|
|
Welcome to the Exploding Garrmondo Weiner Interactive Swiss Army Penis. |
GFF is a community of gaming and music enthusiasts. We have a team of dedicated moderators, constant member-organized activities, and plenty of custom features, including our unique journal system. If this is your first visit, be sure to check out the FAQ or our GFWiki. You will have to register before you can post. Membership is completely free (and gets rid of the pesky advertisement unit underneath this message).
|
|
Thread Tools |
Lehman Bros file for bankruptcy - Not a good day for investors
So the continuing crisis in the World's financial markets claims another scalp and rather a high profile one at that. The US government, previously adamant that they wouldn't get involved are now having to pump money into the financial system (Although given American national debt in total, it's not actually that much money) and share prices around the world are tumbling, meaning many small investors will have had their savings wiped out this morning. General consensus is that these are all problems of the banks' own devising. That a system whereby big gains are rewarded with massive bonuses but big losses are shifted on to shareholders has encouraged bankers to take stupid risks and made the entire global financial system incredibly fragile. Even so, it's likely that the vast sums the executives have pocketed in recent years will tide them through, even if their share options become worthless. The victims here continue to be the regular people who have either lost their jobs or had their savings wiped out by today's events. It would seem as though the way financial markets are operated will have to change and evolve in order to continue to be viable but I suspect that rather than the fundamental change that's so dearly needed, we will instead see simply a re-structuring with the companies that retain their value snapping up the failing ones and a market with even less competition arising as a result. If people were better informed one might expect to see a few runs on banks but luckily, the average bloke on the street is rather oblivious to the fact that if his bank goes bankrupt as a result of sketchy lending, all his money goes with it. Personally I spend all my money each month and have no savings so if HSBC went tits up I'd suffer for no more than a couple of weeks. So if you have any savings or investments are you at all concerned about their safety? What do you think needs to be done to restore stability in the market? Should governments be bailing the banks out or should we sit back and let the invisible hand run it's course, allowing the banks to fold and waiting for new financial institutions to rise up in their place? Have we learnt nothing from the mistakes of history and is another massive depression coming up or can the experience of the '20s and to a lesser extent the late '80s be used to ride through this current crisis? Jam it back in, in the dark. |
My savings account is with the NC State Employees' Credit Union, so I assume it's fairly safe from collapse. Of more concern to me is that the bulk of federal employee retirement funds come from investments in the "Thrift Savings Plan", which is a collection of supposedly stable stocks. We don't get a straight federal pension like the old days; instead, a percentage of our paychecks (1-14%) is deducted, matched by the government and invested. Some people used to micromanage their accounts, trading stocks daily, until the government ruled that we can only make 2 transactions per month.
Me, I don't have a head for the stock market, and wouldn't feel comfortable futzing around with my money. If I was close to retirement, I'd be worried, but I'm sure in the long run everything will work out. There's nowhere I can't reach. |
This thing is sticky, and I don't like it. I don't appreciate it. I didn't say I wouldn't go fishin' with the man.
All I'm sayin' is, if he comes near me, I'll put him in the wall. |
This is a good time to short BAC
Oh, and to buy Merrill Lynch shares of course I am a dolphin, do you want me on your body? |
I doubt investment banks are insured by the FDIC though. Only the commercial retail banks, like BoA, Citibank...
I was speaking idiomatically. |
$150,000? That's not bad at all. Accounts over here are only guaranteed up to £30,000.
I was discussing this with some mates last night and the general consensus of opinion is that this probably won't change much in the long run. The executives will all get taken on by other companies and will get straight back to lining their pockets. After Enron and the dissolution of Arthur Andersson a lot of people were expecting sweeping changes in the audit market but in reality, most of the AA partners got jobs in KPMG, there were a few non-committal grumblings from the IASB and big four audits still aren't worth the paper they're written on. I do think it'd be amusing if big Arab conglomerates started buying up American banks though. If I was the Sultan of Oman I'd buy a big American bank and rename it the Freedom Bank and impose Sharia law on all employees, just for the looks of righteous indignation on the faces of the customers. The stock markets across the world took a proper hammering yesterday though. The time has never really been more right for the Chinese and Arabs to start buying up American businesses so I wouldn't be at all surprised to see a bit of that going on in the coming months. What kind of toxic man-thing is happening now? |
Stock markets here taking a beating though, with banks in the lead. Especially the banks that have investments in Lehman Brothers.
Bear Stearns and Lehman Brothers is dead, Merrill Lynch sold itself, that leaves Morgan Stanley and Goldman Sachs. Time to short these in the fake stock market... FELIPE NO
Last edited by Zergrinch; Sep 16, 2008 at 05:34 AM.
|
Hay guys I would sell my AIG shares as soon as possible if I still had some
What, you don't want my bikini-clad body? |
RIP Lehman Brothers Survived the Great Crash of '29, fell fast in the Credit (Banking) Crisis of '07. They were only 158 years old.
There are disturbing parallels to the financial collapse we're seeing right now and the Great Depression. Still not sure if we're repeating the mistakes of the past though. Likely. Greenspan lowered interest rates and kept them there which inflated the housing bubble. Like all economic bubbles it burst. When it did it spread the chaos to banks. This is only the second year (13th month) of the banking crisis. The banking crisis during the Great Depression lasted about three years before it ended. The Federal Reserve and Treasury are using plays from Hoover's book with their various rescue schemes and it appears we've run out of any "new" or "innovative" solutions that will solve this mess. It'll just have to run it's course. Lehman Brothers is not going to be the last major institution to be pushing up daisies. Who knows what kind of chaos will be unleashed with AIG imploding. But hey, at least oil is dropping right? Time to party! Jam it back in, in the dark. |
Should I feel bad in that my hatred for the stock market and the general way our global financial systems are run is letting me enjoy all of this?
There's nowhere I can't reach. |
* because a bunch of people with an individual worth of $20k a year can bring the biggest banks to their knees. This thing is sticky, and I don't like it. I don't appreciate it. |
*hears of the banking crisis* "Heh, puny humans and their financial systems." *smirks* I am a dolphin, do you want me on your body? |
Also, not worrying too much about my own abilities to purchase a house within the next 10 years since straight out of school I should be landing in the top 25% of Americans for annual household income. Add in the chances of being with someone earning comparable income and I should be in the top 5% or so. I was speaking idiomatically. |
Investment Banking was where you made real money. The people you're laughing at are only fucked because they couldn't soak up capital before the crunch bottomed out demand for their finance degrees.
Most amazing jew boots |
How ya doing, buddy? |
You pessimist! Let him live his great American dream!
What, you don't want my bikini-clad body? |
Most amazing jew boots |
It only affects people in finance, we engineers are a-ok.
Now excuse me while I rush out to surrender my AIA insurance policy There's nowhere I can't reach. |
This thread has made me a man. I now understand things like a man does.
Additional Spam:
This thing is sticky, and I don't like it. I don't appreciate it. |
How ya doing, buddy? |
Well anyone who lives or works in New York will be immediately affected, no matter what their job. That many high-paid people losing their jobs at once is going to be a huge blow to the local economy. The London branch of Lehman's shed 5,000 jobs. That's 5,000 people who no longer buy lunch or go out for coffee, who don't catch the train to work, don't go to the gym in the area or use day-care services and that's just the regular admin staff. The executives are the ones who keep the bars and restaurants in business. To suggest that this is a finance only problem is incredibly naive.
Any big job losses have an immediate niegative effect on the local economy and you'll see job losses in all areas of business. What about the companies with big supply contracts for Lehman Bros? I imagine whoever supplied their IT systems is already planning to axe a bunch of software engineers, the catering compnay wil be laying off workers, as will the stationery suppliers, the air-con engineers, security firm, pension company, marketing company, auditors, the list goes on. When all those people lose their jobs then the local economies where they live take a hit too. The butterfly effect is really noticeable when it comes to the death of a huge company like this. Wider financial issues aside, a company of that side going tits up has serious implications for everyone. RR, you might be in line to score a well paid job but now the labur market has a lot more people in it than it did last week. Sure, not many will have your skills but some might and others might now re-train. All of these make job competition harder and pay-packets lower. On top of that, if big companies are worried about a period of economic shrinkage, they're less likely to be taking on new staff at all, especially highly paid ones. More and more stuff will get out-sourced to India or China where the skills are available but the labour far cheaper. Once the inital wave of redundancy has passed, eveyone's pay packets are going to fall in real terms. As I said, an increased labour supply means more competition for jobs and as such lower wages. Also with lower revenues, companies can't afford to give pay-rises any more and the rampant inflation that's still in effect across most of the world as a result of comedy oil prices (The knock on effect of which still haven't finished filtering down into food and heating prices, let alone everything else that needs haulage, i.e. everything) means most people will be effectively receiving a pay-cut this year I'd have thought. If you work for the government you're screwed and public sector wage cuts are the easiest way to combat inflation, short of increasing taxes or persuading the fed to put up interest rates even further. So you're earning less, there's fewer opportunities to change job, work's getting out-sourced to India and China and then you're going to see knee-jerk regulatory measures imposed on the banking system. It'll be incredibly hard to get credit any more and banks will start imposing higher charges on regular accounts to try to recoup some of their massive losses of late. Oh yeah, and your currency is fucked and will remain so until faith is restored in your banks. This means anything you have to import will cost more. Also, OPEC are seriously considering ending the years-old system of charging for oil in dollars and switching to basing the price on a basket of currencies, including the Euro and Yen. If (Or more likely when) this happens, the weakness of the dollar against pretty much every other currency on the planet will make your oil even more expensive so you'll either see further price inflation or you'll have to invade another middle eastern country (The government expenditure related to which causes inflationary pressure). On the upside, if you do manage to land a well paid job then you're laughing because property in America won't be worth the land it's built on this time next year as the banks who reposessed it all will be after some cash so selling at bargain prices. Now would also be a good time to start buying shares if you've spare cash floating around because the market will recover eventually, that's the nature of markets, it's just going to take a while. Also, if you bought stock options and gambled low on the price than you're probably already a millionaire. I mean, that's pretty much a best case scenario. Standing back laughing at people working in finance is fine but when you do so, remember that the people at the top who fucked everything else already liquidated their assets, hence the plummeting stock markets, and are happily sitting on piles of cash. The people who worked for the bank on a normal wage are basically fucked, as are the people who relied on those people's money for their own income and it's those people you're laughing at. Hardly the kind of grass-roots patriotism that Americans are so famous for. This is a far bigger story than anything else on the planet at the moment and will have a more significant impact on global economics and national foreign policies than I feel most people realise. I was speaking idiomatically. |
I think the fallout won't be as bad as you fear. AIG has been rescued by the Feds, and Barclay's has agreed to buy up some Lehman Bros. operations for a billion pounds.
I do hope that this is the epic failure of subprime and that things will start to get better from here on out. Morgan Stanley and Goldman Sachs better tread carefully What kind of toxic man-thing is happening now? |
AIG might not be dead just yet but to buy up that much debt means there's less money available elsewhere in the federal budget. You can't just keep increasing your national debt ad infinitum, at some point you've got to pay your bills. Barclays have been forced to buy the Lehman stocks while at the same time over here HBOS and Lloyds, two of our biggest retail banks are in sudden merger talks which the government has said they won't enforce the competition rules over, implying that one or the other was in seriously bad financial dire straits.
Barclays will only have bought functioning bits of Lehmans, the fuck off massive debts will still get written off by the liquidators meaning that a lot of firms who supplied them are going to find themselves seriously out of pocket. Corporate restructuring on this level also always involves shedding most of the work force so all the negative issues regarding mass unemployment still stand. Just because your newspapers are telling you not to panic, doesn't mean everything is ok. The American and UK governments and probably a few others around the world are desperately trying to preclude a massive run on the banks at the moment. Talk of banks collapsing makes everyone with any savings want to run to their branch and withdraw the whole lot, whether or not their savings are protected by federal laws. The situation at present is similar to the collapse of the Soviet Union. Everything's fucked on an institutional level and it'll take a long time to reorganise everything and get back to any sort of normality. In the mean time, the common people get shit on either because their jpbs are axed or prices rise so fast. At the end of it, you'll have a much smaller number of much bigger companies which will mean higher prices for everyone as they attempt to claw back what they just spent on asset stripping their competitors. Either that or the government will run everything and although the irony of America having a state operated banking system is a delicious prospect, that just isn't going to happen any time soon. You'll also see the emergence of some super-rich individuals who will be the ones who kick started the recovery by actually buying all the shares that are up for sale and thereby sending the prices back in the right direction. Essentially there'll be a smaller market that for a time at least will be far more risk-averse. Banking will become more expensive for everyone leading to further inflationary pressures but any country with an independant central bank (UK, US) won't be able to rely on interest rate rises slowing things down as that would just stop the banks lending to each other again and re-fuck the financial markets. Also, with little disposable income left, concumer spending wouldn't be the driving factor behind the inflation, it'd be government spending and the only easy way to cut that is reduce public services. As I see it, there's going to be some tough choices ahead and it being an election year in the US at least means that the politicians will be looking for vote-winning quick fixes, such as bailing out the failing companies. The problem being that in the medium to long term this is going to shaft the economy and there's little they can do about it. The sensible thing for a free-market loving economy like America's would have been to let AIG die and wait for other companies to pick off the bits they want. The government stays out of it, thereby not introducing any false demand into the economy and if the demand for the business is there, then someone will supply the products. There is the risk that it'd be foreign money that steps in though which I suspect is why this hasn't been allowed to happen. The problem with a protectionist free-market is that it completely fails when the market you're protecting runs out of resources. All it takes is for the World Bank to decide it wants some of it's money back or at least to say America has reached it's borrowing limit and the whole economy is royally fucked, unless the borders are opened up and they let the Chinese, Russians and Arabs bail them out. FELIPE NO |
(Probably why the Fed didn't lower interest rates yesterday. No need to toss more fuel on the fire.)
This is going to be a really good indicator if we're headed for a global depression or if we're just going to be hammered badly in a recession. What, you don't want my bikini-clad body? |
On the other hand, thumbing your nose at people who gave you career advice back in high school. I'm down with that. Whenever my mom asks me to program the DVD player, I bring up how she mocked computers back in the day. IT'S JUST A FAD HUH GOD MOM JUST LEAVE ME ALONE Jam it back in, in the dark. |
|
Similar Threads | ||||
Thread | Thread Starter | Forum | Replies | Last Post |
Any good day planner programs? | Andrew Evenstar | Help Desk | 7 | Jul 26, 2006 02:11 AM |