2008-09-18, 23:43 | Link #1 |
Insane Fangirl
Author
Join Date: Jul 2008
Location: Home of the 2010 Olympics
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Economic Crisis of 2008/2009
Well, everyone's seen the news about that insurance company in the States going bankrupt, and the world economy is going into a slump. If you haven't, look up the articles in the News Stories thread.
This is just to basically discuss the Crisis that is going on right now. I'd like to hear people's opinions on it, especially the people who are in Econ. for university, or have a job related to it.
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Last edited by Hari Michiru; 2008-09-20 at 11:13. |
2008-09-19, 00:16 | Link #2 |
Bittersweet Distractor
Join Date: Nov 2007
Age: 32
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No, Republicans say we are not in an economic recession. We shouldn't interfere with the economy. Everyone should do everything by themselves, people are not children.
Like hell that is true . Our inability to regulate these greedy wall street people is digging ourselves a hole that is getting harder and harder to climb out of. As a person who wants to go into finance mathematics, I am not very happy with the condition of companies such as AIG.
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2008-09-19, 00:52 | Link #4 | |
Moving in circles
Join Date: Apr 2006
Location: Singapore
Age: 49
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These are the casualties this month (Sept 08):
There are worries that Morgan Stanley (investment bank) and Washington Mutual (US savings bank) are next on the chopping block. SeijiSensei posted a good primer on the origins of the current Wall Street crisis in the US Elections thread. The problems began with the steady deregulation of the US financial industry that started over 20 years ago. At this point, most observers probably feel a smug sense of schadenfreude while watching the mess unfold. The truth is, we are all equally to blame. The gigantic scale of the present problem could not have been caused by just a handful of greedy bankers or insurance salesmen alone. It was also caused by rampant consumer and corporate demand for liquidity created by securitisation. Without the availability of free-flowing funds, the dot-com boom of the 1990s would not have been possible, for example. So, in a very real sense, all of us are getting our long overdue comeuppance now. The entire system is at fault, because it had been built primarily on that most primal of human instincts — greed. The US and British banking system had, quite simply, lost touch with the real economy. When all kinds of dodgy deals — ranging from "business models" written on the back of a napkin to sub-prime mortgages — can be packaged neatly into financial instruments that are then traded on the world market, we've created a system that progressively encouraged the original lenders to neglect due diligence. In effect, banks and moneylenders enjoyed a situation where they could keep passing the buck, and make money out of it. Hence the temptation to create more such dodgy deals. During the boom years of banking growth, US and European banks frequently called Asian bankers wusses for not leveraging up and getting "optimal" returns for their capital. Well, look who has the last laugh now. At a time when US and British financial institutions are trembling, Asian banks are standing steady on rock-solid foundations of deposits. But, even then, there is little room to gloat. The world economy is so tightly interconnected today that everyone will be affected sooner or later. The cost of debt has suddenly shot up over the week, which means that credit has all but dried up for many individuals and businesses. That could, in turn, affect the real economy, as many companies might suddenly find it harder to manage their cash flow. That could, in turn, lead to recession and job losses, and if the situation gets out of hand, another Great Depression could materialise. The only "good news" for now is that oil prices are falling, due to worries over slowing global demand. Hopefully, that would drag down other commodity prices as well. It would be disastrous to deal with a recession at a time of cost-driven inflation. Last edited by TinyRedLeaf; 2008-09-19 at 08:55. Reason: Fixed a link. |
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2008-09-19, 04:22 | Link #11 | |
(ノಠ益ಠ)ノ彡┻━┻
Moderator
Join Date: Mar 2006
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Quote:
Anyway, the world isn't ending. I really hate the doom and gloom folks - bad attitudes are just making things worse. I'm not saying people shouldn't pretend things are wrong....they are. But this isn't the Great Depression. Not even remotely close. Come back when a quarter to half your nation is unemployed, when inflation is so astronomical even people with jobs can't afford anything, when suicide is rampant and people are standing in soup lines waiting for daily rations, when the world birth rate drops three percent in one year because kids are too expensive to be born. When it takes the government running up the national debt astronomically and a world wide war to get the economy running again. Until then, people have food, jobs, luxuries. Will it get worse before it gets better? You bet. But it will get better. It just won't be tomorrow.
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2008-09-19, 04:39 | Link #12 |
Senior Member
Join Date: Apr 2007
Location: East Cupcake
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^Well, it is not like the American Great Depression started with "quarter to half [the] nation...unemployed, ...inflation so astronomical even people with jobs can't afford anything, ...suicide is rampant and people are standing in soup lines waiting for daily rations", the country had to work up to that point. While I agree with you concerning doom-and-gloom analysis, it must be said that the original depression started much the same way ("...the key cause of the Depression was the expansion of the money supply in the 1920s that led to an unsustainable credit-driven boom"), and was only worsened by inept leadership decisions on part of Hoover and the Federal Government. The months ahead will show us if we will be lead into another Great Depression, or if a society can, for seemingly the first time in history, actually learn from previous mistakes.
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2008-09-19, 04:51 | Link #13 | |
(ノಠ益ಠ)ノ彡┻━┻
Moderator
Join Date: Mar 2006
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What you said pretty much sums up the make or break of the whole thing. One would hope that this time around, with signs everywhere, that steps will be taken before it becomes too late. So far it seems that those actions are being taken, slowly, even if they are baby steps. That's probably a good thing, we don't really need more knee jerk actions at this point. It's crappy times for sure, but it's not that kind of bad, yet. We still have until 2012 for the end of the world after all....so we're a bit ahead of schedule.
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2008-09-19, 05:18 | Link #14 |
Observer/Bookman wannabe
Join Date: Oct 2006
Location: Singapore
Age: 39
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I would say that the Great Depression became Great because of the tariffs and economic nationalism of the 30s. If the US/EU/Asia starts erecting barriers, we're going to be in big trouble.
At least this time round, the US isn't the sole dynamo of the world economy, unlike the situation after WWI.
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2008-09-19, 06:10 | Link #15 |
Senior Member
Join Date: Nov 2003
Location: The dog gossips too much.
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Hint to thread starter: "Economic" and "Economical" do not mean the same thing.
And I'm sorry for those in crisis, but this U.S. trouble is not affecting my life in any way. Good luck to those in the banking sector.
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2008-09-19, 08:43 | Link #16 |
(。☉౪ ⊙。)
Author
Join Date: Jul 2004
Location: In Maya world, where all is 3D and everything crashes
Age: 36
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America is already bankrupt, if all countries would collect their debts from it the land would be for the picking
however thsi situation will have effect on the world, its already effecting our economy and McCain wants to spend more money on Iraq -_-; silly man it was already predicted that America would get into deep trouble a long while back, I could see it coming last year |
2008-09-19, 09:20 | Link #17 | |
Observer/Bookman wannabe
Join Date: Oct 2006
Location: Singapore
Age: 39
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Quote:
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2008-09-19, 09:24 | Link #18 |
I've been Kawarolled
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This is all caused by our economics becomign far to soft and accessible to those who really shouldnt be dabbling in it i.e. 0% down subprime morgages
its a brutal outlook short term and ive withdrawn my assets from the market, but in the long run with reinforced rules governing the economy and transfer of money, we should be fine in 2-3 years. Its insane to think banks were giving out money without anything in return, they honestly deserve this. FOR YOU INVESTORS OUT THERE hold on to your money for 2-3 months until about december after the election. Then invest heavily in the large banking firms that survive and you will reap profits in 1-2 years that you cant fathom. Because when our economy rebounds, the survivors who have absorbed the defunct banks will be stronger than ever Im an Intl. Business Major, but my StepFather and Brother are both economists who have both worked for the SEC, and this is what theyve been prediciting, take it with a grain of salt. This is not a political issue, its just a general decay of the overall system, it became too soft. FYI to both obama and mccain backers (im a centrist) obama people: By taking even more money from the nation which already is in dire straights and cash strapped financially, yes you may help strengthen the overall infrastructure of the nation, but what good is that if people have absolutely no capital to do anything to invest in the economy since they can barely subsist on what net income they receive Mccain people: While putting more capital in the hands of hte people through tax cuts makes sense as it releases more cash flow into the economy, putting our govt into massive debt severly cuts its ability to perform as the ineffective nature of hte SEC in dealing with this issue has shown as it unfolds. in summation FLCL FOR PRESIDENT I stand for progressive and open domestic policy, wide open globalization, ironfisted foreign policy that puts the UNITED STATES interest at the forefront of our agenda. Vote FLCL for president! ^_^ |
2008-09-19, 09:25 | Link #19 |
noch einmal?
Join Date: Mar 2008
Age: 37
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It may not affect your life now, but the state of the U.S. economy has a huge impact on the rest of the planet, does it not? If everything's going to hell here, you may have trouble in the future too. I hope things get better soon, because this really is scary. I don't think we're headed for another 1930s-esque depression, but the current situation has me worried.
Last edited by blue skies; 2008-09-19 at 11:41. Reason: goofy sentence structure |
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