# Black Monday



## mrjimmy (Nov 8, 2003)

Hang onto your hats. It could be a wild ride on Wall Street.

http://www.nytimes.com/2008/09/15/business/15lehman.html?_r=1&hp&oref=slogin


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## Dr.G. (Aug 4, 2001)

Way to go, mrj. Let's start the day off with some good news. Still, it can get worse before it gets better. We shall see. Paix, mon ami.


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## mrjimmy (Nov 8, 2003)

Dr.G.,

No worse than starting the day bickering about climate change or politics. 

I think of it as the net result of greed. A wake up call if you will that the chickens will always come home to roost. Sort of rural, pastural imagery. Not negative at all.


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## Dr.G. (Aug 4, 2001)

Very true, mrj. I still find it amazing how people figured that housing prices could only go up and up and up. I know someone who bought a condo last year in Vancouver for $950,000. It is now valued at $750,000, but he is carrying the mortgage on $900,000. Unreal.


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## gastonbuffet (Sep 23, 2004)

Dr.G. said:


> Way to go, mrj. Let's start the day off with some good news. Still, it can get worse before it gets better. We shall see. Paix, mon ami.


So, Dr.G; you think McCain is going to win?


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## Dr.G. (Aug 4, 2001)

"So, Dr.G; you think McCain is going to win?" gb, it is going to be close. I am voting for Obama in the State of Georgia via absentee ballot. We shall see.


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## eMacMan (Nov 27, 2006)

This one has been coming for some time. If nothing else it proves my grandads belief that the stock market is pari mutual betting for the wealthy. Essentially you are buying some electrons and hoping someone else wants those electrons more than you did when the time comes to sell.


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## MazterCBlazter (Sep 13, 2008)

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## Dr.G. (Aug 4, 2001)

So far this year, 7% of all house sales in Florida have gone to Canadians.


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## MACenstein'sMonster (Aug 21, 2008)




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## MLeh (Dec 23, 2005)

Leveraged financing is the world's biggest pyramid scheme. It's the last people to come in who lose everything.


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## EvanPitts (Mar 9, 2007)

People just spend too much of the money they don't have, and easy credit is the fastest path to economic calamity.

Spending $750,000 or $900,000 on a Condo is the dumbest thing possible - since one could just go out and buy a few houses for the same money. And the thing with a Condo is that one gets to pay out "maintenance fees" that are little different from paying rent for an apartment. So sure, one saves on "rent" but spends it on "fees" on top of a mortgage payment.

What is dumber still are banks that would underwrite such a mortgage - that's why the banks are folding like all get out these days. Did I hear it right this morning - three more institutions went under in the US today?


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## screature (May 14, 2007)

mrjimmy said:


> Dr.G.,
> 
> No worse than starting the day bickering about climate change or politics.
> 
> I think of it as the net result of greed. A wake up call if you will that the chickens will always come home to roost. Sort of rural, pastural imagery. Not negative at all.


You do realise that the security of countless millions of pension holders are tied to the markets, not the least of which being Canadian Pension fund holders.


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## Dr.G. (Aug 4, 2001)

"You do realise that the security of countless millions of pension holders are tied to the markets, not the least of which being Canadian Pension fund holders." Sad, but all too true, Screature. I am one of these persons, watching my RRSP slowly sink.


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## screature (May 14, 2007)

Dr.G. said:


> "You do realise that the security of countless millions of pension holders are tied to the markets, not the least of which being Canadian Pension fund holders." Sad, but all too true, Screature. I am one of these persons, watching my RRSP slowly sink.


As am I. I am probably further away from having to draw on mine than you are so we have more time for things to come back. I truly feel for anyone who is currently in retirement without a locked in pension and has to rely on their RRIF holdings for added income. They must be terrified.


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## Dr.G. (Aug 4, 2001)

Again, Screature, sad, but all too true. Luckily, here at Memorial, we are now not forced to retire at the age of 65. I would like to retire when I am 65, but I will not retire and still have any money owing to any bank. We shall see.


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## Dr.G. (Aug 4, 2001)

This is a relief. With Bush at the helm of the economic situation in the US, we may all breathe a bit easier and sleep a bit sounder today.

NEW YORK (CNNMoney.com) -- President Bush on Monday acknowledged the "pain" of investors and workers in the finance industry, but assured the public that the government is working to iron out the problems.

"I know Americans are concerned about the adjustments that are taking place in our financial markets," said Bush, speaking at the White House Rose Garden. "We are working to reduce disruptions and minimize the impact on the [broader economy]."

Bush says government working to reduce finance disruptions - Sep. 15, 2008


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## Dr.G. (Aug 4, 2001)

As luck would have it, John McCain is ready, willing and able to pick up where Bush has left off in terms of the economy. Just like All State Insurance, we are in "good hands".

YouTube - Crisis


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## Dr.G. (Aug 4, 2001)

YouTube - John McCain NAILS IT !! Economy GREAT !!

Don't listen to CNN ................. or the reality of the situation.


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## Dr.G. (Aug 4, 2001)

Upon accepting the 1932 Democratic nomination for president, Franklin Roosevelt promised "a new deal for the American people." Luckily, for the US and the rest of the world, the McCain/Palin team will be able to provide to the American people the leadership, intelligence, fortitude, compassion, empathy, experience, dedication, loyalty and plain common sense that will help us all through these difficult times. As Franklin Roosevelt said, 

“ Throughout the nation men and women, forgotten in the political philosophy of the Government, look to us here for guidance and for more equitable opportunity to share in the distribution of national wealth… I pledge myself to a new deal for the American people. This is more than a political campaign. It is a call to arms."


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## gastonbuffet (Sep 23, 2004)

I truly can't understand WHY, an old man like McCain, would want to get elected as President. He should kick back and relax instead of this craziness. But in 30 days, when he is truly tired (if he actually makes it), expect Obama to crank it up a notch. Obama will win this election in a last minute sprint. And McCain will only have aged 12 years to show for his ????naiveness ?


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## adagio (Aug 23, 2002)

screature said:


> I truly feel for anyone who is currently in retirement without a locked in pension and has to rely on their RRIF holdings for added income. They must be terrified.


Thank you. I am. 

I'm tired of hearing gleeful chuckles as our retirement funds dwindle. The truly rich aren't hurting at all. It's millions like myself who are getting clobbered.

Fortunately, I had some AAPL that I was able to sell off today at a slight profit which will keep me going for a few months. Everything else, and I'm well diversified, has tanked.


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## EvanPitts (Mar 9, 2007)

My funds haven't been clocked too badly - I think I can recover from the 26.75 cents I lost today, especially if I scrounge around the streets downtown for some pennies. 

My mutual funds just seem to keep steaming ahead, which is an example of why people really should read the prospectus when getting into something. Not that I will become rich on it, but I have managed to double it up in the span of just a little over five years. Makes me think that I also made a decent decision when I bought some bonds last year, even if the interest rate wasn't thrilling - at least when the government tanks, I can get a few stones from the Parliament buildings as my cut...


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## Dr.G. (Aug 4, 2001)

"I truly can't understand WHY, an old man like McCain, would want to get elected as President." gb, he has been chosen to lead America in her time of need.


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## Dr.G. (Aug 4, 2001)

"My mutual funds just seem to keep steaming ahead, which is an example of why people really should read the prospectus when getting into something." Evan, I would love to know what sorts of funds are "steaming ahead".


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## MazterCBlazter (Sep 13, 2008)

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## GratuitousApplesauce (Jan 29, 2004)

The Asian Markets are part way through their day and are reacting now to today's NA market losses. I hope this doesn't just turn into a growing snowball.

Wall St. shockwaves hammer Asia stocks, oil | Markets | Reuters


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## Vandave (Feb 26, 2005)

There is strong support only a couple hundred points below present. If that breaks, then it will be ugly. The fed would probably step in at that point with a good cut. But, at the same time, they only have so many cuts left in their back pocket and this financial crunch still has legs. Future markets are saying 80% chance of a cut tomorrow. My bet is no because they need to let the market try and build confidence itself.


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## Adrian. (Nov 28, 2007)

I have lost about 20 grand in Cameco stocks alone. I am hurting really badly right now.  

Good thing I stayed the hell away from anything financial.

People, usually pension funds, who have mixed portfolios are getting beaten the worst right now. The only people making any money are spot investors who bet on one company and go with it. I thought Cameco was mine 3 years ago. Turns out not.tptptptp.

Believe it or not a lot of the tech stocks are fairly well. RIM has been doing fairly well.


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## Adrian. (Nov 28, 2007)

MazterCBlazter said:


> If its gonna crash, sell all you can. Buy more back cheaper later.
> 
> The market always goes up and down. Even after a big crash, it will eventually recover. No need to panic, unless your direct line of employment is affected.


That is horrible advice. Keep your stocks the markets will come up again. Markets haven't been this low in the hell of a long time they will recover. Selling will only force you to buy back more expensive. If anything, if you have the money, buy now in stable corps. like Honeywell, Cemex or Weyerhauser. They are not going anywhere and have under valued figures because of the crappy markets. Nokia is a good bet as well.


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## gastonbuffet (Sep 23, 2004)

looks like black monday will give way to gray Tuesday.
I'll put whatever i have left in rice stock!!!! I meant rice and stock.....baby gotta eat!


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## chas_m (Dec 2, 2007)

I don't think we've heard the last of headlines like "large bank fails" or "stocks dive" or "consumers hit hard by (new increase in some vital commodity)". I've never in my life been so happy to be out of the stock market.

Alan Greenspan today (nice timing, grandpa!) called the current financial crisis "the worst I've seen in my lifetime."

He was born three years _before_ the original Black Monday of 1929 brought on the Great Depression.

As someone once said -- IT'S THE ECONOMY STUPID.


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## gwillikers (Jun 19, 2003)

When 'grandpa' says that, I sit up and take notice. Very concerning.

My early retirement plans are likely in jeopardy.


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## Dr.G. (Aug 4, 2001)

"My early retirement plans are likely in jeopardy." Good luck, gw. Personally, I gave up that dream years ago. So much for "Freedom 55".


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## Adrian. (Nov 28, 2007)

Just do not sell. The markets will return. If they get any worse then you might as well buy cattle. It will be worth more for bartering.


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## EvanPitts (Mar 9, 2007)

Dr.G. said:


> "My mutual funds just seem to keep steaming ahead, which is an example of why people really should read the prospectus when getting into something." Evan, I would love to know what sorts of funds are "steaming ahead".


A fair chunk is in the Bank Of Nova Scotia - they are always doing well. The fund is a real mix of financials, and energy has really been a profit making aspect of the fund. But I did pick the fund because it was the one fund they were offering at the bank that had very little holding in the bank itself, as if the RBC Financial Grope didn't trust itself. I can't recall what the fund is called.


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## EvanPitts (Mar 9, 2007)

Adrian. said:


> Just do not sell. The markets will return. If they get any worse then you might as well buy cattle. It will be worth more for bartering.


One should always hedge against such adjustments. People always want to score the biggest percentages in the smallest amount of time, which entails risks, especially since the market has been bearish for the past seven years. I have long thought the market can not sustain anything above 11,000 points, there just isn't enough money to finance anything higher for any length of time.

The US housing market collapsed, the bubble was just too big. When a person that is scoring $100k a year, and his wife is a nurse scoring $80k a year - and they can't afford a mortgage, you know the market is going to bust.

Plus, this is the worst time of year in the markets anyways, investors get an itch in September and October. If the market continues to falter in December, then there is something to worry about.

I wonder if the current situation doesn't have something to do with some big investor manipulating the market, because all of a sudden there seems to be a big run on the mortgage insurers like Lehmann, and possibly Washington Mutual either folding or making a big deal today.


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## chas_m (Dec 2, 2007)

Adrian. said:


> Just do not sell. The markets will return. If they get any worse then you might as well buy cattle. It will be worth more for bartering.


This is kind of simplistic advice IF you are someone who is watching their nest egg disappear close to the time that they actually need it.

It's one thing for a prudent investor of 25-35 to ride out this storm, but what about someone who's 65? 75?

In the Crash of 1929, stocks did not return to their pre-crash levels for TWENTY-FIVE YEARS. Imagine for a moment what would happen to YOUR future if _that_ happened again.

While I doubt a recovery would take that long these days, we are DEFINITELY in a position to have a 1929-like crash, and without serious financial stewardship (IOW, if McCain wins) it could easily be a decade investors will deeply regret.


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## Dr.G. (Aug 4, 2001)

Thanks, Evan. Actually, my wife holds the RBC Energy Fund in her CIBC RRSP and it has done better than the CIBC Energy Fund. Go figure.


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## eMacMan (Nov 27, 2006)

Actually this may be the tip of the iceburg. From what I have read nearly 1000 banks may be at risk. Also the derivative 5h!t has yet to hit the fan. That's the short term threat.

Long term a lot of baby boomers have their retirement funds tied up in equities. Other than dividends the only way to get cash out of equities is to sell them. Could place long term downward pressure on the market as the boomers retire.

Finally interest rates actually need to rise. The problem was at least partially caused by large amounts of borrowed capitol being gambled in the market. Makes as much sense as maxing out your mortgage to finance a spree in Vegas.


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## Dr.G. (Aug 4, 2001)

"Long term a lot of baby boomers have their retirement funds tied up in equities. Other than dividends the only way to get cash out of equities is to sell them. Could place long term downward pressure on the market as the boomers retire." Very true, eMacMan. I turn 60 next month. Over the past 10 years, I have been cashing out some of my profits from stocks and putting them into Canada Savings Bonds and GICs that have an interest rate greater than the rate of inflation. This way, those profits are locked in and increase a bit in value without risk. I would like to retire in 5 years, but we shall see.


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## TroutMaskReplica (Feb 28, 2003)

gwillikers said:


> When 'grandpa' says that, I sit up and take notice. Very concerning.
> 
> My early retirement plans are likely in jeopardy.


'grandpa' ought to know, since he is the man largely responsible for creating this mess.

why this man is not in prison i will never understand.


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## Dr.G. (Aug 4, 2001)

This is turning into a "black week" .................. and we are not even in to October yet ............... the month of major declines/crashes in the stock market.


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## EvanPitts (Mar 9, 2007)

Dr.G. said:


> Thanks, Evan. Actually, my wife holds the RBC Energy Fund in her CIBC RRSP and it has done better than the CIBC Energy Fund. Go figure.


That is why one really has to sit down and scrounge through the prospectus. When I picked, I wanted something that was quite conservative, but at the same time, capable of making a good long term return.

The Bank of Nova Scotia has been one of the most obscenely profitable banks of all times, even though it has a smaller base of capital. Some of my ancestors scored large with it, especially after a group of them sold some of their ships to a coal merchant in Halifax by the name of Cunard. They have also been somewhat immune to the merger culture.


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## Dr.G. (Aug 4, 2001)

Evan, I am also a bug about high MERs. If it is a long term investment, I don't want a yearly fee of over 2% eating away at my holdings year in and year out. Under 1% is fine, other than for a fund that might make 50% one year, lose 35% the next, gain 27% the next year and charge 2.5% for doing this. I still gain. iFunds are great if you just want to buy the market for a low fee.

I sense a "sucker market" today, with investors piling back into equities because they are now up, and then getting crushed late this afternoon or tomorrow when the market turns ugly again.


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## adagio (Aug 23, 2002)

DrG, the rich get richer by taking chances. It's folks like us who can't afford risk that lose out on many opportunities.

I had relatives who became multimillionaires after the Great Depression ended. While the rest of the family was on hard times, and remained so for a very long time, these folks scooped up cherry properties at pennies on the dollar. If they were alive today I bet they'd be amongst those diving into the bargain barrel of the stock exchange.


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## Vandave (Feb 26, 2005)

Dr.G. said:


> I sense a "sucker market" today, with investors piling back into equities because they are now up, and then getting crushed late this afternoon or tomorrow when the market turns ugly again.


If you look at the trading range of the DOW it falls within a narrow band and hasn’t diverged outside of that band. If you project the bottom of the trading band to present time, you will see that there is strong support at 10,500, which is basically where we are trading. If the past trend holds up, then the market will recover upwards for quite a number of weeks or a couple months before the next big down-leg (unless we break outwards from the band). The next up-leg would probably take the DOW up to around 11,500 / 11,750 and the next down-leg to around 9,500.

If were are to drop another couple hundred points from present within the next couple weeks, then I would expect a very severe crash which would take us to about 8,000, for which there is very strong level of support. If that happens, gold will go to about 1,600.

I think this stage of the bear market will bottom out somewhere in the 8,000 range, but that could still be six months out. 

As you say Dr. G, we shall see.


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## Dr.G. (Aug 4, 2001)

Adagio, you are correct, but one has to have the money to lose before they can risk it on buying stocks at the various massive dips. Vandave has it right with buying in the ranges, which I have done in the past. However, I have my money now tied up in CSBs and quality dividend paying stocks which are holding their value. I am too near my retirement to sell these to buy other stocks. Guess I shall never be a millionaire. Such is Life.


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## eMacMan (Nov 27, 2006)

As for MERs if a fund manager loses your money, clearly he should not be rewarded with a management fee for that period. Up to consumers to demand the change.


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## eMacMan (Nov 27, 2006)

*Bush says he's working hard on economic turmoil (AP)*​
Just spotted that headline. As if things weren't bad enough already.beejacon


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## Dr.G. (Aug 4, 2001)

eMacMan, good luck trying to get the MERs changed in your favor. I finally had enough of a broker buying stocks and mutual funds for me, with commissions and trailers attached to these purchases, and took charge of my own RRSP. I have not looked back nor regretted the decision.


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## EvanPitts (Mar 9, 2007)

Dr.G. said:


> I sense a "sucker market" today, with investors piling back into equities because they are now up, and then getting crushed late this afternoon or tomorrow when the market turns ugly again.


I do a bunch of research before I settle on something - then I plunk it there and basically forget about it. The market is always going to bobble, so I lean towards those companies that are stable and make good earnings. I guess it is similar to Warren Buffet, who only invests in companies that make something that people can buy. I remember when he was being interviewed and "regretted" not buying tech stocks because "he didn't understand how they were going to make money doing everything for free". I could imagine his grin when the bubble entirely burst - but people were still drinking Coke!

Doing the day to day trading thing is for the gamblers who do not mind being bankrupt. For me, I want to put my money into those companies that deserve it.

I dumped Bell because I perceived that they were becoming garbage. They replaced the old bills that were all on one page and entirely understandable - with new bills that proclaim the greatness of the savings I could achieve but were pretty much unreadable. I thought that they should stick with telephones and make a nice, steady income providing a service that was entirely acceptable to the customers. But when they went on the free for all, buying TV stations, setting up a cell phone network with obsolete, non GSM technology, satellite TV and other garbage best left to those that have the know how - it was time to dump it.

Same with Northern Telecom, when they went all Nortel and stopped making telephone equipment. What use is a telephone equipment manufacturer if they aren't going to make telephones. Instead, they fool around with networking stuff that is pretty much rubbish - and I guess it worked out well for me, considering that they pretty much lose millions of dollars every quarter. My money is happier elsewhere.

But lemmings will do what lemmings will do, so they can't handle the stress of a loss because the market takes a dip - so they end up running off the cliff despite the fact that there are so many solid, reliable investments that are profitable.


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## eMacMan (Nov 27, 2006)

EvanPitts said:


> ...
> 
> Doing the day to day trading thing is for the gamblers who do not mind being bankrupt. For me, I want to put my money into those companies that deserve it.
> 
> ...


Sorry Evan; what you are buying are a bunch of Electrons with some companies name attached. If you buy initial offerings then you are investing in the company and the company gets your money to do with as they please. Otherwise you are investing in the big Casino and the company never sees a dime of it.


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## MazterCBlazter (Sep 13, 2008)

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## Dr.G. (Aug 4, 2001)

"But lemmings will do what lemmings will do, so they can't handle the stress of a loss because the market takes a dip - so they end up running off the cliff despite the fact that there are so many solid, reliable investments that are profitable." Very true, Evan. Very true. One may make some money in a bull or bear market, but greedy pigs get slaughtered in both markets.


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## Dr.G. (Aug 4, 2001)

I put 3% of my RRSP into small niche companies -- ZENN Motors, Western Wind Energy and Carmanah Technologies. I had made a few thousand dollars when they were up and now have lost a few thousand dollars after this past couple of month. So be it. I bought those companies for the long term with a block of profits I made off of Shoppers Drug Mart. We shall see.

I am not a stock picker, but I do as Evan does, research and watch and wait, and then when I make my move, it is done. Five years from now I shall see if these were smart of speculative investments.


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## iJohnHenry (Mar 29, 2008)

You wanna make money in the market??

Become a trader.


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## Dr.G. (Aug 4, 2001)

Very true, iJH. My borker went wild when I refused to sell everything I owned and put it into BreX. Found out later that he had big clients that wanted out of the stock as it was zooming up and then heading down, and he had to get someone to cover their sales. Thank God, it was not me.


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## MazterCBlazter (Sep 13, 2008)

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## MacDoc (Nov 3, 2001)

Excellent explanation of Bear, Lehman and AIG and why the Fed acted as it did and why the situation is so remarkable.
Very easy to understand and well written :clap:

Diamond and Kashyap on the Recent Financial Upheavals - Freakonomics - Opinion - New York Times Blog


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## Dr.G. (Aug 4, 2001)

Where is Reagan and his "trickle down" economics. Let the rich get richer, and it will slowly trickly down to everyone else.


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## GratuitousApplesauce (Jan 29, 2004)

Dr.G. said:


> Where is Reagan and his "trickle down" economics. Let the rich get richer, and it will slowly trickly down to everyone else.


By "trickle-down", they were talking about urination.

The inevitable result of this laissez faire unregulated system brought to you by decades of neo-conservatives since Reagan doing the bidding of financial lobbyists. Now that the crap has hit the fan they're counting on average US taxpayers to bail them out, because letting them fail, as the unfettered free market would dictate they should, would be catastrophic.

Stock markets rallied today as the US government announced a repository will be set up to absorb all this bad debt. I wonder if all those free marketeers who partied like bandits since the '80s making vast billions off complete BS loans and other fictional financial products are going to offer any of their piles of gold to help the taxpayers in their bail-out of the financial system?

No, I guess they won't, eh? They'll just pay even more lobbyists to make sure those taxpayers don't get their hands on a health care plan or any tax breaks that should be going to the top 5%. And huge swaths of the middle class who bailed them out and took the losses in their retirement funds will still parrot their trickle-down talking points.


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## Dr.G. (Aug 4, 2001)

GA, we got our crumbs during those trickle-down days. Be grateful for what you have. Paix, mon ami.


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## iJohnHenry (Mar 29, 2008)

You bet.

It always amazes me that I'm still alive, yet not living under a bridge somewhere.

I must have fumbled the ball out of bounds a few times. :lmao:


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## Dr.G. (Aug 4, 2001)

"The rich haven't gotten richer — or poorer — this year. The price of admission to this, the 27th edition of The Forbes 400, is $1.4 billion (Can.) for the second year in a row. The assembled net worth of America's wealthiest rose by $31.8 billion — only 2 per cent — to $1.7 trillion."

Special Report: The Forbes 400

See, that old saying is not true. Pity the poor rich these days. Imagine, only a 2% increase in one's value. The average factory worker made a better increase on their pay with a 3% pay increase this year.


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## EvanPitts (Mar 9, 2007)

Unfortunately, no matter how many people slagged Reagan for his Voodoo Economics; it has proven to be a fairly durable idea in the long run. For thirty years, the world engaged in the economic system that was laid down at Bretton Woods, but unfortunately, the markets became just too large with too many players for it to be viable. Once the agreement collapsed, the world entered an inflationary regime, with radical swings on the run of currency in the markets. "Trickle Down" basically allowed for much greater flexibility, so that the Fed and the other banks could manouver to give some stability to the system. With the exception of a few times when there was a run on the markets, the world enjoyed the benefits of greater levels of investment.

Everyone is jumping the gun with this bear market. This is not a new bear - the market has been somewhat bearish for the past 8 years. There is a shortage of currency in the markets, and about 10% of currency should disappear this year alone. Of course, it hinges on the much wider markets, with more nations and more people utilizing even greater wealth. People feared "peak oil", and the markets soured - but at the same time, people also found out that their $400,000 house was only worth perhaps $200,000.

Sub-prime mortgages clobbered people. But then again, who would give up the chance of owning a house when it would cost less than renting a place - even if there was a risk that they may lose it all. Nothing is a greater loss than to pay rent - so it is a zero sum for many. Not to mention the fact that there is a lot of monney to be made in bankrupcy - people like Kerkorian are experts at how to make wealth out of liquidation.

Research, invent wisely, hedge against market fluctuations, avoid short term trendiness, and dump stock once they start talking "levered buyout" or "merger". Stick with what is durable, and the wealth will return. The markets have survived every bubble ever - just look at how profitable Apple is in the post-tech stock bust years...


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## eMacMan (Nov 27, 2006)

They got the traditional Thursday Dead Cat Bounce. Here's the kicker though, it came about entirely because they were stuffing the wounds with taxpayer money. beejacon 

We shall see how long that lasts. Good thing I am not counting too heavily on Social Security.


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## GratuitousApplesauce (Jan 29, 2004)

eMacMan said:


> They got the traditional Thursday Dead Cat Bounce. Here's the kicker though, it came about entirely because they were stuffing the wounds with taxpayer money. beejacon
> 
> We shall see how long that lasts. Good thing I am not counting too heavily on Social Security.


In 2004 Bush was campaigning heavily to privatize the Social Security fund, which would have put all that money in the hands of all those Wall Street idiot gamblers. Fortunately, public opinion at the time nixed that one.

Found a great article this morning by James Moore, who wrote Bush's Brain. It focuses on Texas Senator Phil Gramm, McCain's current economic advisor and thought by many to be in line for Treasury Secretary if McCain were to win. He chronicles his connection to the Enron meltdown and Gramm's authoring of the bill during the early days of the Bush administration that set the stage for the current crisis:



> His name is Phil Gramm. A few days after the Supreme Court made George W. Bush president in 2000, Gramm stuck something called the Commodity Futures Modernization Act into the budget bill. Nobody knew that the Texas senator was slipping America a 262 page poison pill. The Gramm Guts America Act was designed to keep regulators from controlling new financial tools described as credit "swaps." These are instruments like sub-prime mortgages bundled up and sold as securities. Under the Gramm law, neither the SEC nor the Commodities Futures Trading Commission (CFTC) were able to examine financial institutions like hedge funds or investment banks to guarantee they had the assets necessary to cover losses they were guaranteeing.


The article also presents a thumbnail sketch of the Keating S&L scandal of the 1980's, where McCain was involved in the previous deregulation disaster that killed the pensions of thousands.


> In the early 80s under the Republican president, congress deregulated the savings and loan industry in much the same way that Gramm made sure there were no laws hindering our current financial malefactors on Wall Street. S&Ls simply lobbied until they had less regulation and then began making rampant, unsound investments.


James Moore: A Nation of Village Idiots


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## gastonbuffet (Sep 23, 2004)

i'm a little puzzled that Obama is not EVERYWHERE blaming this economic debacle on McCain.


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## Dr.G. (Aug 4, 2001)

"i'm a little puzzled that Obama is not EVERYWHERE blaming this economic debacle on McCain." Blame it on Bush, and the "wizards" of Wall Street.


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## Dr.G. (Aug 4, 2001)

gb, I prefer to place my blame elsewhere. Sadly, I do not understand derivatives. "Derivatives are financial instruments whose value changes in response to the changes in underlying variables. The main types of derivatives are futures, ...." Then, I am lost. Thus, I place my blame elsewhere.

YouTube - Blame It On The Bossa Nova ~ Eydie Gorme'


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## GratuitousApplesauce (Jan 29, 2004)

Dr.G. said:


> gb, I prefer to place my blame elsewhere. Sadly, I do not understand derivatives. "Derivatives are financial instruments whose value changes in response to the changes in underlying variables. The main types of derivatives are futures, ...." Then, I am lost. Thus, I place my blame elsewhere.
> 
> YouTube - Blame It On The Bossa Nova ~ Eydie Gorme'


Derivatives, eh? A friend who has a lot of money in various investments told me he was approached by one of the major Canadian banks he deals with and some broker was trying to sell him on getting into derivatives. Apparently he made it sound like a quick way to make big dividends with no downside. But being suspicious of the sales pitch he dug around for information on what exactly these were about.

He came to the conclusion that derivatives were nothing more than people placing bets on other things like stocks and futures and that the whole thing looked like it had a very major downside. He was a little surprised that a major Canadian bank would be advising it's customers to get into this kind of stuff. I wonder if the Canadian financial institutions aren't vulnerable on some of this crap, even though Harper is telling us otherwise? Might this explain his early election call, before too much crap hits the fan?

Gee, I think I'll take everything I've got and head to Vegas with it. You think the government will bail me out when I lose it all?

I think there's a lot of rapacious children on Wall Street, Bay Street and elsewhere whose brains probably worked no better than your average meth addict. And these greed addicts were able to buy enough lobbyists to make sure the right-wing morons in Congress and the White House gave them whatever they asked for. That's who the US taxpayers are bailing out now.


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## Dr.G. (Aug 4, 2001)

GA, sad and very maddening, but you are probably correct.


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## iJohnHenry (Mar 29, 2008)

Just another way for Banks to increase fees, so as to appease their shareholders.


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## MacDoc (Nov 3, 2001)




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## mrjimmy (Nov 8, 2003)

I must admit, I've never been concerned with the security of my deposits in Canadian banks until recently. Also, I have some locked in accounts with Manulife that I feel sick about. 

Although I'm constantly told it can't and won't happen here by people who appear to know what they're talking about.... I seem to remember similar statements in the early 2000s when Nortel headed south. Remember? The tech phenomenon wasn't a bubble just like real estate isn't now.


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## Adrian. (Nov 28, 2007)

Buy bonds. Debt never goes away...


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## Macfury (Feb 3, 2006)

GratuitousApplesauce said:


> And these greed addicts were able to buy enough lobbyists to make sure the right-wing morons in Congress and the White House gave them whatever they asked for. That's who the US taxpayers are bailing out now.


Fannie Mae and Freddie Mac were both heavily championed--and managed by--the left wingers who loved them.


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## EvanPitts (Mar 9, 2007)

mrjimmy said:


> I seem to remember similar statements in the early 2000s when Nortel headed south.


Nortel "went south" because they sold off all of their production and got out of the business of telephones - and got into "networking". Just like when Warren Buffet said that he had no idea how if a company doesn't make something that can be sold, how can that company make money.

Of course, they never did get to the bottom of the Nortel swindle and how thousands of investors were left with worthless paper - when in essence, those investors had never held "Nortel" stock but rather, BCE. In any other case, it is called fraud - but no one except the investors paid the price.


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## Macfury (Feb 3, 2006)

I remember somebody practically beating me up because I refused to buy Nortel stock during its decline. His theory was that it simply couldn't fall any lower. His theory was wrong. 

He also bought stock in Martha Stewart's company as well as WWF at its peak. You could kind of count on him as a bellweather of which stock NOT to buy.


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## GratuitousApplesauce (Jan 29, 2004)

Macfury said:


> Fannie Mae and Freddie Mac were both heavily championed--and managed by--the left wingers who loved them.


From what I've read the FNMA and the FHFA worked well as they were intended to, until guys like Phil Gramm, John McCain and neo-conservatives starting passing laws to trash the regulatory oversight. But to be fair, many neo-cons in the Democratic party bought into financial deregulation also, but the real push was coming from the neo-conservative arm of the Republican Party, post-Reagan.

You'd think Americans would have wised up after the Savings and Loan crisis and bailout, or the Enron debacle, but they just kept the idiots in power who pushed for greater de-regulation. Now we see Bush about to enact the greatest government nationalization program the world's ever seen. Has communism finally triumphed? 

Or course Bush's program isn't there to buy anything useful, just to buy up a dumpster load of worthless debt. That trillion dollars could have bought a lot of health care, infrastructure, or education, but there was never enough money for that according to the right wing. But when the Wall Street boys scream for a welfare program? "Oh hey guys, here's a trillion clams."


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## iJohnHenry (Mar 29, 2008)

Net result??

The little guy is taxed beyond reason to support Corporate America.

Sounds suspiciously like Socialism to me.


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## eMacMan (Nov 27, 2006)

OK this has now turned into the biggest swindle in history. Taxpayers on the hook for at least a trillion dollars. All of it going to whoever the treasury secretary picks, ie BushBuddies. 

Absolutely nothing being done to stamp out the cause of the problem. Financial institutions still do not have to clearly define their assets on financial statements. Leveraging is still not limited. The derivative mess about 500 trillion still has not been addressed.


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## Max (Sep 26, 2002)

This tidy little bit of corporate welfare is going to come back to haunt America.


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## EvanPitts (Mar 9, 2007)

Max said:


> This tidy little bit of corporate welfare is going to come back to haunt America.


But can't you see - it keeps the government from having to provide "affordable housing" - which is real commie-pinko style socialism...


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## Dr.G. (Aug 4, 2001)

Congress is trying to get the Bush administration to accept limits on executive compensation, which the Bush administration does not want to see imposed. They do, however, want to bail out foreign banks involved in this crisis, bailing out foreign banks with taxpayer money. Unbelievable!!!!


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## Vandave (Feb 26, 2005)

Dr.G. said:


> Congress is trying to get the Bush administration to accept limits on executive compensation, which the Bush administration does not want to see imposed. They do, however, want to bail out foreign banks involved in this crisis, bailing out foreign banks with taxpayer money. Unbelievable!!!!


It's only fair at this point.


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## Dr.G. (Aug 4, 2001)

Fair that there should be limits on their salaries and bonus, or only fair that they should be rewarded for creating this mess in the first place? 

Case in point, Lehman Brothers, which filed for Chapter 11 bankruptcy protection, is setting setting aside $2.5 billion for executive compensation and bonus packages for the top executives. Unreal!!!!


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## Vandave (Feb 26, 2005)

Fair that if you are bailing out a company with taxpayer money that you set maximum salaries.

Don't worry Dr. G, I haven't turned into a rabid socialist.


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## Dr.G. (Aug 4, 2001)

Vandave, I just ran outside to see if Hell had frozen over. Well, all is now back to the way it should be. Amazing how many diverse viewpoints on other subjects are suddenly cast aside when it comes to using taxpayer dollars to fund private business executive compensations and bonus payments. Solidarity forever, brother. Paix, mon ami.


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## MacDoc (Nov 3, 2001)

Predation writ large :nono: 













> *39 billion: The Wall Street bonuses for the big five investment banks last year.»*
> 
> ABC News reports:
> 
> ...


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## GratuitousApplesauce (Jan 29, 2004)

MacDoc said:


> Predation writ large :nono:


In the old days during a crash they just jumped out of their top floor offices. Now they have "golden parachutes".

I guess they can change the song to "Brother Can You Spare A Billion?".

Get out yer guitars, boys!


> Am E7 A7
> Once I built a railroad, made it run,
> 
> D G7 C E7
> ...


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## Dr.G. (Aug 4, 2001)

Listening to Treasury Secretary Henry Paulson and Federal Reserve Chairman Ben Bernanke speaking on Capitol Hill in front of a Senate committee. Finally, some politicians are realizing that you can't keep taking from the taxpayer who plays by the rules and reward those who got us into this mess in the first place.


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## Dr.G. (Aug 4, 2001)

"39 billion: The Wall Street bonuses for the big five investment banks last year." MacDoc, that was last year. Their bonus checks have dropped to apx. $11 million for each bonus. That is a huge drop in income, and imagine the pain of trying to adjust your lifestyle to fit in a household budget of this amount? Of course, these bonuses are taxed at a much lower rate than the average wage-earner pays, but that is the way of Wall Street.


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## gastonbuffet (Sep 23, 2004)

a little over the top and mixed up, but entertaining : 

The Great Wall Street Swindle

CBC News: Sunday


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## Dr.G. (Aug 4, 2001)

Unreal, and yet all too real. Thanks for the link, gb.


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## MacDoc (Nov 3, 2001)

Well this is likely the right number....  



> Tuesday, September 23, 2008
> *$5 Trillion Needed to Stop Bank Crisis, Says Japanese Expert*
> 
> Ken Ohmae, former head of McKinsey's Tokyo office (disclosure: I have a passing acquaintence with him and he was enormously well regarded in his day despite being a tireless self-promoter) says that the Paulson program is grossly inadequate and the magnitude of the US crisis is so large that a $5 trillion international facility is necessary.
> ...


naked capitalism: $5 Trillion Needed to Stop Bank Crisis, Says Japanese Expert


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## Dr.G. (Aug 4, 2001)

Lest we forget ..................

YouTube - The Great Depression

YouTube - The Face of the Great Depression


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## Dr.G. (Aug 4, 2001)

Some of you are too young to have met and gotten to know many of the people who went through the Great Depression and the Second World War. There are many of us here in ehMacLand that have this vicarious experience of knowing these people, or some may have even been around for some of these events. Ask them if it can again happen. We shall see.

YouTube - Dust Bowl - Songs and Photos of the Great Depression


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## HowEver (Jan 11, 2005)

As long as the US can just keep printing money as a failsafe, great depressions are indeed a real possibility.

If little Bush's plan doesn't work, expect a loaf of bread to cost $1000 in a few months--if you can find one on the shelf.


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## screature (May 14, 2007)

HowEver said:


> If little Bush's plan doesn't work, expect a loaf of bread to cost $1000 in a few months--if you can find one on the shelf.


What nonsense!


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## Dr.G. (Aug 4, 2001)

President Bush is to address nation at 9:01 p.m. ET on a proposed $700 billion bailout plan for financial institutions. His main point shall be very much like Roosevelt's, albeit to a different audience.

"To the CEO's and other high executives in the various financial institutions that shall eventually be bailed out by the US taxpayers, I pledge this to you -- You have nothing to fear about losing your executive salaries and multi-million dollar bonus checks. This great unequal distribution of wealth will endure as it has endured, will revive and will prosper. 

So, first of all, let me assert my firm belief that the only thing we have to fear is fear itself—nameless, unreasoning, unjustified terror which paralyzes needed efforts to convert derivatives into profits. In every dark hour of our national life a leadership of frankness and vigor has met with that understanding and support of the people of wealth and power which is essential to victory. I am convinced that you will again give that support to leadership in these critical days."

I for one feel much better now that Bush is finally taking charge of this situation.


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## MacDoc (Nov 3, 2001)

Someone should draft Bill Gross for this refinance project....



> *How Main Street Will Profit*
> By William H. Gross
> Wednesday, September 24, 2008; Page A23
> 
> ...


Exactly - Gross knows...
••

I think the issue most have is not saving the banking structure but with the pay scales and bonuses for executives that have become embedded in the financial community as if it's their due......makes many many hard working people in both private and public sphere very angry - especially as the perception remains that massive failure of fiduciary duty is rewarded.


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## MacDoc (Nov 3, 2001)

Hmmp speaking of pay scale.....



> *Paulson Gives Way on C.E.O. Pay; Bush to Speak Tonight*
> 
> By DAVID STOUT
> Published: September 24, 2008
> ...


http://www.nytimes.com/2008/09/25/business/economy/25cong.html?hp


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## Dr.G. (Aug 4, 2001)

"The continuing crisis, already a huge issue in the presidential election campaign, had a more direct effect on Wednesday afternoon, as Senator John McCain, the Republican nominee, announced that he was temporarily suspending his campaign and returning to Washington to deal with the crisis. He also asked Senator Barack Obama, his Democratic opponent, to agree to postpone their first debate, scheduled for Friday night. But Mr. Obama was inclined to go ahead with the debate, his aides said, and was planning to explain his stance late Friday afternoon."

Smart move by McCain. Slipping in the polls (which I don't trust), and knowing that a free debate on Friday could be disasterous for him, he now "sees the light" for regulations. I still think that the debates should go ahead on Friday, however, but if he does not show up, what else can Obama do? We shall see.


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## MacDoc (Nov 3, 2001)




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## mrjimmy (Nov 8, 2003)

I wonder how the real estate agents will spin this one:

TheStar.com | Business | Report warns of U.S.-style housing woes



> Merrill Lynch is challenging the prevailing view that Canada's housing and mortgage markets are more stable than their U.S. counterparts, warning that households in this country are so indebted that it's only a matter of time before we see a major downturn here as well.


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## Dr.G. (Aug 4, 2001)

Sad, but all too true, MacDoc.


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## Dr.G. (Aug 4, 2001)

Good point, mrj. Luckily, here in St.John's, there was never much of a boom, so prices won't drop dramatically. This is fine with me, since I did not want to get stuck with a huge property tax bill based on the value of a home that was inflated.


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## Dr.G. (Aug 4, 2001)

Well, after listening to Bush last night I felt a whole lot calmer. Seems it was the common man and woman who took out these sorts of mortgages that they could never hope to pay off that were the root cause of all of these problems. Wall Street does not need a bailout, but rather nearly $1 trillion US taxpayer dollars to help "rescue" the poor banks and investment dealers. 

I think that Bush should host a telethon on Nov.27th, US Thanksgiving Day, to raise funds for all of those CEOs who will not not be allowed their windfall bonus checks. How are they going to survive on their regular salaries of, on average, $10 million US??????

I for one will be sending some of my hard earned after-tax Canadian dollars to help these poor folks in their time of need.


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## Macfury (Feb 3, 2006)

Dr. G: This bail-out is outrageous (no sarcasm). That the CEOs were holding out for higher bonuses is beyond the pale. No taxpayer bail-out. Time to hold:


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## Dr.G. (Aug 4, 2001)

I see your point, Macfury. However, President Bush promised us all that there would be no "windfalls" for these CEOs. As his Treasury Sect. said, you have to pay these people the salaries they deserve if you are going to attract the same caliber of people that got us in to this mess in the first place. These salaries are based on their status and not their abilities. Thus, if you use common sense, you would see that ............................ wait a minute .................................. the same people getting the same salaries ............................ the same people getting the same salaries for getting us into the mess we are now in ........................... the same people who walk away millionaires ............................. ????????????????????

I now see your point, Macfury .............. and your outrage (no sarcasm). It is strongly shared, mon ami. Paix.


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## eMacMan (Nov 27, 2006)

The ones that should be really outraged are the kids in their twenties. They and their grand kids will be paying dearly for trying to keep the bulls alive a little longer. Markets go up then they come down. This one was past due for the fall. The longer it's delayed the worse it will be.

What really needs to be done instead of Paulsen's Plunder is to clean up the regulatory chaos that created the mess. 

McCain of course led the charge to relax regulations hence his concern about the 5h!t hitiing the fan before the election.

Personally I am sick and tired of every decision in Washington being based on fear. In this case the rats in charge went way out of their way to create the fear. My country should be better than that!

*STOP PAULSEN'S PLUNDER*​


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## MacDoc (Nov 3, 2001)

> Congress hits the panic button
> As George Bush speaks of doom and gloom, lawmakers fret about whether it's worse to pass a bailout plan or not to pass a bailout plan. And Republicans get nervous.


good overview

Congress hits the panic button | Salon News


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## Macfury (Feb 3, 2006)

eMAcMAn: I don't like McCain but he did go before the Senate to predict this mess and call for regulatory reforms for Mac and Mae in 2005.


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## eMacMan (Nov 27, 2006)

Macfury said:


> eMAcMAn: I don't like McCain but he did go before the Senate to predict this mess and call for regulatory reforms for Mac and Mae in 2005.


True but he also led the deregulation charge that helped create the mess. 

What's needed is not a bailout. 

Start with higher interest rates and limits on leverage. The current system is nothing but the worlds largest Ponzi Scheme and extraordinarily low rates combined with extreme leverage allowed the bubble to bloat far beyond its natural bursting point.

A 6-8 month moratorium on primary residential repossessions and mortgage rate increases. This would give the current and the next Congress time to come up with intelligent regulations. Doing things in a panic or under the gun of fear almost always makes things worse.

Banks should have to hold mortgage papers for at least 5 years, no immediate selloffs to brokers. That way they would have a reason to be sure the mortgage victim was capable of handling the mortgage.

Mortgage payments should not be tax-deductible. The way this is set up, only people with large expensive homes benefit and they are the ones most likely to mortgage all their equity to buy stock. That way the money borrowed is tax deductible and the returns get taxed at a lower rate.

Financial Institutions must clearly list their assets. Derivatives should count as liabilities not assets since even the bank managers have no idea what they are. 

Forget Golden Parachutes, CEOs should be held fiscally responsible. They knew what they were doing would lead us here and were counting on their BushBuddies to bail them out.

Yes it would make credit extremely hard to come by while things shake out but truth is people should not be maxing out their mortgages to play the stock market. Nor is it a good idea for the entire nations economy to be based on the Wall Street Casino


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## eMacMan (Nov 27, 2006)

Flakey connection 
Double Post deleted


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## Macfury (Feb 3, 2006)

eMacMan, you make some very good suggestions.


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## Dr.G. (Aug 4, 2001)

"What's needed is not a bailout." True, and this is what our beloved President Bush has promised. It is a "rescue". Just as the WMD caused the need to go into Iraq and fix that mess, so too does Wall Street and the US banking/investment community need such a rescue. In his benevolence, Pres. Bush has also seen fit to bail out banks in England and Germany. It was people who were talked into huge mortgages by "skilled" brokers/bankers who were the cause of this whole mess. Now, the average person merely wants to walk away from this mess .................... or be lead away by a Sheriff's Order to "vacate the house" due to foreclosure. 

The bottom line is that if you believe that "the businees of America is business" then you MUST protect Big Business. Help the banks/investment firms to become solvent once again. Let the US taxpayer buy up these bad loans/debts, and get on with the business of making money the old fashion way once again. People should again start to spend, spend, spend as if there were no tomorrow. Thus, the whole cycle will again start to spin ........................ that is until the next crisis. However, the American taxpayer was there once before and he/she will be there once again. It's the American Way. 

Long Live our Beloved President Bush. Long Live Capitalism. God Bless Wall Street and the United States of America.


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## MazterCBlazter (Sep 13, 2008)

.


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## Dr.G. (Aug 4, 2001)

I think that Bush was quite smart to call in McCain to help the matters. With his command of the concepts of classical economics, and his understanding of the needs of Main Street and the average home owner (i.e., he owns 7 homes and he must live near some average people in some of those neighborhoods), he is best prepared to save the nation at this critical moment. 

God bless America, and God save John McCain.


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## Vandave (Feb 26, 2005)

Dr. G, I hope that they bring in the big guns to help solve this crisis. I am personally expecting Governor Palin to lend her economic expertise to get things back on track. 

YouTube - Palin: Bailout is about healthcare!


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## Dr.G. (Aug 4, 2001)

Vandave, good point. She could call her economic policy "The Bridge to Somewhere". Yes, voters marching uphill ............ out of darkness .................... into darkness. We shall see. Paix, mon ami.


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## eMacMan (Nov 27, 2006)

I know some religious fanatics try to deny the existence of black holes. This fiasco will prove that they do indeed exist. Once that bail out money is sucked into the vortex it will vanish forever.


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## Dr.G. (Aug 4, 2001)

eMacMan, at least the investment banking executives will be able to find their deck chairs ...................... on the Titanic.


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## screature (May 14, 2007)

eMacMan said:


> Mortgage payments should not be tax-deductible. The way this is set up, only people with large expensive homes benefit...


How do you figure that? The average home owner benefits as well with mortgage payments being tax deductible. 

I wish it was the case here in Canada. Why should mortgage payments be tax deductible on an investment property but not on a principle residence. Now that is a tax policy that is only for the rich. By having your mortgage payments on your principle residence tax deductible it actually makes home ownership more affordable to the middle class.


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## Macfury (Feb 3, 2006)

screature: It's an interesting question. I'm not always sure that the government WANTS people to own homes. I think in many cases, the likes of David Miller would prefer seeing people ensconced in council flats or government stock rental.

That said, I agree with the interest deduction.


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## eMacMan (Nov 27, 2006)

screature said:


> How do you figure that? The average home owner benefits as well with mortgage payments being tax deductible.
> 
> I wish it was the case here in Canada. Why should mortgage payments be tax deductible on an investment property but not on a principle residence. Now that is a tax policy that is only for the rich. By having your mortgage payments on your principle residence tax deductible it actually makes home ownership more affordable to the middle class.


The mortgage interest has to exceed ones basic deductions before it has an impact. For a couple with kids in a modest home there is generally no benefit.


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## screature (May 14, 2007)

eMacMan said:


> The mortgage interest has to exceed ones basic deductions before it has an impact. For a couple with kids in a modest home there is generally no benefit.


What do you (they IRS) mean by "basic" deductions, what would be the Canadian equivalent?


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## EvanPitts (Mar 9, 2007)

It isn't that the mortage payment is so much a write off on investment property - it just avoids a double tax, since investment properties are subject to captial gains taxes. So given the choice, they allowed the small write off on the investment in order to collect the much greater amount of cash on the gains.

Besides, the original money used to the investment has already been taxed, whether through income taxes, corporate taxes, or whatever. It ends up the "write off" is a sop, because it is pretty much minicule compared to property taxes. The more land that is owned - the more cash the government gets.


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## Dr.G. (Aug 4, 2001)

John McCain is headed to Mississippi for the debates. Guess all is well in Washington, DC. He goes with the hopes and prayers of a grateful president and a grateful nation. Amen, Brother John. "Many are called, but few are chosen."


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## MazterCBlazter (Sep 13, 2008)

.


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## Dr.G. (Aug 4, 2001)

YouTube - God Bless America By Kate Smith


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## MazterCBlazter (Sep 13, 2008)

.


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## Dr.G. (Aug 4, 2001)

MCB, to vote against McCain is to vote against God and Country. For me, it's "my country, right or wrong" ............ "America, love it or leave it" .............. "better dead than red" ................ "Ask not what your country can do for you, but what you can do for your country" .............. "what America needs most now is change you can believe in" ................ "Yes we Can" ...................... 

"I guess your preference is McCain Dr.G?" MCB, you know me better than that.

YouTube - "A Stronger Economy"

YouTube - Yes We Can - Barack Obama Music Video


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## iJohnHenry (Mar 29, 2008)

You forgot "A sucker in every pot."


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## Dr.G. (Aug 4, 2001)

""A sucker in every pot." No, just teasing with MCB. Of course, it was Hoover who promised "two chickens in every pot and a car in every garage". That was in the election of 1932 and the rest is history.


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## MacDoc (Nov 3, 2001)

•••••

Speaking of pig at trough.


Wamu CEO - in place for 3 weeks......severance deal .......$13-18 million....


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## Dr.G. (Aug 4, 2001)

MacDoc, he put in a hard 19 days of work. Imagine trying to bail out the Titanic as it was sinking? Of course, Alan H. Fishman might be compared to J. Bruce Ismay, who was the Managing Director of the White Star Line, and got aboard Lifeboat C on the Titanic as it was sinking ............ ahead of other women and children. We shall see.


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## MazterCBlazter (Sep 13, 2008)

.


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## Dr.G. (Aug 4, 2001)

MCB, I like Jolson's version better ............ workers of the world, unite, for the struggle carries on ............ for this is the time and the place.

Too bad communism never worked .......... it was good in theory, but the workers of the world never got their fair share. C'est la vie.


YouTube - Al Jolson - Brother can you spare a Dime

YouTube - Interationale in different languages- 2 (English)

YouTube - The Communist Internationale (Original, with English Lyrics)


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## Dr.G. (Aug 4, 2001)

YouTube - Depression Video

YouTube - Dust Bowl - Songs and Photos of the Great Depression


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## Dr.G. (Aug 4, 2001)

Of course, the CEOs of the various investment banks shall soon be singing the hard time blues themselves ................ maybe. We shall see.

YouTube - Hard Times


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## Dr.G. (Aug 4, 2001)

Bruce Springsteen has agreed to do a benefit concert for those displaced CEOs who will be getting less than the $10 million average salaries they were used to last year. He will try to pick up their spirits to help them to "keep their eyes on the prize".

YouTube - Bruce Springsteen - Eyes On The Prize 2006

I like the Mavis Staples version of "Eyes On The Prize" better, especially tonight, with the presidential debate taking place at "Ole Miss" in Oxford, Miss.

YouTube - The Freewheelin' Bob Dylan - 09 Oxford Town

"OXFORD, Miss. (AP) _ Two generations ago, bullets flew and tear gas canisters exploded among the magnolias as segregationists fought federal authorities over the court-ordered admission of the first black student to the University of Mississippi.

It was the flagship school in what was then the most defiantly white supremacist state in the union. Now, Ole Miss is a diverse university where racial conflict is a topic for history classes rather than a fact of everyday life, and it's hosting the first presidential debate featuring a black nominee for a major party."


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## Dr.G. (Aug 4, 2001)

All in all, whatever the final outcome of the Wall Street bailout/rescue/rejection, "a hard rain's a-gonna fall." We shall see.

YouTube - The Freewheelin' Bob Dylan - 06 A Hard Rain's A-Gonna Fall


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## Sonal (Oct 2, 2003)

Dr.G. said:


> Too bad communism never worked .......... it was good in theory, but the workers of the world never got their fair share. C'est la vie.


Well you know, Dr. G. Under capitalism, man exploits man. Under communism, it's the other way around.


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## Dr.G. (Aug 4, 2001)

Very true, Sonal. As well, under both forms of government, the powerful get rich, the poor get poorer, and the rich get even richer.


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## gastonbuffet (Sep 23, 2004)

DEJAfreakingVU?!!!!


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## eMacMan (Nov 27, 2006)

See the Whitehouse has come up with Paulsen's Plunder 1.1. Same as the original but they have to vote on it without actually discussing it and preferably without even reading it.

We are truly witnessing the death throes of American democracy.


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## MacDoc (Nov 3, 2001)

Latest....



> *Citigroup buys Wachovia bank assets for $2.2B*
> 
> As part of all-stock deal, Citi will acquire deposits, loans from *nation's fourth largest bank*. Citi also to raise $10B in stock sale, cuts dividend.


The fourth largest bank in the largest economy in the world goes for $2 billion on a stock trade and you can bet that was due to a red hot poker from the Fed being brandished.

Maybe scale of the problem is sinking in......



> Monday, Sept. 29, 2008 08:27 PDT
> *A bailout bill that pleases no one*
> 
> After what is likely to be a lively few hours of debate the House of Representatives is expected to vote on the bailout bill by the early afternoon Monday. The expectation is that the measure will pass, but the question is, by how much? Will the Democratic Congressional leadership be hung out to dry by House Republicans rebelling against the "crap sandwich" served to them by their own party? Will Democrats in tight races bridle against handing more power to the Bush administration to rescue Wall Street fat cats?
> ...


----------



## GratuitousApplesauce (Jan 29, 2004)

Protester's sign on Wall Street says it all.

(Edited for language)


----------



## MacDoc (Nov 3, 2001)

Sadly - it has already happened.....



> *Credit crunch banker leaps to his death in front of express train*
> 
> By Christopher Leake
> Last updated at 11:06 PM on 27th September 2008
> ...


Credit crunch banker leaps to his death in front of express train | Mail Online


----------



## Dr.G. (Aug 4, 2001)

Legislation to bail out the U.S. financial system appears near defeat on the floor of the House.


----------



## eMacMan (Nov 27, 2006)

Although Nancy Bush Pelosi is keeping the vote open in hopes of twisting enough arms to reverse the defeat.

Perhaps she should share a cell with Bush and Cheney.beejacon


----------



## iJohnHenry (Mar 29, 2008)

There will be no "cells".

Bush will pardon all and sundry on his last day in office.


----------



## Dr.G. (Aug 4, 2001)

John McCain will save the day. Wait and see. He will show one and all how he reacts in a time of crisis. Look at his first major decision -- taking on Gov. Palin as his running mate .................... the person who is a heart beat away from the presidency when he wins the election ..................... 

Uh oh ............................................................


----------



## MacDoc (Nov 3, 2001)

Safe Haven | Will the US Dollar Drown in an Ocean of Debt?


----------



## Dr.G. (Aug 4, 2001)

MacDoc, bring us some good news ..................... especially on October 29th. Merci, mon ami.


----------



## Dr.G. (Aug 4, 2001)

House Minority Leader John Boehner is now blaming Speaker Pelosi for this failure of passing the bill. He said she should have done more to pass a bill proposed by Pres. Bush. Someone should remind him that Bush is a Republican president.


----------



## EvanPitts (Mar 9, 2007)

Looks like the US may actually end up funding all of the steak dinners and expensive cars of the filthy rich. I think it is high time to get rid of all of this CEO garbage, and go back to the proper administration of Corporations, where there was a Chairman and a Board that weren't all on the take, ripping off the investors with their high salaries and special bonuses. It would be more proper if the highest wage in any corporation was no more than four times the lowest wage...

And the investors really have so little say - just look at the mess GM is in, even though the investors for years asked why the company refuses to produce a decent, fuel efficient car. All of the cash that went into GMAC - all gone to bust because of Ditech.Com...


----------



## Dr.G. (Aug 4, 2001)

McCain is now blaming Obama for this failure to pass the bill. His aides said that Obama "called it in" re the support he gave to this bill.


----------



## MacDoc (Nov 3, 2001)

> The American economy can take a lot of abuse, but no economy is invincible. Illustration by Edward Sorel.


Prescient....



> Reckoning
> *The Economic Consequences of Mr. Bush*
> 
> The next president will have to deal with yet another crippling legacy of George W. Bush: the economy. A Nobel laureate, Joseph E. Stiglitz, sees a *generation-long struggle to recoup.*
> by Joseph E. Stiglitz December 2007


a good if depressing read....
The Economic Consequences of Mr. Bush: Politics & Power: vanityfair.com


----------



## Dr.G. (Aug 4, 2001)

It would be appropriate now that Bush blame the Democrats for not passing his bill. He could also assure a McCain victory if he throws his support behind Obama, saying "He's my man." Knowing Bush, however, he would not us the word "man", but rather use the word "boy".


----------



## Voyager (Aug 7, 2005)

Dr.G. said:


> House Minority Leader John Boehner is now blaming Speaker Pelosi for this failure of passing the bill. He said she should have done more to pass a bill proposed by Pres. Bush. Someone should remind him that Bush is a Republican president.


Maybe someone should have reminded Speaker Pelosi that it isn't prudent to give a partisan speech *before* the vote is cast. Also, since only 60% of Democrats voted in favour of the bill so she didn't do a really good job selling it to members of her own party.


----------



## Vandave (Feb 26, 2005)

Dr.G. said:


> McCain is now blaming Obama for this failure to pass the bill. His aides said that Obama "called it in" re the support he gave to this bill.


More Republicans voted it down than Democrats. I imagine a lot of Republicans up for election know they stand a good chance of being unemployed within a few months, hence they have a greater ear for what their constituents are saying.

I am really surprised it got voted down. When they first spoke about the bailout a couple weeks ago, I figured it was a done deal. I expected outrage by voters, but it grew a lot more quickly than anybody anticipated. The longer they delay this thing, the less likely it will be to pass. 

Most economists say it is needed to ensure the economy continues to function well. I think a lot of taxpayers don't really care and are willing to take an economic hit to make the point about uncontrolled spending.


----------



## MacDoc (Nov 3, 2001)

And Bush did a worse job selling it to his party......good for goose n'all


----------



## Vandave (Feb 26, 2005)

I think most probably want the bill to pass but nobody wants to be the one to vote for it.  

It reminds me of the theory of Prisoner's Dilemma.


----------



## Voyager (Aug 7, 2005)

MacDoc said:


> And Bush did a worse job selling it to his party......good for goose n'all


 Pelosi only had to convince 13 more of her own party to vote for it and *she* couldn't do it.  All it proves is that no single person ever has total control of their political party.

Let's face it, Vandave was right when he said most people probably wanted the bill to pass but many didn't want to be seen voting for it. They had to choose between what as, arguably, best for the country and possibly getting reelected and some, both Democrat and Republican, chose the latter. Of course for some, if not many, Republicans the whole bailout bill was the antithesis of conservative philosophy and so their vote, in their eyes, was based on principle.


----------



## MacDoc (Nov 3, 2001)

I wonder how many Republican Congressmen shorted the market. :roll: 

•••

It was a Republican engendered failure of policy and oversight that caused the problem and a Republican engendered solution ...........don't go trying to shift any blame - the Dems delivered the votes the Republicans Congress bailed on Bush and their House leaders.

A majority of Dems voted for it. Only 1 in 3 Repubs voted for the bill their leadership supported.

Was Pelosi - stupid - yep but that's not new.

•••
Best comments - incumbents are going to pay big time.


----------



## Dr.G. (Aug 4, 2001)

Confidence is fleeting .............. as the stock market is tanking. Not sure if there are many firewalls to protect Canada from all of this fallout.


----------



## Dr.G. (Aug 4, 2001)

This reminds me of an arguement as to who threw some sand in a sandbox when my son was in preschool. Everyone pointed fingers at other children. Eventually, Ida and Notme were given the final blame, as in "Who started to throw the sand?", with the replies "Ida know" and "Not me".


----------



## MacDoc (Nov 3, 2001)

Terrific overview



> *The Monster That Ate Wall Street*
> 
> How 'credit default swaps'—an insurance against bad loans—turned from a smart bet into a killer.


The Monster That Ate Wall Street | Print Article | Newsweek.com

Mea culpa - sort of....



> *A message from Wall Street to Washington DC - by Barry Ritholtz*
> 
> We on Wall Street feel somewhat compelled to take at least some responsibility. We used excessive leverage, failed to maintain adequate capital, engaged in reckless speculation, created new complex derivatives. We focused on short-term profits at the expense of sustainability. We not only undermined our own firms, we destabilized the financial sector and roiled the global economy, to boot. And we got huge bonuses.
> 
> But here’s a news flash for you, D.C.: We could not have done it without you. We may be drunks, but you were our enablers: Your legislative, executive, and administrative decisions made possible all that we did. Our recklessness would not have reached its soaring heights but for your governmental incompetence.


HousingPANIC - The Housing Bubble and Credit Crisis Blog with an Attitude Problem


----------



## Dr.G. (Aug 4, 2001)

President Bush says "economic damage will be painful and lasting" if Congress fails to pass a $700 billion economic bailout plan. Bush said the U.S. economy is at a "critical moment" and failure to act could mean economic hardship for millions of Americans. Bush spoke ahead of the opening of the U.S. markets.

He also warned that if Congress does not pass this bailout/rescue plan, he would suspend the upcoming federal election in the US. Everyone is now rushing back to Washington, DC to pass the bill. We shall see.


----------



## eMacMan (Nov 27, 2006)

Dr.G. said:


> President Bush says "economic damage will be painful and lasting" if Congress fails to pass a $700 billion economic bailout plan. Bush said the U.S. economy is at a "critical moment" and failure to act could mean economic hardship for millions of Americans. Bush spoke ahead of the opening of the U.S. markets.


Given the mess in the financial markets the 700 Billion will make little or no difference and will easily end up being at least 10 times that amount.



Dr.G. said:


> He also warned that if Congress does not pass this bailout/rescue plan, he would suspend the upcoming federal election in the US. Everyone is now rushing back to Washington, DC to pass the bill. We shall see.


Knew that was coming. Just did not know what excuse he would use. Maybe it will be the prod Congress needs to develop a back bone and impeach the bum.


----------



## Dr.G. (Aug 4, 2001)

eMacMan, Lincoln held elections in 1864, in the middle of a Civil War. I think that Bush will say that the Democratically controlled Congress is hiding weapons of mass destruction, and thus, need to be "detained" until some future date. Those Republicans who refuse to go along with his "rescue plan for the US", will also be "detained". Any American complaining about the "rescue plan" will be detained. To save the environment, newspapers will not be allowed to publish any Anti-Bush comments. To save energy, only TV shows and news programs that have been approved by the new Department of Homeland Security and Acceptable Information will be allowed on the airwaves. Internet access will take on a Chinese-style filer system.

Welcome to the New United States of America.


----------



## Vandave (Feb 26, 2005)

Dr.G. said:


> President Bush says "economic damage will be painful and lasting" if Congress fails to pass a $700 billion economic bailout plan. Bush said the U.S. economy is at a "critical moment" and failure to act could mean economic hardship for millions of Americans. Bush spoke ahead of the opening of the U.S. markets.
> 
> He also warned that if Congress does not pass this bailout/rescue plan, he would suspend the upcoming federal election in the US. Everyone is now rushing back to Washington, DC to pass the bill. We shall see.


Dr. G., I thought it was pretty irresponsible for everybody to make such statements and then take off for a couple days of holiday. 

I understand that people want to be with their families, but many more families are loosing their homes and jobs. I think God would give them a pass on this one for working over the holiday.


----------



## eMacMan (Nov 27, 2006)

Dr.G. said:


> eMacMan, Lincoln held elections in 1864, in the middle of a Civil War. I think that Bush will say that the Democratically controlled Congress is hiding weapons of mass destruction, and thus, need to be "detained" until some future date. Those Republicans who refuse to go along with his "rescue plan for the US", will also be "detained". Any American complaining about the "rescue plan" will be detained. To save the environment, newspapers will not be allowed to publish any Anti-Bush comments. To save energy, only TV shows and news programs that have been approved by the new Department of Homeland Security and Acceptable Information will be allowed on the airwaves. Internet access will take on a Chinese-style filer system.
> 
> Welcome to the New United States of America.


Dr. G.; I do wish you weren't being completely serious with that statement.


----------



## Niteshooter (Aug 8, 2008)

Dr.G. said:


> To save energy, only TV shows and news programs that have been approved by the new Department of Homeland Security and Acceptable Information will be allowed on the airwaves. Internet access will take on a Chinese-style filer system.
> 
> Welcome to the New United States of America.


Oh great more of the likes of FOX and CNN.....


----------



## Dr.G. (Aug 4, 2001)

"Dr. G., I thought it was pretty irresponsible for everybody to make such statements and then take off for a couple days of holiday. 

I understand that people want to be with their families, but many more families are loosing their homes and jobs. I think God would give them a pass on this one for working over the holiday." 

I agree, Vandave. I can see the few Jewish members of Congress going home for two days, but not half of the Congress. Hopefully, a new vote shall be held on Thursday. We shall see.


----------



## Dr.G. (Aug 4, 2001)

eMacMan, we have special "re-education camps" for doubters such as yourself. Think of Room 101 in "1984" ............. but with an attitude.

The Battle For America - Large Quicktime


----------



## Dr.G. (Aug 4, 2001)

No CNN ............. they are too independent and free-thinking. Fox News would have to get a bit more conservative. PBS will be a thing of the past ................... as will most freedom of speech, assembly, and a free press.

Gone will be the labor unions, organizations like the ACLU, and forget about the UN.


----------



## iJohnHenry (Mar 29, 2008)

But will Mother Russia help them???


----------



## Dr.G. (Aug 4, 2001)

iJH, Mother Russia to the rescue .............. in the spirit of Stalingrad. "Death before dishonor".

YouTube - Soviet Internationale


----------



## Dr.G. (Aug 4, 2001)

The elite ruling class must be feeling somewhat uneasy these days.

YouTube - Noam Chomsky - Why The Elites Hate Democracy

YouTube - Noam Chomsky - Taxes


----------



## iJohnHenry (Mar 29, 2008)

100,000,000+ guns within their borders, foreign warships at their borders, not a good vision.

Perhaps it's time for me to get a shotgun permit, to protect myself from rabid skunks?


----------



## MacDoc (Nov 3, 2001)

Uh oh....



> October 1, 2008
> *Savings flow to Irish accounts as Republic offers solid guarantee*
> Britons take advantage of ‘safest banks in Europe’


Savings flow to Irish accounts as Republic offers solid guarantee - Times Online


----------



## Dr.G. (Aug 4, 2001)

The Celtic Tiger roars.


----------



## gastonbuffet (Sep 23, 2004)

guys, you will love this! guaranteed
8 minutes, superb!

YouTube - Bird and Fortune - Subprime Crisis


----------



## iMatt (Dec 3, 2004)

TSX in a tailspin again this morning. It's tempting to get in there and buy low, but I suspect we haven't seen the lowest of the lows yet.

Many people who got in 10+ years ago should still have lots of gains they can cash out -- way less than if they'd sold in May or June, but enough that they can still sell and preserve their capital.

Scary times.


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## eMacMan (Nov 27, 2006)

Ahhh but the new bail-out plan will save us all.

-Any pretense at increased regulation has been removed.
-Financial institutions can now operate with zero reserves. That is unlimited leveraging.
-Financial Institutions can pretty much place any value they like on the securities they hold. 
-Big Bonus: An additional $160 billion in pure pork has been added in.

Clearly the Senate believes; "The Hair of The Dog" solution is just the ticket.beejacon


----------



## MacDoc (Nov 3, 2001)

An extremely good ( and long ) look at the inner workings of the crisis on a macro scale....



> As Credit Crisis Spiraled, Alarm Led to Action
> 
> “Panic can cause a prudent person to do rational things that can contribute to the failure of an institution.” — William A. Ackman of the hedge fund Pershing Square Capital Management.


http://www.nytimes.com/2008/10/02/business/02crisis.html?em

Excerpt



> Panic was spreading on two of the scariest days ever in financial markets, and the biggest investors — not small investors — were panicking the most. Nobody was sure how much damage it would cause before it ended.
> 
> This is what a credit crisis looks like. It’s not like a stock market crisis, where the scary plunge of stocks is obvious to all. The credit crisis has played out in places most people can’t see. It’s banks refusing to lend to other banks — even though that is one of the most essential functions of the banking system. It’s a loss of confidence in seemingly healthy institutions like Morgan Stanley and Goldman — both of which reported profits even as the pressure was mounting. It is panicked hedge funds pulling out cash. It is frightened investors protecting themselves by buying credit-default swaps — a financial insurance policy against potential bankruptcy — at prices 30 times what they normally would pay.
> 
> It was this 36-hour period two weeks ago — from the morning of Wednesday, Sept. 17, to the afternoon of Thursday, Sept. 18 — that spooked policy makers by opening fissures in the worldwide financial system.


and in Europe 





















> European bank rescue plan in tatters amid savings stampede


 

Hilarious read tho deadly serious.......

European bank rescue plan in tatters amid savings stampede - Times Online


----------



## eMacMan (Nov 27, 2006)

Dennis Kucinich came up with a very clear explanation of the bail out. Sorry to paraphrase:

The US taxpayer is borrowing $700 Billion dollars from the banks. This money will then be given to bail out the banks in exchange for a stack of almost worthless securities. The minimum cost after compound interest will be about $7000 for every man woman and child in the country.


----------



## Dr.G. (Aug 4, 2001)

Next in line ..............

"(CNN) -- California may need a $7 billion emergency loan from the federal government to pay for "teachers' salaries, nursing homes, law enforcement and every other state-funded service" this month, Gov. Arnold Schwarzenegger warns. 

Schwarzenegger gave the warning in a letter sent Thursday to U.S. Treasury Secretary Henry Paulson."

California may need $7 billion federal loan - CNN.com


----------



## iJohnHenry (Mar 29, 2008)

Getting your money out of a bank is somewhat of a joke.

Although, if things really get bad, you can use it for toilet paper.


----------



## MacDoc (Nov 3, 2001)

Good article from the Economist....



> *The credit crunch
> World on the edge*
> Oct 2nd 2008
> From The Economist print edition
> ...


there is more.....
World on the edge | World on the edge | The Economist


----------



## gordguide (Jan 13, 2001)

The mortgage interest deduction in the US is not the free lunch some people think it is. There are many pitfalls associated with the deduction that can catch consumers in the wallet.

First of all, some history. In the first US Income tax law, all interest, regardless of it's purpose, was tax deductable. Over the years most of these exemptions have fallen by the wayside, but the mortgage interest deduction remains.

It so fundamentally shapes the entire banking, manufacturing, and construction industries, and consumer behaviour, that to repeal it is probably impossible; at a minimum is would be very disruptive.

First of all, and this is different from Canadian tax procedures, but in the US you can deduct a standard exemption or itemize, but not both. Nor do we have joint returns.

The US Federal standard exemption ranges from $4,250 (single) to $7000 (head of household) to $9,500 (married and filing jointly). Broadly speaking, owning a home will probably increase your deductions beyond these limits, due to the Mortgage Interest deduction. In that case, you would itemize your deductions.

However, when you itemize, you can't claim the standard exemption; it's one or the other. There is a basic exemption of $US 3,400 that all US Federal taxpayers get, compared to the $C 9,500 Basic Personal Exemption in Canada. (2007 examples used).

It might be worth mentioning at this point that most US taxpayers do not itemize their deductions, because if they did the tax reduction would be less than the standard exemption, or they don't want to keep the necessary records and file the long tax form each year, or they don't want to run the risk of losing deductions in an audit.

Itemized deductions are subject to a limit: if your income is $78,200 or more, the deduction will be reduced (the formula is complicated, so no examples).

There may be capital gains taxes on the sale of your home in the US. About 10 years ago an exemption was passed; up to $250,000 (single) or $500,000 (married and filing jointly) of that may be exempt, but you need to follow the rules or you won't get all of that deduction.

In Canada any Capital Gains from the sale of your principal residence are exempt, period.

In the US, it's in your best interest to have the largest mortgage you can, and pay the principal down slowly or not at all. If you have equity in your home, you are usually advised to re-mortgage or take out a second mortgage to maximize the deduction. However, you can only use $100,000 of that amount on something other than on the home itself (such as a renovation); any more and the mortgage deduction is reduced.

What is worse, the mortgage deduction is based on the current value of your home. If you took out a second mortgage of $100,000 on your Florida home with a first mortgage of $200,000 and an appraised value of $300,000 two years ago, and invested that money in the market, you probably would be following conventional, sound advice offered at the time.

But today your Florida home is appraised at $200,000 again. Your mortgage payments are for a $300,000 mortgage. Your investments may be worth $50,000 today. One third of your mortgage interest is now non-deductable, since your home is worth less now. This is an example of the financial pressures facing some Americans who did little more than follow the advice of experts.

The mortgage interest deduction, which encourages large mortgages, is one significant contributing factor to the current mortgage backed securities crisis in the US. Savvy homeowners in the US are always mortgaged to the hilt, because the tax laws encourage them to. To those who probably could not qualify for a conventional mortgage, sub-prime mortgages were sold to consumers, and part of the pitch was that it was a way to take advantage of tax incentives to own a home.

A good part of why our lenders are not in trouble with Canadian mortgages is because there is no tax incentive in Canada to have a huge mortgage; the incentive is to pay the mortgage down as quickly as possible.

However, perhaps more importantly, the tax codes of each jurisdiction are complex and differ vastly in the way income and deductions themselves are calculated and applied. It is impossible to assess a deduction or tax without essentially filling out a return in both countries using you own personal information and a great deal of research ... assume nothing.

You will find things are taxable in the US that would surprise you (personal property ... your furniture, ATVs, the boat and motor ... are subject to annual taxes based on their appraised value in many states, for example).

Once there, you probably would realize that you would organize your life and finances in a different manner depending on where you lived, further reducing taxes but fundamentally changing how you live as well. Perhaps it's the only time ordinary taxpayers come face-to-face with the goals of most tax laws themselves ... which is to change the behaviour of taxpayers in a way the Government feels is good policy for the nation.


----------



## gastonbuffet (Sep 23, 2004)

thank God there aren't many Argentine-Americans living in the States, because now that they approved the bailout, they 'll be rioting big time.


----------



## MLeh (Dec 23, 2005)

gordguide said:


> <mortgage interest deduction and taxation system explanation>


Thanks for that. Along with the (lack of) leverage limits of the US banks, it explains why, aside from a few overheated markets, Canadians on average are in a much better position individually than many of their southern neighbours.


----------



## MacDoc (Nov 3, 2001)

too perfect .......1922

••




> Along with the (lack of) leverage limits of the US banks,


???? Banks have capital ratios in the US tho that might have been shifted just this week.


----------



## MacDoc (Nov 3, 2001)

> *Blocked pipes*
> Oct 2nd 2008 | LONDON AND NEW YORK
> From The Economist print edition
> 
> ...


more Blockages in the money markets | Blocked pipes | The Economist


----------



## MacDoc (Nov 3, 2001)

The party IS over.....

THIS is a truly scary video ( attached to the article ).



> SOCAL:FORECLOSURE ALLEY
> 
> On 9/29/2008 | By: Corgiguy | Filed Under: MORTGAGE CRISIS
> 
> This video was a shocker to my senses since I live in the Inland Empire where the video was filmed and i've seen the foreclosure signs everywhere. I've always wonder how this people could afford this homes and the life style they were carrying. Seeing the american dream thrown in the dumpster is truely sad. And to think that is going to get worse when those adjustable mortages recast in the comming months. Lisa Ling did a fabulous job on this piece as usual, top notch.


SOCAL:FORECLOSURE ALLEY.


----------



## Dr.G. (Aug 4, 2001)

Yes, one wonders if these homeowners will be helped by this bailout. We shall see.


----------



## Dr.G. (Aug 4, 2001)

Finished watching that video. Those homes are amazing. I could put my home inside some of those homes. I have less than 3 years left on my mortgage. "There but for the grace of God go I."


----------



## MacDoc (Nov 3, 2001)

9% of ALL US mortgages were delinquent or in default/foreclosure in June - imagine the number now. 

And of course the big screens etc are left as they were bought on credit too. New version of the Okies.......maybe goin' home to Oklahoma where cost of living is lower.


----------



## Dr.G. (Aug 4, 2001)

MacDoc, I was amazed at what they left behind as well. I can't afford a big screen TV unless I put in on credit, so my 10 year old 27 inch CRT will have to do for now. I feel sorry for those people, but what were they thinking when they bought these huge homes? The man that said he was paying $3100 a month in morgage payments made me think, "I don't even earn that much in a month".


----------



## MazterCBlazter (Sep 13, 2008)

.


----------



## MazterCBlazter (Sep 13, 2008)

.


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## Dr.G. (Aug 4, 2001)

Still, those are amazing homes on sale for about 50% of what my home is worth right now.


----------



## Vandave (Feb 26, 2005)

Dr.G. said:


> Yes, one wonders if these homeowners will be helped by this bailout. We shall see.


It will help for sure. Whether it is a good use of money is a different matter.

They say the number 1 cause of foreclosures in the US is homeowners running out of money due to unanticipated health care bills. 

This whole crisis is a culmination of a decade of bad Republican policy. Bush has had bad energy policy, bad fiscal policy and bad healthcare policy.


----------



## MacDoc (Nov 3, 2001)

A 21st century version of this required....

_Desperate times means desperate measures_













> SUBSEQUENT TO HIS inauguration ceremony and parade, President Roosevelt chose to forego the traditional celebratory balls and begin work directly, an indication of the severity of the national economic crisis.
> 
> "This great Nation will endure as it has endured, will revive and will prosper." That afternoon, in unprecedented fashion, his cabinet was sworn in, unceremoniously, at the White House and the Roosevelt Administration was underway. Almost immediately there was a change in atmosphere and attitude at the White House and in Washington--there seemed to be a sense of motion, energy and determination. The next day, the president issued two proclamations, both of which he had brought with him to Washington. The first called Congress to meet in a special session on March 9; the second declared a four-day bank holiday to stabilize the economy while the administration developed legislation to address the banking crisis.
> 
> ...


The Hundred Days

here is the crisis he faced










Banking Crisis


----------



## Dr.G. (Aug 4, 2001)

MacDoc, we need another FDR. I don't think that Obama is another FDR, but he may surprise us all. We shall see.


----------



## MazterCBlazter (Sep 13, 2008)

.


----------



## Dr.G. (Aug 4, 2001)

1929 we had Herbert Hoover as president. He sent food to starving animals that were on the farm in the midwest, but would not send food for the farmers who were also starving. FDR understood the needs of the people back then, just as Obama understands.


----------



## MazterCBlazter (Sep 13, 2008)

.


----------



## Dr.G. (Aug 4, 2001)

I see your point now, MCB. Mea culpa.


----------



## MacDoc (Nov 3, 2001)

Sinfest


----------



## Dr.G. (Aug 4, 2001)

MacDoc, wait until California comes looking for 7 billion dollars.


----------



## Dr.G. (Aug 4, 2001)

NEW YORK (CNNMoney.com) -- Stock futures were lower on Monday after the financial crisis appeared to deepen in Europe, heightening worries about a global economic slowdown.


----------



## gastonbuffet (Sep 23, 2004)

hey, what is it about mondays?


----------



## SINC (Feb 16, 2001)

It comes right after Sundays?


----------



## Dr.G. (Aug 4, 2001)

The markets here in North America are really getting pounded today. Seems that the bailout was not enough to keep things going in a positive direction. Personally, I am in for the long-haul, but it is difficult to watch my portfolio in free-fall.


----------



## MazterCBlazter (Sep 13, 2008)

.


----------



## Sonal (Oct 2, 2003)

I keep telling myself I'm not going to look. Then I look. Then I wince.

This should not affect me greatly, since I am also in this for the long haul, but at the moment, I'm down about 18%.


----------



## eMacMan (Nov 27, 2006)

While the bailout will certainly line the pockets of a few Bush Buddies, the sense of panic that the Shrub used to push it through will actually help to make things worse. Beyond that it does nothing to tackle the cause of the problem, artificially low interest rates which led to overextended financial institutions. Actually it removed all leveraging restrictions which is certainly a step in the wrong direction.


----------



## MacDoc (Nov 3, 2001)

If you think 1929 was bad.....










have a scary read.......

The Real Great Depression - iTulip.com Forums


----------



## Dr.G. (Aug 4, 2001)

Where is Herbert Hoover now that we need him? Luckily, John McCain will lead the way for all of America.


----------



## MazterCBlazter (Sep 13, 2008)

.


----------



## MacDoc (Nov 3, 2001)




----------



## Dr.G. (Aug 4, 2001)

Sad, but all too true, MacDoc. Still, what goes down must go up ........... someday ............... hopefully.


----------



## MacDoc (Nov 3, 2001)

I thought the UK might get hit worse and apparently faster....



> *Massive rescue plan for banks*
> 
> By George Parker and Chris Giles in London and Tony Barber in Brussels
> 
> ...


  

FT.com / Companies / Financial services - Massive rescue plan for banks
Oh wow .....

is there an image for ordure hitting rotating blades......

•••

Dr. G you may not want to watch this

YouTube - Cramer Say Get OUT of the Stock Market NOW!


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## MacDoc (Nov 3, 2001)

Of course you could be teaching in Iceland......



> Iceland teeters on the brink of bankruptcy
> Updated Tue. Oct. 7 2008 4:15 PM ET
> 
> The Associated Press
> ...


CTV.ca | Iceland teeters on the brink of bankruptcy

Russia lent 5 billion and Norway is standing by with more


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## Dr.G. (Aug 4, 2001)

Iceland may be the dominio ............................


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## MacDoc (Nov 3, 2001)

UK nationalizing program may be more significant. Iceland is 300,000 people.

UK a major world economy.
Implications for the fractional reserve may be enormous - it really was too much of a permission and the state ( in general ) may well have to rethink the nature of that.

It's far too much a sanctioned pyramid scheme as it sits.

The fact that the M3 money supply was not tracked anymore makes many governments appear culpable in this entire mess.

M3 Money Supply Numbers are Back

TANSTAAFL


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## Vandave (Feb 26, 2005)

At least they are almost carbon neutral.


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## Dr.G. (Aug 4, 2001)

"WASHINGTON (AP) -- Days after it got a federal bailout, American International Group Inc. spent $440,000 on a posh California retreat for its executives, complete with spa treatments, banquets and golf outings, according to lawmakers investigating the company's meltdown."

Lawmakers steamed over ritzy AIG retreat after bailout - CNN.com

Amazingly, according to my neighbor, who is a tax accountant for Canadians with US accounts, this is also a tax deduction for the company.


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## MacDoc (Nov 3, 2001)

> *U.S. May Take Ownership Stake in Banks*
> Treasury Dept. Would Hope to Spur Lending
> By EDMUND L. ANDREWS and MARK LANDLER
> 
> The Treasury Department is considering taking ownership stakes in many U.S. banks to try to restore confidence, according to government officials.


http://www.nytimes.com/2008/10/09/business/economy/09econ.html?hp


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## GratuitousApplesauce (Jan 29, 2004)

Here's the invoice from the AIG junket:










I agree with what Obama said in the debate last night. The management who approved this should be fired. It's pretty amazing to think of these guys, given the climate of the economic crisis and their company just got bailed out by the taxpayers, and they have the nerve to go on a luxury retreat that cost half a million. Something must be really wrong with these people.


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## Dr.G. (Aug 4, 2001)

"The management who approved this should be fired." This is the plan. They are now just working out their million dollar plus severance bonuses.


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## Dr.G. (Aug 4, 2001)

Tick, tock .............. tick, tock, ......................

NEW YORK (AP) -- The National Debt Clock in New York City has run out of digits to record the growing figure.

As a short-term fix, the digital dollar sign on the billboard-style clock near Times Square has been switched to a figure -- the "1" in $10 trillion. It's marking the federal government's current debt at about $10.2 trillion.


U.S. debt overpowers National Debt Clock - CNN.com


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## MacDoc (Nov 3, 2001)

Insult to injury



> AIG, Castigated for Resort Event, Plans Another One (Update2)
> 
> By Erik Holm and Hugh Son
> 
> Oct. 8 (Bloomberg) -- American International Group Inc., castigated by the White House, Congress and Barack Obama for hosting a $440,000 conference days after an $85 billion federal bailout, plans to hold another gathering for brokers next week.


Bloomberg.com: Worldwide

AND



> October 08, 2008
> 
> *AIG to Get ANOTHER $37.8 Billion From The Fed*
> 
> Well, well, well. Look who is back for some more cash, our friends at AIG. After getting a $85 billion loan from the Fed, so they could make collateral calls to their biggest investment banking credit default swap counterparty, Goldman Sachs (remember when we told you about Lloyd Blankfein's little meeting with Hank Paulson on September 15, where we very strongly presume that Blankfein told Paulson that if AIG goes down, they were going to rip Goldman a $20 billion new arse) AIG is back for another $37.8 billion from the Fed.




PT Barnum had the right of it....


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## Dr.G. (Aug 4, 2001)

And, to make matters worse ..................

"LOS ANGELES, California (AP) -- Hugh Hefner is down a girlfriend.

Hefner and Holly Madison, one of E!'s "The Girls Next Door," are no longer dating. Hefner said he's been "down in the dumps" about the split.

The 28-year-old model-actress stars in the reality series with Kendra Wilkinson and Bridget Marquardt as one of the 82-year-old publisher's girlfriends who live with Hefner in the Playboy Mansion."

Playboy's Hugh Hefner, girlfriend call it quits - CNN.com


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## iJohnHenry (Mar 29, 2008)

Awe, the poor old sod. :lmao:


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## Dr.G. (Aug 4, 2001)

Well, at 28, her biological clock was ticking. At 82, Heff was just ticking.


----------



## MacDoc (Nov 3, 2001)




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## MazterCBlazter (Sep 13, 2008)

.


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## Dr.G. (Aug 4, 2001)

MacDoc, that is all too real. I do NOT think that most Americans could do what millions of Americans had to do back during the Great Depression.


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## MazterCBlazter (Sep 13, 2008)

.


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## Dr.G. (Aug 4, 2001)

Problematic will be when the electricity goes, or gets shut off. I recall growing up many days when we had to live without electricity until my father could get the money to pay Con Edison of New York City, our electricty provider, so that they would turn it on. We just learned to do without electricity for a couple of days every so often. 

Today, going without electricity would send some people into shock.


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## MacDoc (Nov 3, 2001)

Money out??

You mean like thousands in Iceland and Britain this week 

A number of towns in England have no funds at all as they had them in Icebank.


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## Dr.G. (Aug 4, 2001)

I usually keep a few hundred dollars on hand in cash for emergencies.


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## GratuitousApplesauce (Jan 29, 2004)

*The financial crisis: 1929 vs. 2008*


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## MazterCBlazter (Sep 13, 2008)

.


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## MacDoc (Nov 3, 2001)

> *Darling cool on rescuing councils caught out with Icesave investments*
> 
> Landsbanki bank
> 
> ...


Darling cool on rescuing councils caught out with Icesave investments - Times Online


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## Dr.G. (Aug 4, 2001)

MCB, my cash reserve is usually only for when we get snowstorms over 75cm with heavy drifting. A neighbor has her driveway cleared out by someone with an industrial snowblower, brought to her driveway by Arctic Cat. Before I got my own snowblower, I would pay them $50 to clear out the front of our driveway that would have a snow drift (once the plows come by) of about 5 feet high by 7 feet wide. These snowblowers throw it over the house into our back yard. It is a sight to see.


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## MLeh (Dec 23, 2005)

Panic is what breeds panic. Ya'll need to go watch 'It's a Wonderful Life' again, where George explains to panicked people that their money is not held in cash at the bank, but is actually loaned to people who owe money to the bank. 

The Canadian banking system is highly regulated and has mandatory cash reserves. But if everyone started panicking there wouldn't be enough ready cash to satisfy them all. That's what's called a 'run on the bank', and it is fueled by a 'me first' attitude.

Besides which, all your deposits are guaranteed up to $100K, and I don't think anyone wants to keep that much money around in ready cash.

But, it's nice to know:  there's no need to panic


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## Dr.G. (Aug 4, 2001)

I have not touched my investments, held mainly in my RRSP. Sell now, and you lock in these losses. 

MLeh is correct in her views re panic. Was in the bank to deposit money and there were lots of older people withdrawing all by $5 from their accounts (so as to keep them active). Saw people walking out of the bank with thousands of dollars in cash.


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## Dr.G. (Aug 4, 2001)

This just in from CNN-- "Dow falls more than 600 points. Gauge of investor fear -- an index known as the Vix , hits an all-time high."


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## MacDoc (Nov 3, 2001)

> *Canadian banks the soundest in the world: report*
> 
> Updated Thu. Oct. 9 2008 1:52 PM ET
> 
> ...


CTV.ca | Canadian banks the soundest in the world: report


----------



## MacDoc (Nov 3, 2001)

Financial Times commentator calls for *FULL GOV TAKEOVER OF ALL MAJOR BANKS*  



> *Temporary full state ownership is only solution*
> 
> By Paul De Grauwe
> 
> ...


FT.com / Comment & analysis / Analysis - Temporary full state ownership is only solution


oh my.....


----------



## gastonbuffet (Sep 23, 2004)

SINC said:


> It comes right after Sundays?


explain thursdays then!!!!!!!! 
anybody has a ledge?? at least 6 stories high please, lower could make everything even worse!!!


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## iJohnHenry (Mar 29, 2008)

The roof of my building is above the 5th floor. Will that do??

I have the keys. beejacon 

Oh, an added feature, in consideration of the clean-up crew, if you take a running start, you can hit the truck turn-around in front of the building.


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## eMacMan (Nov 27, 2006)

Obviously the investing types have figured out that sub-prime mortgages and overly leveraged banking systems cannot be cured by lowering interest rates.

Congress needs to close the stock exchange for at least a month. During this period they need to come up with a plan to keep people in their homes and working. They also need to phase in regulations limiting leveraging by the financial institutions and they need to close down the derivative bit completely totally and forever. Derivatives are nothing but high stakes gambling and the banks are doing it with OUR money.

Note: Other than stockbrokers, closing the exchange will not impact any real companys ability to do business.


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## Dr.G. (Aug 4, 2001)

Obama and McCain are giving us a clear sense of who they are and how they would lead. It would seem that Obama has been studying the 1932 campaign of Franklin D. Roosevelt. The key to Roosevelt's victory was not a big program but a jaunty sense of optimism in the midst of despair that led to his signature inaugural line -- "the only thing we have to fear is fear itself." Less famously, Roosevelt declared in his acceptance speech that "this is no time for fear, for reaction or for timidity."

In recent days, Obama has painted himself as calm, pragmatic, open and hopeful. He seemed to be channeling FDR when he told a crowd in Indianapolis on Wednesday: "This isn't a time for fear or for panic. This is a time for resolve and steady leadership."


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## MissGulch (Jul 20, 2005)

We need somebody with his demeanor right now, because it feels like everything is falling apart. Bush is going out with a crash, and not a whimper. How different things were when he took over.


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## eMacMan (Nov 27, 2006)

I do believe that the Shrubs ultimate goal is to be remembered as the worst president in the history of the nation. By adding a sense of terror to the market crisis, in order to funnel even more taxpayer money to his buddies, I do believe his success is completely assured.beejacon


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## MacDoc (Nov 3, 2001)

Feels like?? 

from the Economist today


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## Dr.G. (Aug 4, 2001)

Good point, Ms. G. Imagine what might be different had Gore been allowed to take the presidency that he won.


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## Dr.G. (Aug 4, 2001)

MacDoc, where is the next picture? In that case is the golden parachute to help for a soft landing. The son of one of my best friends was recently laid off. He was an investment banker and very successful. However, seniority was at issue, and he was willing to leave quietly and peacefully with a "going away package". His "package" was the same as five years of my salary, before taxes!!!! He is going to spend a year traveling the world, and then see what the situation is for him.


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## EvanPitts (Mar 9, 2007)

Dr.G. said:


> Good point, Ms. G. Imagine what might be different had Gore been allowed to take the presidency that he won.


Gore would have claimed to have invented the Stock Market...

Next to that, nothing would be different because the market was so overinflated. It is the culmination of a number of fears: that the price of oil was far too high to sustain economic growth, that some banks were under capitalized and were basically penny ante junk bonds, and that industry has not taken the steps needed to yield sustained growth in the longer term.

All bear markets are the same - and the ones that can yield a profit in a bear market are the wisest investors that should be followed...


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## EvanPitts (Mar 9, 2007)

MacDoc said:


> Feels like??
> 
> from the Economist today


Could also be a picture of Obama caught in the fallout of the ACORN Scandal in Nevada.

Change - oh yeah, now the Democrats are stuffing the ballots a al Bush in the past two elections...


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## Dr.G. (Aug 4, 2001)

Dow drops below 8,000 for second time today; down more than 570 points.


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## Dr.G. (Aug 4, 2001)

President Bush today encouraged the American people to have confidence in the economy and said the U.S. government is acting to resolve the financial crisis and stabilize the markets. "We are a prosperous nation with immense resources and a wide range of tools at our disposal ... We can solve this crisis and we will," Bush said in remarks from the White House Rose Garden.


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## EvanPitts (Mar 9, 2007)

Dr.G. said:


> President Bush today encouraged the American people to have confidence in the economy and said the U.S. government is acting to resolve the financial crisis and stabilize the markets. "We are a prosperous nation with immense resources and a wide range of tools at our disposal ... We can solve this crisis and we will," Bush said in remarks from the White House Rose Garden.


I think he messed up, it should have read "... a wide range of tools in Washington".

This crisis only occurred because the US Government allowed the banks to break the regulations when it came to capitalization, as well as allowing a constant flux of mergers, hostile takeovers, and levered buyouts.

I don't think Bush can solve the problem, because given the fact that he has had more than seven and a half years, he hasn't solved one problem yet...


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## MazterCBlazter (Sep 13, 2008)

.


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## EvanPitts (Mar 9, 2007)

MazterCBlazter said:


> That and all the problems he has created.


A vertitable pantheon indeed...

Half the "problems" didn't need to exist in the first place, if he could have resisted pandering to Big Oil. And if he really wanted to "get Obama", why did he attack Saddam instead? All of that stuff just leads creedence to the whole fantasy land of the New World Order...


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## GratuitousApplesauce (Jan 29, 2004)

EvanPitts said:


> And if he really wanted to "get Obama", why did he attack Saddam instead?


The 2003 Shock and Awe Invasion of Chicago?


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## Dr.G. (Aug 4, 2001)

"The business of America is business." Calvin Coolidge


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## eMacMan (Nov 27, 2006)

Dr.G. said:


> President Bush today encouraged the American people to have confidence in the economy and said the U.S. government is acting to resolve the financial crisis and stabilize the markets. "We are a prosperous nation with immense resources and a wide range of tools at our disposal ... We can solve this crisis and we will," Bush said in remarks from the White House Rose Garden.


Course this is coming from the same guy that said; "The sky is falling. Be very afraid and give all my buddies mucho money or the world will end." Clearly calculated to create the panic that he now says is unwarranted.


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## Dr.G. (Aug 4, 2001)

"Course this is coming from the same guy that said; "The sky is falling. Be very afraid and give all my buddies mucho money or the world will end." Clearly calculated to create the panic that he now says is unwarranted." eMacMan, I never said that Bush was an FDR.


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## MacDoc (Nov 3, 2001)

THIS - has not even began to ripple through as bond insurers are now on the hook.



> Lehman Brothers demise triggers huge default
> Tom Bawden in New York and Suzy Jagger in Washington
> 
> Lehman Brothers, the bust investment bank, triggered one of the biggest corporate debt defaults in history yesterday as it emerged that the US Federal Reserve is harbouring grave concerns about whether Washington’s $700 billion (£413 billion) bailout fund will avert a financial meltdown.
> ...


Two weeks to settle a 1/3 of a trillion dollars!!!! .....in THIS chaos!!!!

Next round coming right up....get your peanuts, popcorn....while you can


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## MacDoc (Nov 3, 2001)

An idea a bit overdue



> *Before This Hole Gets Deeper, a Break From Digging*
> 
> 
> 
> ...


Steven Pearlstein - Before This Hole Gets Deeper, a Break From Digging - washingtonpost.com


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## EvanPitts (Mar 9, 2007)

i think this crisis has become genuinely scary - considering that they are bailing out the banking system of Iceland!!!

2008 Icelandic financial crisis - Wikipedia, the free encyclopedia

Besides, we could be much worse off - Zimbabwe is the current champion of devalued currency:



> The Reserve Bank of Zimbabwe issued a *ZWD 10,000,000 note* in January 2008, roughly equivalent of *4 US dollars*. Zimbabwe's inflation soared to a record high of 26,470.8 percent as the economy contracted by 6 percent, the central bank said.
> 
> In April 2008 the Reserve Bank of Zimbabwe issued a *ZWD 50,000,000 note*, which was then worth approximately *1.20 US dollars*. In May 2008 the Reserve Bank of Zimbabwe issued bank notes or rather "bearer cheques" to the value of ZWD 100 million and ZWD 250 million. Meanwhile inflation had surged to an estimated 165,000 percent with some unconfirmed reports putting the figure as high at 400,000 percent. Ten days later, new notes with a value of *ZWD 500 million* (then equivalent to about *USD 2.00* were issued. The US ambassador to Harare projected that inflation would soar to 1.5 million percent by the end of 2008.
> 
> ...


Imagine solving "inflation" by removing 10 zeros from the currency - and it doesn't even really help!


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## MacDoc (Nov 3, 2001)




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## MacDoc (Nov 3, 2001)

Wow heavy sovereign guns put into play by Australia...



> *Global Crisis: Rudd guarantees all financial deposits
> *
> 
> October 12, 2008
> ...


read the details - pretty astute move

Global Crisis: Rudd guarantees all financial deposits | The Australian


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## Dr.G. (Aug 4, 2001)

"... in return for the guarantees, banks would have to pay an insurance premium. " Interesting idea. Countries are becoming bankers and insurance companies.


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## iJohnHenry (Mar 29, 2008)

Doesn't CDIC already hold deposits from chartered banks, as part of their mandate??


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## Macfury (Feb 3, 2006)

> And it would be a powerful reminder to everyone that markets need to serve the interests of the economy and society, not the other way around.


This is a philosophical statement and not a fact. The current financial crisis was based on false market conditions created and guaranteed by the U.S. government over 20 years. It was fundementally basedon the idea that lending restrictions were too strict. This was government's solution.

The behaviour of people trying to acquire wealth hasn't changed at all over thousands of years, it's the government that has changed the rules. 

This is like having the neighbour's dog bite you on the ass, and then making him the town's animal control officer to deal with it.


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## EvanPitts (Mar 9, 2007)

It's still a bad situation, as the market is in free fall, and everyone is bailing out everyone else.

The Americans should be ashamed, as they engaged in forms of hard capitalism that allowed for such a huge amount of greed that it is ruining their system. They should be ashamed simply because they didn't enforce the rules that they do have - ignoring them so long as the market can stay on the bubble. This is the second President in a row who's main achievement has been to oversee the growth and destruction of a bubble...


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## Macfury (Feb 3, 2006)

EvanPitts said:


> They should be ashamed simply because they didn't enforce the rules that they do have - ignoring them so long as the market can stay on the bubble..


No, that's simply not correct. They enforced the rules each time they changed them to make lending easier, to enable more Americans to borrow, to encourage banks to facilitate those loans, and offering greater guarantees to back up each loan.

The requirements of the banks themselves to lend were much more stringent before Clinton and Bush II forced them to "chill," though the seeds of this were sown by Jimmy Carter.


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## MacDoc (Nov 3, 2001)

The Harder They Fall, the More I Smile - NYTimes.com


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## Macfury (Feb 3, 2006)

Put Uncle Sam in the drunk's place, and the txpayer in place of Uncle Sam.


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## GratuitousApplesauce (Jan 29, 2004)

Macfury said:


> No, that's simply not correct. They enforced the rules each time they changed them to make lending easier, to enable more Americans to borrow, to encourage banks to facilitate those loans, and offering greater guarantees to back up each loan.
> 
> The requirements of the banks themselves to lend were much more stringent before Clinton and Bush II forced them to "chill," though the seeds of this were sown by Jimmy Carter.


I noticed in your posts of late MF as well as here and there around the media the new spin from the right wing on the current economic crisis. Feeling the heat of the blame for years of crazed and greedy business practices they're hoping to manufacture a new racist-tinged meme that goes like this: "If only Democratic bleeding hearts and Jimmy Carter didn't force Fannie and Freddy to force banks to loan to clearly unqualified minorities, the Markets would still be racing ever skyward to lofty new heights." 

They are expecting us to buy the idea that the richest people in the world, running the most powerful banks were laid low by Clinton, Carter and a bunch of shiftless minorities who got in over their heads.

The cause of this was not banks being forced to make bad loans. Poor lending decisions were the fault of the institutions. The Community Reinvestment Act didn't force any of these institutions to lend to anyone who couldn't qualify. It mandated that loans be safe and sound but only that loans in minority communities should not be held to greater credit standards than other areas. In fact much of the sub-prime and predatory lending that went on was by small companies newly freed from regulation that weren't under the CRA. 

Greed by many of these outfits caused them to promise people who had no hope of affording a mortgage ridiculous things and caused them to turn a blind eye on their own duty to check out who they were lending to. No one made them make bad loans. As well many people took advantage of these lending practices to get into low rent properties with the hope of fixing and flipping just like on the late night infomercials.

It's like the radio ad I heard just tonight, trying to get low income young people to buy a car. "We'll give you a loan even if your credit is so messed up your Momma won't lend to you."

The real cause of this sh!tstorm had nothing do do with banks being encouraged to make loans. The real cause was the deregulation and cancelled oversight, championed by right-wingers funded by the banking lobbyists, like McCain's economic advisor Phil Gramm, that allowed the packaging and re-packaging of sub-prime loans as part of ridiculously risky financial instruments that no one could even properly audit. Bits of these toxic debts were strewn through the financial system. The market they created in these products grew to be 3 times the value of all the world's stock markets, 62 trillion dollars in dicey credit default swaps and other securities, much of it purchased with borrowed money.

When the banks found they could create and make insane returns on these products they dove in head first into the sub-prime market, like pigs at a trough, even though many of their more sober members were quietly hinting that this was creating a massive bubble that would soon have to burst. They no longer needed any CRA encouragement to go to the sub-prime market. In fact many minority community organizations were starting to complain that predatory sub-prime lending was destabilizing their communities. But they couldn't stop themselves, their addiction to greed was too strong. Clinton, Carter and minority lending didn't do this, blind stupid greed did it.

Now when their deified "invisible hand of the marketplace" threatens to swat them down like puny gnats, they come running to the taxpayer for corporate welfare and bail-outs, while at the same time blubbering like children who started a fire, realizing they're in some serious trouble, "We didn't do it, it was those black kids down the street."


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## MacDoc (Nov 3, 2001)

Just a LITTLE irony  ....note the Google ads in relation to the article content.... :


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## eMacMan (Nov 27, 2006)

Note of sanity here:

Defaulted sub-prime mortgages are less than seven percent of the mortgage market. It would be easy enough to keep those who were making the old payments in their homes. Subprime mortgages did not cause the market collapse.

The market collapse was caused by banks borrowing huge sums of money at artificially low rates and betting that money on high risk derivatives. Funneling more money into these institutions at those low rates will only make the problem worse! Buying those toxic derivatives simply transfers these weapons of mass economic destruction into the nations treasury. 

The solution is returning the regulations that served us well for 60+ years and applying them to the derivative market. Interest rates should also be raised at least 2% to discourage the high risk leveraging that created the ginormous bubble.

I also like this solution:
I’m Changing My Name to Fannie Mae | Red State Rebels


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## MacDoc (Nov 3, 2001)

Just a trigger - like stepping on the wrong part of an unstable avalanche slope...it's not like this wasn't warned about several years ago.


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## gwillikers (Jun 19, 2003)

eMacMan said:


> The market collapse was caused by banks borrowing huge sums of money at artificially low rates and betting that money on high risk derivatives.


Derivatives, Texas style...

An East Texas rancher, following lengthy discussion after a Sunday church service, bought a donkey from an old neighbor for $100. 
The neighbor agreed to deliver the purchase the next day.
The next day, the neighbor drove up and said, “Sorry, but I have some bad news. The donkey died.”
“Well then, just give me my money back.”
“Can’t do that. I went and spent it already.”
“Okay then. Just give me the donkey.”
“What ya gonna do with him?”
“I’m going to raffle him off.”
“You can’t raffle off a dead donkey!”
“Sure I can. That's what they do in a big city”
A month later the farmer met up with the city boy and asked, “Whatever happened with that dead donkey?”
“I raffled him off. I sold 500 hundred tickets at two dollars apiece and made a profit of $998.”

“Didn’t anyone complain?”


“Just the guy who won. So I gave him his two dollars back.”


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## MacDoc (Nov 3, 2001)

Grapes of Wrath image circa 2008












> Nevada tent cities rise in shadow of casinos
> SCOTT SADY/AP FILE PHOTO
> _Robert Scott Cook walks his dog through the tent city that sprung up next to the homeless shelter in downtown Reno, Nev., on June 25, 2008._
> 
> ...


TheStar.com | Columnist | Nevada tent cities rise in shadow of casinos


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## Dr.G. (Aug 4, 2001)

Times are tough all over, MacDoc. Get used to in. Imagine, no conferences and junkets and perks?!?!?!?

NEW YORK (CNNMoney.com) -- "American International Group, which tapped another $12 billion in emergency government funding in the past week, agreed Thursday to curb millions of dollars of spending on junkets, perks and executive compensation.

The troubled insurer has come under fire in recent weeks from lawmakers and regulators for planning to spend big on corporate trips and events even as the government had lent it more than $120 billion.

AIG agreed Thursday to curb certain expenditures after criticism from Congress and New York State Attorney General Andrew Cuomo. The company canceled 160 conferences and events - some that carried price tags of as much as $750,000."

AIG draws another $12 billion - Oct. 16, 2008


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## SINC (Feb 16, 2001)

Copycats.

Edmonton circa 2007:












> Province won't tear down Edmonton's tent city
> 
> Last Updated: Wednesday, July 18, 2007 | 2:30 PM MT
> CBC News
> ...


----------



## GratuitousApplesauce (Jan 29, 2004)

gwillikers said:


> Derivatives, Texas style...
> 
> An East Texas rancher, following lengthy discussion after a Sunday church service, bought a donkey from an old neighbor for $100.
> The neighbor agreed to deliver the purchase the next day.
> ...


:lmao: 

That's the best explanation of BS finances I've ever seen. Except that to parallel our current economic crisis, all those raffle ticket holders would have put up contracts to pay their 2 bucks based on a bet about the donkey's ability to live for a fixed period of time. Donkey life futures or something. Then some big investors would have come in, borrowed money to buy up lots of billions of raffle tickets, making the raffle guy really rich on paper. Then he got into the Donkey LIfe Futures Market, got a guy at Lehman's to start selling tons of these lots of billions of raffle tickets to other suckers with promised massive returns. Meanwhile the raffle guy would have gone and invested all that paper money on some other risky crap, while the big investors would have taken their crap donkey futures and put them up as collaterall for some other crap securities. When everyone discovered that all these greedy assholes were betting on a sub-prime dead donkey, that no one had bothered to check out, and that had defaulted on its own life, the whole stinking crapball would come crashing down around everyone's heads.

I was reading something online yesterday that estimated the worldwide derivatives market as far greater than I've ever heard before, in the hundreds of trillions. I can't even imagine how that happened, but all of that gambling money is just imaginary anyway. It's beyond ridiculous that this could have been allowed to happen. These are what Warren Buffet has called "financial weapons of mass destruction" and he stayed far away from them for good reason. There was some talk in the blog about treating all that owed money like unenforceable contracts, because as that bubble bursts, it could easily take down all the banks.

Whatever is going to happen, we are far away from the end of this storm. I guess I better go buy us a good quality tent while the Visa card still works.


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## Dr.G. (Aug 4, 2001)

Warren Buffet is now buying only US stocks. He said he is in "for the long haul". Of course, being in his 80's, and a billionaire, he can afford to wait out this downturn or not worry. Either way, he wins.


----------



## MacDoc (Nov 3, 2001)

Wow......



> Oct 17 2008 12:01PM EDT
> 
> *Hedge Fund Manager: Goodbye and F---- You*
> 
> ...


Hedge Fund Manager: Goodbye and F---- You - News Blog - Daily Brief - Portfolio.com


----------



## Dr.G. (Aug 4, 2001)

A touching letter, and a suggestion for us all. We should take our wealth and now enjoy life. We shall see.


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## MazterCBlazter (Sep 13, 2008)

.


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## EvanPitts (Mar 9, 2007)

MazterCBlazter said:


> Also noteworthy are his closing comments on Hemp and sustainability.


It is a crop that grows quite well in Canada, but isn't farmed commercially. It is official government policy that farmers are only allowed to grow crops they can't make any money on, because that keeps the dole moving forward!



> Our technology was more than capable of providing the worlds population with an excellent standard of living without damaging the environment and the population working like slaves, 50 years ago.


50 years ago, we didn't have 7 Billion people in the world either...



> Today there is absent leadership with vision for significant improvement in either the business or political worlds.


We don't even have enough leadership to make sure Main Street gets paved in a timely manner. They ground it all up, so the busiest street in town is a slalom course of manhole covers and divots - and not one truck of asphalt in sight! But what am I to say, since out City Hall is in a mall right now while they argue whether the windows in the actual City Hall will be aluminum or steel framed...


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## MacDoc (Nov 3, 2001)

One reason is because most of the taxes go to Ottawa and only 7% stays where it originates. Stupid system. 

••••

A moment of reflection 


Change.org - Humanitarian Relief: Guest Blog - A Crisis of Conscience


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## MacDoc (Nov 3, 2001)

good riddance











> *Bankers' pink slips: their pain, society's gain
> *
> ERIC REGULY
> 
> ...


Indeed.....


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## MazterCBlazter (Sep 13, 2008)

.


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## Vandave (Feb 26, 2005)

I think $150 barrel of oil has played a bigger role in this financial crisis than is being discussed. Most of the current account deficit (trade deficit) in the US can be attributed to imported oil. The shortfall of money then flows into US investments, which creates a demand for all sorts of financial instruments and products. 

The US economy is still very dependent on energy. I think we are currently paying the price for the lack of vision showed by the Bush administration on this issue. I hope we don’t repeat the mistake of the 80’s by not making changes after an energy crisis.


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## MacDoc (Nov 3, 2001)

This has been predicted and coming for several years - oil has very little to do with it.

The threat of the unravelling of the shadow banking has been around and Bill Gross has been warning about it as have others.

This liquidity crisis started in August 2007 when oil was at $75 a barrel.

Try a billion a week for Iraq if you want a contributing factor for the US but the major trigger was the collapse in the US housing market which is still heading down.

The seeds were planted long ago......



> *In the late 1970s*, a lot of very smart Wall Street types managed to create a shadow banking system to finance more aggressive, risky and profitable investments, including novel vehicles based on the bad home loans peddled mostly (although not exclusively) by nonbank mortgage firms. (The government-sponsored Fannie Mae and Freddie Mac bought into the high-risk innovations of the shadow banking system around 2005 by buying a bunch of now-toxic mortgage-backed securities.)
> 
> *The result was a parallel system almost as big as the banking system that had none of its post-Depression stabilizing pillars: no deposit insurance, no access to the lender of last resort, no resolution regime and only a patchworky, inadequate framework of restraints for risk-taking.*


Are Paulson and Bernanke Running Out of Options? - TIME


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## GratuitousApplesauce (Jan 29, 2004)

Having an ING Direct account I took notice yesterday when I heard on the news that the Dutch government had bailed out ING with some tens of billions of Euros.

I looked up some news stories to see what this was about and discovered that part of the reason given for ING's trouble was a big exposure in the world derivatives market. Oh crap! Derivatives are at the root of the financial crisis. Some of these are the hokey "credit default swaps" that are worth $62 Trillion worldwide and were issued against many of these sub-prime loans with no oversight.

The Dutch government is saying that ING is healthy and that their bailout is just a loan to see that it remains so. Hmmmm.

I guess the little "save your money" guy appearing so sober and sensible couldn't keep himself from dipping into the crazy get-rich-quick derivatives schemes with all of our saved money. "Save your money and we'll blow it in Vegas" should have been their theme. 

In the meantime, I'm not freaking out and taking my money out of ING. ING is covered under CDIC insurance for up to $100,000.

Incidentally, I read yesterday that CDIC doesn't cover US dollar accounts issued by Canadian banks.

I don't think oil prices are the problem, it's derivatives, unregulated, unsupervised, not audited and the fact that deregulation allowed banks, insurance companies and investment houses could blur their boundaries and dive into this gambling trough to get in on the crazy returns. Warren Buffet has called them "financial weapons of mass destruction".


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## MacDoc (Nov 3, 2001)

I'd not worry about ING either - the Dutch are just propping up the system if needed as has been done here.
There are some expansion opportunities for well run banks looming.


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## Macfury (Feb 3, 2006)

GratuitousApplesauce said:


> Having an ING Direct account I took notice yesterday when I heard on the news that the Dutch government had bailed out ING with some tens of billions of Euros.


If they fold on you, you can always storm their offices...oh...wait...


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## EvanPitts (Mar 9, 2007)

MazterCBlazter said:


> All that and much of the North American manufacturing careers have been closed down or shipped overseas to places like China.


First, jobs were packed up and moved to Mexico. When the "standard of living" got too rich in Mexico, companies packed up and moved to Guatamala and Honduras. Next, they will move wherever it is cheaper, until they move to a place where people are slaves.

Sad thing is that the "standard of living" is becoming too rich in China, and they were contending with the number of companies that are leaving China for Vietnam...

Manufacturing leaving Canada has less to do about paying wages, and more than the Corporates really do not care about fostering business unless they can score the big cash. This is nothing new, Canada was loosing business to the Japanese forty years ago, simple because the companies here wouldn't bother, while Japan was open for business.

A place I worked at had a machine commissioned in the late 60's. First, they tried local manufacturers - you know, the local steel makers, foundries, machine shops - and no one was interested because there was "not enough money". So they stumbled on a small company by the name of Hitachi, who wanted to grab some kind of large engineering project so that they could build skills in the realm of high precision, large casting engineering. And the machine was spectacular - instead of the 1/2 degree of accuracy that the local yokels couldn't attain, Hitachi built the machine to 1/2 second of arc. And it was built to tight tolerances, and I can recall the struggle to disassemble the machine thirty years alter when it was decommissioned.

Now, Hitachi is all about the large, precision engineering projects - while the local companies are all extinct. They were clobbered not because Hitachi or Japan has anything special - but simply because Hitachi and Japan wanted to do business - even if the project was a money loser, because they reaped benefits that far surpassed some fast cash profits.

We are not losing jobs to China - we are sending the jobs there simply because we lack ambition and a want of doing a job - in other words, we are lazy, lazy beyond all belief...


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## iJohnHenry (Mar 29, 2008)

GratuitousApplesauce said:


> I looked up some news stories to see what this was about and discovered that part of the reason given for ING's trouble was a big exposure in the world derivatives market.


I wanna have a talk with this guy ... STAT.


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## mrjimmy (Nov 8, 2003)

So the question these days is if one of the big four banks in Canada went belly up, which would it be?

Any (other than armchair) analysts out there?


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## MacDoc (Nov 3, 2001)

CIBC - voted "bank most likely to walk into sharp objects"

recall Argentina 

That said I see no potential for that whatsoever - it's really how much carcass picking they will all do in the US and perhaps elsewhere.

Royal would just love to buy CIBC at firesale and close 2/3 branches.....ain't gonna happen.
Now Caisse???....


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## Dr.G. (Aug 4, 2001)

Friday marks the 79th anniversary of the day that launched the stock market crash of 1929. 

As an unprecedented wave of selling threw the floor of the New York Stock Exchange into pandemonium on a day that became known as Black Thursday, a show of organized support by a coterie of leading bankers halted the panic. But on the following Monday, the market collapsed in a tsunami of selling.


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## MacDoc (Nov 3, 2001)

> Over the past two decades, Wall Street has relied on arcane risk models produced by mathematical wizards who, as it turned out, conjured wild understatements of risk.
> 
> "They had advanced degrees and they looked very learned and they came with these things that said 'gamma,' and 'alpha,' and 'sigma,' and all that," super-investor Warren Buffett told PBS' Charlie Rose last week.
> 
> Buffett, who calls derivatives "financial weapons of mass destruction," drew the moral of the story: '*'Beware of geeks bearing formulas*."


:clap:


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## GratuitousApplesauce (Jan 29, 2004)

> Oct. 22 (Bloomberg) -- Employees at Moody's Investors Service and Standard & Poor's privately questioned the value of some mortgage-backed securities that were given creditworthy ratings, saying they created a ``monster,'' according to e-mails released by a U.S. House panel.
> 
> ``Let's hope we are all wealthy and retired by the time this house of cards falters,'' one e-mail from an S&P employee said.


On one hand you have the jokers making up the insane house of cards, then on the other you have the rating agencies putting their AAA stamp on them, because they are in the employ of the big financial institutions. If this keeps getting worse are they going to bring back public flogging?


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## Dr.G. (Aug 4, 2001)

GA, this seems to change the meaning of "junk bonds", n'est pas?


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## MacDoc (Nov 3, 2001)

Staggering numbers considering what has already occurred.....



> *Wall St. futures frozen after plunge
> 
> World stocks go into freefall, with Japan losing 9.6 per cent and Europe 8 per cent
> *
> ...


reportonbusiness.com: Wall St. futures frozen after plunge

Black Friday indeed.


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## MazterCBlazter (Sep 13, 2008)

.


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## MacDoc (Nov 3, 2001)

You may well be correct...UK is in big big trouble.


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## Vandave (Feb 26, 2005)

I think we are going to test the 2002 bottom of 7,500 for the DOW. It will probably happen early next week. That level of support goes back 11 years and is pretty strong, so I doubt it will break under it. The next level of support would be 6,700.


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## MacDoc (Nov 3, 2001)

> *As Yard Sales Boom in Hard Times, Sentiment Is First Thing to Go*
> Heidi Schumann for The New York Times
> 
> In Manteca, Calif., a center of the foreclosure crisis, garage sales help raise much-needed cash.
> ...


more here
As Yard Sales Boom in Hard Times, Sentiment Is First Thing to Go - NYTimes.com


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## Adrian. (Nov 28, 2007)

MacDoc said:


> more here
> As Yard Sales Boom in Hard Times, Sentiment Is First Thing to Go - NYTimes.com


I read that article the other day. The most shocking thing for me were peoples' commutes. Some people commuting like 150 miles a day! Absolutely rediculous. That is like commuting from London to Toronto daily. 

The US is a lot of superficial wealth and it is all crumbling around them. Quite unfortunate. I sure hope they don't start coming to Canada for free medical health.


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## MacDoc (Nov 3, 2001)

We have people in Ontario commuting from Fort Erie to the Toyota plant - that's about the same distance - all because of stupid housing prices.


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## Dr.G. (Aug 4, 2001)

"You ain't seen nothing yet."

YouTube - Bachman Turner Overdrive - You Aint Seen Nothing Yet

"You ain't seen nothing yet" These were also the immortal words of one of the greatest showmen on Broadway, His name ........................ Al Jolson.


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## MacDoc (Nov 3, 2001)

I love listening to Randy Bachman on Vinyl Tap - Friday night I think at 9 - if you've never listened Dr. G - try it out here. He never fails to amuse and inform....and he knows EVERYBODY.
He plays bits of songs himself, explains the background and then the songs - very well done and engaging radio.

Vinyl Tap | CBC Radio

•••













> *Christmas sales start early*


  

TheStar.com

Not much ho ho ho this year....


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## eMacMan (Nov 27, 2006)

MacDoc said:


> I love listening to Randy Bachman on Vinyl Tap - Friday night I think at 9 - if you've never listened Dr. G - try it out here. He never fails to amuse and inform....and he knows EVERYBODY.
> He plays bits of songs himself, explains the background and then the songs - very well done and engaging radio.
> 
> Vinyl Tap | CBC Radio
> ...


One of my favourites as well. Also on Saturday at 7PM if you're not into Hockey Night in Canada or prefer to watch without the commentary.

On Topic: It is well to remember that the market is every bit as vulnerable to manipulation as it was in the 20s. As long as money is to be made by pushing it down it will continue to go down.


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## eggman (Jun 24, 2006)

Dr.G. said:


> "You ain't seen nothing yet."
> 
> YouTube - Bachman Turner Overdrive - You Aint Seen Nothing Yet
> 
> "You ain't seen nothing yet" These were also the immortal words of one of the greatest showmen on Broadway, His name ........................ Al Jolson.


Wasn't Al Jolson more known for saying "You ain't *heard* nothin' yet" Dr. G? 

In line with him being in the first talkies as the silent film era ended.

We shall see...


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## MacDoc (Nov 3, 2001)




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## Dr.G. (Aug 4, 2001)

"I love listening to Randy Bachman on Vinyl Tap - Friday night I think at 9 - if you've never listened Dr. G." I like to listen to him on Sat. night. He comes on here in St.John's at 830PM.


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## Dr.G. (Aug 4, 2001)

Luckily, I got my Christmas shopping done early this year. We give mostly small items, and out one big item is a contribution to a local charity here in St.John's. Neither my wife nor I need anything and this way, people who don't have much of a Christmas get our assistance.


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## GratuitousApplesauce (Jan 29, 2004)

A 12-minute story on 60 Minutes explaining Credit Default Swap derivatives, the 63 trillion dollar market of financial weapons of mass destruction that are most responsible for the potential takedown of all the world's banks.

Credit Default Swaps Video - CBSNews.com

Some interesting info on the 1907 stock market crash that I hadn't heard of. Apparently the 1907 crash was exacerbated by "bucket shops", privately run betting shops that specialized in unregulated side bets on the stock market. These were made illegal after 1907, but that was reversed by one ignorant vote in Congress in 2000 that made these kinds of unregulated derivative side-betting legal again.

Thanks to Alan Greenspan, and all the other Market Fundamentalists whose faith that the laissez faire market could do no wrong and that regulation of it was entirely unnecessary. It seems that they misunderestimated the lethal combination of greed and ignorance. Seems like Alan is now aware his faith might have been misplaced and is examining his beliefs in his One True Religion now. Greenspan says he is "in a state of shocked disbelief" because he "looked to the self-interest of lending institutions to protect shareholder’s equity", but it didn’t. Well, I guess Alan and his buddies are retired now and can happily live out their dotage pondering their philosophical adjustments on their yachts or at their vacation homes.

I'm glad that Warren Buffet, who has been warning against this crap for years, is advising the Presidential front runner. Let's see, who was advising the other guy ... oh, yeah the main Congressional architect of much of this deregulation, Phil Gramm.


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## Dr.G. (Aug 4, 2001)

A very interesting point, GA.


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## MacDoc (Nov 3, 2001)

Warren Buffet and Bill Gross understood....no one was listening.

Googling on "shadow banking" brings up many incredible articles.

Of course it seems the Republican party seems rather technically challenged....


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## MacDoc (Nov 3, 2001)

I for one hope this guy is correct again



> *Heed the advice of The Smartest Man*
> 
> DEREK DeCLOET
> 
> ...


There is more
reportonbusiness.com: Heed the advice of The Smartest Man


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## Macfury (Feb 3, 2006)

This is all nonsense. The market WAS being regulated and the bubble was being nursed by all the watchdogs, including members of both parties who profited from it. Had this huge market bubble not been protected by the likes of Fannie and Freddie, it would have burst long ago.

Greenspan's self-immolation is just his effort to get invited back to all the best Washington parties. He is a self-serving old fool.


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## HowEver (Jan 11, 2005)

Seth Meyers explained the US economics crisis in a few sentences the other night.


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## Macfury (Feb 3, 2006)

MacDoc said:


> I for one hope this guy is correct again


Me too. I mean, he's the smartest right? I have a sense that he may be right, but my gut instinct is irrelevant here.


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## eggman (Jun 24, 2006)

Macfury said:


> This is all nonsense. *The market WAS being regulated* and the bubble *was being nursed by all the watchdogs*, including members of both parties who profited from it. Had this huge market bubble not been protected by the likes of Fannie and Freddie, it would have burst long ago.
> 
> Greenspan's self-immolation is just his effort to get invited back to all the best Washington parties. He is a self-serving old fool.



Nice after the fact rationalization MF - but you're coming perilously close to realizing that self regulation was non-functional. You'd better step back.


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## Macfury (Feb 3, 2006)

eggman said:


> Nice after the fact rationalization MF - but you're coming perilously close to realizing that self regulation was non-functional. You'd better step back.


Typically when government steps in to regulate an economic sphere, all of those activities which are not acted on under that regime become acceptable and are considered more or less safe by the populace.

Add to that the de facto backing of these investments by Fannie and Freddie and you have a recipe for disaster. Both Republicans and Democrats sucking on that teat had no desire to stop the flow of sweet, sweet milk, even though they knew the whole thing was a Ponzi scheme. The mechanics of regulation were there, the warnings were there, but because the regulators chose to nap at the switch and actually nurse the bubble along, it continued.


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## eggman (Jun 24, 2006)

Macfury said:


> Typically when government steps in to regulate an economic sphere, all of those activities which are not acted on under that regime become acceptable and are considered more or less safe by the populace.
> 
> Add to that the de facto backing of these investments by Fannie and Freddie and you have a recipe for disaster. Both Republicans and Democrats sucking on that teat had no desire to stop the flow of sweet, sweet milk, even though they knew the whole thing was a Ponzi scheme.* The mechanics of regulation were there, the warnings were there, but because the regulators chose to nap at the switch *and actually nurse the bubble along, it continued.


So you're saying that the regulation was there, but it was non-functional...

please describe how this is different from not having regulation? (Other than the obvious lack of business suited sycophants standing on street corners with signs "will regulate for food") 

Is this is the hand of the "free market" giving everyone the finger?

Interesting - I'm reading Fooled By Randomness at the moment, seems relevant (written by a risk averse Wall Street trader (by profession)/traitor(to some))


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## Macfury (Feb 3, 2006)

eggman said:


> So you're saying that the regulation was there, but it was non-functional...


I'm not only saying that it was non-functional, but that those who were in the position of regulating were encouraging the bubble to grow.

Without the belief that government agencies would rescue you from financial collapse, or that Freddie and Fannie's trillions were backing up the market, who would have been fool enough to enter into this kind of a financial investment?

The bubble would have inflated and collapsed long ago.


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## eggman (Jun 24, 2006)

Macfury said:


> I'm not only saying that it was non-functional, but that those who were in the position of regulating were encouraging the bubble to grow.
> 
> Without the belief that government agencies would rescue you from financial collapse, or that Freddie and Fannie's trillions were backing up the market,* who would have been fool enough to enter into this kind of a financial investment?
> *
> The bubble would have inflated and collapsed long ago.


Anyone and everyone. Bubbles/collapses/crises have happened before - greed is a part of human nature and randomness is part of the system and the lack of a gov't bailout didn't stop any of the previous ones from happening. I think you may be engaging in wishful thinking to prop up your political philosophy MF. I'm sure you're not alone (I've done it myself) - no worries! 

Read Manias, Panics, and Crashes: A History of Financial Crises by Solow.


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## Macfury (Feb 3, 2006)

Of course bubbles occur. We expect them. But if someone regulating such things actually encourages the growth of the bubble, we expect it to get bigger and bust harder. You might argue that the regulators--including congressional oversight and the role of FNMA--did nothing to encourage the bubble. I wouldn't agree.


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## (( p g )) (Aug 17, 2002)

HowEver said:


> Seth Meyers explained the US economics crisis in a few sentences the other night.


Here's one: Too much debt, not enough capital, and no one/thing to step in to reverse that slide until it was too late.


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## GratuitousApplesauce (Jan 29, 2004)

Macfury said:


> This is all nonsense. The market WAS being regulated and the bubble was being nursed by all the watchdogs, including members of both parties who profited from it. Had this huge market bubble not been protected by the likes of Fannie and Freddie, it would have burst long ago.
> 
> Greenspan's self-immolation is just his effort to get invited back to all the best Washington parties. He is a self-serving old fool.


Credit default swaps ARE NOT regulated and WERE NOT. Many other derivatives are not even traded at stock markets. Some are and fall under some regulation. The watchdogs were asleep on their watch and the big watchdog, Mr. Greenspan was shocked when he awoke from his slumber. His belief system, by his own admission, didn't allow that banks, now in cahoots with Wall Street greed merchants, could possibly do anything foolish so he supported the lessening of regulations and the merging of banks with investment salesmen. Greedy, stupid, Wall Street lemmings drove the whole bus off the cliff and deregulation made it all possible. Fannie and Freddie were a part of this stupid and asleep at the switch culture, but the cause was the legalization of side-bet bucket shops and deregulation that allowed them to merge with commercial banks. A housing bubble may still have occurred but wouldn't have threatened to bring down the house.


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## MacDoc (Nov 3, 2001)

I notice MF ignores shadow banking.....an inconvenient truth

Pimco's Bill Gross: Our shadow banking system - Nov. 28, 2007

RGE - The Shadow Banking System is Unravelling: Roubini Column in the Financial Times. Such demise confirmed by Morgan and Goldman now being converted into banks


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## gordguide (Jan 13, 2001)

" ... In the meantime, I'm not freaking out and taking my money out of ING. ING is covered under CDIC insurance for up to $100,000.

Incidentally, I read yesterday that CDIC doesn't cover US dollar accounts issued by Canadian banks. ..."

I have two accounts with ING, but for day-to-day banking, I deal with a Saskatchewan Credit Union. Just yesterday (Tues 27Oct08) I attended an extensive 2-hour meeting, along with about 150 other members, to discuss the current financial situation and how it affects me and other members. Here is part of what I learned:

Deposits are covered by Credit Union Deposit Guarantee Corporation, a Saskatchewan corporation privately held by member Credit Unions, and the oldest deposit insurance corporation in Canada (1953) ... and the second oldest in North America. The Charter Banks of Canada used CUDGC as it's model when they formed the CDIC a decade later.

Credit Unions are provincially regulated, so each province has it's own Deposit Insurance Corporation and limits on coverage. Unlike Saskatchewan, some provinces are insured by Crown Corporations, but in any case all have some entity that protects Credit Union deposits. Saskatchewan, as well as Alberta, Manitoba, New Brunswick (since 2005) and British Columbia (since a week ago ... October 22 2008) have unlimited coverage on Canadian accounts.

CUDGC also covers US dollar accounts with the same unlimited guarantee, the only one to do so. Newfoundland and Nova Scotia accounts are covered to $250K, Quebec and Ontario to $100K and PEI to $60K.

Sask CU's collectively have 500,000 members, $12 Billion in deposits and $1 Billion (7% is the statutory reserve rate for CUs in Saskatchewan **) in cash reserves. CUDGC has it's own cash reserves as well. The hold no Mortgage backed securities; all cash and reserves ares held in T-Bills. Lending is continuing at the same rate and with the same lending criteria as before the current crisis, as Credit Unions are unaffected directly by problems in the Banking Industry. Current liquidity problems at Charter Banks can be basically summed up as the banks' refusal to lend to each other.

I would be surprised to learn that, due to the tight regulation of Credit Unions, it is any different anywhere else in Canada. Something to think about if you have borrowing needs and are a bona fide good risk. I moved to a CU from a Charter Bank five years ago and haven't regretted it for one second. After last night, I'm even more happy I made the move.

** Charter Banks are not required to keep any cash as statutory reserves as of 1991 when Brian Mulroney's Conservatives phased out the requirement. They can lend 100% of deposits, which is why liquidity is such an issue today.


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## MacDoc (Nov 3, 2001)

I concur - I see a real opportunity for Credit Unions and I admire the community aspect of lending for wealth building locally :clap: That is what capital pooling is supposed to be about.....not speculation on froth. 

I go with TD as I like both their management and hours of service and in particular their foreign exchange facilities.

CIBC is a disaster in comparison.


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## Dr.G. (Aug 4, 2001)

Exxon Mobil Corp. might be next in line for federal bailouts. They failed to make their hoped for $15 billion in the third quarter.

"Exxon Mobil Corp. set a quarterly profit record for a U.S. company today, surging past analyst estimates, CNNMoney.com reports. Exxon Mobil, the leading U.S. oil company, said its third-quarter net profit was $14.83 billion, or $2.86 per share, up from $9.41 billion, or $1.70, a year earlier. That profit included $1.45 billion in special items."


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## Dr.G. (Aug 4, 2001)

With the price of oil dropping, the oil companies will be hurting and looking for handouts. Better to give it to them than some of the other undeserving groups in the US .................... like hungry children ........ or elderly people who are sick.

"The business of America is business."


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## Vandave (Feb 26, 2005)

MacDoc said:


> This has been predicted and coming for several years - oil has very little to do with it.
> 
> The threat of the unravelling of the shadow banking has been around and Bill Gross has been warning about it as have others.
> 
> This liquidity crisis started in August 2007 when oil was at $75 a barrel.


Jeff Rubin agrees with me - RE: Oil prices

reportonbusiness.com: Blame high oil prices for recession, CIBC says


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## Macfury (Feb 3, 2006)

Vandave: that makes perfect sense. The ninnies trying to explain a world recession entirely on the mortgage bubble are way off base. Question is-how quickly can an implosion in oil prices revive the stagnant economies.


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## GratuitousApplesauce (Jan 29, 2004)

Vandave said:


> Jeff Rubin agrees with me - RE: Oil prices
> 
> reportonbusiness.com: Blame high oil prices for recession, CIBC says


Certainly high oil prices, especially moving up quickly put a major strain on and causes instability to the economy. Rubin's argument is that sub-prime loans simply can't account for the credit crisis. “How do falling property values in Cleveland create a recession in Japan, and the Euroland economies, before they even create a recession in the U.S. economy?” Mr. Rubin asks.

It seems like most economists agree that they couldn't, on their own. But massive leveraging on truckloads of BS mortgage backed securities and credit default swaps that were criminally rated triple-A, putting the assets of all the world's banks at risk, could. Rubin seems to just ignore this. The 3 big US banks hold many trillions in credit swaps worth many times their assets and the whole pile is suspect because the ratings can't be trusted and the bits of toxic loans contained within can't be unravelled easily. Trust has disappeared and credit is frozen.

Interesting that Rubin is a spokesperson for CIBC, the Canadian bank that has the highest exposure to these kinds of securities through the aggressive participation of its US operations. It's all oil, not derivatives says Rubin. Parenthetically, Rubin seems to suffer from a serious lack of trust, at least shown by the opinions of the readers of the G&M's business pages and their estimation of his past predictions.


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## MacDoc (Nov 3, 2001)

CIBC - voted bank most likely to walk into sharp object. 

Self serving deflection from their own mismanagement.

Fail.


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## MacDoc (Nov 3, 2001)

wow!!!



> * Stunned Icelanders struggle after economy's fall*
> By Sarah Lyall
> Published: November 8, 2008
> 
> ...


couple of pages of woe... 
Stunned Icelanders struggle after economy's fall - International Herald Tribune


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## MazterCBlazter (Sep 13, 2008)

.


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## GratuitousApplesauce (Jan 29, 2004)

Everything you need to know about the economic crisis. 



















*YouTube - The Wile E Coyote Government*


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## Dr.G. (Aug 4, 2001)

Good one, GA.


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## MacDoc (Nov 3, 2001)

Images of oil prices......










Pictured: The graveyard where 'credit crunched' budget airlines send unwanted passenger jets | Mail Online


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## MacDoc (Nov 3, 2001)

Excellent *American Experience* on PBS this week about the 1929 market crash. On tonight.










American Experience | The Crash of 1929 | PBS


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## Dr.G. (Aug 4, 2001)

Deja vu all over again. We shall see.


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## MacDoc (Nov 3, 2001)




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## Dr.G. (Aug 4, 2001)

The roller coaster ride continues.


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## MacDoc (Nov 3, 2001)

> *All US Financials Will be Nationalized in a Year: Manager*
> 
> Sectors:Financial Services
> Companies:Citigroup Inc
> ...


All US Financials Will be Nationalized in a Year: Manager - Financials * Europe * News * Story - CNBC.com


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## MazterCBlazter (Sep 13, 2008)

.


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## Dr.G. (Aug 4, 2001)

"Better dead than red." Still, a utopian socialistic society would help bring about equality for one and all ................. maybe. We shall see.


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## MacDoc (Nov 3, 2001)

Shades of things to come... a new episode of Dickens in the works??



> *Is Japan's ‘lost decade' a window to the future?*
> 
> MARCUS GEE
> From Saturday's Globe and Mail
> ...


more here - a good read
globeandmail.com: Is Japan's 'lost decade' a window to the future?


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## MacDoc (Nov 3, 2001)

HIghly recommended series of articles from the Economist













> *The World in 2009*
> The World in 2009 is the 23rd edition of The Economist's annual collection of predictions for the year ahead—with views from journalists, politicians and business people.


The World in 2009: forecasting the year ahead | The Economist


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## MacDoc (Nov 3, 2001)

Dollar a year guy - voluntarily 



> *Swedish CEO says he will work for free*
> 
> STOCKHOLM, Sweden – Lars G. Nordstrom isn't the only CEO being criticized these days for earning too much money during the world financial crisis. But he may be one of the few who has reacted by deciding to work for free.
> 
> ...


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## MacDoc (Nov 3, 2001)

The Mea culpas emerging.....



> Ex-UBS executives forfeit pay
> 
> By Haig Simonian in Zurich
> 
> ...


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## Dr.G. (Aug 4, 2001)

Too little, too late, MacDoc.


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## MacDoc (Nov 3, 2001)

bout right...


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## MacDoc (Nov 3, 2001)

A Black Friday indeed 





> *Worker dies at Long Island Wal-Mart after being trampled in Black Friday stampede*
> 
> BY JOE GOULD
> DAILY NEWS WRITER
> ...


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## MLeh (Dec 23, 2005)

Fear and greed.

What a world.


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## MazterCBlazter (Sep 13, 2008)

.


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## GratuitousApplesauce (Jan 29, 2004)

Wow, dying for Wal Mart. That's just sad.  

So I guess we can expect Walmart to do right by the guy's family now, eh?


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## Dr.G. (Aug 4, 2001)

"So I guess we can expect Walmart to do right by the guy's family now, eh?" They will claim that it is not their fault. They just opened up the doors.


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## MazterCBlazter (Sep 13, 2008)

.


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## Dr.G. (Aug 4, 2001)

The mob would blame the store .......... the store would blame the mob .............. the courts would blame society ............ and Bush would urge people to keep spending for the sake of the American economy.


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## EvanPitts (Mar 9, 2007)

MLeh said:


> Fear and greed.
> 
> What a world.


It's all about grabbing stuff for Christmas, the holiday of good will to all...


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## EvanPitts (Mar 9, 2007)

MazterCBlazter said:


> Everyone in that mob should be arrested and charged with something significant.


Living in Nassau County should be a Federal offense... beejacon


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## gwillikers (Jun 19, 2003)

Trampled at a SqualorMart... just pitiful.
It's sometimes embarrassing to be a human being. :yikes:


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## EvanPitts (Mar 9, 2007)

Dr.G. said:


> The mob would blame the store .......... the store would blame the mob .............. the courts would blame society ............ and Bush would urge people to keep spending for the sake of the American economy.


I'd blame the Chinese, since they made most of the stuff that was in that StampedeMart.

I'd also blame Columbus, because if he hadn't sailed in 1492, the New World wouldn't have been founded, and there would be no WalMart.


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## MissGulch (Jul 20, 2005)

MacDoc said:


> A Black Friday indeed


The stampede happened 10 minutes away from me.


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## Dr.G. (Aug 4, 2001)

Miss G., I once went to a Macy's White Sale to get some pillow cases for my mother. I nearly got trampled trying to get a few nice pillow cases and a matching sheet.


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## MazterCBlazter (Sep 13, 2008)

.


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## Dr.G. (Aug 4, 2001)

Two people were shot and killed at a Toys R Us store in California over a dispute over a toy.


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## iMatt (Dec 3, 2004)

Anyone else feeling a little nostalgic for the Black Monday we went through back on Sept 15? Joining that panic looks like a pretty good idea in retrospect...


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## MacDoc (Nov 3, 2001)




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## Dr.G. (Aug 4, 2001)

"TORONTO - The Royal Bank of Canada (TSX:RY) says quarterly profits fell 15 per cent from a year ago to $1.12 billion as it booked expected charges related to the downturn in global markets."

Where is the Canadian government on this matter??? They need help and help now. Imagine if next quarter their profits fall below $1 billion???? This will be a national crime. Let's discontinue Old Age Security payments to seniors and send it to RBC to help them out in their time of "need".


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## SINC (Feb 16, 2001)

.


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## Dr.G. (Aug 4, 2001)

Sad, but all too true, Sinc.


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## EvanPitts (Mar 9, 2007)

Dr.G. said:


> Two people were shot and killed at a Toys R Us store in California over a dispute over a toy.


A light day for crimes and sin in the City of Angels...


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## MacDoc (Nov 3, 2001)

> *Canada loses 70,600 jobs in month*
> 
> THE CANADIAN PRESS/J.P. MOCZULSKI
> Ontario led the country in job losses in November as manufacturers shed workers.
> ...


Proportionally that's worse than the US by a large factor but I suspect that's because the downturn was later in getting to Canada.


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## SINC (Feb 16, 2001)

There are some companies that are taking advantage of the current economic climate by laying off employees when it is not necessary.

Although their sector has remained strong, they seize the opportunity and make 5 - 10% cuts to payroll leaving a larger workload per employee as a result. The remaining employees, in fear of their jobs, accept this extra burden without a word.

Sadly, I know of at least a dozen circumstances where this holds true.


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## mrjimmy (Nov 8, 2003)

SINC said:


> There are some companies that are taking advantage of the current economic climate by laying off employees when it is not necessary.
> 
> Although their sector has remained strong, they seize the opportunity and make 5 - 10% cuts to payroll leaving a larger workload per employee as a result. The remaining employees, in fear of their jobs, accept this extra burden without a word.
> 
> Sadly, I know of at least a dozen circumstances where this holds true.


Hmm... and Unions are a bad thing.


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## SINC (Feb 16, 2001)

mrjimmy said:


> Hmm... and Unions are a bad thing.


They certainly are, as they did nothing to stop it or protest the move.


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## mrjimmy (Nov 8, 2003)

SINC said:


> They certainly are, as they did nothing to stop it or protest the move.


What companies are you speaking of exactly? I'm sure there is much more to the story.


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## SINC (Feb 16, 2001)

Sorry, but I cannot breach confidence with the person who fed me the information. My source would lose her job.


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## mrjimmy (Nov 8, 2003)

SINC said:


> Sorry, but I cannot breach confidence with the person who fed me the information. My source would lose her job.


Fair enough but you should reserve comment if you can't elaborate.


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## Dr.G. (Aug 4, 2001)

Things must be getting better on Wall Street. John Thain, the CEO of Merrill Lynch was putting in for a $10 million bonus for 2008 -- mostly because, in 2008, he adeptly held Merrill Lynch down to a loss of only $11.67 billion.

Guess you can make a silk purse out of a sow's ear.


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## MacDoc (Nov 3, 2001)

Sign of the times....












> _New York businessman wears sandwich board pleading for job
> A former businessman has taken to the streets of New York wearing a sandwich board pleading for a job opportunity as the financial crisis hits the middle classes._
> 
> 
> ...


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## Dr.G. (Aug 4, 2001)

MacDoc, I read about this last week on CNN.com. What I would find most difficult if I was in this situation is the notion of being "redundant". Luckily, my area of expertise is needed at a Faculty of Education here at Memorial, so long as teachers need to be trained. Strangely enough, if students from here in NL decided not to come to our program, there are students from NS and ON who would flock to our programs. It is difficult to get into an education program in ON, and in NS, the tuition is two to three times higher than it is here at MUN.

For the record, I feel that this man has the courage to do what he is being forced to do under the circumstances. I am not sure if I would have this sort of courage.


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## MacDoc (Nov 3, 2001)

A very good analysis from Scientific American on the failure of regulation...and faulty assumptions ...



> *After the Crash: How Software Models Doomed the Markets*
> 
> Overreliance on financial software crafted by physics and math PhDs helped to precipitate the Wall Street collapse
> 
> ...


continues
After the Crash: How Software Models Doomed the Markets: Scientific American


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## eMacMan (Nov 27, 2006)

Cutting the interest rates to zero was about the worst thing the Fed could have done. First of all very low interest rates helped create the problem. Lower rates cannot reverse it as there is no where rates can go now but up. It also tells the Joe on the street that the worst is still ahead. Something that will not inspire a Wall Street Junkies optimism. Finally it robs people who have retired and depend on ordinary savings for needed income, so they are going to end up spending less. Again leading to reinforcing the economic downward spiral.


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## MacDoc (Nov 3, 2001)

It especially does not help if the banks won't lend anyways - just puts more money in their pockets as they pay out less.


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## MacDoc (Nov 3, 2001)




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## Dr.G. (Aug 4, 2001)

CNN is reporting that the total bonus amounts for the CEOs of the companies that were bailed out at taxpayers expense will total over $1.6 billion. I am so very glad I am not back in the US and working hard to pay my taxes. I would consider not paying my taxes this year out of protest .............. and would most likely go to jail.


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## MacDoc (Nov 3, 2001)

Hmmmm 1929 now 2009...... must be something in that....


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