Edstock Posted September 29, 2008 Share Posted September 29, 2008 Here's an interview by der Spiegel, with the German Finance Minister. Has some very interesting observations. http://www.spiegel.de/international/busine...,581201,00.html 'We Were All Staring into the Abyss' SPIEGEL spoke with German Finance Minister Peer Steinbrück about the roots of the US credit disaster, whether Germany is in grave danger and what the future has in store for world banking. SPIEGEL: Mr. Steinbrück, Wall Street is imploding. The government of the United States wants to establish a $700 billion (€480 billion) bailout program for its banks and their bad loans. How serious is the situation for the rest of the world? Steinbrück: We are experiencing the most severe financial crisis in decades, although one should be careful about historic comparisons with 1929. One thing is clear: After this crisis, the world will no longer be the same. The financial architecture will change globally. Quote Link to comment Share on other sites More sharing options...
TStag Posted September 29, 2008 Share Posted September 29, 2008 No one likes to make the direct comparison to 1929 for obvious reasons. But I'm not sure anymore that even the brightest and best know how bad this situation is. This may not be the begining of the end of the crisis for all we know. It could be the start! Quote Link to comment Share on other sites More sharing options...
jpd80 Posted September 29, 2008 Share Posted September 29, 2008 No one likes to make the direct comparison to 1929 for obvious reasons. And the obvious reason is that falling stocks in 1929 was caused by lack of communication. That is the opposite of what is happening here - we have information overload. Quote Link to comment Share on other sites More sharing options...
V8 Ford Posted September 29, 2008 Share Posted September 29, 2008 This isn't 1929 -Proportionally, the losses are much smaller. From what I can tell even S&L crisis of the 80s was bigger in terms of %GDP than the current one (of course, everyone quotes raw nominal dollar numbers so it seems much worse than it really is) -The Fed won't allow the money supply to drop as dramatically as it did in the lead up to 1929 (which was the ultimate cause of the great depression). Either this means bailouts or that the crisis isn't deep enough to cause a drop in money supply enough to warrant them. Quote Link to comment Share on other sites More sharing options...
jpd80 Posted September 29, 2008 Share Posted September 29, 2008 Agree, only something like 6% of mortgages are sub prime and of those around 40% are delinquent over 90 days. It's not as though the whole banking system is collapsing because of systemic failure. Quote Link to comment Share on other sites More sharing options...
Ford Jellymoulds Posted September 29, 2008 Author Share Posted September 29, 2008 (edited) Well...no deal was signed today. The world didn't implode. Did the markets take a hit? Sure. They probably would have, deal or no deal. But hardly what I'd call a "Black Monday".... The House rejected the Wall Street bailout bill and the market screamed, selling off frantically until the Dow was left with its biggest one-day point drop ever. http://www.cnbc.com/id/26945972 Edited September 29, 2008 by Ford Jellymoulds Quote Link to comment Share on other sites More sharing options...
jpd80 Posted September 29, 2008 Share Posted September 29, 2008 The House rejected the Wall Street bailout bill and the market screamed, selling off frantically until the Dow was left with its biggest one-day point drop ever.http://www.cnbc.com/id/26945972 Which would have happened anyway. Maybe let the market savage itself for about an week and then see what rescue package is really needed. Quote Link to comment Share on other sites More sharing options...
Edstock Posted September 29, 2008 Share Posted September 29, 2008 Maybe let the market savage itself for about an week and then see what rescue package is really needed. It's a credit crisis; with AIG, the US government has shown it can move quickly, and European governments are wide awake, so holding off for a couple of days is probably prudent, actually. Quote Link to comment Share on other sites More sharing options...
FordBuyer Posted September 29, 2008 Share Posted September 29, 2008 It was reported today by Metro Detroit Ford Dealers that 80% of all prospective vehicle buyers were turned down in last few weeks, and many had excellent credit ratings. They just didn't get OK on vehicle loan and Ford was out the sale and customers were in state of shock. That is how badly credit is choked off. It's choking the life right out of the economy and Congress acts like time is their friend. Time is our enemy if something is not done soon. Quote Link to comment Share on other sites More sharing options...
macattak1 Posted September 30, 2008 Share Posted September 30, 2008 Global Markets Are Rattled By Growing Financial Crisishttp://www.cnbc.com/id/26755041 Financial markets continued to be pounded by worries that the turmoil sweeping Wall Street would continue to spread around the globe. The $85 billion US government rescue of giant insurer AIG failed to calm the markets as the uncertain fate of other financial institutions continued to unsettle investors. Indeed, shares of the two remaining Wall Street firms, Morgan Stanley and Goldman Sachs plummeted on worries that they may be the next to fall But others worried that the rescue of AIG brings short-term relief but may lead to other problems down the road. "What the U.S. government is doing is basically delaying the recovery of the economy really by keeping AIG alive and by going back to the printing press to issue more U.S. dollars, which long term should be negative to the U.S. dollar," said Ronald Chan, chief investment offer for Asian equities with Fortis Investments in Hong Kong. How will this affect Ford in nobody wants to lend money and if the Feds only way out is to print more money the recession will last longer hit harder than the 1930's great depression, and If the US Government & Fed were to go bankrupt who would bail them out, China? Have no fear. We created the Federal Reserve and paper money to stop this from happening. And don't worry about the $60 trillion in total US govt and consumer debt. Everything is fine. Peace and Blessings Quote Link to comment Share on other sites More sharing options...
jpd80 Posted September 30, 2008 Share Posted September 30, 2008 It was reported today by Metro Detroit Ford Dealers that 80% of all prospective vehicle buyers were turned down in last few weeks, and many had excellent credit ratings. They just didn't get OK on vehicle loan and Ford was out the sale and customers were in state of shock. That is how badly credit is choked off. It's choking the life right out of the economy and Congress acts like time is their friend. Time is our enemy if something is not done soon. I fail to see how sweeping a few bad debts under the carpet is going to fix anything. If treasury is prepared to print that much money, the US Dollar will surely tank against all other currencies. If that happens, you may be paying $30,000 for a Fiesta and $10/gallon for gas Quote Link to comment Share on other sites More sharing options...
iluvford Posted September 30, 2008 Share Posted September 30, 2008 It is a simple concept: spend less than you make! Quote Link to comment Share on other sites More sharing options...
V8 Ford Posted September 30, 2008 Share Posted September 30, 2008 I fail to see how sweeping a few bad debts under the carpet is going to fix anything.If treasury is prepared to print that much money, the US Dollar will surely tank against all other currencies. If that happens, you may be paying $30,000 for a Fiesta and $10/gallon for gas The treasury would finance it by the sale of bonds, not printing money. If they did anything by printing money, we'd be paying $3,000,000 for a Fiesta and experiencing 100,000 %+ hyperinflation, although it wouldn't affect the real exchange rate (it would affect the nominal exchange rate, but that's meaningless). Quote Link to comment Share on other sites More sharing options...
Ford Jellymoulds Posted September 30, 2008 Author Share Posted September 30, 2008 (edited) The treasury would finance it by the sale of bonds, not printing money. If they did anything by printing money, we'd be paying $3,000,000 for a Fiesta and experiencing 100,000 %+ hyperinflation, although it wouldn't affect the real exchange rate (it would affect the nominal exchange rate, but that's meaningless). South African Ford owners know who caused the problem and how to to solve the problem. http://www.capri-perana.co.za/ Gotta say a $12,000,000 Mondeo will make Ferrari go green witn envy even though the FWD Mondeo already has close to Ferrari sales numbers this car really is getting exclusive what next another Bond movie product placement paid for with Ford pick-up sales profits Still the new Ka will be the next big FWD flop sorry a KA with Ferrari type exclusive SALES numbers you can see it coming maybe this should be used for a Bond movie as well paid for with Fiesta Econetic diesel/Transit profits? Why does Jame Bond hang around in losers cars why not a F-Series truck or a Ford ECOnetic diesel winner for a change, what ever next will it be a Jaguar or Land Rover loser. Well at least as Austin Powers saves the world he does not drive a product placement he gets to drive a rather tasty Classic Jaguar E-Type gotta say l would stop watching his movies if they got all commercial? Ford are loaded with $$$ and no doubt and with the massive profit generated from 1392 Mondeo sales in the UK last month in its biggest market in the world. It must have helped to repay $14,000,000 spent on the last Bond movie product placement. Its a good job you can't accuse Ford of burning money like the US Government does propping up failed banks in a so called FREE market place.. Edited September 30, 2008 by Ford Jellymoulds Quote Link to comment Share on other sites More sharing options...
jpd80 Posted September 30, 2008 Share Posted September 30, 2008 (edited) The treasury would finance it by the sale of bonds, not printing money. If they did anything by printing money, we'd be paying $3,000,000 for a Fiesta and experiencing 100,000 %+ hyperinflation, although it wouldn't affect the real exchange rate (it would affect the nominal exchange rate, but that's meaningless). I'm sorry, I meant "printing money" metaphorically not literally. Edited September 30, 2008 by jpd80 Quote Link to comment Share on other sites More sharing options...
Ron W. Posted September 30, 2008 Share Posted September 30, 2008 It is a simple concept: spend less than you make! I agree with you 100% but apparently that is a concept beyond most peoples (including our elected officials) understanding. Quote Link to comment Share on other sites More sharing options...
jpd80 Posted September 30, 2008 Share Posted September 30, 2008 Most people don't understand the concept of growth where by money is "created" by capacity to pay. If you try to save enough to pay for a house in cash, most people would never get ther in a lifetime. The trick is to buy in today's prices and pay off in tomorrow's increased income. Fine in theory but what if your asset isn't worth the asking price and your income stream is risky? When a home owner does it, he's subprime, when a bank does it they're entrepeneurs investing. Quote Link to comment Share on other sites More sharing options...
NickF1011 Posted September 30, 2008 Share Posted September 30, 2008 The Dow dropped by 777 points by close of play and was in freefall. Heading towards a black Tuesday? Dow back up around 200 points as this is being written. Doesn't seem that way, eh? Quote Link to comment Share on other sites More sharing options...
Ford Jellymoulds Posted September 30, 2008 Author Share Posted September 30, 2008 Dow back up around 200 points as this is being written. Doesn't seem that way, eh? Soon as T-Stag mentioned black Tuesday l thought they are bound to go up Nick Quote Link to comment Share on other sites More sharing options...
jpd80 Posted September 30, 2008 Share Posted September 30, 2008 (edited) I hope T-Stag is not someone's financial adviser. It's amazing how so many feel the US government has to act, I don't believe so. Don't saddle the US people with a $700 billion debt and an economy in the doldrums for years. Have a big correction and be done with it. Edited September 30, 2008 by jpd80 Quote Link to comment Share on other sites More sharing options...
NickF1011 Posted September 30, 2008 Share Posted September 30, 2008 I hope T-Stag is not someone's financial adviser. It's amazing how so many feel the US government has to act, I don't believe so. Don't saddle the US people with a $700 billion debt and an economy in the doldrums for years. Have a big correction and be done with it. How about they just return $700 billion to the taxpayers and let us decide how to spend it? Quote Link to comment Share on other sites More sharing options...
FordBuyer Posted September 30, 2008 Share Posted September 30, 2008 I hope T-Stag is not someone's financial adviser. It's amazing how so many feel the US government has to act, I don't believe so. Don't saddle the US people with a $700 billion debt and an economy in the doldrums for years. Have a big correction and be done with it. That is wrong headed. The credit market has seized up and without credit the economy can't function. Retailers restock inventory with credit line. Consumers buy autos and appliances on credit. Big companies meet payroll with credit. Ford Motor operates on credit. The system we live under is called Capitalism and it needs capital to function. Why should our economy grind to a halt because some right wingers want to prove a point. If this economy completely tanks, the politicians that stop a rescue plan will be marked but good. I already have Thaddeus McCotter of MI on my hit list. He will not get my vote. Quote Link to comment Share on other sites More sharing options...
jpd80 Posted September 30, 2008 Share Posted September 30, 2008 (edited) That idiot in Treasury has been saying all is fine for over 12 months, now he says otherwise. US lives by the freedom and the stock market controlling its own destiny but then panics and wants to throw bucket loads of cash at the problem. Everywhere else this has been done it stifles the economy for years. The credit market is only seized up because they're waiting to see what happens. Let a correction come and a clean out happen, that brings stability back to lending. Proping up with cash injections, sweeps the problem under the rug. Edited September 30, 2008 by jpd80 Quote Link to comment Share on other sites More sharing options...
TStag Posted September 30, 2008 Share Posted September 30, 2008 That is wrong headed. The credit market has seized up and without credit the economy can't function. Retailers restock inventory with credit line. Consumers buy autos and appliances on credit. Big companies meet payroll with credit. Ford Motor operates on credit. The system we live under is called Capitalism and it needs capital to function. Why should our economy grind to a halt because some right wingers want to prove a point. If this economy completely tanks, the politicians that stop a rescue plan will be marked but good. I already have Thaddeus McCotter of MI on my hit list. He will not get my vote. Yep I agree it's time for the Republicans to put ideology to one side and swallow a "socialist" solution.... Quote Link to comment Share on other sites More sharing options...
Harley Lover Posted September 30, 2008 Share Posted September 30, 2008 Why should our economy grind to a halt because some right wingers want to prove a point. 40% of the democrats didn't vote for the measure. Democrats control the House. Explain how this is a 'right winger' issue. Quote Link to comment Share on other sites More sharing options...
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