Wall Street Financial Crisis

[clyder]

dollar bounce

So have you sold all your dollars and bought remimbi? After all, if you believe what you're reading, that's exactly what you should do. What exchange rate did you get? How many cenral banks are dumping the dollar and euro and running to the remimbi?

I suspect the current strength of the dollar is due to US corporations having to liquidate overseas holdings of equities to obtain cash now that credit is nearly unobtainable. That is why the Brazilian and Russian stock markets collapsed last week.

[tim52]

BINGO
Maybe Banks actually need regulation?

I couldn’t agree more.

“The problem is that Wall Street is very different from, say, Silicon Valley, where a light regulatory hand is genuinely beneficial. Financial institutions are based on trust, which can only flourish if governments ensure they are transparent and constrained in the risks they can take with other people's money. The sector is also different because the collapse of a financial institution harms not just its shareholders and employees, but a host of innocent bystanders as well.”

The Fall of America, Inc. | Print Article | Newsweek.com

[clyder]

I wish I could think so but I stick with my original thoughts. Our leaders think we are losers and they keep cheating us. I'd like to see the folks responsible for this financial mess go to prison for the rest of their lives and forfeit their ill-gotten gains but they won't. Probably, everything they did to enrich themselves was legal.

Yes, I'm for elections. I'm always interested in what the next crop of crooks will do.

I dont know about the scale of the scams on Wall St, but the british bankers paid themselves Ł8billion in personal bonuses last year.

There were 4000 bank employees in London who had bonuses over Ł1million last year.

Those bonuses drew down the capital of the banks. It is no wonder then that the taxpayer is having to fork out Ł40 billion to recapitalise them. That amounts to about 5 or 6 years of siphoning off capital.

So the taxpayer is footing the bill for what must be one of the biggest collective frauds in history.

[Jay]

clyder,

Thats totally true atleast wrt INR. The US FII's have been pulling out dollars so much that the rupee went from 40 to a dollar to 47 to a dollar.

But this has to stop somewhere and then we will see some appreciation of other currencies. But Indian and other foreign owned oil companies will be purchasing more oil (cheap oil), so the demand for dollar will be steady for the coming few months.

[Ray]

The chief features of the Bretton Woods system were an obligation for each country to adopt a monetary policy that maintained the exchange rate of its currency within a fixed value—plus or minus one percent—in terms of gold and the ability of the IMF to bridge temporary imbalances of payments. In the face of increasing strain, the system collapsed in 1971, following the United States' suspension of convertibility from dollars to gold. This created the unique situation whereby the United States Dollar became the "reserve currency" for the Nations who signed.

What prompted the acceptance of the Dollar as a reserved currency when it was not backed by gold or any other asset?

Is it true that US is being sustained by the money invested by foreign nations?

Hope someone could educate me on this.

[clyder]

This created the unique situation whereby the United States Dollar became the "reserve currency" for the Nations who signed.

What prompted the acceptance of the Dollar as a reserved currency when it was not backed by gold or any other asset?

Is it true that US is being sustained by the money invested by foreign nations?

Hope someone could educate me on this.

I suspect that a factor at present is fear by smaller oil producing states of what the US might do if they started demanding payment in other currencies.
I was in Venezuela last week talking to journalists and asked why Venezuela did not switch to demanding payment in euros, or in Bolivars ( as Putin has
demanded payment in ROubles).

The answer was that the government is afraid of what the US might do if they followed such a course. To me such fears seemed groundless, I do
not think it concievable that a US govt in its current financial difficulties could
dare threaten countries that switched out of dollars.

[steelface581]

Col,
I'm not sure I'm understanding this analogy. Is the piper lender or govt? The bail out plan does not directly help the end consumer who is facing foreclosure. That program has a lots of restrictions and regulations.
-------------------------------------------------------------------------

-------------------------------------------------------------------------
After Indymac takeover by FDIC, they have re-structured a lot of mortgages and staved off foreclosures for a lot of people (I dont know the number, but its a model worth looking at). If you let the fat cats die, which you should the whole credit market will freeze. If GE or ATT cannot raise money from the commercial paper markets, who else can?? You are just under estimating them fat cats like Paulson thought about Lehman.

-----------------------------------------------------------------------------
the piper to me, the piper is *the repercussions* for bad management- somebody always has to pay- in this case , it Isnt the guys that ultimately are responsible! btw- what did all these financial experts think would happen when the Feds raise interest rates?? you could put it 80ft neon in Times Square and it wouldn't have been any plainer....


AIG was the only insurer, and see, unless im wrong here, once they went under, it fell to the Feds to cover all the bad mortgages there after, both those that AIG had on their books and the ones that defaulted after AIG was bankrupt. what this bailout is doing is keep the people who implemented this Crisis in the game...sure the CEOs are gone (for now) but everyone else is still there. its is NOT to save the people with the bad mortgages- no one penny of this bailout goes toward that, its to get the banks lending again so that stocks dont slide further. But the real damage has already been done- 8 Trillion (no exaggeration) have already been lost in the stock markets.to put it another way- a madman walked up to us and unloaded his gun at us- what the President did with this bailout, is hand the guy another clip......at the very least all the regs that went out the window under Clinton and Bush need to be restored before handing these guys ANYTHING, we would have been better served sweeping these guys to the curb, (with a alot of prison terms handed out as lead parachutes) pull a few business professors together and have the Feds back a temporary bank while Wall Street is restructured.

[Officer of Engineers]

Col,
I'm not sure I'm understanding this analogy. Is the piper lender or govt? The bail out plan does not directly help the end consumer who is facing foreclosure. That program has a lots of restrictions and regulations.

The piper is the final guy holding the piece of paper he put real dollars buying. Foreclosure is going to happen no matter what. Those who cannot afford a home in the real world will lose his home. Period.

However, those who can is not going to lose his home just because his creditor is going to go bankrupt and as a result demanding payment in full.

[Ironduke]

The piper is the final guy holding the piece of paper he put real dollars buying. Foreclosure is going to happen no matter what. Those who cannot afford a home in the real world will lose his home. Period.

However, those who can is not going to lose his home just because his creditor is going to go bankrupt and as a result demanding payment in full.

Heh, just before WaMu failed the minimum payment jumped considerably on the two cards I have with them, for no apparent reason. Interest rates/finance charges didn't go up, just the minimum payment. So I transferred the balances to a 0% APR/12 month card.

[gunnut]

Heh, just before WaMu failed the minimum payment jumped considerably on the two cards I have with them, for no apparent reason. Interest rates/finance charges didn't go up, just the minimum payment. So I transferred the balances to a 0% APR/12 month card.

Is that card with WaMu too? If not, they just got all of their money instead of the minimum.

[Ironduke]

Is that card with WaMu too? If not, they just got all of their money instead of the minimum.

Nah, Citi.

[JAD_333]

Is that card with WaMu too? If not, they just got all of their money instead of the minimum.

No one catches you sleeping.

[Ironduke]

No one catches you sleeping.

I'm sure they're happy they got it all. ;)

[Ray]

All this credit card stuff runs a chill down my spine.

I have to clear mine.

I hope my bank (foreign owned) has not folded up!

I am in no mood to sing Jim Reeves:

From a jack to a king
From loneliness to a wedding ring
I played an ace and I won a queen
And walked away with your heart

[JAD_333]

8 Trillion (no exaggeration) have already been lost in the stock markets.

Nothing's lost until it's sold at a loss. The markets lost value, not money.

Today's bounce in all the indices brought back a lot of value. Decisions made over the weekend to guarantee interbank lending and the pumping of cash into the backing system cheered investors. Let the cash commence to flow.:) It was a better, or rather faster way to reinstill confidenece in the market than waiting for the gov't to start buying up subprime paper which hasn't been valued yet.

The buzz is that Paulson miscued when he let Lehman Bros. go under. That apparently led to the drop in money market shares to 99 cents on the dollar and that froze the credit market.