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William_Cleland · Posted: Sat Feb 02, 2008 5:24 am Post subject:

They must be extremely desperate to get the Republican elected in November.

Holebender · Posted: Sat Feb 02, 2008 7:11 am Post subject:

It was a Republican who made this mess. Why would they want another one?
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William_Cleland · Posted: Sat Feb 02, 2008 8:09 am Post subject:

Hilary Clinton winning combined with Democrat majorities in the House of Representatives and Senate would be a very interesting scenario. Reforms like universal health care would be very much on her agenda and that verges on communism as far as the type of people who run the Federal Reserve are concerned.

http://www.cnn.com/2007/POLITICS/09/17/health.care/index.html

Then there is the whole question of the neo-con agenda in Iraq...

Holebender · Posted: Sat Feb 02, 2008 8:39 am Post subject:

I'm sure as far as the Fed is concerned "it's the economy, stupid". They don't care the colour of the rosette, only the economic competence of the incumbent.
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William_Cleland · Posted: Sat Feb 02, 2008 9:46 am Post subject:

It would be nice to think so but America doesn't work like that.

http://www.youtube.com/watch?v=kJ4SSvVbhLw

Reluctant Hero · Posted: Mon Mar 17, 2008 9:15 pm Post subject:

The FTSE 100 took another hit today, dropping over 200 points on the news about Bear Stearns. Is there an end in sight, or are we in a spiral heading for recession?

http://news.bbc.co.uk/1/hi/business/7300017.stm

Markets rattled by bank worries

Markets worldwide recorded heavy losses in reaction to the emergency bailout of US investment bank Bear Stearns over the weekend.
Wall Street had a rollercoaster session, with the benchmark Dow Jones average ending in positive territory after tumbling in early trading.

European shares suffered most, with the UK's FTSE 100 index ending down 3.9%.

Investors fear that the collapse of one of Wall Street's biggest names means that the credit crunch is intensifying.

Banks hammered

US, UK and European banks were hammered: shares in Lehman Brothers fell 19%, UBS lost 10%, HBOS 12.7% and Germany's Commerzbank fell 6.8%.

At the end of the day the Federal Reserve is stepping up every time and creating a process by which the markets will be allowed to recover

Michael Williams, Tocqueville Asset Management

However, the Dow Jones ended up 0.18%, or 21.16 points, at 11,972.25 after tumbling 194 points at the start of trade as investors took heart from JP Morgan's takeover of Bear Stearns, which was backed by the Federal Reserve.

"Investment banks are getting their heads handed to them, but at the end of the day the Federal Reserve is stepping up every time and creating a process by which the markets will be allowed to recover," said Michael Williams at Tocqueville Asset Management in New York.

The broader Standard & Poor's 500 Index fell 0.90%, while the Nasdaq Composite Index, dominated by technology stocks, closed down 1.6%.

Earlier, France's Cac 40 closed down 3.5% and Frankfurt's Dax tumbled 4.1%.

Bush urges calm

US President George Bush attempted to reassure investors on Monday.

"We are in challenging times," Mr Bush said at a press conference.

But he added that the US authorities were "on top of the situation" but "when need be, will act decisively, in a way that continues to bring order to the financial markets."

"In the long run, our economy is going to be fine".

Under scrutiny after the steep fall in its share price, Lehman Brothers also attempted to reassure investors on Monday about its financial situation.

"Our liquidity position has been and continues to be very strong," Lehman Brothers said in a statement.

Asian stocks also fell, with Tokyo's Nikkei average closing 3.7% lower and Hong Kong's Hang Seng slumping 5.2%.

In Mumbai, the Sensex was down 6.5%.

Central bank help

Central banks have been trying to restore some confidence to the financial system.

On Sunday, the US Federal Reserve reduced its discount rate - the interest rate at which it lends to commercial banks - from 3.5% to 3.25% and offered to buy up the assets of other troubled banks.

The Fed is expected to lower its general interest rates on Tuesday by up to 1%.

To ease fears in the UK, the Bank of England on Monday made an extra £5bn ($10bn) available for UK banks to borrow.

Banks scrambled to access the funds and the Bank of England's offer was nearly five times over-subscribed.

"Given the money market conditions this morning, the situation is very serious and represents a new and unwanted twist to the credit squeeze," said Philip Shaw, chief economist at Investec.

"Five billion pounds represents a substantial sum."

Overnight inter-bank dollar lending rates have risen sharply in London to levels not seen since 11 September 2001, reflecting growing unease about the health of the US financial system.

The investment bank was forced to seek emergency funding from the US Federal Reserve last week and was sold over the weekend to JP Morgan Chase for a tiny fraction of its earlier value.

The bank got into trouble when other banks refused to lend it money over fears that it had too many bad debts due to the sub-prime mortgage crisis.

The Fed has agreed to take over up to $30bn of Bear Stearns' assets, removing the risk for JP Morgan.

The quick sale failed to calm investors' nerves who, this week, will receive earnings announcements from other big US investment banks, including Lehman Brothers, Goldman Sachs and Morgan Stanley.

"There is persistent credit uncertainty. Market players have been repeatedly let down which shows the sub-prime mortgage problems are so deep-rooted," said Atsuji Ohara, global strategist at Shinko Securities in Tokyo.

"Just buying an investment bank does not solve the problem," he added.

Dollar woes

Worries about the credit crisis and the health of the banking industry also undermined the dollar.

It fell to 95.72 yen, its lowest level in more than 12 years. The euro hit a record against the dollar, buying $1.5903.

The weak dollar boosted commodities, with oil rising to another record, light sweet crude traded at $111.80 before falling back.

The dollar is also falling because of the expectation that the US Fed will cut interest rates further, making it less attractive to hold dollars as opposed to other currencies.
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Morph · Posted: Mon Mar 17, 2008 9:19 pm Post subject:

i'm not great on economics. Is a recession caused by shareholder worries or is it something deeper?
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Red Justice · Posted: Mon Mar 17, 2008 9:45 pm Post subject:

Think the reality it is the credit boom and the personal borrowing that has been going on the bubble burst. I do not understand markets and admire Alex Salmond because he understands both economics and politics. I just don't like high interest rates or inflation. I like the idea of investment but not every one can have the resources, the capitalists don't always make it easy for the poorer classes to get through an economic crisis.
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Cymro · Posted: Tue Mar 18, 2008 4:51 pm Post subject:

It does seem quite frightening and interesting the same time. Never really payed attention to the financial markets before. I'm even fancing taking a course in Business Studies or Economics as a result of all whats going on.

Agree that it's wrong that economy seems to be built on so much debt. I'm guilty of falling into the debt trap over the last few years myself. 2007 was very difficult in terms of debts so am ensuring 2008 is a lot nicer. Have cleared all my credit cards, and am putting some extra money away to pay off a personal loan a bit sooner. My fixed rate mortgage comes to an end in 18 months so will be keeping a closer luck over the next year or so. Have increased my payments slightly to try and pay off my equity a bit more as we had a 100% mortgage. With prices coming down too I don't want to be with negative equity if I can help it.

Think it's a good thing that banks are more fussy about where the lend their money

Reluctant Hero · Posted: Sat Mar 22, 2008 9:50 pm Post subject:

The official definition of a recession is a period of two or more successive quarters where the country's Gross Domestic Product (GDP) falls.

Gross Domestic Product is defined as Consumption + Gross Investment + Govt Spending + Exports - Imports.

So if people stop buying things in the shops, then consumption falls as does GDP, then companies start making people redundant, profits aren't as big as expected therefore the share value falls and pensions/endowments don't do as well as people thought and we have a pretty grim situation.
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Scott2006 · Posted: Sun Mar 23, 2008 6:17 am Post subject:

http://www.sundayherald.com/news/...dnews/display.var.2140424.0.0.php
THE RED MENACE
The world's markets gambled on financial alchemy. They lost.
By Iain MacWhirter
COME BACK Karl Marx, all is forgiven. Just when everyone thought that the German philosopher's critique of capitalism had been buried with the Soviet Union, suddenly capitalism reverts to type. It has laid a colossal, global egg and plunged the world economy into precisely the kind of crisis he forecast.
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(Iain MacWhirter puts forward a view that sees one man's experience of a world over 140 years ago as relevant to today where ease of access to knowledge and 140 years of advances is seemingly under threat... surely it would be under threat by better economists with a realistic world view of 2008 and a view as to how events will unfold in the mid to long term?)
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Karl Marx visited the British Library to collect the relevant data to produce his critique of the capitalist system.
The events of 1848 or any year where a malfunctioning governmental system fails to feed the starving or allow able and forward thinking people to earn an honest wage will grind to a halt and perhaps be overthrown by idealists.
Idealists need to be pragmatic when in government and lose the overt idealism - Mr G Brown has been on such a journey.
Mr Mugabe and his brand of socialism in the vein of North Korea one of allies is in much greater danger of collapse.
Mr Ben Bernanke is an economist who well understands the conditions of October 1929 and the strength and weakness of being in a currency attached to the gold standard.
Richard Nixon believed his economy in 1971 was large enough to sustain the value of its currency as a creator of wealth and removed the connection to the gold standard.
The top economists have access to data and data sets of information on the competeing models of the areas of the economy and the differing variables in those cycles - millions and billions of individual pieces of information more relevant than Marx in todays vibrant economy.
The intellectual economy will not suffer, the aids to Ben Bernanke will seek to utilise the best practise and with the greatest degree of forethought of how individuals and individuals firms should act when inflation hits the United States and other areas of the world. The world economy needs stability and growth that can turn todays cash at the government level into real assets over a 25 year time scale. Japan in the 1980s decided to fight the inflationary pressures by having low interest rates after their economy was over-valued previously in world terms. A few years of high inflation that Japan endured when growing fast in the 1960s had succeeded in the ruling cliques in politics and business endeavouring to avoid that repetition.
The British economy can best fight inflation when it comes by continuing to follow policies which outgrow the real inflation level at that time.
A balanced series of judgements of when to intervene to stop unwarranted abuses rising to affect agents of the macroeconomy is fully justifiable and beneficial.
Banks should plan to be around solving small liquidity cash flow transactions at the microeconomic level for the next many many years or so. They may not have a 25 year plan - but they most certainly can see living standards rise overall and as the capitalist system swaps knowledge and applied local understandings with long term investments in 'the means of production' of everything from housing stock and all the services and sectors of the economy in the real world in the years 2008 to 2032.
Inflation can be predicted a few months before it actually arrives - there any many factors which central government and its bankers will use to manage this phenomena that were never possible in 1929-1933 period and the slow period of marginal recovery before the second world war.
The UK needs accurate information gathering and politicians and business leaders helping to restore confidence in the underlying economy and retaining a competitive edge that will see real living standards improve year on year in real terms with a manageable amount of moderate inflation caused by counteracting the speculative players in mainly overseas trading partners.

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http://www.sundayherald.com/oped/...r_disappearing_act_from_brown.php
Another crisis, another disappearing act from Brown
Iain Macwhirter on Gordon Brown
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Gordon Brown knows whats going on at the macroeconomic level - $50 thousand billion dollars in the world economy but $750 thousand billion dollars in the economic bubble propped up by that $50 thousand billion seemingly swirling around at all levels of the lower part of the macro picture or the highest level of the microeconomic overview.
Inflation is almost impossible to avoid, so why should any politician that understands how the big picture seems to fit together undermine hard money and assets by saying anything at all?
The rich can ride out any recession and be only marginally affected.
If the world economy grows at 10% a year, which can only happen if a long recession is avoided, then most of the $750 thousand billion will become tangible assets in the next 25 years or so. Gordon Brown is only responsible for the next 2 years and by getting the economy to grow faster than inflation he will be doing as much as his level of involvement will allow him.

Iain MacWhirter quotes a few opinion polls but if you step back and see a longer trend - Labour look as if they will be 1 or 2 % lower than at the last election when the next vote comes around. The Lib Dems have a new leader who still has to shine - if he fails to impress the voters the LDems could lose 2 or 3%. The Tories are a rural and rich areas party - there are more rich but fewer rural areas as towns and cities swell in size - perhaps overall they can resonably expect to gain 3 or 4% - what might hold the Tories back is the view that economically Labour and Conservatives are much too close. Gordon Brown's Party might as well be called the Red Tory Party as socialism is seen as a poor brand just now or as a failed creed.
Poetry is a Romantic take on Reality.
I'd prefer Gordon Brown to read Machiavelli and quote from 'The Prince' rather than a form of words that sounds good but signifies nothing (a slight nod to Will Shake Spear).
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Hazel · Nationalist Joined: 06 Dec 2005 Posts: 153

It is hard for a totally unlettered-in-economics person to put in words but we see what we see. I call it "trickle-down control". The top brass are in total control So long as we are willing to spend, they'll raise prices and keep calling us in. That glorious housing boom is a first-rate example. Anyone who has lived fifty years should have seen what would come and it did.

Prices? First it was oil for the oil barons. Now it is food. Eggs alone have risen from less than $1 to over $2 per dozen in the last month. They tell us it is a shortage of grain. But, why is there a shortage of grain? For the same same reason there is a shortage of oil. And, it isn't Planet Earth doing us in. Too much oil, too much grain, lower prices which mean less profit for the companies which mean lower bonuses for the CEOs.

The other side of the coin? They'll pay as little as they can and, if they find a new employee who is willing to take less than you are asking, you are out the door. Example. How many companies have moved from America to Scotland where they paid less and have now moved on from Scotland to another country where they can pay still less?

All right. I admitted I know too little about it; so, I'll stop but this first. Someone mentioned interest rates. I suppose lower (but not too low) interest rates are better for the overall economy but please do not forget that some people depend on those interest rates to buy food and pay rent or whatever. Not all who save are millionaires. Also, when the Fed does raise rates, banks very often do not pass the increase on to their customers.

Now, I'll go and let someone intelligent explain it. Hazel
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Reluctant Hero · Posted: Thu Apr 10, 2008 8:46 pm Post subject:

BoE cut interest rates to 5% today, but some mortgage lenders have raised their rates or withdrawn products.

http://news.bbc.co.uk/1/hi/business/7340142.stm

House prices have fallen by 2.5% in March across the UK, yet they continue to rise in Scotland.

http://news.bbc.co.uk/1/hi/business/7336010.stm

Rocky times ahead...
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Reluctant Hero · Posted: Sat Apr 12, 2008 8:01 pm Post subject:

The Herald is reporting that mortgage lending may be cut by half next year.....

http://www.theherald.co.uk/news/n...50bn_fall_in_mortgage_lending.php

No more 100% mortgages, no more 5 times your salary mortgages etc etc. Unless house prices come down, many people aren't going to be able to buy their own home.
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Reluctant Hero · Posted: Sat Apr 12, 2008 8:46 pm Post subject:

An absolutely excellent article by Iain MacWhirter in tomorrow's Sunday Herlad.

http://www.sundayherald.com/oped/...play.var.2192876.0.0.php#comments
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Reluctant Hero · Posted: Sat Jun 07, 2008 9:57 pm Post subject:

We face the deepest slump since 1990 according to the Organisation for Economic Co-operation and Development.

http://www.telegraph.co.uk/news/2...es-deepest-slump-since-1990s.html
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Reluctant Hero · Posted: Sat Jun 21, 2008 9:25 pm Post subject:

Another great article in the Herald tomorrow from Iain MacWhirter

http://www.sundayherald.com/oped/opinion/display.var.2356746.0.0.php
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Reluctant Hero · Posted: Fri Jul 11, 2008 11:18 pm Post subject:

The stock market entered bear territory yesterday. It is not looking good.

http://www.theherald.co.uk/news/n...of_Israeli_air_attack_on_Iran.php
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RWD · Posted: Wed Jul 23, 2008 12:57 pm Post subject:

there is nothing like a recession to change a government. BYE BYE Mr Brown.
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Lord Pitsligo · Posted: Sat Jul 26, 2008 11:10 pm Post subject: