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Thread: global financial crash yay!

  1. #1
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    Thumbs up global financial crash yay!


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    Every time the market dips a few points, there's over-hyped news stories about a huge recession looming. I think the pricks with huge amounts of money tied up in investments know how to deal with this by now. They've got what they want and I don't see them panhandling on the street any time soon. This'll all blow over in a couple of months, with a rally in share prices, don't get too optimistic, the people who suffer the most are probably going to be your average shmuck trying desperately to make their hiked up mortgage payments.

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    Quote Originally Posted by swears View Post
    Every time the market dips a few points, there's over-hyped news stories about a huge recession looming. I think the pricks with huge amounts of money tied up in investments know how to deal with this by now.
    i kind of agree about the hype but by definition, a crash happens when no-one's expecting it, otherwise they'd have covered themselves.

    I think that there is real uncertainty in the financial markets at the moment. This sub-prime thing in the US is a big deal - I read today that there might be $300bn of bad debts at risk. And the UK is massively over-reliant on property, a lot of which is owned by corperate investment bodies who will sell the instant the market starts to seriously drop. I don't think the UK housing market is anything like as robust as people think.

    Bottom line is that what goes up always comes down. Every time there's a bubble, the people inside the bubble find reasons why their bubble will be the exception, and they're always wrong. It happened in the dotcom boom, and it's happening now in property.

    There's also the long term uncertainty in the energy markets, which unsettles manufacturers and stops them investing.

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    http://www.globalresearch.ca/index.p...xt=va&aid=6209

    any idea how the severity of this bubble compares to the tech one 10 years ago?
    BOOK: sound/bodies // paul.autonomic »» deeptime.net

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    subject made me happy (for but a few moments, still...)

  6. #6
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    Quote Originally Posted by nomos View Post
    http://www.globalresearch.ca/index.p...xt=va&aid=6209

    any idea how the severity of this bubble compares to the tech one 10 years ago?
    This is a minor crash at the moment-- but the bubble is absolutely fucking immense. This latest crisis gives a flavour of the kind of activities (essentially massively leveraged credit-derivatives creating debt with less risk, which is then sliceable and tradeable) which are going to utterly fuck the markets eventually. Its a world of ever expanding credit and virtual finance, endlessly and promiscuously broken down and sold on as derivatives, often themselves financed with debt. Interestingly the UK govt has recently banned the purchase of what I think are termed double-leveraged credit derivatives, ie buying a debt-based derivative on credit. But the credit/debt problem extends into other areas of contemporary finance also, for example the whole world of private equity, and pretty much most hedge funds (which of course are more like leverage funds nowadays)... but it is credit derivatives which can be blamed for the current down-turn, exposing far more institutions and investors than might be expected to the US sub-prime problem.

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    Quote Originally Posted by Gabba Flamenco Crossover View Post
    I don't think the UK housing market is anything like as robust as people think.
    I suspect it is cushioned by supplyside issues to a much greater extent than the American market, may be up to 30% of value to be lost tho.

  8. #8
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    Default One day capitalism really will collapse

    and then we won't have a job or food or rizla or the bus or the traffic lights and then we'll be sorry.

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    Yeah, cuz if there's nobody to flog those things, then they cease to exist, right?

  10. #10
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    Quote Originally Posted by swears View Post
    Yeah, cuz if there's nobody to flog those things, then they cease to exist, right?
    no but the rizla will all stick together.

    actually I'm all set for the global financial crash as I have an allotment and a sewing machine.

  11. #11

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    The sub-prime fiasco is not necessarily a "bad" thing unless you are particularly worried about rich investors with too much money relative to common sense suffering entirely appropriate market re-positionings.

    Martin Wolf's column in the FT last week, "the welcome return of fear", was entirely OTM:
    http://www.ft.com/cms/s/cc3e4300-4a7...s%2Fmartinwolf

    @gek-opel - the dispersal of expected effects and outcomes represents not the death-knoll of the global economy due to the market's granularity, rather, it's all about the management of risk - that's exactly why these things are spread out so widely - it's their purpose. In any case, investors operating in a bubble or riding their expectations of the Fed's "put" deserve what they get. The implications will be widespread, but you should expect this to improve the position of global capitalism and financial markets in the long-run.

  12. #12

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    Wolf's column should be open to subsrcibers only, but seems to appear here in full, with some discussion.

    Financial markets, and particularly the big players within them, need fear. Without it, they go crazy. Moreover, it is impossible for outsiders to regulate a global financial system riddled with conflicts of interest and dominated by huge derivatives markets, massive trading by highly leveraged hedge funds and reliance on abstruse mathematics and questionable statistical models. These markets must regulate themselves. The only thing likely to persuade them to do so is the certainty that the players will be allowed to go bust.

    When William Poole, chairman of the St Louis Federal Reserve, said that “the Fed should respond to market upsets only when it has become clear that they threaten to undermine achievement of fundamental objectives of price stability and high employment or when financial market developments threaten market processes themselves”, I gave a cheer.

    Not so Jim Cramer, hedge fund manager and television pundit, who declared last Friday that chairman of the Federal Reserve, Ben Bernanke, “is being an academic!...My people have been in this game for 25 years. And they are losing their jobs and these firms are going to go out of business, and he’s nuts! They’re nuts! They know nothing! . . .  The Fed is asleep.”

    So capitalism is for poor people and socialism is for capitalists. This view is not just offensive. It is catastrophic.

  13. #13
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    Quote Originally Posted by vimothy View Post
    The sub-prime fiasco is not necessarily a "bad" thing unless you are particularly worried about rich investors with too much money relative to common sense suffering entirely appropriate market re-positionings.

    Martin Wolf's column in the FT last week, "the welcome return of fear", was entirely OTM:
    http://www.ft.com/cms/s/cc3e4300-4a7...s%2Fmartinwolf

    @gek-opel - the dispersal of expected effects and outcomes represents not the death-knoll of the global economy due to the market's granularity, rather, it's all about the management of risk - that's exactly why these things are spread out so widely - it's their purpose. In any case, investors operating in a bubble or riding their expectations of the Fed's "put" deserve what they get. The implications will be widespread, but you should expect this to improve the position of global capitalism and financial markets in the long-run.
    Apparently the way these instruments were packaged up hid a lot of the risk. But even so the purpose of these things (their aim) is to make money for those who operate and sell them. In abstract the idea of managing risk is fine, and makes perfect sense but in its operation in globalised finance it appears to enable the creation of more extensive amounts of credit, precisely because as you say it enables risk to be shared (or sliced up and sold on). Credit in itself is the issue to my mind...

  14. #14
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    "The implications will be widespread, but you should expect this to improve the position of global capitalism and financial markets in the long-run."
    I wonder though....it's surely theoretically possible for there to be such a major cock-up that it seriously undermines the global financial system. I'm not saying that this is it or that that would be a good thing but it could happen.

    "Apparently the way these instruments were packaged up hid a lot of the risk. But even so the purpose of these things (their aim) is to make money for those who operate and sell them."
    Pretty much true (I think that they were given high ratings by people who hadn't bothered to check them properly) but so what?

    "In abstract the idea of managing risk is fine, and makes perfect sense but in its operation in globalised finance it appears to enable the creation of more extensive amounts of credit, precisely because as you say it enables risk to be shared"
    Looks like it, so what?

    "Credit in itself is the issue to my mind..."
    What do you mean Gek, you always begin so precisely but get so vague when you get near to making an actual point.

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