No US bail out
Discussion
jamesuk28 said:
Not that I felt it would have been the miracle cure it was hyped to be..... but
How serious are the effects of this? total melt down, increased mortgage rates, depression or simply bad recession?
it could be really bad, basically if these banks keep going down it will be the worst recession ever seen since the 30's. Fortis in Belgium (just) got saved by the governments, but the more banks go down the worse it will get. Just hope the banks in general manage to stay afloat - then it will be just a rough ride and recession to deal with rather than complete utter market choas that will effect every man on the street.How serious are the effects of this? total melt down, increased mortgage rates, depression or simply bad recession?
I don't see the point of these bail-outs. Each time there's a bit of a spike as speculators ride the a sentimental knee-jerk and then it's back to the trend. Only six working days ago the FTSE 100 rallied over 400 points after short-selling of banks was banned, yet it now sits nearly 200 points below the price that it was at prior to that rally. The government should stop wasting taxpayers' money trying to divert a tidal wave by pissing against it.
Also, people should realise that what is happening now isn't a slump to abnormality, it's the deflating of a bubble to a point where normality will be reached. Slack monetary policy which began pretty-much as soon as Labour got in has led to a situation where everything has been built upon a financial unreality. What's happening now was going to happen sooner or later. The reason the consequences are so bad is because they've contrived to pump more and more air into the bubble each time it showed signs of potential deflation. They should have let it deflate ages ago, but they carried on without a thought as to where the next lungful of air might come from, because their precious housing market and the fallacy that everyone was rich because they could MEW their brick box and buy a Porsche Cayenne was more important. But it wasn't wealth, it was a facade funded by debt secured against overvalued assets.
Now people like me who have been priced-out of the housing market from day one are paying tax to fund futile attempts to perpetuate this sham and protect those who have always enjoyed a better life than us, along with those who lent them the money that paid for it. If anyone other than the government was doing this it would be illegal.
Also, people should realise that what is happening now isn't a slump to abnormality, it's the deflating of a bubble to a point where normality will be reached. Slack monetary policy which began pretty-much as soon as Labour got in has led to a situation where everything has been built upon a financial unreality. What's happening now was going to happen sooner or later. The reason the consequences are so bad is because they've contrived to pump more and more air into the bubble each time it showed signs of potential deflation. They should have let it deflate ages ago, but they carried on without a thought as to where the next lungful of air might come from, because their precious housing market and the fallacy that everyone was rich because they could MEW their brick box and buy a Porsche Cayenne was more important. But it wasn't wealth, it was a facade funded by debt secured against overvalued assets.
Now people like me who have been priced-out of the housing market from day one are paying tax to fund futile attempts to perpetuate this sham and protect those who have always enjoyed a better life than us, along with those who lent them the money that paid for it. If anyone other than the government was doing this it would be illegal.
Edited by MitchT on Monday 29th September 23:00
MitchT said:
I don't see the point of these bail-outs. Each time there's a bit of a spike as speculators ride the a sentimental knee-jerk and then it's back to the trend. Only six working days ago the FTSE 100 rallied over 400 points after short-selling of banks was banned, yet it now sits nearly 200 points below the price that it was at prior to that rally. The government should stop wasting taxpayers' money trying to divert a tidal wave by pissing against it.
Also, people should realise that what is happening now isn't a slump to abnormality, it's the deflating of a bubble to a point where normality will be reached. Slack monetary policy which began pretty-much as soon as Labour got in has led to a situation where everything has been built upon a financial unreality. What's happening now was going to happen sooner or later. The reason the consequences are so bad is because they've contrived to pump more and more air into the bubble each time it showed signs of potential deflation. They should have let it deflate ages ago, but they carried on without a thought as to where the next lungful of air might come from, because their precious housing market and the fallacy that everyone was rich because they could MEW their brick box and buy a Porsche Cayenne was more important. But it wasn't wealth, it was a facade funded by debt secured against overvalued assets.
Now people like me who have been priced-out of the housing market from day one are paying tax to fund futile attempts to perpetuate this sham and protect those who have always enjoyed a better life than us, along with those who lent them the money that paid for it. If anyone other than the government was doing this it would be illegal.
It amazes me how the general public don't realize how bad this is, and what problems it is going to cause...... Maybe it will hit home a bit more when their company can't raise the funds to pay their salaries.... I am afraid this is not as simple as a bubble deflating, it is much worse and the ramifications could be catastrophic...... Also, people should realise that what is happening now isn't a slump to abnormality, it's the deflating of a bubble to a point where normality will be reached. Slack monetary policy which began pretty-much as soon as Labour got in has led to a situation where everything has been built upon a financial unreality. What's happening now was going to happen sooner or later. The reason the consequences are so bad is because they've contrived to pump more and more air into the bubble each time it showed signs of potential deflation. They should have let it deflate ages ago, but they carried on without a thought as to where the next lungful of air might come from, because their precious housing market and the fallacy that everyone was rich because they could MEW their brick box and buy a Porsche Cayenne was more important. But it wasn't wealth, it was a facade funded by debt secured against overvalued assets.
Now people like me who have been priced-out of the housing market from day one are paying tax to fund futile attempts to perpetuate this sham and protect those who have always enjoyed a better life than us, along with those who lent them the money that paid for it. If anyone other than the government was doing this it would be illegal.
Edited by MitchT on Monday 29th September 23:00
To be fair mate it sounds like you are bitter, and see it as the well paid bankers getting what they deserve... If that is the case i suggest you read a bit more Bloomberg and little less Sun
short selling, on financial stocks was temporarily halted and the US deal was being mooted as well...
The problem is two-fold...
1) As a US Senator pointed out, if a business gets things wrong, they (we) pay... If a bank gets it wrong, we pay... (apparently)
The above is the overriding sentiment felt towards banks. You pay them to hold your money, then you pay some more and then you pay when they get things badly wrong..
2) If the banks go down, they'll drag the lot of it with them... If we bail them out now, then the system should survive..
The above is not a commonly held sentiment...
Maybe we should be asking ourselves if we've got "it" right... For so long we've been extolling the virtues of the Western economic structures - "look at those silly communist/socialists..." However right now we're not looking too hot.. But trust me some people are going to make huge fortunes from this, I'm just trying to work out how they're going to do this!!!
The problem is two-fold...
1) As a US Senator pointed out, if a business gets things wrong, they (we) pay... If a bank gets it wrong, we pay... (apparently)
The above is the overriding sentiment felt towards banks. You pay them to hold your money, then you pay some more and then you pay when they get things badly wrong..
2) If the banks go down, they'll drag the lot of it with them... If we bail them out now, then the system should survive..
The above is not a commonly held sentiment...
Maybe we should be asking ourselves if we've got "it" right... For so long we've been extolling the virtues of the Western economic structures - "look at those silly communist/socialists..." However right now we're not looking too hot.. But trust me some people are going to make huge fortunes from this, I'm just trying to work out how they're going to do this!!!
I think whatever happens over the next 18 months there will be a lot more government regulations for banks there after. I think everyone worldwide is waking up and smelling the salts. There will be less money being lent (due to higher rates in general) and less growth. This may not be a bad thing. However the kind of banding around of money (not even real money, just other banks dept) will be over. Its not a bad thing in my mind, I just hope we can make it thought this current crises - and lets be clear - it can still turn into a huge crises rather than what it is currently. We live in interesting times.
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