The Financial Crisis

[Francisco Montana]

Ok. I am hardly the alarmist type. Look at my posting history to see for yourself. However, and with that said, I do want to take a short moment to say what the heck is really going on with our financial markets!?

http://www.breitbart.com/article.php...show_article=1

http://uk.news.yahoo.com/rtrs/200809...l-7318940.html

http://www.iht.com/articles/2008/09/...s/15lehman.php

http://biz.yahoo.com/ap/080914/lehma...ers.html?.v=30

http://www.iht.com/articles/2008/09/...ess/crisis.php

[danzig]

In the end Im thinking this is for the best and Im actually glad to see the feds will allow Lehman to fail. Bail out what is vital to get over this rather large hump and let the rest fail if they are going to fail so Wall Street learns its lesson again atleast until the next time.

[Francisco Montana]

In the end Im thinking this is for the best and Im actually glad to see the feds will allow Lehman to fail.

I couldnt possibly agree more. I have said for a long time that if you have a crappy business model, guess what, youll fail.

That doesnt mean the govt has to completely turn the other way. They do have a roll. But that simply does not include pouring billions of dollars of tax payer money into a company that obviously is too thick with corruption and cronies to remain viable. Let some new up-and-coming maverick fill the void with new innovations and less restricting strings attached (mainly in Washington.)

[danzig]

Yep their role is to make sure Fannie and Freddie are secure and to prevent to against any vicious circle of failures. I mean clearly seeing Lehman fail isnt pretty but I think the Feds have done what they could to ensure such failures are self contented, they obviously cant bail out every failing investment bank. And Lehman Brothers did announce an hour ago they are failing chap 11. Some times the medicine is rather bitter to swallow after all but no point in bailing out something simply not worth bailing out. My objection to goverment involve in such things is become more and more tolerant though considering the competitive nature of things.

[Thanatos]

Much as I dislike seeing things go bankrupt, I don't believe it's right for the Feds to bail out every single business like Freddie and Fannie Mac that made bad decisions, even if they are large ones.

[danzig]

Much as I dislike seeing things go bankrupt, I don't believe it's right for the Feds to bail out every single business like Freddie and Fannie Mac that made bad decisions, even if they are large ones.

Freddie and Fannie arent exactly typical businesses though and their health IS vital to the US and pretty damn important as far as world economy goes. If the US allowed THOSE to fail the effects/ripple would be quite devastating.

[Thanatos]

Freddie and Fannie arent exactly typical businesses though and their health IS vital to the US and pretty damn important as far as world economy goes. If the US allowed THOSE to fail the effects/ripple would be quite devastating.

And so we should bail them out, when technically our money is worth nothing, since not only are we backed on nothing, but we also have a mountain of debt that is only growing larger by the day?

[Francisco Montana]

And so we should bail them out, when technically our money is worth nothing, since not only are we backed on nothing, but we also have a mountain of debt that is only growing larger by the day?

If we would develop our own natural resources instead of relying on foriegn energy we could not only fuel ourselves for the next century but we could pay down the national debt with even the most modest taxes on those homegrown yobs and company profits.

We need a paradigm shift in this country.

[Viking Prince]

This problem will continue as long as banks make bets on volatile securities with short term hedge fund money. You can only make wild bets so long before you get bit.

The old model of borrowing with long term funds and lending at a higher rate with shorter terms is starting to look actually brilliant. I wonder when this will be rediscovered by the latest crop of MBA's as the newest way to make money?

[Chaigidel]

the problem will continue as long as republicans control the government-- curious this collapse has entirely occured under the watch of one GWB and MCCAIN

[WrathofTulkas]

the problem will continue as long as republicans control the government-- curious this collapse has entirely occured under the watch of one GWB and MCCAIN

OMG PROPAGANDA!

I dont know about that... letting a company collapse is a very conservative thing to do, very Hoover like :O I think its call laissez faire.

The problem we are having with the investment companies has little to with natural resources and much to do with greed. These companies got greedy, as did the consumer, and began issuing and buying high risk loans. Once these loans began going bad and then snow balling, someone has to take a hit.

I never thought the gov should have bailed out any of the mortgage firms, but the more I learn about Freddie and Fannie, the more I realize that was probably legit. But the whole loan industry needs to take serious hit and suffer a bit in order to learn a lesson. The more painful the better, and this is true for those taking loans they can't afford, the better it is for everyone in the long run.

And someone mentioned developing our own natural resources. Although, yes, it would take a little strain off our national debt the key word is 'little'. Right now the war is costing us 10b in debt a month and local oil would only cover about 7% of our use in the best estimates. What the US needs is a new industrial model and new industry. We need to create stuff the world wants to buy instead of credit.

So, needless to say, it also angers me when I hear about the gov giving money to support the auto industry. As someone else said above. If you have a bad business model then you should fail. If the auto industry can not see the writing on the wall, then they should fail and be replaced by those who can.

Totally agree with that, I think those greedy CEOs should burn in ....

[Viking Prince]

the problem will continue as long as republicans control the government-- curious this collapse has entirely occured under the watch of one GWB and MCCAIN

You forgot to mention all of the members of the US Senate and House banking and finance committees. Maybe some special emphasis to senior memebers of both parties? When things go this wrong, lots of people should get credit for helping create the mess. Congressional oversite and legislative responsibilites are just as important as some of Pres. Bush's appointees.

[WrathofTulkas]

You forgot to mention all of the members of the US Senate and House banking and finance committees. Maybe some special emphasis to senior memebers of both parties? When things go this wrong, lots of people should get credit for helping create the mess. Congressional oversite and legislative responsibilites are just as important as some of Pres. Bush's appointees.

Viking, according to a lot of people today, if something goes awry in the United States the answer usually is "Omg Bush is suck a ing retard, what a ing stupid bastard ruining our country... Cant wait till Obama"

[JP226]

These companies have to die because there just isn't this much wealth in the industry to support them. And this applies to the stock market in general, no way in hell should it have been whatever it was 14 or 15,000. And i've been calling for a collapse like this for the last year or two now, and especially since the Fed cut rates back in last October. What they were doing is feeding the inevitable.

[Sebdeas]

Just another showing that greed isn't good.
Loaning money to people who can't pay it back, just so you can earn rent in the short run.

Shame the rest of the world economy has to suffer from the greed of a few people.

[Ramashan]

The problem we are having with the investment companies has little to with natural resources and much to do with greed. These companies got greedy, as did the consumer, and began issuing and buying high risk loans. Once these loans began going bad and then snow balling, someone has to take a hit.

I never thought the gov should have bailed out any of the mortgage firms, but the more I learn about Freddie and Fannie, the more I realize that was probably legit. But the whole loan industry needs to take serious hit and suffer a bit in order to learn a lesson. The more painful the better, and this is true for those taking loans they can't afford, the better it is for everyone in the long run.

And someone mentioned developing our own natural resources. Although, yes, it would take a little strain off our national debt the key word is 'little'. Right now the war is costing us 10b in debt a month and local oil would only cover about 7% of our use in the best estimates. What the US needs is a new industrial model and new industry. We need to create stuff the world wants to buy instead of credit.

So, needless to say, it also angers me when I hear about the gov giving money to support the auto industry. As someone else said above. If you have a bad business model then you should fail. If the auto industry can not see the writing on the wall, then they should fail and be replaced by those who can.

[Big War Bird]

This is a failure of government. It would not be regulating and rescuing banks like it has been for decades now. Repeated government intervention has taken genuine risk out of the equation.

All kinds of irresponsible behavior is being forgiven. It is as if a casino had a policy that everyone that plays is guaranteed not to lose money. If you go in and lose everything in blackjack the casino will hand you your money back on the way out.

[Thanatos]

This is a failure of government. It would not be regulating and rescuing banks like it has been for decades now. Repeated government intervention has taken genuine risk out of the equation.

All kinds of irresponsible behavior is being forgiven. It is as if a casino had a policy that everyone that plays is guaranteed not to lose money. If you go in and lose everything in blackjack the casino will hand you your money back on the way out.

Exactly, it's a perfect lose-lose situation.

[Sphere]

I think a big chunk of blame falls on the Fed, specifically greenspan. He actually endorsed sub-prime type mortages and refused to hike interest rates up to the levels they should have been to curb risky loaning. Certain deregulation also caused serious problems, but that blame goes to the congress and the president.

However, the majority of the blame falls on private industry and the firms who threw out commmon sense when it came to home loans. The repackaging and selling of these loans has also caused huge problems, but the core of the problem was making bad loans in the first place.

I mean it was painfully obvious there was a housing bubble. When cable channels start putting on reality shows about "flipping" houses (buying a house, doing few thousand dollars of repairs and then selling it for $20,000+ more than you bought it), you know something is wrong.

[Last Roman]

This is a failure of government. It would not be regulating and rescuing banks like it has been for decades now. Repeated government intervention has taken genuine risk out of the equation.

seems to me that the government had little to do with it and was mostly the fault of banks who saw dollar signs and just couldn't say no.

but to be fair, I probably haven't been following this as closely as I should