Comments on: That was the week that was – and it’s still not over

By: Erica Rose

Erica Rose — Thu, 04 Jun 2009 15:14:21 +0000

This was a great help to me so thanks for the advice!

By: Dusty

Dusty — Thu, 25 Dec 2008 04:27:36 +0000

Nice! i`ll be stopping by from time to time

By: Bazman

Bazman — Sat, 20 Sep 2008 18:24:12 +0000

It’s still not over. Anyone can see there is high prices, high house, low wages, and large debts in many forms. Something was going to happen and still is.

By: Adrian Peirson

Adrian Peirson — Sat, 20 Sep 2008 01:35:33 +0000

It is unlikely to be inflationary ?

can that really be true ?

Either Govt is simply Printing more money, thereby devaluing existing money. IE Inflation.

Or it is Saddling us with Bad Debts, which we have to pay back which itself is inflationary.

Govt has a choice of Protecting the People or the Banks, why not simply say to the Banks, you got us into this mess.
I am going to declare that as of today, all mortgage Debt is forgiven and the People can keep their homes.

The Banks wont like it of course but Other Banks will take their place.

Who should Govt protect, the Banks or the People.

Since they have only lent us worthless fiat money or thin air credit any way, they have lost nothing anyway.

PS.

given that a £50 note costs around 1p to print why did Brown swap a large pile of Gold Bullion for a large Pile of unbacked, essentially worthless fiat money.

By: figurewizard

figurewizard — Fri, 19 Sep 2008 18:01:35 +0000

The week has ended with the FTSE up 9% on the day and the stars of the show were the banks. However it is entirely possible that those who had taken short positions on their shares were faced with huge losses once Bush announced his nationalisation of all of his country’s dodgy mortgages and were therefore desperate to get their hands on stock before it sailed into the stratosphere. That was Friday then – We shall see what kind of a grip Bush and Brown have, come the close of business next Monday.

By: Acorn

Acorn — Fri, 19 Sep 2008 17:31:46 +0000

Watching the market today, I was starting to feel better about the world’s finances. Then I was sent this link.

It seems the problem is much much bigger than I imagined. It appears that there is a “ten trillion dollar opportunity” out there for anyone who has any cash to spare. Some of the text in this link is nearly understandable.

http://www.highyieldblog.com/

By: APL

APL — Fri, 19 Sep 2008 16:55:54 +0000

JR: “Now in the UK we have a ban for a few months on short selling shares in financial institutions.

There has been a rally in the market today, some are saying it is because of the wise move on the part of that financial genius Gordon Brown.

Well, how about this to give you nightmares?

Shorts are getting out of their positions for fear of legal sanction. That seems to me to mean they now have to buy stock to cover their short position, hence the rally. They may well have lost money – because they have had to unwind their positions premeturely. OK so what you say, shorts are evil.

So now shorting is illegal. Next week, perhaps next month, when the reality of the financial stocks dawns, the drift downwards will start and gather momentum. You know what – there will be no short covering rally. No one will be buying stock to cover their short positions, everyone will be scrambling to sell.

Imagine a boat in rough seas with the passengers and crew standing on one side.

Effectively, our financial ‘genius’ Gordon Brown has removed the mechanism in the market that would normally have stopped a plunge to the bottom.

Personally, I think he is insane.

By: StevenL

StevenL — Fri, 19 Sep 2008 16:05:45 +0000

It’s not all doom and gloom with this financial crisis, I’ve actually found it all very educational.

A few years ago I had a part time job in the banking sector, taking applications for credit cards and performing balance transfers on activation calls. This was in early 2004 and it struck me then just how much debt was out there and how unlikely it was that it could all ever be repaid.

I’ve also worked in the public sector and done some work on debt advice. People with no income would regularly be seeking help with many thousands of pounds debts they had accumulated. It always struck me through the boom years that the banks must have been overvaluing this mountain of debt, and that the housing market was going bananas.

I didn’t have the faintest clue what would happen though. Before the financial press started discussing the state of the US property market on the run up the first front-page shock of the credit crunch last year I didn’t even know what the LIBOR was, let alone a MBS, a CDO, and SUV, a CDS, a CFD or the rest of it.

As a direct upshot of all this I’ve started reading the financial news, bought books on the subject and even dipped my toe in the water, made a few small derivatives bets and had my fingers burned just enough to teach me a thing or two about different ways of managing my money and risk.

So in a way I think the credit crunch is not only an inevitable thing, but also a cloud with a silver lining.

By: mikestallard

mikestallard — Fri, 19 Sep 2008 15:35:53 +0000

As an Historian, I try to take a very simplistic and long term view of life.
How does this fit with the present crisis?
Before the Big Bang, an Englishman’s word was his bond. People shook hands and meant it. If you cheated, you were out of the club. The catch was that you had to have gone either to a good school or to have been an officer in the Armed Forces and have the right accent. “A good egg”.
After Big Bang, the Americans moved in and people began working on computers which, I learn, can do three transactions in the space of one eye blink.
Honesty and being a gentleman who was trustworthy became quaint relics of Empire. (Telegraph cartoon – “Alex”?)
But what were these transactions?
Sub Prime Mortgages very often (perhaps inspired by do goody (words left out) busybodies in the government?) And, of course, as they were “transactions”, nobody either knew or cared what they were so long as they could sell them.
It all got (deliberately?) very complicated indeed.
Now even the governments have got together to put Humpty back together again.

Myself, I cannot see how things can improve. If the city is just shuffling worthless pieces of paper – along with some serious transactions – and nobody has the faintest clue what they are doing, how can they?

And, by the way, isn’t the whole idea of a hedge fund to escape regulation by the City? I wonder who is checking up on them? You need a greyhound to catch a hare.

By: Bazman

Bazman — Fri, 19 Sep 2008 14:57:13 +0000

Sounds like pyramid selling, (words left out) at worst. At best, a bit like the American car dealerships who claim that they can get credit and thus a car for anyone. The car is so old and worthless that any lose by non payers is just absorbed by the car dealer and the finance companies. Keeps everyone in a job and America on the road.
Unfortunately the amounts of money where significant and Homer Simpson was buying from Cowboy Bob.
Madge: Did you spend our life savings on a motor home?
Homer: Of course not. I spent our life savings on the down payment of a motor home!
They end up stranded in the woods.
There will be of course fortunes to be made from the wreckage in cheap shares, fees to advisor’s/consultants/dealers and cheap property. Much of it paid for by the taxpayer if we stop pretending.
‘It never rains on the rich’ remains true as ever and it looks like there is some humidity on the way for me.