Bretton Woods II: A New World Financial Order (1 Viewer)

[Nenz]

Not sure what you mean by domestic because the nations are meeting to figure out what needs to be changed regarding the world financial system.

touche

my Prime Minister asserts that rewards for CEO's taking certain financial risks should be abolished/illegalised. I certainly hope this doesn't turn out to be the case, seeing as risk taking is necessary in all business.
I believe there's some disagreement between Sarkozy and George bush on this matter also. I don't want our financial system to become too rigid and centralised, this goes against the whole spirit of capitalism.

Andy, perhaps you can answer this question. Is this recession not purely (or at least mainly) psychological? the only thing we have to fear is fear itself kinda thing? This recession comes from the stupidness of banks, but also later on the indecisiveness of banks to come to certain agreements on how this, at the time mild problem, could be addressed. Now its up to consumers. I know there are certain families and people in crisis due to unemployment or otherwise who are unable to spend, but what about the people, generally personally unaffected by the recession. Shouldn't they be able to spend? And if so, why aren't they?

 

Buy on AliExpress.com

[Bjerknes]

touche

my Prime Minister asserts that rewards for CEO's taking certain financial risks should be abolished/illegalised. I certainly hope this doesn't turn out to be the case, seeing as risk taking is necessary in all business.
I believe there's some disagreement between Sarkozy and George bush on this matter also. I don't want our financial system to become too rigid and centralised, this goes against the whole spirit of capitalism.

Andy, perhaps you can answer this question. Is this recession not purely (or at least mainly) psychological? the only thing we have to fear is fear itself kinda thing? This recession comes from the stupidness of banks, but also later on the indecisiveness of banks to come to certain agreements on how this, at the time mild problem, could be addressed. Now its up to consumers. I know there are certain families and people in crisis due to unemployment or otherwise who are unable to spend, but what about the people, generally personally unaffected by the recession. Shouldn't they be able to spend? And if so, why aren't they?

A recession is defined as two consecutive quarters of negative real Gross Domestic Product Growth. At the moment, the US Government already reported that the last quarter had approximately a negative 1% in growth decline. I wouldn't be surprised if that number was doctored and the real number was somewhere around 2% or higher. Over the past few months, banks and other businesses had to close down, thus driving unemployment up. Jobless claims have been rising pretty steadily through the last few months, and I believe that will continue through 2009.

Psychological recession? I don't think so. People have been losing their retirement funds due to the drop in the stock market, realizing that they are going to have to work for a longer period than expected, all the while they fear for their jobs. The people who can spend, or rather, the people who can borrow, are still doing so, but the middle classes who don't have much money to begin with are cutting back because of the deterioration of the economy. When you have possible unemployment levels reaching eight, nine, or perhaps even ten percent, that alone will send the nation into a recession.

The whole problem is contained in a negative feedback loop where one piece of bad news leads to another. Now the fear is General Motors will go bankrupt, therefore displacing about a million workers out on the street, driving up the jobless claims about three percent alone, unless the government provides them with a rescue package worth billions of dollars, thus driving up the money supply, causing the dollar to fall in value, increasing the probability of hyperinflation, driving commodity prices through the roof, et cetera, ad nauseum.

I'm sure the leaders are discussing what to do with the dollar right now.

 

[Nenz]

A recession is defined as two consecutive quarters of negative real Gross Domestic Product Growth. At the moment, the US Government already reported that the last quarter had approximately a negative 1% in growth decline. I wouldn't be surprised if that number was doctored and the real number was somewhere around 2% or higher. Over the past few months, banks and other businesses had to close down, thus driving unemployment up. Jobless claims have been rising pretty steadily through the last few months, and I believe that will continue through 2009.

Psychological recession? I don't think so. People have been losing their retirement funds due to the drop in the stock market, realizing that they are going to have to work for a longer period than expected, all the while they fear for their jobs. The people who can spend, or rather, the people who can borrow, are still doing so, but the middle classes who don't have much money to begin with are cutting back because of the deterioration of the economy. When you have possible unemployment levels reaching eight, nine, or perhaps even ten percent, that alone will send the nation into a recession.

The whole problem is contained in a negative feedback loop where one piece of bad news leads to another. Now the fear is General Motors will go bankrupt, therefore displacing about a million workers out on the street, driving up the jobless claims about three percent alone, unless the government provides them with a rescue package worth billions of dollars, thus driving up the money supply, causing the dollar to fall in value, increasing the probability of hyperinflation, driving commodity prices through the roof, et cetera, ad nauseum.

I'm sure the leaders are discussing what to do with the dollar right now.

yes but all these close downs, rising unemployment rates etc. are all tangibilities derived from a psychological recession or in the terms you put it a "negative feedback loop". There's no doubt that this financial crisis extends to things far greater than the sentiments of people.

I've gotta say this could have been avoided if it wasn't for the fearful sentiments of the banks. Certain companies that have been victims to the inability to refinance debts, probably wouldn't have fallen victim if banks had thought clearly and didn't let their fears take control. This has been going since this time of last year. My father at the time was a CFO for a large property company "Centro". They had short term debt to small group of banks, Australian and international. One bank (JP morgan, the most affected by the credit crunch) refused to give them the few months extension they needed and this lead to their collapse. This lead to a chain reaction with similar companies sharing the same fate that ended about a month after. Things like these send fear through big business and consumers alike. What's important to note is that this was based solely on the fears of banks, which later affected the confidence of consumers, which is indicative of the psychology element that plays such a major role in the international economy.

I guess this is a simplistic view but why couldn't someone just say, hey why can't we all just try and buy general motors stock? Rally consumer confidence. The only thing we have to fear is fear itself, that applies generally in economics.

 

[Bjerknes]

yes but all these close downs, rising unemployment rates etc. are all tangibilities derived from a psychological recession or in the terms you put it a "negative feedback loop". There's no doubt that this financial crisis extends to things far greater than the sentiments of people.

I've gotta say this could have been avoided if it wasn't for the fearful sentiments of the banks. Certain companies that have been victims to the inability to refinance debts, probably wouldn't have fallen victim if banks had thought clearly and didn't let their fears take control. This has been going since this time of last year. My father at the time was a CFO for a large property company "Centro". They had short term debt to small group of banks, Australian and international. One bank (JP morgan, the most affected by the credit crunch) refused to give them the few months extension they needed and this lead to their collapse. This lead to a chain reaction with similar companies sharing the same fate that ended about a month after. Things like these send fear through big business and consumers alike. What's important to note is that this was based solely on the fears of banks, which later affected the confidence of consumers, which is indicative of the psychology element that plays such a major role in the international economy.

I guess this is a simplistic view but why couldn't someone just say, hey why can't we all just try and buy general motors stock? Rally consumer confidence. The only thing we have to fear is fear itself, that applies generally in economics.

The fearful sentiments of the banks? That's what caused the whole problem? I think it was rather their nonchalance in passing around exploding debt bonds to counterparties that were backed with Triple A ratings. Meaning, it was the lack of fear and sheer psychotic destructiveness of the banks that helped cause this problem.

I mean, these mortgage-backed securities were sold to various people around the world when in reality they were worth nothing. The whole US economy is based on consumer debt mongering, which was allowed to roam free after Alan Greenspan cut interest rates after 9/11 giving incentive for Americans and business to borrow, borrow, borrow. This is what we call the credit bubble. The credit bubble was always going to burst just like all sorts of bubbles, but now since US consumers have no savings they have to continue to borrow to sustain their way of life, yet nobody is going to provide them with money now since everything has collapsed.

This is the crux of the problem. US consumers are in so much debt that they have to cut back on various goods and products, thus hurting corporations. The corporations then must have to cut back on the workforce considering their sales are in decline, thus laying off even more people who will not be able to go out to dinner as frequently, thus laying off waitresses who will then find themselves in a similar situation. This is the cyclical disaster I'm talking about.

So it's not fear-mongering, it's debt mongering that is the crux of this crisis. And that is why this crisis is different from the Great Depression because nobody has any savings anymore. So the entire system is seemingly unwinding and nobody knows where it will end.

 

[GordoDeCentral]

our only solace is the whole world is in it with us, and the us is the most flexible of them all should be a fun 3-5 years

 

[Bjerknes]

I wouldn't say the whole world is in a similar situation, just the US and Europe. The people of China actually have savings, same with other Asian nations. India has 18% of the world's Gold.

What do we have? Just a lot of debt and no savings. These bailouts won't do anything to solve those problems. If GM goes bankrupt we'll produce even less goods. Then we have to worry about the dollar going down the tube, something Peter Schiff predicts, just like he predicted this whole disaster two and a half years ago.

Now since there is backwardation in the Gold market, that's not good news because it only happens when something big is about to happen.

 

[GordoDeCentral]

japan has had savings the whole time they ve been in an asphyxiating recession; what help was it for them. and china and India at this juncture of their economies are third world without a healthy west. Trust me Andy the US will the first to get back up.

 

[Bjerknes]

Even if the dollar is no more?

 

[GordoDeCentral]

thats the thing, if not the dollar then what? the fed is smart enough to keep the metal market(gold) in check; and no other currency seem to be doing better

 

[Bjerknes]

Everybody knows the gold market is being manipulated. But what happens if the dollar is dumped as being the world's reserve currency? We don't have as much bargaining chips and it gives incentive to price commodities in another currency.

The FED keeps printing out money like it's a hot novel. We can't just keep manipulating the world economy forever.

 

[GordoDeCentral]

until the chinese get enough influence and clout in the countries that matter this will remain the case

 

[Bjerknes]

I guess I can see that, and I hope you're right.

 

[Bjerknes]

"We have in many ways humiliated ourselves as a Nation with this current financial crisis."

- Hank Paulson

http://www.reuters.com/article/governmentFilingsNews/idUSWAT0104802008114


No, you psychotic morons at various investment banks humiliated us and continue to humiliate us with your goddamned bailout thievery.

 

[Bjerknes]

Equities in the US take a huge hit. Broke through support levels from a decade ago. Doom and gloom is reality here, at least.

 

[icemaη]

Read on some news site about the CEOs of Automobile majors flying in their business jets to Washington to ask for a $25 billion bailout plan... thats got to be a PR disaster...

 

[Bjerknes]

Read on some news site about the CEOs of Automobile majors flying in their business jets to Washington to ask for a $25 billion bailout plan... thats got to be a PR disaster...

They shouldn't get a bailout, and this is coming from someone who loves Detroit and has family members that depend on the health of the American auto industry.

But seriously... the government provided these banks and insurance firms with cash when it was those entities who spread around bad mortgages and bonds that were worth absolutely nothing. These weirdos at various banks did not have any regard for their shareholders, the common public, or even the rest of the world where they passed their debt to. They're a bunch of psychotic, debt wielding lunatics. Why do they deserve a bailout over Detroit?

At least corporations such as GM produce an actual good. While they have not been making money, at least they weren't destroying it like those maggots at various investment banks. Especially the maggots in my avatar.

 

[Nenz]

thats why its automobile manufacturers asking for the bail outs.. not the maggots from investment banks

 

[Bjerknes]

I say we either bail out them all or bail out none. Anything in between is hypocritical nonsense, which is happening right now with that utter freak Paulson running the bailout fund. Fuck, I mean, we might as well let Osama Bin Laden run the fund, or maybe Dr. Mengele or Joseph Stalin, or maybe Charles Manson. Let them run the fund and take this economy to zero.

 

[swag]

BLOOM!

 

[Bjerknes]

Too bad the bill has been rejected by the Senate at this point.

The same people who applauded the psycho banker bailout are now against the Auto bailout. Hypocrisy at its best. People don't understand what's going on here.