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    Global Economic Downturn

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    Hector_Nicols_Accordian

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    Registration date : 2008-09-15

    Global Economic Downturn

    Post  Hector_Nicols_Accordian on Mon Sep 15, 2008 1:57 pm

    Hello

    Lots of bad things have been going on lately with the economy. That Lehman Brothers Bank filing for bankruptcy being just the latest. Countless businesses are shutting down and people are losing jobs.

    What does everyone on here think about it?

    Oh - and oil is down to $94 a barrel - that is about the only bright spot - and house prices falling.
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    meanie

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    Re: Global Economic Downturn

    Post  meanie on Mon Sep 15, 2008 2:03 pm

    Working for a bank is making it quite interesting, probably looking at year and a half/2 years until the economy get back to a reasonable state again I reckon.
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    Hector_Nicols_Accordian

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    Re: Global Economic Downturn

    Post  Hector_Nicols_Accordian on Mon Sep 15, 2008 2:07 pm

    Yeah, usually stocks and shares are boring to me but I was fascinated watching the prices falling all through the day.

    AIG (who sponsor Man United) lost about 60% of their value today.

    And HalifaxBankofScotland were down about 40% at one point!
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    Garibaldi
    The Higher Power

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    Re: Global Economic Downturn

    Post  Garibaldi on Mon Sep 15, 2008 2:22 pm

    Don't say that, I'm meeting the bank manager at the Halifax tomorrow to tweak the mortgage. Want to get rid of the credit card (was a bad idea) and protect myself from the current economic storm

    That said, My mortgage is around 35k on a two bedroom with gardens, a garage + central heating and due to be paid off about 4 years ahead of schedule (part of it even sooner!) so I don't think another 7k or so will be a huge problem.


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    Inno
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    Re: Global Economic Downturn

    Post  Inno on Mon Sep 15, 2008 3:14 pm

    I have no money already therefore it doesn't make me panic any further Razz

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    Re: Global Economic Downturn

    Post  Guest on Wed Sep 17, 2008 3:31 am

    The price of oil has been plumetting for about a month now but has petrol gotten any cheaper? Nooooooooooooooooooooooooo! Thank you Mr Brown/Darling! Rolling Eyes
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    Bradshaw101

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    Re: Global Economic Downturn

    Post  Bradshaw101 on Wed Sep 17, 2008 3:59 am

    The Real JK wrote:The price of oil has been plumetting for about a month now but has petrol gotten any cheaper? Nooooooooooooooooooooooooo! Thank you Mr Brown/Darling! Rolling Eyes

    Because if Labour wasn't in power, petrol companies would magically become less profiteering? confused
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    Garibaldi
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    Re: Global Economic Downturn

    Post  Garibaldi on Wed Sep 17, 2008 5:07 am

    Ok, yesterday I successfully got rid of my credit card by adding the balance to my mortgage and tweaking the terms of the (now) three parts of the mortgage so I'm actually paying less for that than before. Which is cool.

    Today I get up and, as predicted, hear that the Halifax (who I have my mortgage with) is in total freefall. Bloody typical!

    Years of financial mismanagement topped by US banks abandoniung common sense post-Katrina and then protecting themselves (unsuccessfully) by dumping the risk-laden debt overseas have caused absolute diisaster. I give it 6 months max before we can't move for hearing Russian leaders declaring this is the curse of capitalism and radical terrorist groups saying this is God/Allah/enter relevant deity punishing the western world for its crimes/decadence/actions.


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    Bradshaw101

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    Re: Global Economic Downturn

    Post  Bradshaw101 on Wed Sep 17, 2008 5:48 am

    HBOS is now in negotiations with Lloyds for a rescue merger, so you might not be as boned as it looks now.

    Decent piece from the BBC on that: http://news.bbc.co.uk/1/hi/business/7620744.stm

    The US Goverment is now buying out AIG as well. Mass nationalisation in the USA, eh? At least I can get a few ironic laughs out of this crap.
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    showstealer

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    Re: Global Economic Downturn

    Post  showstealer on Thu Sep 18, 2008 12:13 pm

    My mate worked at Lehman Laughing

    Wonder how the fonz is copping, I still believe that a few people are benefiting greatly by this... (note: I don't think he's one of them! Very Happy )
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    thefonz

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    Re: Global Economic Downturn

    Post  thefonz on Thu Sep 18, 2008 1:02 pm

    On the surface, the Lehman's bankruptcy is sexy news, but there's more going on too.

    The stock market is just fleshing out what's already going on in real world markets. There's your value at the end of the day. It was squandered a year ago with the loads of bad subprime loans that went out. It was only a matter of time before they all started defaulting, and the spike in oil price just compounded the problem.

    What you get with the stock market, in these kinds of situations where there isn't a growing business but just risk and payoff (commodities, insurance, loans...), the supply-demand finally sets the value. All the buyers and sellers are doing is betting on the risk of supply, buyers that it later goes down, sellers that it later goes up. Then the supply works itself out in the real world, and the market just fleshes it out.

    In the case of oil, it was China's unforeseeable insane increase in demand that seriously diminished the supply (oil companies couldn't/wouldn't meet it); commodity buyers made a ton of money and the price of oil got pushed sky-high. But they weren't the ones actually doing the pushing. Blame oil companies and China communicating for that.

    In the case of the subprime loans, it was the loads of defaults that killed demand for the value of those loans. Some early sellers might have made a little (or rather, didn't lose as much), and pushed the value so low we see the results now (and now some buyers cleaning up the mess; they're gaining something, yes, but something riddled with liabilities too, and they also bear indirect losses.). But the "value" was in taking an incredibly irresponsible risk in the first place that wasn't properly hedged. Pretty much everybody loses on this one.

    That is, it may be zero-sum for traders, buyers and sellers betting on risk ... but it's not zero-sum for the market as a whole. Supply-demand ultimately sets the value, and when the people in control of that act irresponsibly, against their own interest, it screws everybody else as well.

    That's why caring about your own long-term interest matters in a capitalist system. If you get selfish for an irresponsible quick payoff (or rather, you're not selfish enough for a greater longterm gain), you don't just hurt yourself but everybody else as well. That goes for the oil companies, China, defaulting homeowners, and the banks ... every one of these groups can be accused of getting irresponsibly greedy, taking a stupid risk and screwing their own best interests, and taking all of us down with them.

    (In comparison, if there hadn't been an open market, all of this would have occurred behind closed doors and the fallout couldn't have been hedged or fleshed out at all, and then you could get an absolute market breakdown ... it takes months for the oil supply to even start flowing again because they can't get capital, and banks topple one after another to cover a runaway of defaults.)

    So what do I think? Its a good thing in my opinion. Happily though, my position at HSBC is strong - i'm in the M&A business and as a bank HSBC are doing good; we have a ridiculously strong position in the eastern/asian countries so are suitably hedged. However I still feel sorry for the poor buggers over at Lehman's who I saw leaving their office on Monday morning. But hey, that's Capitalism for you affraid
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    meanie

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    Re: Global Economic Downturn

    Post  meanie on Fri Sep 19, 2008 1:47 am

    I have a mate who recently started a job with one of the big 4 auditors in Edinburgh, and has been in London training this week. He says he went out on Monday night for a pint, and said its usually quite quiet. He said the place was mobbed with folk drowning their sorrows from Lehman Bros. Also he said it always kicked off in the pub/bar he was in since there were also a lot of city slickers in celebrating their big wins on the stock market that day Laughing
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    Hector_Nicols_Accordian

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    Re: Global Economic Downturn

    Post  Hector_Nicols_Accordian on Fri Sep 19, 2008 2:23 am

    Some of those city slickers are a right showers of odious gimps.
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    thefonz

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    Re: Global Economic Downturn

    Post  thefonz on Fri Sep 19, 2008 1:35 pm

    Hector_Nicols_Accordian wrote:Some of those city slickers are a right showers of odious gimps.

    Shut up you twat. You've got no idea what its like down here right now.

    Sure some of them/us are twats but we power the economy.

    Go back to your crayons and colouring in like a good Geography Teacher is meant to do - living a meaningless existence while the rest of us power the economy and try to save your skin from the streets.

    Goit. Evil or Very Mad
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    iamstevie

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    Re: Global Economic Downturn

    Post  iamstevie on Fri Sep 19, 2008 1:39 pm

    Harsh words

    Harsh, bewildering words
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    Hector_Nicols_Accordian

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    Re: Global Economic Downturn

    Post  Hector_Nicols_Accordian on Fri Sep 19, 2008 2:10 pm

    Power the economy? Would some people not claim it was those guys who got us in the mess in the first place?

    Everyone could see that banks were going to struggle to survive, people have been predicting it for a couple of years now but these guys kept on their merry way collecting their big bonuses whilst they were at it.

    The average salary for a Lehman Brother employee in London was 435,000, this company was paying people handsomely to totally mess it all up. Shame for the people further down the chain right enough, big shame for them but guys making the big money for not actually producing anything should have enough saved up for a rainy day.

    Unless I am missing something. I have been reading quite a lot of anti-market stuff in the papers lately so I guess I am not properly informed on both sides of the story.
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    Hector_Nicols_Accordian

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    Re: Global Economic Downturn

    Post  Hector_Nicols_Accordian on Fri Sep 19, 2008 3:07 pm

    Just seen on the news that the American Government are going to take on all the bad debts held by American banks. Surely the phenom will be annoyed at this state intervention into the free market? Also it seems a little unfair that the American taxpayer is having to bail out these banks who offered stupid mortgages that couldn't be paid back to people in the first place? On the other hand people shouldn't have taken out these bizarre mortgages.

    Good news for shares round the world though. Boy on Sky News said it was the biggest one day rise on the stock market ever.
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    DougFlair

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    Re: Global Economic Downturn

    Post  DougFlair on Fri Sep 19, 2008 4:24 pm

    Basically the US Government had to step in, as much as I hated to see that happen. If they had stayed out if this and left things to fix themselves, then the market would have stayed in a downwards spiral, which then spreads to the rest of the economy.

    I am very much of a Libertarian/Consitutionalist when it comes to matters like this, I would prefer to see the Government stay out of peoples business, as well as staying out of peoples pockets, but I am also a realist and see that this was a lose/lose situation. With the price of oil and other commodities rising as it has been already, people are hurting as is. Letting this big a blow happen would have set up a major depression.

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    thefonz

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    Re: Global Economic Downturn

    Post  thefonz on Sat Sep 20, 2008 8:55 am

    Hector_Nicols_Accordian wrote:Just seen on the news that the American Government are going to take on all the bad debts held by American banks. Surely the phenom will be annoyed at this state intervention into the free market? Also it seems a little unfair that the American taxpayer is having to bail out these banks who offered stupid mortgages that couldn't be paid back to people in the first place? On the other hand people shouldn't have taken out these bizarre mortgages.

    Good news for shares round the world though. Boy on Sky News said it was the biggest one day rise on the stock market ever.

    Read my first post in this thread - its the oil companies and china who caused this. But in all its a much needed reset of the economy that we needed. And you really going to argue with me? I dont know like shit about teaching colouring-in to kids, but finance and economics; i'm better than you. Beatch.
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    Hogan Is God

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    Re: Global Economic Downturn

    Post  Hogan Is God on Sat Sep 20, 2008 9:03 am

    Inno wrote:I have no money already therefore it doesn't make me panic any further Razz
    However, that now makes you richer than Lehmann Brothers

    Congratulations!!
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    Ultimo LJ

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    Re: Global Economic Downturn

    Post  Ultimo LJ on Sat Sep 20, 2008 9:16 am

    thefonz wrote:
    Hector_Nicols_Accordian wrote:Just seen on the news that the American Government are going to take on all the bad debts held by American banks. Surely the phenom will be annoyed at this state intervention into the free market? Also it seems a little unfair that the American taxpayer is having to bail out these banks who offered stupid mortgages that couldn't be paid back to people in the first place? On the other hand people shouldn't have taken out these bizarre mortgages.

    Good news for shares round the world though. Boy on Sky News said it was the biggest one day rise on the stock market ever.

    Read my first post in this thread - its the oil companies and china who caused this. But in all its a much needed reset of the economy that we needed. And you really going to argue with me? I dont know like shit about teaching colouring-in to kids, but finance and economics; i'm better than you. Beatch.

    I do have an A-Level in Economics, and I reckon that if banks had just renamed interest on accounts "Sexy Interest" and then claimed that getting a cheap mortgage left you with enough money to "Pull in those bitches in that shed of yours" than none of this would have happened.
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    Uptown Llama of Doom
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    Re: Global Economic Downturn

    Post  Uptown Llama of Doom on Sat Sep 20, 2008 9:37 am

    Ultimo LJ wrote:

    I do have an A-Level in Economics, and I reckon that if banks had just renamed interest on accounts "Sexy Interest" and then claimed that getting a cheap mortgage left you with enough money to "Pull in those bitches in that shed of yours" than none of this would have happened.


    I'd like to sign up for some sexy interest please.
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    iamstevie

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    Re: Global Economic Downturn

    Post  iamstevie on Sat Sep 20, 2008 9:59 am

    My brother works for an investment bank.

    Your welcome! cyclops
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    Hector_Nicols_Accordian

    Number of posts : 468
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    Re: Global Economic Downturn

    Post  Hector_Nicols_Accordian on Sun Sep 28, 2008 11:50 am

    Bradford and Bingley are probably going to get taken over by the Government - it is annoying my tax money is being used for this purpose.

    And MFI may be going bust too, these stories are becoming more and more common lately, it is pretty worrying.
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    meanie

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    Re: Global Economic Downturn

    Post  meanie on Sun Sep 28, 2008 2:33 pm

    Hopefully my bank have the sense to buy up some of the B&B deposits and possibly some of their branches.
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    Hector_Nicols_Accordian

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    Re: Global Economic Downturn

    Post  Hector_Nicols_Accordian on Mon Sep 29, 2008 11:20 am

    The american congress have just rejected that 700 billion bailout plan. Bush said the effects of not voting for it would be "catastrophic" - so things will probably turn out ok then!
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    Garibaldi
    The Higher Power

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    Re: Global Economic Downturn

    Post  Garibaldi on Mon Sep 29, 2008 5:33 pm

    Much as I dislike the tories, Cameron's idea of capping bank profits and executive wages/bonuses is the same model I've suggested over a few pints myself the last few years - if you're making that much profit after expenses/upgrades/development then you're obviously charging too much. Only difference, I've been saying it about utilities companies mostly.

    Unfortunately, for all the good it's done, it's the curse of the private shareholder model - eventually someone tries to maximise dividends rather than service and value. Those who could afford to get in get richer whilst those who couldn't have t pay mopre.

    The model works, providing you, as they are suggesting, cap it. Allow for decent dividends and bonuses based on performance, but prevent abuse of the system at the expense of the customer.

    Think like betting. We allow you to place large bets at long odds, but we have limits on every market. You can play on any market, as is the spirit of the game, and you can win big, but there's a common sense aspect involved to ensure you can't break the bank.


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    Hector_Nicols_Accordian

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    Re: Global Economic Downturn

    Post  Hector_Nicols_Accordian on Mon Oct 06, 2008 10:20 am

    Today was the biggest fall in share prices since 1987 - I knew this was going to get a lot worse. The professionals in the city seem to have little faith that Bush's big bailout will work, I wonder what the taxpayers make of that 800 billion dollars going up the spout?
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    The Phenom

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    Re: Global Economic Downturn

    Post  The Phenom on Mon Oct 06, 2008 5:26 pm

    Part of the problem with this entire global crisis is that we are now in the age of 24 hour news media, and because they elect to talk about this all day long, it adds to part of the problems we have, as investors are now far more fearful and influenced by the news.
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    Hector_Nicols_Accordian

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    Re: Global Economic Downturn

    Post  Hector_Nicols_Accordian on Wed Oct 08, 2008 1:34 pm

    That was nice today. The government borrowed a load of our money to lend to the banks in order that they can lend it back to us again. Great idea that one.

    I thought this whole crisis was caused by people getting too much credit and borrowing too much money so why are they trying to get the banks to start lending us money again?

    And the stupid cut in interest rates. Now the interest people will earn on their savings will be so low compared to inflation that you will lose a lot of money through saving, it's just like being charged to keep your money in the bank which we now part own.

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