World Recession

[condotown]

[beej]

I'm sitting here crying about my stocks only being up 4% today, looks like I should shut up looking at that graph.

[beej]

Did that goon Bush just say the US was being taken over by Guatemala?

[Cosmo]

Just out of interest, are yanks concerned that the bailout plan will merely cover the asses of the mis-managing bankers and do nothing to save more mortgage foreclosures on the people who are also struggling and risk losing the roof from above their heads?

Seems like the banks will be able to continue business as usual, but what about the real people?

Will it help safeguard them too?

The little people will always be f**ked over, and the big people will always come out smelling of roses.

Thats' the problem as far as I cansee. The companies bailed out will be able to continue trading as per, and the people who really need the help, will be in exactly the same situation.

This money should be used to help everyone in need, not just those who are responsible for creating the mess in the first place. CEOs on 500,000 a year who lose their jobs won't be hand to mouth suddenly. But there are people who are right now, and who won't benefit from this.

I would disagree on these points.

IMHO, there are plenty of blames to go around;

1. the investment banks who packaged them and sold them as complexed securities,

2. the rating agencies who gave them the triple AAAs,

3. the Federal government who provided easy credits (interest rate was 1% at one stage),

4. the State governments who offered lax regulations on home lending,

5. the local banks and S& L institutions which offered Honeymoom rates of 1%,

6. the mortgage brokers who encouraged the so called "poor" to take out loans to buy homes and investment homes, and

7. the so called "poor" who took out the loans when they KNEW they could Not Afford it, especially when the Honeymoon rate period ends (in many cases, they did not even have a full time job).

Note; if the so called "poor" was still paying their loans, this crisis would not exist at all.... :roll:

IMHO, they should share a large part of the blame.

Just a shame that the media and the politicians are just focusing on Wall Street and not on Main Street as well - I guess there are more votes on Main Street then Wall Street..... :roll: :roll: :roll:

And if you had been watching the news and listening to the utterance from politicians, you would think this is a bailout package to save Wall Street and not Main Street.

I guess the politicians and the masses need their scapegoat - just easier to blame these financial engineers from Wall Street who make million dollar salaries then to blame themselves who behaved just as Greedy.

Just my 2 cents....

[eagle]

Its insane in the US with elections. I saw a bunch of McCain stickers with another bumber sticker saying drill now save later. Telling people lies is the whole republican agenda and the sad ting is alot of people just want cheap gas :shock:

[Cosmo]

MARKETS in Australia and Asia will be poised today for more details of an historic $US700 billion ($A840 billion) financial rescue package, after news last night that negotiators in Washington had reached a breakthrough in lengthy talks.

Negotiators from both major US parties, and both chambers of Congress, confirmed they had tentatively agreed to one of the biggest US Government interventions since the Great Depression - a plan to buy troubled debt from ailing financial firms in a bid to prevent widespread economic collapse.

The breakthrough will be welcome news to investors globally. The negotiators had been aiming to strike a deal before markets opened in Asia and Australia this morning, hoping to reassure investors.

Shane Oliver, chief economist with AMP Capital Investors, said a confirmed deal would be "pretty positive" for the Australian sharemarket, which "meandered" last week on uncertainty surrounding the bail-out.

The US Dow Jones Industrial Average closed higher on Friday, with hope the deal would be struck over the weekend, after Australian shares closed lower on fears it would not.

"If it is passed and it goes through pretty much without any major watering down, it will probably lead to quite a strong boost to the market," Dr Oliver said.

In a press conference in the early hours of the morning Washington time - late afternoon Australian time - Treasury Secretary Henry Paulson said legislators were on the brink of "a deal which will work and be effective" in the marketplace. More work needed to be done, he said, "but I think we're there."

Congressional staff members were expected to work through the night to finalise the language of the agreement and draft a bill, which would be voted on by the House of Representatives today, followed by the Senate.

Under the plan, $US250 billion would be made immediately available and another $US100 billion used when requested by the President for debt purchases, according to the budget committee chairman, Senator Kent Conrad.

Congress could bar the expenditure of the remaining $US350 billion only by passing a resolution to block it.

The package included a provision aimed at "preventing golden parachutes" for executives leaving companies that have sold troubled assets to the Government.

In some cases, the Government would receive equity stakes in companies that seek aid, allowing taxpayers to profit should the rescue plan work and the companies flourish in the months and years ahead.

The White House also agreed to strict oversight of the program by a congressional panel and conflict-of-interest rules for businesses hired by the Treasury to help run the program.

The plan includes a proposal by House Republicans - whose objections scuttled an earlier agreement - that provided for government insurance of mortgage-backed securities. Mr Paulson had opposed the idea.

Public opinion polls have shown the bail-out plan to be deeply unpopular in the US. Conservative Republicans have denounced the plan as an affront to free-market capitalism, while some liberal Democrats criticise it as a giveaway to Wall Street.

Negotiations were strained and Roy Blunt, the lead negotiator for House Republicans, said his colleagues were "very concerned that we would be able to bring both free-market principles and taxpayer protections to the table".

Senator Conrad said the bail-out was about more than just Wall Street.

"The chairman of the Federal Reserve has told us if the credit lock-up continues, 3 million to 4 million Americans will lose their jobs in the next six months."

The ultimate cost of the rescue plan to US taxpayers is virtually impossible to know. Because the Government would be buying assets of value - potentially worth much more than the Government will pay for them - there is even a chance the rescue effort would eventually return a profit.

WASHINGTON POST

[English_Bob]

Well, I'm not sure about the poor being "so-called", poor............etc etc.......................... who will be the ones actually paying it.

Perfectly put, Mr Ant.

[Cosmo]

Well, I'm not sure about the poor being "so-called", poor............etc etc.......................... who will be the ones actually paying it.

Perfectly put, Mr Ant.

In 2002 the latest year of available data, the top 5 percent of taxpayers paid more than one-half (53.8 percent) of all individual income taxes, but reported roughly one-third (30.6 percent) of income.

The top 1 percent of taxpayers paid 33.7 percent of all individual income taxes in 2002. This group of taxpayers has paid more than 30 percent of individual income taxes since 1995. Moreover, since 1990 this group?s tax share has grown faster than their income share.

Taxpayers who rank in the top 50 percent of taxpayers by income pay virtually all individual income taxes. In all years since 1990, taxpayers in this group have paid over 94 percent of all individual income taxes. In 2000, 2001, and 2002, this group paid over 96 percent of the total.

The share of taxes paid by the bottom 50 percent of taxpayers will fall from 4.1 percent to 3.6 percent.

The share of taxes paid by the top 1 percent of taxpayers will rise from 32.3 percent to 33.7 percent.

Source: US Treasury - Office of Tax Analysis

[Cosmo]

Sept. 29 (Bloomberg) -- Bradford & Bingley Plc, the U.K.'s biggest lender to landlords, was seized by the government after the credit crisis shut off funding and competitors refused to buy mortgage loans that customers are struggling to repay.

Bradford & Bingley became the second British bank after Northern Rock Plc to be nationalized this year as survivors of the global credit crunch balk at swallowing all the risks facing weaker competitors.

Governments around the world are stepping in to prevent bank failures, with regulators in Belgium, the Netherlands and Luxembourg injecting 11.2 billion euros ($16.3 billion) to save Fortis.

[Ngairo]

Sept. 29 (Bloomberg) -- Bradford & Bingley Plc, the U.K.'s biggest lender to landlords, was seized by the government after the credit crisis shut off funding and competitors refused to buy mortgage loans that customers are struggling to repay.

Bradford & Bingley became the second British bank after Northern Rock Plc to be nationalized this year as survivors of the global credit crunch balk at swallowing all the risks facing weaker competitors.

Governments around the world are stepping in to prevent bank failures, with regulators in Belgium, the Netherlands and Luxembourg injecting 11.2 billion euros ($16.3 billion) to save Fortis.

Amazing....when the governments don't own anything and borrow it from private enterprise and expect them (tax payers) to pay it back.....by tax laws.

Bankruptcy is a funny thing.....governments are exempt....time they were accountable....

[Cosmo]

Wachovia has just been taken over by the FDIC.... :shock: :cry: :roll:

OMG, where will this end?

[GoldMember]

Amazing....when the governments don't own anything and borrow it from private enterprise and expect them (tax payers) to pay it back.....by tax laws.

Not really any choice.Either the government steps in ( taxpayers cough up) or the UK banking system along with the entire economy goes down the swanny.The fault lies with the banks for reckless lending policies and to a lesser extent,the government in that they draw up the financial guidelines in the first place.Having said that B n B was always likely to be one of the first victims of the housing slump.It's stock has been shorted to the bone in anticipation of impending nationalisation .Bit of a non news story really.

[Cosmo]

Sept. 29 (Bloomberg) -- Citigroup Inc., the biggest U.S. bank by assets, agreed to buy the banking operations of Wachovia Corp., the Charlotte, North Carolina-based lender best by mortgage losses and a 74 percent drop in market value this year.

Citigroup will absorb as much as $42 billion of losses on Wachovia's $312 billion pool of loans, the Federal Deposit Insurance Corp. said today in a statement. The FDIC will take on losses beyond that amount in exchange for $12 billion in preferred stock and warrants.

``For Wachovia's customers, today's action will ensure seamless continuity of service from their bank and full protection for all of their deposits,'' FDIC Chairman Sheila C. Bair said in the statement. ``There will be no interruption in services and bank customers should expect business as usual.''

Wachovia is the latest casualty of a financial crisis that drove Lehman Brothers Holdings Inc. and Washington Mutual Inc. into bankruptcy and led to the hastily arranged rescues of Merrill Lynch & Co. and Bear Stearns Cos. The purchase gives Citigroup about 3,300 branches and offices in 21 states. Wachovia will continue to own the A.G. Edwards Inc. brokerage and the Evergreen mutual-fund family.

Wachovia, which reported a net $9.7 billion of losses in the first half of 2008, has stumbled since the $24 billion takeover two years ago of Golden West Financial Corp., a California lender that specialized in payment-option adjustable-rate mortgages. Wachovia now expects losses on 12 percent, or $14 billion, of its $122 billion of option-ARM holdings. Analysts at Fitch Ratings predict default rates on such loans packaged as securities may reach 45 percent.

Option ARMs

Wachovia is the largest holder of option ARMs, ahead of Washington Mutual, the Seattle-based lender that collapsed last week. Option ARMs allow borrowers to skip part of their payment and add that sum to their principal. Monthly payments increase after five years or once the loan balance reaches a predetermined limit, usually 110 percent to 125 percent.

For the average option ARM borrower, payments will rise 63 percent, or by an additional $1,053 per month, when their rates reset, according to a Sept. 2 report by New York-based Fitch. Wachovia has worked with 26,000 borrowers in the past year to make their payments more manageable, according to company spokesman Don Vecchiarello.

[beej]

I want to get back into Lloyds but somehow think its going to go below 200p this week.

Melt down.

[Exploring]

It is a big word isn?t it? Yes, we are heading down towards that state whether we are willing to face it or not. Some might say, it is just a cycle of the economy up and down. I disagree for that. Lots of economist or financialist claimed that the suprime problem was in control?.well back in that time I did believe that. Later we all knew that it wasn?t true. It was the root of series of the problems. Actually we have to take responsibility on our actions that we made the problem happened.

Moral hazard plays the main rule in this situation. The causes of the suprime is when we were enjoy inventing derivatives instruments- a tool that allows the speculators and hedgers to control the risks or even gain extra profit on asset. Later, we have one so- called mortgage backed securities .It is one kind of debt financing and we pooled it together then sold it to you as investor!. When the chief of the company can?t control the debt and then faced the finance problem since they didn?t get the AAA borrower so default happened. Finally, the financial system lack of liquidity-lack of money, then they all pulled the money back resulting things in bankruptcy ininvestment baking. You guys might say, it is the wall stress matter not main stresst .It has linkages to each other. The end u will share the burden as well hahahah!I can see some fund mangers work so hard to make the fund get the profit, but we have so much volatility in the economy and it is so hard to predict correctly anymore.

I do support Paul Krugman way of thinking and pray that his though would be right.At the end, we can land in the? soft ground?

Keep an eye on ? bailed out pan?

Wish we luck.

[beej]

I'm getting out of all markets and all stocks tomorrow.

Just the tip of the ice burg this!

[beej]

Well thats f**ked it, a NO vote on the $700 bill bail out, DOW dropping 500+

Here we go!

[beej]

Well thats f**ked it, a NO vote on the $700 bill bail out, DOW dropping 500+

Here we go!

Things are looking up.

Get your cash out now.

Gold's where you wanna be.

{Bet you wish you'd bought gold 10 years ago.}

Bet I wish I hadn't bought those LloydsTSB shares when they dipped this afternoon, those bastards are going to be sinking fast tomorrow!

[beej]

Well thats f**ked it, a NO vote on the $700 bill bail out, DOW dropping 500+

Here we go!

Things are looking up.

Get your cash out now.

Gold's where you wanna be.

{Bet you wish you'd bought gold 10 years ago.}

Bet I wish I hadn't bought those LloydsTSB shares when they dipped this afternoon, those bastards are going to be sinking fast tomorrow!

Sorry for your woes mate.

But I can only hope you take Cosmo down with you.

hehe no woes, I've been a greedy bastard and I deserve to loose a bit.

Be nice to see house prices drop in Europe and those banking toff boy tossers all loose their jobs.

[Cosmo]

Well thats f**ked it, a NO vote on the $700 bill bail out, DOW dropping 500+

Here we go!

Things are looking up.

Get your cash out now.

Gold's where you wanna be.

{Bet you wish you'd bought gold 10 years ago.}

Bet I wish I hadn't bought those LloydsTSB shares when they dipped this afternoon, those bastards are going to be sinking fast tomorrow!

Sorry for your woes mate.

But I can only hope you take Cosmo down with you.

Sorry to disappoint ya :roll:

but I was the one who saw this crash coming for almost a year now

I have had plenty of time to prepare and made some money along the way too... :roll:

Maybe next time..

[Sinenat]

Wisit Ongpipatkul of Tisco Research foresees lower US interest rates soon. PHAKRIT JUNTAWONG

Thai stocks nosedived 2.86% yesterday as Asian and European markets closed lower over growing fears that the US "Big Mac" crisis was spreading to banks across the world. The Stock Exchange of Thailand index closed yesterday at 601.29 points, down 17.68, in trade worth 10.05 billion baht. Shares fell under the 600-point line to a low of 598.59 in the afternoon before rebounding slightly before the close.

Blue-chip stocks fared worse than the overall market, with the SET50 index off 3.37% on the day. Energy stocks led the market, dropping 3.39% for the day, while banks fell 3.7% and ICT stocks closed off 2.21%.

Foreign investors, net sellers of over 130 billion baht in stock this year, were net sellers of 1.3 billion baht yesterday.

The losses mirrored the rest of the region, with Hong Kong dropping 4.3%, Tokyo down 1.26% and Sydney off 2%. :evil:

Analysts said the expected passage of a $700-billion bailout package by the US Congress to buy bad debt from ailing banks did little to ease fears that the global economy is heading for a recession.

Reports that the Belgian-Dutch banking and insurance group Fortis and the British mortgage lender Bradford & Bingley both needed government intervention only added to fears that more banks could fail due to the ailing US economy.

The Hong Kong market was hammered yesterday as the leading Chinese insurer Ping An fell 10.5% on concerns about its exposure to Fortis. The Dah Sing Banking Group also suffered losses over concerns over its exposure to failed US bank Washington Mutual.

Wisit Ongpipatkul, an executive director and head of Tisco Research, said the US crisis would have a lasting impact on equity markets around the world.

The SET index, down 27.87% from January, was likely to recover by the second half of 2009 on the back of local investment flows, he said.

But the crisis would cut export growth for Thailand in 2009 and could result in local banks posting lower profits.

Tisco currently recommends investors hold up to 60% of assets in the money market, with the remainder split between high-dividend and fundamental stocks.

Mr Wisit said US interest rates were likely to be cut sharply over the next few months, possibly leading to a rate cut by the Bank of Thailand in 2009.

Tawatchai Asawapornchai, a vice-president at Globlex Securities, said fear of a US economic recession and tensions in the global financial sector were pressuring equity markets worldwide. :evil:

"We could see the SET index continue to drop this week. There just isn't any good news for investors now," he said.

To be honest, I'm scared about describes a situation the economy is stagnant don't want to think about country and the world very big problem my friend can't find job in US too 6 mount ago very sad!!!!

:cry:

[Cosmo]

Rather than turn this into a class struggle between the have and have not.

We should focus on the world as a whole....

Think for a minute, what happens when there are no credits available to you to buy a home, or when you can't get a loan to study, or when you can't get a loan to buy a car, etc.

Companies will cut back on spending and hiring because they can not get loans. People will cut back on demand because they fear losing their jobs.

Imagine what this impact will have on the world economies!!!

The bottom line is, when economies goes into a recession (in this case, it maybe a depression), everyone suffers.

In the next few months, millions upon millions will lose their jobs because companies can not borrow money to pay their staff...this Christmas will be a bleak one for many, regardless of whether they are rich or poor.

If you think you are immune from this, just wait and see as the financial meltdown filters through the world's economies!!!

[Bruce551]

During the debate Monday morning on the bailout bill, one conservative Republican after another denounced the bill. We don't need $700 billion to fix the problem, they said. Instead, the real solution is the repeal of a specific accounting rule.

The accounting rule, FASB Statement #115, first promulgated in 1993, requires financial institutions to assess their holdings according to whatever price the market currently values them at. This is known as the "mark-to-market" rule. Since right now, no one wants to buy mortgage-backed securities or their derivatives, the assumed market price is very low, thus causing tremendous balance sheet problems for their owners. But according to the Republicans, the "real" value of these assets is much higher, and if the "mark-to-market" rule were dropped, and companies could tot up the assets according to some measure of intrinsic value, voila -- everybody would be in back in black, the credit markets would unfreeze, and the crisis would be over.

Maybe the finance situation is not as bad it seems.

http://www.salon.com/tech/htww/?last_story=/tech/htww/2008/09/29/mark_to_market_accounting/

[Sinenat]

Wisit Ongpipatkul of Tisco Research foresees lower US interest rates soon. PHAKRIT JUNTAWONG

Thai stocks nosedived 2.86% yesterday as Asian and European markets closed lower over growing fears that the US "Big Mac" crisis was spreading to banks across the world. The Stock Exchange of Thailand index closed yesterday at 601.29 points, down 17.68, in trade worth 10.05 billion baht. Shares fell under the 600-point line to a low of 598.59 in the afternoon before rebounding slightly before the close.

Blue-chip stocks fared worse than the overall market, with the SET50 index off 3.37% on the day. Energy stocks led the market, dropping 3.39% for the day, while banks fell 3.7% and ICT stocks closed off 2.21%.

Foreign investors, net sellers of over 130 billion baht in stock this year, were net sellers of 1.3 billion baht yesterday.

The losses mirrored the rest of the region, with Hong Kong dropping 4.3%, Tokyo down 1.26% and Sydney off 2%. :evil:

Analysts said the expected passage of a $700-billion bailout package by the US Congress to buy bad debt from ailing banks did little to ease fears that the global economy is heading for a recession.

Reports that the Belgian-Dutch banking and insurance group Fortis and the British mortgage lender Bradford & Bingley both needed government intervention only added to fears that more banks could fail due to the ailing US economy.

The Hong Kong market was hammered yesterday as the leading Chinese insurer Ping An fell 10.5% on concerns about its exposure to Fortis. The Dah Sing Banking Group also suffered losses over concerns over its exposure to failed US bank Washington Mutual.

Wisit Ongpipatkul, an executive director and head of Tisco Research, said the US crisis would have a lasting impact on equity markets around the world.

The SET index, down 27.87% from January, was likely to recover by the second half of 2009 on the back of local investment flows, he said.

But the crisis would cut export growth for Thailand in 2009 and could result in local banks posting lower profits.

Tisco currently recommends investors hold up to 60% of assets in the money market, with the remainder split between high-dividend and fundamental stocks.

Mr Wisit said US interest rates were likely to be cut sharply over the next few months, possibly leading to a rate cut by the Bank of Thailand in 2009.

Tawatchai Asawapornchai, a vice-president at Globlex Securities, said fear of a US economic recession and tensions in the global financial sector were pressuring equity markets worldwide. :evil:

"We could see the SET index continue to drop this week. There just isn't any good news for investors now," he said.

black Monday.

Thanks for this info...about trade at SET, i also suggest to read report from Phatra brokerage, their research team is more professional.

Huh? i don't know about stock much but just sad about the world economic and thailand at the same time ka Van said we need to save money and worry about The bank too :wink:

[Cosmo]

During the debate Monday morning on the bailout bill, one conservative Republican after another denounced the bill. We don't need $700 billion to fix the problem, they said. Instead, the real solution is the repeal of a specific accounting rule.

The accounting rule, FASB Statement #115, first promulgated in 1993, requires financial institutions to assess their holdings according to whatever price the market currently values them at. This is known as the "mark-to-market" rule. Since right now, no one wants to buy mortgage-backed securities or their derivatives, the assumed market price is very low, thus causing tremendous balance sheet problems for their owners. But according to the Republicans, the "real" value of these assets is much higher, and if the "mark-to-market" rule were dropped, and companies could tot up the assets according to some measure of intrinsic value, voila -- everybody would be in back in black, the credit markets would unfreeze, and the crisis would be over.

Maybe the finance situation is not as bad it seems.

http://www.salon.com/tech/htww/?last_story=/tech/htww/2008/09/29/mark_to_market_accounting/

I saw some of the debate.

Sad really - that the US is in the middle of a presidential election and as such, political grandstanding takes centre stage over the welfare of their economy.

The real problem right now is Confidence in the US financial system and by extension the US economy, not just some accounting rule.

We saw last night both Bradford and Bingley (from the UK) and then Wachovia (from the US) went out of business

Before that, Lehman, AIG, Fannie Mae, Freedie Mac, Washington Mutual, IndyMac, Bear Stearns and many other smaller banks, all went bust or were taken over by the government.

If confidence is not restored soon in the financial markets, the US and the world will enter a Depression like the 1930s.