World economy talk

[tidus1203]

Not really a small amount if you multiply that by how many people received free money

the Japan govt wants everyone who received money to spend it

Negus, help the Japan economy

go out and buy something

No Negus listen to me. SAVE IT! Hehehehe para kaming angel and demon ni uls...

[uls]

yep

the USG and Fed is bailing out banks on both sides of the Atlantic

the bailout money just goes thru AIG

yan lang ang silbi ng AIG

so just imagine what happens to AIG after all the banks are stabilized

AIG will be left to die

[uls]

No Negus listen to me. SAVE IT! Hehehehe para kaming angel and demon ni uls...

haha

and i think that's what people will do

they will save it

then the Japan govt will come up with more stimulus

and again, and again

but people are just gonna save money

the money wiill just get deposited in the banks

the banks are gonna burst with money

hehe

[tidus1203]

Mga Japanese pa eh typically East Asians are savers they are not like Americans or Western Europeans who will probably spend it if they get a handout. Pati din Pinoy nahawa sa ugaling Amerikano even though geographically we are closer to China and Japan who save...

[Negus]

I've already spent it in advance....ordered a package from Amazon Japan last saturday. The package just arrived today.

[Negus]

Mga Japanese pa eh typically East Asians are savers they are not like Americans or Western Europeans who will probably spend it if they get a handout. Pati din Pinoy nahawa sa ugaling Amerikano even though geographically we are closer to China and Japan who save...

Japan? savers? you kidding me?

[tidus1203]

Yikes natalo ako hehehe

[tidus1203]

Japan? savers? you kidding me?

I know you live there so you probably have a more hands on idea, I am basing my statements on data regarding the nations savings rate (last checked around 8%). Add in aging population (old people tend to save more as they lose their income in retirement). Although savings rate has been declining its still the highest in the G8. Of course, not as high as China though by a long shot....

[uls]

haha

baka yung mga older generation ang savers

[tidus1203]

haha

baka yung mga older generation ang savers

Maybe... But Japan does have more old people than young people so maybe the savings rate is skewed. And now the government is worried as to how to pay the pensions of the old people without fresh money from the young people.

[uls]

a Chinese agency called SAFE (State Administration of Foreign Exchange) blew $80B

that's more than twice the dollar reserves of the Philippines

China lost US$80b on equities
http://www.straitstimes.com/Breaking...ry_350758.html

BEIJING - CHINA may have lost more than US$80 billion (S$123 billion) of its foreign exchange reserves after buying into equities just before world markets collapsed last year, the Financial Times said on Monday.
The poorly-timed investments were carried out by the State Administration of Foreign Exchange, or SAFE, the manager of the nation's nearly two trillion dollars of reserves, the newspaper said.

'SAFE has built up one of the largest US equity portfolios of any foreign government entity investing abroad, including the major sovereign wealth funds,' Brad Setser, an economist at the Council on Foreign Relations, a US-based think tank, told the paper.

'It appears SAFE began diversifying into equities early in 2007 and, rather than being deterred by the subprime crisis, it continued to buy.'

The report comes after Chinese Premier Wen Jiabao said last week he was 'a little bit worried' about the fate of his nation's huge investments in the United States.

[tidus1203]

Pano kasi the Chinese like to catch falling knives. Knives like Merrill Lynch, Blackrock Group and the others which I forgot...

[uls]

The original intention of the TARP fund was to buy the bad assets from the banks

that was Sept 2008

it's already March 2009 and they still havent started buying the bad assets yet

Obama Plan for Bad Bank Assets Could Come This Week
http://www.cnbc.com/id/29705616

The Obama administration's plan to purchase toxic assets from the banks in a public/private partnership could be made public as soon as this week, according to senior administration officials.

...But some details of the so-called Public Private Investment Fund, or PPIF, had yet to be worked out and officials cautioned that could delay the announcement to the following week.

Coz the bad assets are so hard to price

Here's a Time magazine article about one of those bad assets --- a bond called Jupiter High Grade CDO V

http://www.time.com/time/magazine/ar...881974,00.html

Look under the hood of a bond called Jupiter High-Grade CDO V, and you can understand why we're in trouble.

What does Jupiter contain?

the Jupiter bond contains other bonds which also contain other bonds which contain other bonds that contain the actual loans

Jupiter owns 223 other mortgage bonds. One of those bonds is Mantoloking, which in turn owns 126 other bonds. Not done yet. Mantoloking's mortgage bonds own hundreds of other mortgage bonds. Those mortgage bonds are then all made up of thousands of actual loans, some of which may be current, while others may have expired. Go figure.

hehe

ain't securitization great?

many of the loans contained in the bonds have gone bad

how the hell do u value Jupiter now?

this is just one CDO

there are thousands of them held by the banks

no wonder they still can't buy the bad assets

they can't price them

[tidus1203]

The market says they are worthless (meaning what a buyer is willing to pay for it)... So I guess for me at least that is their value, WORTHLESS. Accountants will probably pull number out of their a$$es, but that does not mean someone is willing to buy it at that price...

[Monseratto]

And what frustrates liberals so much is that AMERICAN taxpayers are bailing out EUROPEAN banks who were stupid enough to deal with AIG...

Hot Topic ngayon sa mga Morning Shows...

AIG payments to banks stoke bailout rage

The revelation on Sunday by American International Group Inc was another potential public relations nightmare, coming on the same weekend that the Obama administration expressed outrage over AIG's plan to pay massive bonuses to the people in the very division that destroyed the company by issuing billions of dollars in derivatives insuring risky assets.

But the revelations that billions of U.S. taxpayer dollars were funneled through AIG to Goldman Sachs -- one of Wall Street's most politically connected firms -- and to European banks including Deutsche Bank, France's Societe Generale and the UK's Barclays could stoke further outrage at the entire U.S. bank bailout.

The fact that billions of dollars given to prop up giant insurer AIG were then transferred to European banks and Wall Street investment houses could raise new doubts about whether the rescue was really economically necessary.

"It doesn't to me seem fair that the American taxpayer has got to bear the 100 percent of the downside," said Campbell Harvey, a finance professor at Duke University.

"A hedge is not a hedge if you did not factor in the counterparty risk. And the U.S. taxpayer should not be obligated to make people whole for hedges that were not properly executed."

Goldman Sachs, formerly led by Henry Paulson who was treasury secretary at the time of the original AIG bailout, said, as it has in the past, that its AIG positions were "collateralized and hedged."

While the news that AIG bailout money went to foreign banks could further stoke political outrage, some experts said the alternative could have been worse.

"The nationality of the bank should not matter," said Peter Morici, professor at the Smith School of Business, University of Maryland. "We have an inter-related financial system. You do something to mess with that and all bets are off the table."

[uls]

haha

guess it's a suprise for a lot of people

it's not an AIG bailout

it's a counterparty bailout

been saying that for months

[uls]

pag dumadami ang nawawalan ng trabaho...

U.S. credit card defaults rise to 20 year-high
http://www.reuters.com/article/ousiv...52F74Y20090316

NEW YORK (Reuters) - U.S. credit card defaults rose in February to their highest level in at least 20 years, with losses particularly severe at American Express Co (AXP.N) and Citigroup (C.N) amid a deepening recession.

AmEx, the largest U.S. charge card operator by sales volume, said its net charge-off rate -- debts companies believe they will never be able to collect -- rose to 8.70 percent in February from 8.30 percent in January.

The credit card company's shares wiped out early gains and ended down 3.3 percent as loan losses exceeded expectations. Moshe Orenbuch, an analyst at Credit Suisse, said American Express credit card losses were 10 basis points larger than forecast.

In addition, Citigroup Inc (C.N) -- one of the largest issuers of MasterCard cards -- disappointed analysts as its default rate soared to 9.33 percent in February, from 6.95 percent a month earlier, according to a report based on trusts representing a portion of securitized credit card debt.

"There is a continued deterioration. Trends in credit cards will get worse before they start getting better," said Walter Todd, a portfolio manager at Greenwood Capital Associates.

U.S. unemployment -- currently at 8.1 percent -- is seen approach 10 percent as the country endures its worst recession since World War Two, leaving more than 13 million Americans jobless, according to a Reuters poll of economists.

However, not all were bad surprises. JPMorgan Chase & Co (JPM.N) and Capital One reported higher credit card losses, but they were below analysts expectations.

Chase -- a big issuer of Visa cards -- reported its charge-off rate rose to 6.35 percent in February from 5.94 percent in January. The loss rate for the first two months of the quarter is 126 bps from the previous quarterly average compared to an estimate of a 145 bp increase, Orenbuch said.

Capital One Financial Corp's (COF.N) default rate increased to 8.06 percent in February from 7.82 percent in January.

[tidus1203]

Yes I think many people still under-estimate the severity of this crisis. The credit card bubble has not yet bursted and I am betting it will and that will cause another tsunami of problems...

[uls]

and anyone who is holding on to bonds that contain credit card loans are seeing those bonds turn toxic

[tidus1203]

Kaya nga eh Ben should just fly his heli and throw money from the sky so everyone can pay their mortgage and credit card bills. Eh di tapos ang problema. Yung nga lang, HYPER-INFLATION! and severe damage to credibility hehehe...