Are we really now facing world recession

[lexbarker]

Is this a sign of a healthy economy?

I'll die in debt, say one in three.
Nine out of 10 people have run up unsecured debt and many fear they will never be able to pay back what they owe, a survey has claimed..........

http://www.telegraph.co.uk/finance/p...-in-three.html

[lexbarker]

Some of your Big 3 got bailed out..

http://www.zerohedge.com/article/mee...ust-cpff-banks

[oecarb]

Some of your Big 3 got bailed out..

http://www.zerohedge.com/article/mee...ust-cpff-banks

Lex,,

Sometimes the media expresses things with a bias or a spin.

For instance, did you know that Barclays bought Lehman Bros, taking them out of bankrupcy and saving thousands of American jobs? Do you not think they deserved to get some of the bailout money that should have gone towards covering the massive debts of this American bank?

http://www.lehman.com/press/pdf_2008...cquisition.pdf

[oecarb]

Is this a sign of a healthy economy?

I'll die in debt, say one in three.
Nine out of 10 people have run up unsecured debt and many fear they will never be able to pay back what they owe, a survey has claimed..........

http://www.telegraph.co.uk/finance/p...-in-three.html

Did you check this with the level of American debt?

[Redman]

Im betting that the Euro as it exists today is on its way out.
The 1 from 10 leaves 0 paradigm remains somewhat in force
The single currency disables a countries ability to devalue its currency as a tool to solve the excessive debt loads that exist.
This ability to devalue would place the risk of default at the feet of those who took the risk-the bond holders.
The only other option is to stimulate by printing money-ie get the strong countries to subsidize the errors and mis management of the PIIGS.

I also think that the US has to take some hard steps to reverse the stimulus that really began after Sept 11 2001.


So Im buying Gold, and other hard commodities.


Later

[oecarb]

Im betting that the Euro as it exists today is on its way out.
The 1 from 10 leaves 0 paradigm remains somewhat in force
The single currency disables a countries ability to devalue its currency as a tool to solve the excessive debt loads that exist.
This ability to devalue would place the risk of default at the feet of those who took the risk-the bond holders.
The only other option is to stimulate by printing money-ie get the strong countries to subsidize the errors and mis management of the PIIGS.

I also think that the US has to take some hard steps to reverse the stimulus that really began after Sept 11 2001.


So Im buying Gold, and other hard commodities.


Later

Fine, Redman.

However, my bet is that when you want to sell your gold/commodities to buy food etc, you will be more than willing to accept euros. Just remember that the European Union started out as a common market with the richer countries helping the poorer ones to develop. The aim is to end up with a group of prosperous countries in one union trading with each other and with free movement of citizens and goods.

In my view, there are only two countries that can break the euro - Germany and France but they are the founding members of the EU and all the other countries know that.

The drama is still unfolding.

[Redman]

You might be right.
But it would be significantly more Euros than its worth now-hence the reason for position.

The question would be whether France and Germany (or ANY country)would want to continue indefinitely being the lender of last resort and absorb the results of taking on sequentially larger and larger liabilities-for other Sovereign nations.

I dont think that the existing bailout plan for the Euro will be much use if Spain falls.


I dont see the solution to excess debt being more debt.


Later

[lexbarker]

Did you check this with the level of American debt?

Yes, the US debt has been in the doghouse for some time now. The US Government has made high class crookery legal and has become the norms in the American way in doing business. I have yet to see one of those banksters brought to justice. But, I was talking about the current situation in Europe. You should also note that it is not only the US robbers that took your money. Large amount of money was also lent to those failing former Communist countries that also added to your debt. Germany is the only one that seems good, the rest including France looks iffy to bankrupt. And, Redman may have a point about the EU dissolving (like I mentioned about a year ago when Germans were refusing to take the Greek Euro).

[lexbarker]

UK social program for college tuition becoming unsocial? Saw on the news that riots broke out in London when the fees of university tripled.


Other news:
UK banks borrowed more than £640bn from US Federal Reserve


http://www.telegraph.co.uk/finance/n...l-Reserve.html

[oecarb]

Yes, the US debt has been in the doghouse for some time now. The US Government has made high class crookery legal and has become the norms in the American way in doing business. I have yet to see one of those banksters brought to justice. But, I was talking about the current situation in Europe. You should also note that it is not only the US robbers that took your money. Large amount of money was also lent to those failing former Communist countries that also added to your debt. Germany is the only one that seems good, the rest including France looks iffy to bankrupt. And, Redman may have a point about the EU dissolving (like I mentioned about a year ago when Germans were refusing to take the Greek Euro).

Lex,

As I keep saying, the drama is still unfolding and everything we say here is just conjecture - until the end result.

Regarding British banks borrowing from the Fed, this borrowing was mainly to prop up their American banking operations after they acquired US banks with huge debts - Barclays had bought Lehman Bros.

RBS had bought Citizens Banking Group which was America's fourth largest bank.

Citizens Financial Group, Inc. is an American bank headquartered in Providence, Rhode Island, which operates in the states of Connecticut, Delaware, Illinois, Massachusetts, Michigan, New Hampshire, New Jersey, New York, Ohio, Pennsylvania, Rhode Island and Vermont. Citizens is a wholly owned subsidiary of the Royal Bank of Scotland Group, with headquarters in Edinburgh, Scotland, UK. Following the financial rescue of RBS, the company's controlling shareholder is currently the British government.

http://en.wikipedia.org/wiki/Citizens_Financial_Group

HSBC had acqired Marine Midland, among others.

The Hongkong and Shanghai Banking Corporation acquired a 51% shareholding in Marine Midland Bank of New York State, headquartered in Buffalo, New York, in 1980 and extended to full ownership in 1987. The banks continued to operate under the Marine Midland name until 1998, when the branch offices were rebranded as HSBC Bank USA in line with the worldwide corporate identity of HSBC.

http://en.wikipedia.org/wiki/HSBC_Bank_USA

Otherwise, why would the Fed lend to foreign banks?

[oecarb]

UK social program for college tuition becoming unsocial? Saw on the news that riots broke out in London when the fees of university tripled.


Other news:
UK banks borrowed more than £640bn from US Federal Reserve


http://www.telegraph.co.uk/finance/n...l-Reserve.html

After the last elections, no party won an overall majority and the Liberal Democrats made the decision to go into a coalition with the Right Wing Conservative Party. Hence the apparent unwinding of the welfare state in Britain. We'll see how long that coalition lasts.

Meanwhile, Scotland and Wales have rejected this plan. The rise in fees would only take place in England and only for English students. For Scottish, Welsh and EU students it's business as usual.

[Redman]

ACTUALLY

At one of the auctions the Fed had executed repo type transactions where they loaned foreign Banks and Central Banks funds following purchases of Treasuries.

So I buy 100B Treasuries and immediately am loaned 100B at a matching rate.
The repos have different disclosure rules-like off balance sheet transactions-so

The net result is that the auction of treasuries went of at lower interest rates.The Fed looks good and the banks play ball with Uncle Fed reserve.

Not sure of the specific entities but it was shown on the fed website-I will look for it

Later

[lexbarker]

......Meanwhile, Scotland and Wales have rejected this plan. The rise in fees would only take place in England and only for English students. For Scottish, Welsh and EU students it's business as usual.

Do not trust politicans. England was just a test. If it had gone smoothly it would have been implemented in the rest of the kingdom. Water testing is part of the game.

[lexbarker]

Lex,
....
Regarding British banks borrowing from the Fed, this borrowing was mainly to prop up their American banking operations after they acquired US banks with huge debts - Barclays had bought Lehman Bros.

RBS had bought Citizens Banking Group which was America's fourth largest bank.



HSBC had acqired Marine Midland, among others.




Otherwise, why would the Fed lend to foreign banks?

I see that the Feds forced the foreign banks to take over the US bad banks.

[oecarb]

I see that the Feds forced the foreign banks to take over the US bad banks.

No, Lex,

The Feds did not force them to acquire the bad banks.

First, almost all US banks has been tainted with toxic debts. This is where the crisis started. But, also, it illustrates how aggressively European (and other) businesses were moving into the USA. If you check the other banks (like the Swiss UBS and French BNP Paribas) you will find a similar pattern over the last decade or so.

The fact is that the US, as owners of a World Currency, has been printing money and the rest of the world has been stockpiling US dollars. What else could they do with these? Buy up America, of course. Using US dollars in CASH.

[oecarb]

Do not trust politicans. England was just a test. If it had gone smoothly it would have been implemented in the rest of the kingdom. Water testing is part of the game.

The EU agreements allow for autonomous regions running their own affairs. Scotland and Wales now have their own parliaments and can decide on matters relating to their own regions. Scotland and Wales both insist on paying for their own students at Scottish, Welsh or English universities - even if they have to raise local taxes.

[lexbarker]

No, Lex,

The Feds did not force them to acquire the bad banks.

First, almost all US banks has been tainted with toxic debts. This is where the crisis started. But, also, it illustrates how aggressively European (and other) businesses were moving into the USA. If you check the other banks (like the Swiss UBS and French BNP Paribas) you will find a similar pattern over the last decade or so.

The fact is that the US, as owners of a World Currency, has been printing money and the rest of the world has been stockpiling US dollars. What else could they do with these? Buy up America, of course. Using US dollars in CASH.

This is my point. The banks did not do their homework. They bought trash and who is responsible for that? There is no excuse but themselves just as they poured money into those former communist countries.

[oecarb]

This is my point. The banks did not do their homework. They bought trash and who is responsible for that? There is no excuse but themselves just as they poured money into those former communist countries.

I suppose you or I would have been very suspicious of those mortgage derivatives. After all, if someone makes a loan and sells it on, why would he waste time trying to ensure that the borrower could pay back that loan?

And, if house prices were rising, he would argue that the security (ie the house) would have been adequate. And the (American) credit rating agencies had rated these derivatives AAA in most cases - ie most secure almost blue chip status.

I must say, though that many of the former communist countries that have joined the EU seem to be doing well. They have a pool of cheap well-educated skilled labour and the folk are willing to work their butts off to raise their standard of living. Britain, for instance, is full of Poles exercising their right to work in any EU country who are carrying out very high standard work and building magnificent homes back in Poland. And British (and other European firms) seem very happy with them.

Problem is, of course, that uneducated, unskilled British people now find it that bit harder to get jobs. However, in a few years, new entrants like Moldovans and Ukrainians would be flocking to Poland to do the same thing as the Polish economy expands.

[lexbarker]

Carbs, it was a well known fact long before the crisis began that the mortgage loans were going to implode. Reports of unqualified borrowers were in the main stream news and almost saturated on the net from financial critics. You mean those high paid financial analysists could not have done a study on those zombie mortgages? At their salaries there is no excuse.

[oecarb]

Lex I think the answer lies in the attitude of these financial analysts and the short-termism of their incentive packages.

As long as they can show a profit for the current year, they can pocket multi-million dollar bonuses. So what if the market collapses next year? And, as we have found out, they continue to get high bonuses even if they are now making losses or have caused losses in the past. Apparently the banking industry cannot afford to lose them!!!!!!!!!!!!!

The unacceptable face of Capitalism (to quote former British PM Ted Heath)?

[lexbarker]

The unacceptable face of Capitalism (to quote former British PM Ted Heath)?

Yeah. I see Capitalism promotes crookery to make a living. Ted heath probable never owned as much as a parlour so it was nice to be sponging off other people's money to survive. Just remenber, when other's people runs dry it would be the end of socialism. You have to control capitalism alive so the system can feed off the blood.

[Redman]

Lex I think the answer lies in the attitude of these financial analysts and the short-termism of their incentive packages.

As long as they can show a profit for the current year, they can pocket multi-million dollar bonuses. So what if the market collapses next year? And, as we have found out, they continue to get high bonuses even if they are now making losses or have caused losses in the past. Apparently the banking industry cannot afford to lose them!!!!!!!!!!!!!

The unacceptable face of Capitalism (to quote former British PM Ted Heath)?

Analysts dont make buy decisions-Fund managers do.

Analysts dint make low income quotas mandatory for community banks-The Govt did.

The analysts didnt keep interest rates low-The Fed did

Analysts didnt design the system-nobody did.

The system created wealth for ALOT of average americans-and by extension worldwide through the CMOs et al

Like all bubbles those who were prudent managed the perceived risk

It will happen again
You give WAY to much credit to the Analysts


The reason the bonuses are high are because there is a MASSIVE amount of money to be made-the people that are getting bonuses have obviously worked to get them.
Its the most competitive industry in the world-

Later

[oecarb]

The reason the bonuses are high are because there is a MASSIVE amount of money to be made-the people that are getting bonuses have obviously worked to get them.Its the most competitive industry in the world-

Later

Yes, the people that are getting bonuses have obviously worked to get them - for that year. Did they care about the following year? Who rated these derivatives as AAA? Where is all this wealth that was created for average Americans? Why are they feeling poor today?

As I have said repeatedly, western European govts do not doubt the ability of capitalism to create wealth. The trick is to create sustainable wealth. This requires (in my view) that private sector capitalism work hand in hand with governments for the good of all - Germany and Norway being the best examples, in my view.

[Redman]

Carb Im sorry but your avatar freaks me out



I cant stop looking at it.

Am I sick?


These are normal people Carb-they would care about the next year the same way all of us care about it in the context of our lively hood.

And as to who kept the wealth-well I dont know-but the fact still remains that the industry most hit by this IS the financial services industry-which dosent sound right if they were smart enought to create the bubble in the first place.

No system is sustainable cept the creation of dotishness out of a certain Red House.

Imbalances create opportunity,pressure moves towards lower pressure-Im not sure there is something that will ever be a system of sustainable wealth.

You are sound, rational,well informed and logical-people and their money are seldom any of the above.ESPECIALLY AS A MOB(AKA A MARKET)

But there are MANY people that were grounded and made the right decisions to get out,or avoided a lot of the downside.
Just like the Internet Bubble,The IT Bubble, the BRIC bubble,the oil gold,1994 crash,Russian crisis,Asian Crisis,Orange county. housing,options,87 crashland,gold rush,oil rush,the tulip bubble,
People make money on the way up-it cant happen otherwise(there would be no supply for the late comers to buy)

This is an on going experiment-and a hard market

I just dont think that 1 sector of the market can be blamed.

It will happen again soon and we will forget about this one.


Later

[Lystra Kochin]

Two was enough for me...

But there are other ways to do business... but it takes courage... which many people don't have.