AnimeSuki Forums

Register Forum Rules FAQ Members List Social Groups Search Today's Posts Mark Forums Read

Go Back   AnimeSuki Forum > General > General Chat

Notices

Reply
 
Thread Tools
Old 2008-09-27, 14:36   Link #121
solomon
Senior Member
 
 
Join Date: Sep 2006
Location: Suburban DC
I have a feeling that Wall Street justice will happen MUCH later. Plus while i'm not happy with the plan that Congress is cooking up, I don't see how you can really be against it, I see no alternative rather than temporary gov't intervention.
solomon is offline   Reply With Quote
Old 2008-09-27, 14:56   Link #122
Shin Muhammad
Putting Truth First.
*IT Support
 
 
Join Date: Sep 2008
Location: Jakarta, Indonesia
Send a message via Yahoo to Shin Muhammad
But, why government should spend their money for something the speculator did?
Is it better to stop money speculating than inject a lot of money to save the economy?
I think it just stop problem for now, but later? Who knows?
__________________


Indonesian Railfans
Shin Muhammad is offline   Reply With Quote
Old 2008-09-27, 15:04   Link #123
WanderingKnight
Gregory House
*IT Support
 
 
Join Date: Jun 2006
Location: Buenos Aires, Argentina
Age: 25
Send a message via MSN to WanderingKnight
Quote:
But, why government should spend their money for something the speculator did?
Welcome to the 1970s, USA! Nice to see you've finally gotten around following the directives your government gave to the South American dictatorships several decades ago. It's done us a world of good!

The irony of it all is just amazing.
__________________


Place them in a box until a quieter time | Lights down, you up and die.
WanderingKnight is offline   Reply With Quote
Old 2008-09-27, 15:06   Link #124
Xellos-_^
Married
 
 
Join Date: Nov 2003
Location: R'lyeh
Age: 38
Quote:
Originally Posted by Shin Muhammad View Post
But, why government should spend their money for something the speculator did?
Is it better to stop money speculating than inject a lot of money to save the economy?
I think it just stop problem for now, but later? Who knows?
because if the government don't do something the who economy could come to grinding halt.

A lot of small business relay on shart term loans to cover expense while they wait to get paid by thier clients. Currently these loans are getting made and that is having a overall down effect on the economy as small business can't get the loans they need.

The reason why the banks are making less of these loans are because they are hard time borrowing money themselves form fund companies and instutation investors. Who are scare silly of making loans.

Money = grease
Banks/investment companies = gears

No money = gears grind to a halt = economy collaspe.
__________________
Xellos-_^ is offline   Reply With Quote
Old 2008-09-27, 19:36   Link #125
karasuma
Senior Member
 
 
Join Date: Apr 2006
A letter from a Bank CEO against the Bail Out plan

Here's a link to a letter from BB&T's chairman to Congress regarding their bailout plan. He doesn't like it. His bank doesn't need it.

For John Allison, the high-risk rollers on Wall Street are getting too much of the ear of Congress and having too much say in resolving the financial nightmare that they created.

That's why Allison, the chairman and chief executive of BB&T Corp., submitted a 14-point letter Tuesday to all 535 members of Congress with a simple message regarding the proposed $700 billion bailout.

"There is no panic on Main Street and in sound financial institutions," he wrote. "The problems are in high-risk financial institutions and on Wall Street."

He said that it is important that "Congress hear from the well-run financial institutions, as most of the concerns have been focused on the problem companies. It is extremely important that the bailout not damage well-run companies." Allison's opinion is seconded by local community-bank officials and community-bank trade groups.


http://media.gatewaync.com/wsj/pdfs/2008/09/allison.pdf
karasuma is offline   Reply With Quote
Old 2008-09-27, 23:08   Link #126
4Tran
Senior Member
 
 
Join Date: Dec 2005
Quote:
Originally Posted by solomon View Post
I have a feeling that Wall Street justice will happen MUCH later. Plus while i'm not happy with the plan that Congress is cooking up, I don't see how you can really be against it, I see no alternative rather than temporary gov't intervention.
The only real reason for being against the government intervention is when it ends up being worse than inaction. There is a chance that taking radical action would alleviate the problem, but there are three factors that make that very unlikely:
  1. Whatever the plan being proposed, the people running it will be Paulson and Bernanke and the ghost of Greenspan. Their inability to do anything before the crisis although they seem to have known that it was pending inspires no confidence that they can do anything to fix it.
  2. It's $700B that we're talking about, but the number seems to have been picked out of a hat. This means two things: that it's $700B less to spend when a greater crisis (likely) hits, and that the money will be largely wasted.
  3. The bailouts being proposed are addressing the wrong problem. Everyone is treating it like a liquidity problem when it isn't. Sure, the banks themselves don't have much cash, but there's plenty of other institutions that do. The reason they're not spending it is because they have no confidence in the financial system, and that's the problem that really needs to be addressed. What this means is that the bailout will purchase all sorts of papers at close to face value, and it'll end up getting people trying to cash out on this deal rather than inspiring any confidence.

Quote:
Originally Posted by Shin Muhammad View Post
But, why government should spend their money for something the speculator did?
Is it better to stop money speculating than inject a lot of money to save the economy?
I think it just stop problem for now, but later? Who knows?
The main problem is that this financial crisis will spread over into the general economy. Right now, banks are trying not to lend money, and it'll only get worse for the next little while. The real danger is that if foreign investors and central banks get scared, the American economy will go straight into a tail spin.

Speculation is one of the things that will have to get tackled, but that's a long-term fix to prevent this kind of thing from happening again, and won't do much to calm the markets right now. Then again, just injecting a lot of money isn't really the answer either. So far this year, the various American government agencies have already done so to the tune of hundreds of billions of dollars, and it's only been enough to avert immediate catastrophe.

Quote:
Originally Posted by Xellos-_^ View Post
A lot of small business relay on shart term loans to cover expense while they wait to get paid by thier clients. Currently these loans are getting made and that is having a overall down effect on the economy as small business can't get the loans they need.

The reason why the banks are making less of these loans are because they are hard time borrowing money themselves form fund companies and instutation investors. Who are scare silly of making loans.
This is already happening. Caterpillar just took out a couple of $500 million loans, and they were charged much higher interest than they normally would have been. Chinese banks have been advised to stop lending to American ones, and I've even heard that the U.S. government is currently at a greater risk of defaulting on its loans than McDonald's.

Quote:
Originally Posted by karasuma View Post
"There is no panic on Main Street and in sound financial institutions," he wrote. "The problems are in high-risk financial institutions and on Wall Street."

He said that it is important that "Congress hear from the well-run financial institutions, as most of the concerns have been focused on the problem companies. It is extremely important that the bailout not damage well-run companies." Allison's opinion is seconded by local community-bank officials and community-bank trade groups.
It seems that this mess is already spreading. Caterpillar is about as well-run a major corporation gets, and it's feeling the squeeze. I can only imagine how much this will hurt lesser companies.
__________________
The victorious strategist only seeks battle after the victory has been won...
4Tran is offline   Reply With Quote
Old 2008-09-27, 23:24   Link #127
Vexx
Obey the Darkly Cute ...
*Author
 
 
Join Date: Dec 2005
Location: On the whole, I'd rather be in Kyoto ...
Age: 57
In the US Northwest .. .small and medium businesses are the vast majority and employ most of the people: they can't get loans. They can't get operating credit so they can survive between doing the work and getting paid. Many of them are starting to close - and they are perfectly good profitable companies with good business plans and good history on paying their bills.

An immediate way to stop a spiral might be setting up a process for them to continue to get operational loan credit (from the SBA?) until the banks decide the Red Alert is over.
Vexx is offline   Reply With Quote
Old 2008-09-27, 23:57   Link #128
Solace
(ノಠ益ಠ)ノ彡┻━┻
*Moderator
 
 
Join Date: Mar 2006
Quote:
Originally Posted by Xellos-_^ View Post
The reason why the banks are making less of these loans are because they are hard time borrowing money themselves form fund companies and instutation investors. Who are scare silly of making loans.

Money = grease
Banks/investment companies = gears

No money = gears grind to a halt = economy collaspe.
Replace money with credit. There's plenty of money out there to write loans, but people aren't willing to take the risk that credits will be repayed. Investors are worried they won't see returns, and it all chain reacts from there.

The problem is still the bad loans written on homes that are losing owners and value. The bailout plan should address that, imo. The effect would give banks reassurance that they'll get paid for those loans, and investors will have reassurance that they'll get paid from the bank. Address it from the ground up monetarily, and revamp the regulation system from the top down.

I'd rather Congress not rush this. If it means delaying recess, good. People are worried that the big banks failing will mean the end of the economy, I can see that viewpoint but we have laws to buffer the market for that. We call it Bankruptcy. Under Bankruptcy law, businesses and individuals are given opportunities to restructure their finances or sell assets to handle the debt load. They are allowed to operate during this procedure under the protection of law while working out methods of repaying the debt.

Bankruptcy is a bad thing, because it's a last resort before giving up. But it does work. Is that any different than a last resort bailout that no one knows will even help?

I've already admitted that my understanding of all of this is limited, so be gentle on my most likely naive views here. But from my perspective, spending billions of dollars to hold up failing companies hasn't helped, so why would even more money that effectively broadens that scope do the trick now? I'm just not convinced that this trickle down effect will work.
__________________
Solace is offline   Reply With Quote
Old 2008-09-28, 00:12   Link #129
Tri-ring
The Censor Bat
 
 
Join Date: Oct 2007
Location: Land of the rising sun
I was watching a Japanese commentary program this morning showing the eerie similarity of the Japanese bubble burst of the 90's.
The Japanese government at the end inject 350 billion dollars to regain confidence back to financial institutions with major banks going bankrupt left and right which have not been recovered till this day. There are still problems but Japan was able to make it through because of a strong export industry.

I wonder how the US(and I don't mean just the government) is planning to regain confidence back to it's finacial institution without federal fundings?

I can say one thing major central bank already have little confidence in the FRB and the US federal government inept to show initiative and congress is just spreading the wound.
Tri-ring is offline   Reply With Quote
Old 2008-09-28, 00:52   Link #130
Vexx
Obey the Darkly Cute ...
*Author
 
 
Join Date: Dec 2005
Location: On the whole, I'd rather be in Kyoto ...
Age: 57
Quote:
Originally Posted by Tri-ring View Post
I was watching a Japanese commentary program this morning showing the eerie similarity of the Japanese bubble burst of the 90's.
The Japanese government at the end inject 350 billion dollars to regain confidence back to financial institutions with major banks going bankrupt left and right which have not been recovered till this day. There are still problems but Japan was able to make it through because of a strong export industry.

I wonder how the US(and I don't mean just the government) is planning to regain confidence back to it's finacial institution without federal fundings?

I can say one thing major central bank already have little confidence in the FRB and the US federal government inept to show initiative and congress is just spreading the wound.
We also lack "a strong export industry" ... there's not much we "make" anymore other what are proving to be less than stellar ideas about how law and business should work.
Vexx is offline   Reply With Quote
Old 2008-09-28, 00:57   Link #131
solomon
Senior Member
 
 
Join Date: Sep 2006
Location: Suburban DC
I rarely read newspaper opinion pages (although the Post is one of the most varied) but this one in the DC Post by a Yale Econ Professor proved interesting;

It's Called;

Everybody Calm Down. A Government Hand In the Economy Is as Old as the Republic.

http://www.washingtonpost.com/wp-dyn...d=opinionsbox1


Tell me what you Econ heads think especially, cause this isn't my forte at ALL.
solomon is offline   Reply With Quote
Old 2008-09-28, 01:26   Link #132
Tri-ring
The Censor Bat
 
 
Join Date: Oct 2007
Location: Land of the rising sun
Quote:
Originally Posted by Vexx View Post
We also lack "a strong export industry" ... there's not much we "make" anymore other what are proving to be less than stellar ideas about how law and business should work.
Actually the US have some export business that no other nation are able to come close.

First there is agriculture, that is why the Mr. Bush wanted to promote Bio-fuel to "Enhance" the price of grain that no other single nation can match in quantity.

Second is weapons. US is the top weapons dealer of the world.

Third is avionics but this is meeting heavy competition with European rival. Recently Boeing had a major blow with the Fuel tanker deal with the military, further expanding the problem with 787 "Dreamliner" which have missed production schedule so many time.

Forth is computer software but this is also meeting tough competition with various rivals and piracy.

Fifth is the movie industry but this is also showing fatigue with lack of original material and the ever rising price in production.
I also believe the US have a formidable chemical industry but unfortunaltely very limited for export due to enviormental problems.

As for machinery and/or construction material production, the US had placed too much emphasis on domestic market not being able to adopt the metric system which greatly hinders export. (No nation is going to by a 1/2 inchΦ bolts and what not's)

The biggest problem the US forsees in the near future is as spoken before, the near sightness of managment shipping their manufacturing facilities overseas so to squeeze HR costs.
From this any and all craftsmanship that resided within the various manufacturing industries either died out or was shipped out making it very difficult to regain the same height even if manufacturing industries come back.
This is the biggest hidden problem US must face.
Tri-ring is offline   Reply With Quote
Old 2008-09-28, 18:17   Link #133
karasuma
Senior Member
 
 
Join Date: Apr 2006
Quote:
Originally Posted by solomon View Post
I rarely read newspaper opinion pages (although the Post is one of the most varied) but this one in the DC Post by a Yale Econ Professor proved interesting;

It's Called;

Everybody Calm Down. A Government Hand In the Economy Is as Old as the Republic.

http://www.washingtonpost.com/wp-dyn...d=opinionsbox1


Tell me what you Econ heads think especially, cause this isn't my forte at ALL.
Maybe I don't understand it, but his essay is lacking in detail. Currently, we have 2 issues here.

1) we have the disease.
2) we have the symptom of the disease.

He essay addresses 1) but not 2), and he provides no detail. The bail out bill address 2).

From my point of view, problem of 1) we have.
a) Change of leverage regulation from 7:1 to 40:1
b) The existence of unregulated CDS market.
c) stated income loan ( liar loan ). This is not limited to subprime.
d) Rating agency is practically worthless.
e) VERY low interest rate
f) Interest only loan with adjusted interest rate.
g) 100% financing
i) opaque CDO
j) CEO and executives compensation structure ( encourage taking risk upfront)
more?

Problem of 2) we have :
1) Credit crunch caused by banks unable to lend due to trashed balance sheet.

You, Me, Privity equity, money <------> Banks <-------> Catapiller or normal companies that need short term financing.

See. The problem is banks in the middle. To be specific, GS, MS, and probably the top 5 US bank. If you can hook left and right together bypassing the banks. You solve the problem and there is no need to bail out banks.
karasuma is offline   Reply With Quote
Old 2008-09-28, 18:26   Link #134
karasuma
Senior Member
 
 
Join Date: Apr 2006
Quote:
Originally Posted by 4Tran View Post
It seems that this mess is already spreading. Caterpillar is about as well-run a major corporation gets, and it's feeling the squeeze. I can only imagine how much this will hurt lesser companies.
There are some stress going on right now because normal big banks can't lend anymore. So, new money is coming in to fill the role. There is a change of guard going on right now.

IE : The big banks are losing market share in lending because of their trashy balance sheet and they don't like it.

Quote:
Caterpillar had good reason to be happy with the terms. When it came to market this week, the company originally wanted to raise about $500 million of the $1.25 billion total using 10-year notes. Lenders were happy to oblige -- but demanded the company pay a premium of 325 basis points over the comparable 10-year Treasury.

A year ago, those same lenders only asked for a 130 basis point premium over the 10-year Treasury. So Caterpillar's borrowing costs had spiked 195 basis points.
With their trashed balance sheet, GS, MS, JPM and etc... want the taxpayer to bail them out. Hence, return them to be the status quo in US finance, and they use the economy as an excuse. If you ask them, whether spending 900B will save the economy, their answer is no or dunno. So, my question is, why are we doing this again?
karasuma is offline   Reply With Quote
Old 2008-09-29, 09:03   Link #135
SeijiSensei
AS Oji-kun
 
 
Join Date: Nov 2006
Location: Mucking about
Age: 64
Full text of proposed legislation:
http://www.huffingtonpost.com/2008/0..._n_130063.html
__________________
SeijiSensei is offline   Reply With Quote
Old 2008-09-29, 11:56   Link #136
Xellos-_^
Married
 
 
Join Date: Nov 2003
Location: R'lyeh
Age: 38
form the look of the stock market today and the news coming out of Europe. It looks like while the US is the first to crash and burn, Europe is just a few behind in thier own ver of market collaspe.

anyone living in Europe wants to chime in on how the European financial market looks?
__________________
Xellos-_^ is offline   Reply With Quote
Old 2008-09-29, 12:23   Link #137
Vexx
Obey the Darkly Cute ...
*Author
 
 
Join Date: Dec 2005
Location: On the whole, I'd rather be in Kyoto ...
Age: 57
Editorial in the New York Times Business section:

http://www.nytimes.com/2008/09/28/bu...em&oref=slogin

Spoiler for lead paragraph...:


Every asset my wife and I own, mostly very conservative investments and real estate, is down at least 25% from 3 months ago ... approaching 40% if you go back a year.
All due to the misrepresentations, mishandling, and scheming of the people neck deep subprime packaginag, derivatives, and credit-swap bets. Oh, some of it is due to mishandling the energy policies but meh... and we're in *GOOD* shape because we have little debt.

Now multiply me and my attitude by millions of other middle-class voters ..... quite literally, there should be a number of CEOs and administration officials being hoisted by their petards, not being handed money to "solve the problem".

Last edited by Vexx; 2008-09-29 at 12:37.
Vexx is offline   Reply With Quote
Old 2008-09-29, 13:01   Link #138
Anh_Minh
I disagree with you all.
 
 
Join Date: Dec 2005
Questions:
- how much influence do you and the other millions of other middle-class voters have over whether Paulson get another trillion of your dollars or not? Isn't it in the hands of the congress and government anyway?
- how many of those millions are in agreement that Paulson shouldn't get that money? (And are willing, say, to write to their congressmen and swear to never again vote for them is Paulson gets the money?)
Anh_Minh is online now   Reply With Quote
Old 2008-09-29, 13:09   Link #139
Xellos-_^
Married
 
 
Join Date: Nov 2003
Location: R'lyeh
Age: 38
Quote:
Originally Posted by Anh_Minh View Post
Questions:
- how much influence do you and the other millions of other middle-class voters have over whether Paulson get another trillion of your dollars or not? Isn't it in the hands of the congress and government anyway?
- how many of those millions are in agreement that Paulson shouldn't get that money? (And are willing, say, to write to their congressmen and swear to never again vote for them is Paulson gets the money?)
the party leaders are mostly going with YES votes form congress that is either retiring or in very safe districts. They are allowing the rest to vote NO. So those who the voters can influence the most is going to vote No anyway.
__________________
Xellos-_^ is offline   Reply With Quote
Old 2008-09-29, 13:17   Link #140
monir
cho~ kakkoii
*Moderator
 
 
Join Date: Nov 2003
Location: 3rd Planet
525 points down.

Drop
Drop
Drop
Drop
Drop

To be somewhat on topic, I know I'll be voicing my opinion in the upcoming election once I find out who were the representative in my area (if any) that voted "Yay" to this resecue plan.
__________________
Eat and sleep! And Solace. Sig by RRW.
Space Brothers Executive member of the ASS. Ready to flee at the first sign of trouble.
monir is offline   Reply With Quote
Reply

Tags
economy, news

Thread Tools

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off

Forum Jump


All times are GMT -5. The time now is 17:58.


Powered by vBulletin® Version 3.8.7
Copyright ©2000 - 2014, vBulletin Solutions, Inc.
We use Silk.