kaz
New Member
Posts: 22
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Post by kaz on Sept 18, 2008 11:57:29 GMT
In Oz we are getting the news about AIG and the US Govt's bail out. We've had a few exciting days on the stock market with one of our biggest investment banks Macquarie losing over 20% of its value in one day......and that bank claimed they had minimal exposure to the US banks. Our exchange rate is heading south at a great rate of knots and I'm sure my superannuation is now worth a few pies and a packet of chips. Anyway I was wondering what is "really" happening in the US because I'm not sure if the media here are making it look better or worse than it really is. I heard a figure that 1/3 of mortgages are failing in the US and that just sounds ridiculous. Does anyone have any info from ground zero....
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Post by Kevin VE3EN on Sept 18, 2008 13:54:25 GMT
From what everybody is saying in the news it is very bad.
Things in Canada are not too bad right now. I just bought my first house. It is a really great time to buy a house, thats for sure.
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Post by mykidsmaid on Sept 18, 2008 18:16:18 GMT
Someone told me today that Russia had to close their stock exchange for 3 days. Is that so?
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Post by Belushi TD on Sept 18, 2008 22:08:03 GMT
As far as mortgages failing, my understanding is that the worst state is florida, where something like 4.7% of mortgages are in foreclosure or about to be, which is far above the historical averages. Here in Alaska, its about 0.8%, which is only a little above the historical average.
My understanding is that it IS true that at least one of the Russian stock echanges is closed for a while. Don't know how long.
What is "really" happening in the US? Well, I think the governemnt is allowing the fallout from the subprime mortgage crisis to be spread out over a long period of time. With Lehman going under along with AGI, we're looking at yet another period of financial crisis. I suspect the feds should have let them both go under and not helped with a buyout. But, I really know very little about finance, so my opinion isn't worth much.
Belushi TD
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Post by jimg on Oct 8, 2008 23:59:50 GMT
The unfortunate thing about the current financial crisis is that it has little to do with Mr. Homebuyer not making his mortgage payments.
Although that is what tipped the scales (in the subprime market) we are facing a crisis of bad debt. Although the Feds keep talking about a "liquidity crisis" the real problem is a solvency crisis. The bad debt that has been underwritten in the last 5 years is now being destroyed.
The brokerages that borrowed agains these mortgages and other forms of bad debt, are now having to come up with more and more cash to maintain their loan-loss reserves. With some of these brokerages leveraged 30:1, that's alot of dough to come up with. And the Fed doesn't seem to have enough to really make a difference anymore.
Get ready for a wild ride!
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kaz
New Member
Posts: 22
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Post by kaz on Oct 10, 2008 10:15:15 GMT
Wild Ride!!! I'm hanging on.... Aus Dollar was at 95cents to the US Dollar a few weeks ago - as of today its bouncing around 65-67 cents. Today is being called "Black Friday" on our stock exchange, had the second biggest one day drop in value in history. Value of shares has dropped by 40% from its high a few years ago.
The Govt is now advising people who are about to retire that they may need to consider working for a few extra years to rebuild their retirement funds.
The most amazing thing is that an acquaintance in the investment industry told me in September last year that we were heading for a Global Crash due to the sub prime market. If he saw it 12 months ago, surely many others saw it coming as well.
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Post by jimg on Oct 11, 2008 3:12:13 GMT
It was only non-obvious to those who don't read the financials and gov't officials. I live in So-California. When home prices started wildly exceeding what the median income could afford....we knew it wasn't going to be a pretty correction. (and that was back in 2004!) Things went even crazier after that. Here's a great article titled "Debt Crisis vs Liquidity Crisis". What's the difference, and what it means.
www.minyanville.com/articles/AXP-sox-Fed-SLM-hgx-subprime/index/a/19378The Central Banks have been fighting a "liquidity" crisis, but to no avail. This suggests that solvency is the real issue, not liquidity. |
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Post by jocarl11 on Oct 14, 2008 13:16:19 GMT
Inflation in the UK today is up 5.5% so looks we will have to dig deaper into our pockets for a pint of milk!
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Post by nautonnier on Oct 23, 2008 23:43:55 GMT
Wild Ride!!! I'm hanging on.... Aus Dollar was at 95cents to the US Dollar a few weeks ago - as of today its bouncing around 65-67 cents. Today is being called "Black Friday" on our stock exchange, had the second biggest one day drop in value in history. Value of shares has dropped by 40% from its high a few years ago. The Govt is now advising people who are about to retire that they may need to consider working for a few extra years to rebuild their retirement funds. The most amazing thing is that an acquaintance in the investment industry told me in September last year that we were heading for a Global Crash due to the sub prime market. If he saw it 12 months ago, surely many others saw it coming as well. Yes - it was being warned against as long ago as 2005 by McCain and others but the left wing Congress here in the US were trying to social engineer mortgages and insisted on the banks giving out loans to people that would have been laughed out only 10 years ago. This in itself is not too bad - but then the housing market dropped and the banks suddenly realized that not only were the loans subprime - but the actual value that they were based on was _dropping_  Cue mistrust and panic in the financial markets who had generated all SORTS of clever ways of betting and sidebetting on the values of various 'financial instruments'. The entire clever house of cards started to tumble and of course the same parasites that caused the problem in the first place started using clever ways such as shorting - to make money out of the crashing prices - this means that the people that could have shored the system up were for personal gain letting (helping?) it crash. |
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Post by kiwistonewall on Nov 29, 2008 21:04:46 GMT
See mises.org/story/3138 it is impossible to organize society, in terms of economics, based on coercive commands issued by a planning agency, since such a body can never obtain the information it needs to infuse its commands with a coordinating nature. Indeed, nothing is more dangerous than to indulge in the "fatal conceit" — to use Hayek's useful expression — of believing oneself omniscient or at least wise and powerful enough to be able to keep the most suitable monetary policy fine-tuned at all times. Hence, rather than soften the most violent ups and downs of the economic cycle, the Federal Reserve and, to a lesser extent, the European Central Bank, have most likely been their main architects and the culprits in their worsening. |
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