Finance Crisis

[Jimbuna]

Originally Posted by Hitman

Hmmmm nobody else here thinks that the high oil prices were one of the most important reasons for the crisis detonation? :hmm:

148$ oil means brutal inflation, which in turn means high interest rates, which in turn means many people can't pay the 45 years variable interest rate mortgage they stupidly signed, which in turn means.....BOOOOMM, a torpedo under the waterline of many banks.

...and a lesson about not encouraging people to take out high risk loans that obviously will become problematic to make the repayments on one day....not learnt/heeded by the greedy, profit driven banking sector.

[Konovalov]

Shortage of liquidity in the banking system doesn't help.

[Skybird]

Inflation doesn't help either.

There is a tumor in the system, very deep inside, and it has infested both bones and neural system. Removing it is a very bloody, painful and risky operation. But it needs to be done. when you are sick, it is too late for prevention, and you need to suffer what you have to. Living healthier was for the time before. In the past 12 months, hundreds of billions have been pumped into preventing shaken major players from falling. Longterm stablizing result: almost zero.

And isn't it that when banks can make profits at others' costs, they do not want to share with anybody and even betray customers and make wrong calculations about real costs for investements, but if they mess it up and have to pay and found they brought themselves into troubles, they call for help and social solidarity - and suddenly the taxpayer is expected to pay the damage in their place?

the system itself is th problem, and in the end ou culture. Our culture encourages brutality and egoism at the cost of others - if you can make a profit from that. Seen that way the crisis is what our societies deserved. The problem reaches far beyond the obvious, superficial facade.

[joegrundman]

ZOMG!

85 billion taxpayer dollars just went to bailout AIG. 85 billion! the mind boggles. That's got to be more than the company has ever made!

http://news.bbc.co.uk/2/hi/business/7620127.stm

AIG will get an $85bn loan, in return for an 80% public stake in the firm.

long live nationalisation!

[Hitman]

And isn't it that when banks can make profits at others' costs, they do not want to share with anybody and even betray customers and make wrong calculations about real costs for investements, but if they mess it up and have to pay and found they brought themselves into troubles, they call for help and social solidarity - and suddenly the taxpayer is expected to pay the damage in their place?

Agree. The only way to look at it from the taxpayer's point of view is by considering that you are trying to help some thousands of innocent workers in that bank. But whenever public help is needed, IMHO it should always mean destitution of the whole directives of the bank and forcing them to pay the black hole they have created, elseif going to prison.

The system itself is th problem, and in the end ou culture. Our culture encourages brutality and egoism at the cost of others - if you can make a profit from that. Seen that way the crisis is what our societies deserved. The problem reaches far beyond the obvious, superficial facade.

Agree even more But the sad thing is that probably nobody will learn from this

[joegrundman]

Does that go for AIG, Merill Lynch and Lehman too?

[Hylander_1314]

This is what happens when loans for homes are made to those who don't qualify, or will knowingly go into default. It all looked great when things were on the upside. Only thing is, nobody was talking about the downside, as if there could never be one.

Same attitude prevailed before the crash of 1929, that sent the world into the dpression that led up to WWII.

This is one of the reasons the Founding Fathers of the United States of America tried to keep a central banking institution like the Federal Reserve from ever coming into being. But they also had a thing called 'debtors prison' in those days. Today we call it bankruptcy. I think the latter makes people think a bit more before they act.

[Gorduz]

In Norway allmost all banks must pay into a fund that the state control. This fund is used to guarantee that all deposits upto 400.000$. This means that you don't get panic withdrawal of money when the banks are in enough trouble allready.
There is nothing wrong with socialistic approaches in a market economy, but they need to be clear and equal for all partisipants, so that the goal of a free competition is conserved.

BTW I read an article in a paper two years ago predicting this, a colapse in the economy. This is of course not sensational but the reason they had was very good and easy to understand. Wearing pink shirts became "in" again!, and thats the clearest sign that the economy is unhealthy..

[SteamWake]

Pelosi says "Hey its not the Dem's fault".

Why dont we just look into this and see whos 'fault' it really is.:hmm:

[UnderseaLcpl]

Originally Posted by Gorduz

In Norway allmost all banks must pay into a fund that the state control. This fund is used to guarantee that all deposits upto 400.000$. This means that you don't get panic withdrawal of money when the banks are in enough trouble allready.
There is nothing wrong with socialistic approaches in a market economy, but they need to be clear and equal for all partisipants, so that the goal of a free competition is conserved.

Oil makes up almost half of Norway's total exports, and the oil business is nationalized, and Norway is still in debt. Almost 500 billlion dollars in debt, in fact.

Norway may be on the up now, but they'lll have to come up with something else when their oil resources are exhausted or demand for them falls.