World economy talk

[uls]

Yes, all the securitized debt will blow up one by one

subprime residential, Alt A, prime, commercial real estate, credit card loans, student loans, auto loans...

just name any debt they securitized, if it hasnt defaulted already, it's gonna default

the financial institutions holding on to those asset backed securities will have more writedowns, then they will have to raise more capital...

then the Fed and US Treasury will keep on bailing them out by buying the securities, buying equity into those financial institutions...

this has been going on for months... and will still go on for months

from hundreds of billions of dollars, the cost of the bailouts is now running in the trillions.

amazing stuff

[tidus1203]

This is probably the fastest money printing exercise in world history. The zeroes are just piling up! Bail out here and bail out there!

[uls]

i remember earlier this year the banks said they were done with writedowns

ya right

every quarter they announce more writedowns

the crap paper they hold just keep blowing up

--


The financial excesses of the past years have forced the US and European governments do stuff they've never done before.

What they are doing is scary.

It will have consequences.

Something soooo big has to have consequences.

The world is not going back to normal after this.

[Monseratto]

Pump it up, pump it up...

Fed's emergency loan program increases activity

WASHINGTON – The Federal Reserve boosted its lending to commercial banks and investment firms over the past week, indicating that a severe credit crisis was still squeezing the financial system.

The Fed released a report Friday saying commercial banks averaged $93.6 billion in daily borrowing for the week ending Wednesday. That was up from an average of $91.6 billion for the week ending Nov. 19.

The report also said investment firms borrowed an average of $52.4 billion from the Fed's emergency loan program over the week ending Wednesday, up from an average of $50.2 billion the previous week.

The Fed said its net holdings of business loans known as commercial paper over the week ending Wednesday averaged $282.2 billion, an increase of $16.5 billion from the previous week.

Financial firms are borrowing from the Fed because they are having trouble raising money through normal channels as the financial system endures its worst crisis since the Great Depression.

Banks are hoarding cash rather than making loans out of fear that they won't be repaid. The Fed and the Treasury have been flooding the financial system with money in hopes that banks can return lending operations to more normal levels.

http://news.yahoo.com/s/ap/20081128/...52KImORIqyBhIF

[uls]

It's good the banks are hoarding cash

they're not doing what the govt wants --- to lend like it was the good old days

US consumers are like drug addicts that need rehab

you don't cure drug addiction by giving the addicts more drugs

but that's what the govt wants --- to revive borrowing and spending

[tidus1203]

So that means the Keynesians are drug pushers? Or rather spend pushers maskin lubog na sa utang... The power of adding zeroes!

[uls]

haha

yep... spend pushers

------

the UK solution: if banks won't lend, force them to lend

Labour fires nationalisation 'warning shot' to force banks to lend to firms and families
http://www.dailymail.co.uk/news/arti...-families.html

Banks facing fury from ministers over their refusal to boost lending were today warned they could be nationalised if they refused to increase the flow of loans to firms and mortgages.

Labour MP John McFall, chairman of the Commons Treasury select committee, stressed he was "firing a warning shot" on his and other people's behalf.

Mr McFall, who is seen as close to both Prime Minister Gordon Brown and Chancellor Alistair Darling, floated the idea that all banks could be nationalised, as happened in Sweden in the Nineties, if they refused to increase the flow of loans to firms and mortgages to avoid a deeper and more prolonged recession.

That article came out Nov. 21

---

Look at what happened to Royal Bank of Scotland...

RBS to be taken over by British government
The Associated Press - 7 hours ago

LONDON (AP) — The British government will take over Royal Bank of Scotland Group PLC with a majority stake of almost 60 percent after the shareholders of the nation's second-largest bank shunned an emergency share issue.

The 20 billion pound ($31 billion) rescue takeover, the result of a plan announced last month, means that dividends on common shares will be scrapped and top executives' bonuses will be canceled. Chief Executive Fred Goodwin has resigned and Chairman Tom McKillop, who last week personally apologized to shareholders for the 85 percent fall in the bank's share value, has said he will retire next year.

[tidus1203]

The free markets are getting killed. The free markets don't want to lend its just too risky for them but here comes the government trying to make things worse by FORCING people to lend even if it is not in the interest of the bank. Call me a doomsayer or whatever, I really don't give much weight to name calling but I really fear for the worse.

[uls]

Right now, the global financial system is functioning (barely) coz of all the fund injections, bailouts, and government guarantees.

Without massive intervention by governments, the global financial system would have collapsed months ago.

So obviously, if the governments stop doing what they're doing, there would be a global bank run, markets would crash, and the global financial system would collapse.

how long will governments maintain the status quo?

when will the financial system get back on its feet and not need govt life support to function?

will the global financial system be on indefinite life support?

even with govt life support, the market still lacks confidence in the financial system

evidence of the lack of confidence is the demand for US treasuries as safe haven...

at incredibly low yield, treasuries are still in high demand

[Zeus]

Wow, meron na pala tayong Ulsian, Tidusian & Galactusian Economic Theories ha

[uls]

haha

aba syempre

the world wouldnt be the same without us

[Zeus]

haha

aba syempre

the world wouldnt be the same without us

Sarap basahin ang thread na ito, business financial news talaga, at pwede pang magtanong at may explanation agad

[badsekktor]

Sarap basahin ang thread na ito, business financial news talaga, at pwede pang magtanong at may explanation agad

hehehehe! agree ako sa yo bro! both sides gives good points kaya basa-basa lang ako.... I do agree that these bailouts and fund injections wont work since these solution would not solve the problem of confidence.

It is because the US incurred too much credit and loans that nobody trusts anybody anymore.

question is, what if the rest of the world would shoo away from the US dollar? would that minimize the impact to the rest of the world?

[uls]

Earlier, we were talking about Black Friday shopping

WORKER KILLED IN WAL-MART STAMPEDE
http://www.nypost.com/seven/11282008...art_141313.htm

may video yan

By KIERAN CROWLEY

Shocking video from a Long Island Wal-Mart shows police officers giving a trampled worker CPR. The man died a short while later.

Throngs of Black Friday shoppers stampeded the man as they rushed into the Green Acres mall in Valley Stream minutes before it opened.

"When the doors opened, all hell broke loose," a law enforcement source told The Post.

Police said about 2,000 people were gathered outside the Wal-Mart doors before its 5 a.m. opening. The impatient crowd knocked the employee, identified by police as Jdimytai Damour of Queens, to the ground as he opened the doors, leaving a metal portion of the frame crumpled like an accordion.

poor guy

Trampled to death by shoppers

[tidus1203]

The question remains, where the shoppers there to buy or para maki-isyoso lang?? We will find out next week... Also Monday is the so-called "Cyber Monday" where people flock online retailers.

[uls]

----------------

[uls]

yes let's wait for official data

for now, anecdotal lang

they say, judging by the crowd, shopper turnout about the same as last year,

but are spending less

[tidus1203]

Wow, meron na pala tayong Ulsian, Tidusian & Galactusian Economic Theories ha

Tidusian economics is simply Austrian economics. You can read it http://en.wikipedia.org/wiki/Austria...l_of_economics

Tidusian economics though emphasizes the Austrian though on the definition of inflation as contrast to Keynesian which is the mainstream economics being taught in our schools.

Tidusians don't believe in spending beyond your means and going into debt to salvage the economy.

[Monseratto]

Good sales but little profit margin...

Early data shows strong Black Friday shopping

CHICAGO – The holiday shopping season got off to a surprisingly solid start, according to data released Saturday by a research firm. But the sales boost during the post-Thanksgiving shopathon came at the expense of profits as the nation's retailers had to slash prices to attract the crowds in a season that is expected to be the weakest in decades.

Sales during the day after Thanksgiving rose 3 percent to $10.6 billion, according to preliminary figures released Saturday by ShopperTrak RCT Corp., a Chicago-based research firm that tracks sales at more than 50,000 retail outlets. Last year, shoppers spent about $10.3 billion on the day after Thanksgiving, dubbed Black Friday because it was historically the sales-packed day when retailers would become profitable for the year.

But this year, many observers were expecting consumers to spend more time browsing than buying, amid contractions in consumer spending and growing fears about economic uncertainty and trouble in the global financial markets.

Still, experts, who predict this year's overall holiday shopping period will be the weakest in decades thanks to an overall contraction in spending, caution that this year's sales growth may be hard to sustain.

http://news.yahoo.com/s/ap/20081130/...KvdC2LOlmyBhIF

[uls]

yep...

3 percent gain from last year.

smallest gain in 3 years

Nov. 29 (Bloomberg) -- U.S. holiday retail sales increased 3 percent yesterday from a year earlier, the smallest gain for a “Black Friday” in three years, research firm ShopperTrak RCT Corp. said.

sa lagay na yan grabe discounts na ang binigay ng mga retailers