's what makes NY what it is (IMO).


Now as the discussion has turned...


There's a lot to consider about value of homes, who bought them, who sold them and for how much or why.

It's not really fair to blame individuals for buying property beyond their financial reach. There's a lot more responsibility to lending institutions as they look at every aspect of potential borrowers before lending money. The problem is that companies were set up that were intentionally lending money to "high risk" borrowers, because once the loan was signed it was then sold to the highest bidder. Many people invested in these high risk loans as they were providing the highest returns due to the buying and selling of these loans. Everyone from top and down to the lowest positions in this industry new of the high risk, but the business can be compared to a game of musical chairs, where the last one left standing is the one that gets burned and everyone knew that someone would eventually get burned but they would not pass up easy money.

So again, don't fault the new homeowners, as many didn't understand how much they could end up paying and at the time they received their loans, it was within their financial limits, but either they didn't have stable jobs or were given variable interest rates on loans which sky rocketed mortgage payments as interest rates went up... and keep in mind that even though the feds lower interest rates, it doesn't mean banks lower interest rates to borrowers.

Its a very sick game that is went unregulated for too long because too many people made a ton of money doing it.

The lending practices as stated above began in 2000, climaxed between 2002 - 2006. The last two years have been mostly a blame game, with very little intervention as most in government were avoiding the possibility that it would reach the results we see today. Which is why it is such a major crisis today... this really should have been avoided years ago.

elxicano
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Post by elxicano » Thu Oct 09, 2008 5:15 am

Dominik wrote:usa is fucked.


for a german it is a great feeling you motherboardfucker.
:roll:
...you do realize, we're bringing the rest of the world with us, right? :roll:

It's a global market now days...

elxicano
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Post by elxicano » Thu Oct 09, 2008 5:26 am

forge wrote:
hambone1 wrote:It will all sort itself out. People are now unable to borrow beyond their means. Mortgages will once again be linked to your income. Credit card limits will be low and also linked to your income.

If you want something, earn the money and buy it. The days of irresponsible borrowing are over. I see that as a good thing.
I agree - kind of like resetting ourselves and remembering how much we actually NEED

there might be some painful times beforehand though

my partner came from a class she's doing telling me all about this old woman teacher she has who is fully freaking out about it, telling everyone in her class it's 5 times worse than the great depression, stock up on food and tents etc - I was laughing mostly at the panic, but the worrying thing about it is there are probably a lot of people around freaking out like that - and this is the biggest irony of the whole thing, this media driven fear frenzy is what will make everyone's worst fears happen because everyone seems to be too shit scared to just get on with their lives and resume trading etc

this fear is a self fulfilling prophecy
Hey Forge,

The bottom line is that we haven't reached the bottom line.

I'm not saying anyone should freak out and panic, but it wouldn't hurt to stock up if you don't have options should you lose your job and governments are unable to cover costs through unemployment benefits (depending on country).

The worst part of this is that no one can accurately predict the outcome since there are so many factor as this is a global economy.

Many predictions were based on the US alone facing this problem and many models for faster recovery were based on foreign consumerism (of course speaking from US perspective here). The idea was that this would sustain our economy while it "rights" itself and then it would allow the US to regain its place as the largest importer, which in turn sustains other economies. It was meant to be a win-win situation in the long run because everyone one supported everyone.

Again... I still don't see need to panic, but I'm sure the teacher was exaggerating to show the importance of this situation since younger people (and I still include myself here) historically are not prepared for these situations.

forge
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Post by forge » Thu Oct 09, 2008 5:40 am

elxicano wrote: Hey Forge,

The bottom line is that we haven't reached the bottom line.

I'm not saying anyone should freak out and panic, but it wouldn't hurt to stock up if you don't have options should you lose your job and governments are unable to cover costs through unemployment benefits (depending on country).

The worst part of this is that no one can accurately predict the outcome since there are so many factor as this is a global economy.

Many predictions were based on the US alone facing this problem and many models for faster recovery were based on foreign consumerism (of course speaking from US perspective here). The idea was that this would sustain our economy while it "rights" itself and then it would allow the US to regain its place as the largest importer, which in turn sustains other economies. It was meant to be a win-win situation in the long run because everyone one supported everyone.

Again... I still don't see need to panic, but I'm sure the teacher was exaggerating to show the importance of this situation since younger people (and I still include myself here) historically are not prepared for these situations.
the thing is this woman's generation, just like the generation of my step father, the ones immediately before the boomers, were the kids of the people who lived through the last depression. I know my step father was permanently affected by that as a result - his father totally drilled it into him about being prepared for when it all goes wrong etc etc because he lost his car (when cars were still a big novelty for working class) and so on - so I understand that generation being anxious, because they heard about it first hand, not only the depression but war/rations etc

but things are very different today - i posted a link from I think 'real clear politics' - maybe in this thread - that went over all the differences between now and 1929 and there is far more in place now to deal with it than there was - EDIT : here it is: http://www.realclearpolitics.com/articl ... _1929.html
...But unlike then, the federal government is a huge part of the economy (20 percent versus 3 percent in 1929) and its spending -- for Social Security, defense, roads -- provides greater stabilization. Unlike then, government officials have moved quickly, if clumsily, to contain the crisis.

We need to remind ourselves that economic slumps -- though wrenching and disillusioning for millions -- rarely become national tragedies. Since the late 1940s, the United States has suffered 10 recessions. On average, they've lasted 10 months and involved peak monthly unemployment of 7.6 percent; the worst (those of 1973-75 and 1981-82) both lasted 16 months and had peak unemployment of 9.0 percent and 10.8 percent, respectively. We are almost certainly in a recession now; but joblessness, 6.1 percent in September, would have to rise spectacularly to match post-World War II highs.

The stock market tells a similar story. There have been 10 previous postwar bear markets, defined as declines of at least 20 percent in the Standard & Poor's 500 index. The average decline was 31.5 percent; those of 1973-74 and 2000-02 were nearly 50 percent. By contrast, the S&P's low point so far (Monday, Sept. 29) was 29 percent below the peak reached in October 2007.

The Great Depression that followed the stock market's collapse in October 1929 was a different beast. By the low point in July 1932, stocks had dropped almost 90 percent from their peak. The accompanying devastation -- bankruptcies, foreclosures, bread lines -- lasted a decade. Even in 1940, unemployment was almost 15 percent. Unlike postwar recessions, the Depression submitted neither to self-correcting market mechanisms or government policies.
you just want to hope if it does get that bad that you have Obama in because a Democrat might actually do something to help the poor, not sure how another republican admin would help there considering they seemed to help it happen and steal the silverware on the way out - Dubbaya refers to 'the elite' as his base.....etc

As for where I am, Australia has a large budget surplus and it's a commodity based economy, so we're in a pretty good position, I don't think we're going to get that bad

and really I don't think it will get that bad in the US either - if the damn media stops scaring the shit out of everyone

the world is vastly different than it was in 1929

elxicano
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Post by elxicano » Thu Oct 09, 2008 5:51 am

forge wrote:
elxicano wrote: Hey Forge,

The bottom line is that we haven't reached the bottom line.

I'm not saying anyone should freak out and panic, but it wouldn't hurt to stock up if you don't have options should you lose your job and governments are unable to cover costs through unemployment benefits (depending on country).

The worst part of this is that no one can accurately predict the outcome since there are so many factor as this is a global economy.

Many predictions were based on the US alone facing this problem and many models for faster recovery were based on foreign consumerism (of course speaking from US perspective here). The idea was that this would sustain our economy while it "rights" itself and then it would allow the US to regain its place as the largest importer, which in turn sustains other economies. It was meant to be a win-win situation in the long run because everyone one supported everyone.

Again... I still don't see need to panic, but I'm sure the teacher was exaggerating to show the importance of this situation since younger people (and I still include myself here) historically are not prepared for these situations.
the thing is this woman's generation, just like the generation of my step father, the ones immediately before the boomers, were the kids of the people who lived through the last depression. I know my step father was permanently affected by that as a result - his father totally drilled it into him about being prepared for when it all goes wrong etc etc because he lost his car (when cars were still a big novelty for working class) and so on - so I understand that generation being anxious, because they heard about it first hand, not only the depression but war/rations etc

but things are very different today - i posted a link from I think 'real clear politics' - maybe in this thread - that went over all the differences between now and 1929 and there is far more in place now to deal with it than there was - EDIT : here it is: http://www.realclearpolitics.com/articl ... _1929.html
...But unlike then, the federal government is a huge part of the economy (20 percent versus 3 percent in 1929) and its spending -- for Social Security, defense, roads -- provides greater stabilization. Unlike then, government officials have moved quickly, if clumsily, to contain the crisis.

We need to remind ourselves that economic slumps -- though wrenching and disillusioning for millions -- rarely become national tragedies. Since the late 1940s, the United States has suffered 10 recessions. On average, they've lasted 10 months and involved peak monthly unemployment of 7.6 percent; the worst (those of 1973-75 and 1981-82) both lasted 16 months and had peak unemployment of 9.0 percent and 10.8 percent, respectively. We are almost certainly in a recession now; but joblessness, 6.1 percent in September, would have to rise spectacularly to match post-World War II highs.

The stock market tells a similar story......
you just want to hope if it does get that bad that you have Obama in because a Democrat might actually do something to help the poor, not sure how another republican admin would help there considering they seemed to help it happen and steal the silverware on the way out - Dubbaya refers to 'the elite' as his base.....etc

As for where I am, Australia has a large budget surplus and it's a commodity based economy, so we're in a pretty good position, I don't think we're going to get that bad

and really I don't think it will get that bad in the US either - if the damn media stops scaring the shit out of everyone

the world is vastly different than it was in 1929
Forge, I agree with you 100%

...I know you weren't responding to me on the 2nd point, but just to have to say that this has been my main point when I hear people say the both republican/democrat candidates are the same and the truth is that they're not.

What they do for the poor should be a driving force in this election as it is with the republican base, since they don't want to give what they deem as "handouts" although a look at their record and it becomes clearly a hypocritical standpoint, but that's another issue.

McCain has repeatedly said that if elected to office, he would FREEZE spending on all government programs and then eliminate some which he thinks are ineffective. Unless someone has worked with many of these federal programs, or received benefits from these programs I think many don't understand the significance of this statement and how negatively it will affect those who need help the most.

...okay I'm rambling on, but in short, I agree with you.

Bagatell
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Post by Bagatell » Thu Oct 09, 2008 6:30 am

elxicano wrote:I hear people say the both republican/democrat candidates are the same and the truth is that they're not.
Quite so. One is a brainwashed, senile war monger, whilst the other is some sort of sixties rebel patsy. They both dance to the same tune though...money, money, money.

Sibanger
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Post by Sibanger » Thu Oct 09, 2008 10:02 am

Dominik wrote:usa is fucked.


for a german it is a great feeling you motherboardfucker.
:roll:
Didn't you kill yourself a few weeks ago?

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