The crisis on Wall Street - Is all in your head?
Reaganomics started it back in the 1980s with Phil Gramm and John McCain leading the pack - end government regulation to encourage a free market, reduce taxes to the movers and shakers, and wealth would trickle down to all of us. We've had Republican control of the Whitehouse or Congress or both for 26 of the past 28 years and these policies have held.
Now we have news of a major financial disaster that Alan Greenspan called the worst he's seen.
Phill Gramm said that the current crisis is all in our heads - we are a nation of whiners http://www.youtube.com/watch?v=1mHsuL6FfY4
McCain temporarily distanced himself, but now Gramm is back full force as McCain's economic advisor. Can we expect more of the same failed economic policies that got us into this mess? where does McCain really stand on the economy? Do his recent statements like this one at Townhall.com point to him abandoning the policies he's adhered to for decades and advocating regulation?
"Our economy, I believe, still, the fundamentals of our economy are strong, but these are very, very difficult times, so I promise you: We will never put America in this position again. We will clean up Wall Street," McCain said."
What do you think? How's this all working out for you so far? Do you believe the economy is strong?
Original Post by santonacci:
Original Post by pgeorgian:
yep. palin talked about the economy (blamed "Washington" - whatever that's supposed to mean)
Blaming "Washington" typically means pointing the finger at the oppposing party, regardless of who throws out the label. Republican says it, it's all Dems fault, Dem says it, it's all Republican's fault.
Neither are correct, of course, but somewhat effective in playing to the crowd and convincing supporters that the other side is certain destruction.
yeah, santo, i know. i just don't know how such a tactic can carry any credibility from such a staunch conservative war-mongering republican {shrug}.
Well, the rich are panicking, and so am I.
I work for a trust company that deals with high-net worth individuals and companies. Until recently, we have been weathering the storm quite well, as we are extremely conservative, and our clientele are extremely wealthy. This was the email we all got this morning from our CEO (company name removed so I don't get deuced):
As you are aware, financial markets are poised for further and perhaps unprecedented turmoil with the events surrounding Lehman Brothers’ bankruptcy filing, Merrill Lynch’s sale to Bank of America and AIG’s expected restructuring. These simultaneous events are placing tremendous stress on financial markets. In response, the Federal Reserve plans to expand its lending facilities to increase liquidity, while a global consortium of commercial and investment banks announced a $70 billion borrowing facility last night. (My own emphasis added.)
The Management Group and senior managers throughout our organization have been tracking events throughout the weekend and monitoring (Company Name)'s exposure to various financial and business risks, particularly with respect to Lehman Brothers. We understand business volumes will be very high today and appreciate your efforts to satisfy client requests.
Partners in (Various Business Units) will reach out to clients today to let them know of steps that (Company Name) is taking to protect their interests. As a global financial institution, (Company Name) is not immune to the effects of today’s events. But in this tumultuous period, our clients know they can rely on us to maintain the highest standards of service and integrity. Our consistent focus on clients’ needs, along with our financial strength and stability, will continue to make a positive difference for our clients and for our firm in this challenging environment.
We will issue additional updates throughout the day as developments occur.
One of my closest friends, 5 years from retirement, has most of her retirement money invested with Merrill Lynch. She is watching to see just how big her loss is going to be. My own retirement fund is in a "balanced fund" but the share price has gone down.
We depend on our savings to support ourselves in old age, since most companies have done away with pensions in favor if 401k investments. This isn't a matter of luxury or extras for us - it's about survival. Yes, I'm scared.
the fact that this thread isn't more active is pretty good evidence that people are in denial (and udo's parallel thread has only 1 reply so far).
Okay, so since there are no positions open for "Woman in fetal position crying" I know I should be working, but this is really really really bad.
Our traders were in at 4 AM this morning trying to get together a game plan. The proverbial **** has hit the proverbial fan.
Oh, and the WSJ sold out if that's any indication of the panic that is gripping the financial services sector.
Original Post by pgeorgian:
the fact that this thread isn't more active is pretty good evidence that people are in denial (and udo's parallel thread has only 1 reply so far).
but... economics is so booooring! Who wants to think about that when we can listen to Sarah the Moose Woman talk that upbeat talk?
I agree, pgeorgian. The Head in the Sand is the latest dance craze.
If it's all in your heads, then I am worried, because it means that our "Experts" don't know what they are talking about either, and have indeed been telling us fibs!....lol
NYSE is down 300 points in this morning's trading.
NASDAQ down about 30.
To the government's credit, they didn't fold on Sunday and offer to bail out Lehman.
There is a small part of me that sees this as correction for the mortgage bubble - effecting only the upper echelon of investors. Unfortunately, when the upper echelon get a cold, the nation gets Ebola. :/
It's sad. Some people act as if it's not a real issues. The same way they act as if the environment isn't something to concern themselves with. The economy should be something upper most on our minds as should global warming. People are so selfish they try not to make it ' their ' issue until something happens. Whatever that something is... When people think about their own life, they burst into tears/or concern. ... But, usually the issue has to wait to be addressed until the issue has a devastating effect on their families. Their life.
I wish everyone would concern themselves with what's best for everyone involved as a whole.
For me it's not so much that lenders are going under, in the current economy you would expect to see smaller lesser well known companies go collapse, but it is the big guys that are falling I mean LB is the third largest lender in the world.....now that is serious! Why did the takeovers not happen Barclay and another one (sorry can't remember) were going to absorb the debts over the weekend but pulled out! there was also trading on Sunday "that is usually a no no. This is most definitely serious and from what we have been told it has no where near peaked yet, there is a lot worse to come. Give this time to ripple down and then we people will start to face the consequences. Our Biggest bank (Bank of England) and others have been putting very large sums of money into the pot since this morning to try and steady the boat, but they say that at the moment they can only stop it tipping, it is still very wobbly!
Sorry I'm a bit out of my element, here. My idea of good investment strategy is to invest in companies that actually sell things within the American economy. Stock in my local grocery store, my brand of toilet paper, my brand of beer, etc.
kathy I am no expert either but yes you still own the shares, but they will not be worth much or anything, depends how hard the company you have shares with was effected. I have minor shares in a Scottish Bank, but this morning after LB collapsed there value dropped by 13% that was by 12 noon my time, what they will be at first thing tomorrow morning could be totally different. That will depend on how much all the other banks have managed to soften the blow.
What people seem to fail to realise is that just because they think it has nothing to do with them, the ripple effect does, when a large company like that goes down what it inevitably does is push the cost of living for us up even further and usually results in Interest rates increase too. This in turn causes smaller companies to go under, lay people off, unemployment goes up and so it goes on and on.
But if you're invested in 'green technology' for instance, that technology is still going to be viable, no?
How did we expect the banking industry not to be deeply hit by the mortgage bubble, I guess is my question.
Original Post by kathygator:
Iggy said, just last week, that there would be more banks to follow.
NYSE is down 300 points in this morning's trading.
NASDAQ down about 30.
To the government's credit, they didn't fold on Sunday and offer to bail out Lehman.
There is a small part of me that sees this as correction for the mortgage bubble - effecting only the upper echelon of investors. Unfortunately, when the upper echelon get a cold, the nation gets Ebola. :/
there is the difference that a million families have lost their homes in this 'bubble' - that's not an effect on the upper echelon
we've also lost over 800,000 jobs so far this year - again, not an effect on the upper echelon
but read what warren buffet said about derivatives and you'll see why this is just the beginning
Outstanding derivatives contracts - excluding those traded on exchanges such as the International Petroleum Exchange - are worth close to $85 trillion, according to the International Swaps and Derivatives Association.
Some derivatives contracts, Mr Buffett says, appear to have been devised by "madmen".
Wall Street didn't listen to Buffett. Derivatives grew into a massive bubble, from about $100 trillion to $516 trillion by 2007. The new derivatives bubble was fueled by five key economic and political trends:
The new bubble is a derivatives bubble. I doubt 1 out 100 americans will know what a derivatives contract is and will just blame some other problem - like immigrants or terrorists or some equally unrelated but convenient scapegoat group. (and i'm not saying that immigration and terrorism don't need to be addressed in an effective way, i'm just saying that they are often convenient scapegoats for other problems)
Exactly, Nomo. It's just excuses used from the Republican party regarding the standing of our economy. We were surplus whenever Bush took office. There is no excuse. The Republican party should be accountable for something instead of passing the buck.
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