BleepingComputer.com: Credit Crunch

Hi folks

Does anyone else feel a little bit p*ssed off that billions of dollors, pounds and euros have been pumped into banks worldwide, by governments that have failed to regulate greed and risk taking behaviour of bankers and hedge fund managers?

A factory can go to the wall, with the loss of hundreds of jobs.... the government does not step in to save it. Whereas banks get billions, for basically taking huge risks with our money?

my moan of the day over...

BAZ

Although I don't pay that much Tax myself I have to say that people have the right to moan about this Money being chucked in the Banks but if they were left to collapse we would be in lot worse state than this think of what turmoil on the Markets was caused when Lehmanns Filed for Bankruptcy our Bank here Barclays was in a Deal with them to take quite a Sizeable Chunk of there Business but the US Government along with the UK Government wouldn't provide Barclays with some Securities over what they were going to take on so they withdrew there offer and at that point Lehmanns Collapsed and filed for a estimated $500 Billion Debt Shortfall pretty Big Debt if you ask me.

These Banks were so Big in terms of Assets and Capital 2 Years ago that quite a lot Dwarfed Countries on this Planet in terms of Income and Actual Wealth of the Banks.

I'm afraid this is the only way out of this predicament the Private Sector can't do anything on a big scale so it is left to the Countries Governments to try and save the Economy. I can say I'm 90% sure these Bail-Out plans are the only way to try and save the World's Economies today we had some Big Growth on the Stock Markets (The Increase on the FTSE 100 was around 5.5% and Wall Street around 4.5%.) as the Credit Freeze starts to thaw and Banks start lending again it has already been seen in Australia where Interbank Rates have lowered these are the Rates at which Banks pay Interest to another Bank for lending the Money.

The Current Rate is around 200 Base Points or 2%, last year I think it was 9 Base Points or 0.09% was the Interest Rate between Banks shows quite a big difference doesn't it but those Base Points are the main reason this Credit Crunch is continuing.

Officially the UK hasn't fallen into recession because we haven't had a Contraction in the Economy since 1992 for a Country to be in Recession they have to have 2 Quarters of Negative Growth (Contraction) although later this week our Figures for the Third Quarter are announced and it is expected to be a Contraction so we would be halfway to a Recession although really we are in a Recession now and probably through some of Next Year as well till the Financial Markets stabilise which should bring the same with the Economy.

And as much as I hate Alistar Darling (Chancellor Of The Exchequer) and Gordon Brown (Prime Minister) for the mess our economy is in but by spending more and more it is the way out of this, they have took a leaf from the American Book from the Great Depression where they created Jobs by funding Projects for the benefit of the Country like Dams in the American case and probably other Projects as well (I don't know all the Projects), In our Case we have 2 New Aircraft Carriers being built, Nuclear Upgrades (Weapon Capability), Olympics Stadium Stuff amongst other things and some thing to do with the Rail system in London all very Big Deals worth Billions of Pounds.

Sorry for the Big Post I do babble on a bit but I hope it gives you some insight on this, I'm just spreading the Knowledge I learn by reading about it deeply and looking at it all.

Moaning is perfectly acceptable - gentle grin - for to do anything else during these financial times would surely be odd.

The banks and financial institutions will be rescued - using taxpayers money - but in reality, where does that actually leave the average tax payer, I wonder.

So much in our lives cost massive tax dollars (infrastructures, schools, etc) - and because they benefit everyone, it's a good thing. But in return, most of us want some sort of 'safe guard' built into our financial systems because without it, so many of us stand to loose not just money but our physical homes and security.

Yeah... its interesting to hear other people's viewpoint. Woodyblade, your long reply just shows a decent understanding of financial markets and how they operate, nowt wrong with that?

Its just strikes me as really harsh on a whole host of hard working people... both taxpayers (who will over time pay the price in higer taxes and cuts in public services) and business who are suffering in times of recession and having to lay staff off.... Governments are not stepping in to help them? The point is bankers and hedge fund managers who have a huge part to play in the banks downfall, just ride the hard times out with huge annual bonuses....

I was suprised to hear that Allister Darling (Chancellor) is reverting to the economics of John Meynard Keynes (i.e. Circular flow of income).... if you pay a person to dig a hole, even if the hole is not needed.... the result is that person spends the money in the economy and hence it creates a circular flow? (I appreciate that is a simplistic view, but its just to illustrate a point).

MaraM... you are right, we are always looking for safeguards. But in a free market, we don't get them... the pound, dollar and euro are king?

BAZ

[quote]Does anyone else feel a little bit p*ssed off that billions of dollors, pounds and euros have been pumped into banks worldwide, by governments that have failed to regulate greed and risk taking behaviour of bankers and hedge fund managers?[/quote]

Nah I am excited. I got about 20 million for being a bank manager that went under. I don't have to work again the rest of my life now. Now what to buy first, a new house, a new boat or that 911 turbo I want? I know how about all 3 AT THE SAME TIME?!!

I think we are all mad really. You can't give loans to people with very bad credit just because you want them to be able to have the American dream. They got in the mess because they were not financially stable at least in a lot of them and so lending to them is dangerous. They gambled with our money and now we have to pay even more of our money to fix the mess while head CEO's get millions to leave. They should sell a lot of these peoples stuff to help pay for this junk or make them work for free under new management.

The CEO,s of the banking and financial world should have there assets stripped like they do to defaulting payers.Send the bailiffs round to there houses and confiscate there belongings.They often go asset stripping other people.

Serj Tankian of System of a Down had an agreeable idea. "In the ballots you should be able to pick what you want your tax dollars to be spent on. Whether it's school, health care, weapons, what ever."

The banks had a good idea.. loaning to at risk clients, selling the mortgages on the stock market, and watching the stock market loose the money while they profit largely. It's sad that they get money for their "losses"

Just watched the last half of a report on NOW (a PBS news show) on predatory lending practices, and how predatory lenders target people who need small loans or have much of their homes paid off and engage in a large number of shady practices. Some U.S. politicos are highly resistant to regulating, let alone putting these legal loan sharks out of business, as they contribute much $$$ to their campaigns. They do not just charge usurious rates, they change due dates, use confusing language, etc., etc. There are cases of intelligent, well-educated minority home owners who were steered away from the legitimate small loans they were qualified for (prime loans) to subprimes. The banks are complicit in this, as they often own a part of the predatory lenders, as well, such as the payday advance loan companies. There are so many companies and individuals involved in each subprime loan, as well: dishonest appraisers, dishonest real estate brokers and mortgage insurance companies, plus local governments that enjoyed receiving taxes on inflated home evaluations. Oh what a tangled web so many people wove. . .

The banks (commercial and investment) and the insurance company AIG are refusing to say how they spent their bailout money. I don't know if Secretary Treasurer Hank Paulson knew the details of the scam, but his deputy certainly did. I think some folks in the gop were hoping to bankrupt the u.s. treasury so severely that the democrats could never put necessary social policies and programs into place. It's called defunding. This bailout went beyond the outsourcing scams in Iraq, where KBR did criminally negligent work on military bases and cannot account for its money. I think that there was a concern that with increased regulation and responsibility in the financial sector, some people were looking toward a much reduced income for themselves and their corporations. Some republicans were hoping to ensure their financial and political futures by being complicit. There has been an orgy of mergers, including institutions in different sectors of finance, which many years ago would never have been allowed to affiliate. The oversight committee has not been able to get answers, despite pressing the financiers who received the funds. The financiers claimed the monies just went into general accounts. When so many individuals and families have multiple accounts nowadays, it just isn't credible that major financial institutions wouldn't have separate accounts for the bailout money, which was supposed to be dedicated to certain purposes. And then there's that loophole that allowed the monies to be given in a way that circumvented the desired oversight and didn't require the funds to increase liquidity in the credit markets for small individual and corporate borrowers.

Thain was just fired by the financial giant that purchased his firm after he engineered the merger/takeover. It turns out he gave about $3 billion in bonuses to underlings while his company was failing, plus spent truckloads of money on redecorating his office with rare antiques and one-of-a-kind items. I think his office should be donated to the Smithsonian as a monument to greed.

It looks like Larry Sommers and some other of Obama's appointees are not following his policy directives in drafting the bailout/stimulus package. I think some of the more progressive folks are feeding details to the press the way they did about Rick Warren's stated beliefs and policies about religion, morals and society. The idea is that the public backlash will be so huge, that Obama's original proposals will have to go back into the package, such as the emphasis on improved infrastructure and promoting green initiatives by massive investment in public transportation. Turns out there are a lot of shovel-ready and public transit purchase options quite readily available, just in Chicago and Illinois alone.

The gop is acting in quite a bizarre way. Many of the moderate gop will not be running for re-election. The guys who voted for the first half of the bailout don't want to spend money to help the middle class and mid and small sized corporations and companies get by. They aren't even wolves in sheep's clothing any more, they are wolves who appear sheepish when someone pins them down on their inconsistencies.

And no, I don't think Obama is the messiah. I am afraid a lot of people are hoping for him to achieve the impossible, when he is simply an extraordinarily gifted man who has had to rely on whatever help he could get. there just aren't that many experienced people out there, and he needed experienced people, pronto.

The Bailouts on the Banking Institutions will not work and should not have been done. The same for the Auto Industry. Gm will go bankrupt either way, they waste too much money. This money would have been better spent on healthcare. Remember , when the government gives someone money, they are taking it away from someone else.

If your a Tax Payer,then a good chance the someone they are taking money from,is you.
We don't have Bailouts,here in OZ,thankfully.
When your Bankrupt,your Bankrupt.
Why throw good money after Bad?
Chances are they still will go bust,only delaying the inevitable.
Unless the money Cow (Government) keeps proping them up.

[quote name='DSTM' post='1105696' date='Jan 24 2009, 10:49 PM']If your a Tax Payer,then a good chance the someone they are taking money from,is you.
We don't have Bailouts,here in OZ,thankfully.
When your Bankrupt,your Bankrupt.
Why throw good money after Bad?
Chances are they still will go bust,only delaying the inevitable.
Unless the money Cow (Government) keeps proping them up. [/quote]



Totally agree with you there, Mate!

Alan Bond and Christopher Skase got there Fingers in the Banks Pie back it the 80s here, Changed not only Banking, but Business in General then. Then there were also Billions involed in it too.

The rest of the World ignored it, but not Aussies.

$2.00 Shelve Companies became a thing of the Past, ALL Directors became Liable for the Company's Debt!

Nice to know we were 20 or more years in front of it? ( it is almost 30? )

Link to Alan Bond?

[url="http://www.australianbeers.com/history/bond.htm"]http://www.australianbeers.com/history/bond.htm[/url]

Link to Christopher Skase.

[url="http://www.abc.net.au/dimensions/dimensions_in_time/Transcripts/s546562.htm"]http://www.abc.net.au/dimensions/dimension...pts/s546562.htm[/url]

I guess we got our fingers burnt enough then?

Just to clarify what I just said?

I am involved as an Exectutor of my Mother's Will? That happened in 1989?

Just recently we had other Funds come into the Estate from our Grand Mother's Will from 40 years ago?

What a Mess!

Instead of following procedure here, others in my Family attempted to exclude me from the proceedings?

Now there are Major Problems that I am trying to resolve nicely!

It is like tip toeing through the Minefield?

What makes it worse was the Bank involved ignored that it is Trust Account Funds? Thankfully a more Senior Person has taken over!

[quote]The banks (commercial and investment) and the insurance company AIG are refusing to say how they spent their bailout money.[/quote]

The problem in Cleveland is we have a rather large bank, that was struggling but not bad enough to call it quits. They couldn't get any bail-out money but a bank in Pittsburgh use their share of the money to buy our bank out. A lot of jobs will be lost