Holy Shit the US economy is fucked

[C.I.A.]

Wall Street's benchmark Dow index has suffered its worst single-day points hit ever after a $860 billion ($US700 billion) financial bailout package failed to pass the US House of Representatives.

The Dow lost about 778 points, or 6.98%, posting its biggest daily percentage decline since the October 1987 stock market crash, while the benchmark S&P 500 also had its worst day in 21 years after the House sent the bailout plan to defeat by a vote of 228 to 205.

[same o]

this is what de-regulating the finance industry does.

the 700 million dollar package would have just increased inflation and been a band aid
for aout 10 years. when it would all just happen again

[gnat]

completely buggered

good time to purchase online however

[Lil MiSbreaks]

AIG's share offer comes out to its employees today.


Im tempted.

[mrj]

If Pro is the opposite of Con, whats the opposite of Progress?

Congress!

[Lil MiSbreaks]

[mrj]

whats lol is the banning of shorting. lot of money to be made today shorting the asx 200 otherwise.

gonna be a day of pain on the asx. watch the financials get battered. energy will continue to cop it prolly.

index is at 4800. any guesses on where it will end up. we lost 150 points yest so you would have to say maybe at least 300 today? 4500? thats low kiddies.

[youthful_implants]

I think its just a matter of time before a better, and more appropriate package is ratified and the loss to the US market in the time that it takes for that to happen is anyone's guess and hopefully not too globally pervasive.

I know that in the UK they've put a freeze on shortselling too I think its a healthy move to stabilse things. Certainly will promote a less cynical environment.

[FoundationStepper]

what is shortselling?

[youthful_implants]

from Wiki, which explains it better than I will.

In finance, short selling or "shorting" is the practice of selling a financial instrument the seller does not own, in the hope of repurchasing it later at a lower price. Short-sellers attempt to profit from an expected decline in the price of a security, such as a stock or a bond, in contrast to the ordinary investment practice, where an investor "goes long" by purchasing a security in the hope the price will rise. Typically, the short-seller will "borrow" or "rent" the securities to be sold, and later repurchase identical securities for return to the lender. If the security price falls as expected, the short-seller profits from having sold the borrowed securities for more than he later pays for them but if the security price rises, the short seller loses by having to pay more for them than the price at which he sold them. The practice is risky in that prices may rise indefinitely, even beyond the net worth of the short seller. The act of repurchasing is known as "closing" a position.

The term "short selling" or "being short" is often also used as a blanket term for strategies that allow an investor to gain from the decline in price of a security. Those strategies include buying options known as puts. A put option consists of the right to sell an asset at a given price; thus the owner of the option benefits when the market price of the asset falls. Similarly, a short position in a futures contract, or to be short on a futures contract, means the holder of the position has an obligation to sell the underlying asset at a later date, to close out the position.

What it doesn't include is that traders spread gossip and lies to try and bolster their shortsales which can critically undermine the market.

[FoundationStepper]

hmmm so the trader enters into an agreement with another party to a later exchange/repurchase? - and legislation against this would target/constrain this type of agreement right?

[youthful_implants]

yeah its a very simple regulatory legislation that is in practice almost impossible to police. but its an ideological move that has the right intention.

[Hardy]

It'll all work out in the end. It's not even real money anyway.

[youthful_implants]

It'll all work out in the end. It's not even real money anyway.

its real debt actually, as opposed to real money.

something's got to give.

[C.I.A.]

It'll all work out in the end. It's not even real money anyway.

That's also the issue that has caused the recent clusterfuck in financials. TBH, I'm kinda glad that the bail-out didn't get passed... that would have pretty much put a whole pile of bad debt on top of the swaying jenga tower that is the current liquidity (is that even a word lol?) crisis.

Now people actually have to bite the bullet and accept that easy credit is over for the time being.

[Hardy]

It'll all work out in the end. It's not even real money anyway.

That's also the issue that has caused the recent clusterfuck in financials. TBH, I'm kinda glad that the bail-out didn't get passed... that would have pretty much put a whole pile of bad debt on top of the swaying jenga tower that is the current liquidity (is that even a word lol?) crisis.

Now people actually have to bite the bullet and accept that easy credit is over for the time being.

Whilst this whole situation is bad, it's hardly the worst that's happened. The 1987 crashes were far worse, but it bounced back eventually without the world collapsing. In the long term, the bail-out not being passed will come to be a blessing, and perhaps teach a lot of people that they are accountable for their actions.

Of course, none of this will matter once they start up the Large Hadron Collider...

[youthful_implants]

They have started it!

[Hardy]

They have started it!

Then why the fuck aren't I dead? My tax dollars paid for a doomsday device, and I DEMAND satisfaction!

[DBoy]

They flew a few fuses or something during testing. They will not be firing the protons at each other till mid november now. Probably a day or two after the US elections. :sinister:

[apophenian]

^^ Yep, it's down till next spring (in Europe) http://en.wikipedia.org/wiki/Large_Hadr ... and_delays

Hmmm suddenly I am a bit nervous about leaving my nice secure job...

[Hardy]

We're here to discuss the conomy, not LHC. Please don't bring it up here again.

[same o]

It'll all work out in the end. It's not even real money anyway.

That's also the issue that has caused the recent clusterfuck in financials. TBH, I'm kinda glad that the bail-out didn't get passed... that would have pretty much put a whole pile of bad debt on top of the swaying jenga tower that is the current liquidity (is that even a word lol?) crisis.

Now people actually have to bite the bullet and accept that easy credit is over for the time being.

I think the whole idea of giving them 700 billion dollars is stupid. give them more money so they can do the same thing.
They need to start to regulate the industry.
Also wont giving them the 700 billion dollars increase inflation beyond the gdp? which in my thinking would be quite bad.
good time to buy shares tho, origan energy and geo dynamics ftw. i actually so far have been 1000.00 ahead since this whole crash. so i am quite happy with my investments.
I recon retail would be the worst thing to invest in as they are talking about not letting americans use there credit cards ny more to reduce debt.

:endrant:

[youthful_implants]

They have started it!

Then why the fuck aren't I dead? My tax dollars paid for a doomsday device, and I DEMAND satisfaction!

you are this is a dream.

[breaksRbest]

Why don't we just print more money?"

[ghetto kitty]

im, so glad im here right now, not there.

its all sinister.

[ADD_Boy]

If it hits. It will hit us all.

RBA seems fairly confidant that we're not overly exposed though

http://www.rba.gov.au/PublicationsAndRe ... _0908.html

Full paper

http://www.rba.gov.au/PublicationsAndRe ... w_0908.pdf

[saintberry]

What they should do with the 700billion is setup a fund to buy all the houses off the people who are in risk of foreclosure and then give them back to them. Literally. These people will then have an asset and more disposable income, there will be a stronger housing market as more people will be living in homes rather than trying to sell them and the investment banks that started the fucking issue may have a chance to survive as they won't have all this liquidity locked up in houses they can't give away.

But that will never happen in the US as could be considered a socialist idea. Funny considering that is was deregulation that go them into the mess in the first place... stick with capitalism guys, it's working great for you I hear.

[lynt]

Just came back from the bank. We were talking about the crash, and the lady behind the counter told me she lost her entire super. Her colleague lost $200,000 in super in the past fortnight as well. Insane.

[Hardy]

Just came back from the bank. We were talking about the crash, and the lady behind the counter told me she lost her entire super. Her colleague lost $200,000 in super in the past fortnight as well. Insane.

Then they are complete stoopids.

[mrj]

i'm not sure i agree with that at all Saintberry. buy up the houses using taxpayers money and then give them to people who were foolish enough to take on debt that they couldn't service? isn't that just rewarding stupidity and mismanagement?

plus a sudden influx of 100% free houses in the economy would kill property prices everywhere even more than what has happened already = stagflation. Declining asset prices + inflation.

The bailout wasn't too badly structured, the government buys and holds the assets thus securing them, and they are held for the benefit of the taxpayer until they can be sold at a later date (although who knows who will ever buy them). The write downs stop and banks stop falling over.

In the end I'm split on the whole thing. I agree that its stupid to try and solve problem that was created by credit with more credit.

The captialist/free market economist in me wants interfering governments out of this, and for the correction to happen and happen early. But the thing about exogenous shocks is you have to be sure that the whole system can survive the shock itself, and I'm not sure thats the case here, in which instance maybe a soft landing courtesy of a bailout package is the best option.

After all Warren Buffet has thrown himself behind it and one thing I am sure of in this life is that Buffet is a man that has more money than me and knows more about money than me.

my 2c.

[DBoy]

Sorry MRJ you care going to have to write some more, your 2c is now only worth 1c.

[same o]

Just came back from the bank. We were talking about the crash, and the lady behind the counter told me she lost her entire super. Her colleague lost $200,000 in super in the past fortnight as well. Insane.

Then they are complete stoopids.

yeah fully, dont there companies envoke slip when the market is volitile.

ohh and hardy u cunts lost some of mi money

hahahaha

[Hardy]

Just came back from the bank. We were talking about the crash, and the lady behind the counter told me she lost her entire super. Her colleague lost $200,000 in super in the past fortnight as well. Insane.

Then they are complete stoopids.

ohh and hardy u cunts lost some of mi money

hahahaha

Ha! So i've heard! Considering what's happened, we've still done fucking well.

[Direkt]

good time to purchase online however

Our exchange rate isn't that flash though is it?

Hovering around 79c, was much better a couple of months back.

[lynt]

Sorry MRJ you care going to have to write some more, your 2c is now only worth 1c.

[a1studmuffin]

x2

[almax]

i was playing a pick up game of basketball down at Prahran the other week and one guy i was playing against was a trader, he was telling me that they just need to let the housing market crash and that they were protecting some big boys in Asia or something, most of it went over my head, he gave me this website to read up on it, but i havent bothered yet http://www.europac.net/

[huge]

good time to purchase online however

Our exchange rate isn't that flash though is it?

Hovering around 79c, was much better a couple of months back.

good for me with extra income coming in USD hah.

[Hardy]

Sorry MRJ you care going to have to write some more, your 2c is now only worth 1c.

Gold son!

[same o]

Then they are complete stoopids.

ohh and hardy u cunts lost some of mi money

hahahaha

Ha! So i've heard! Considering what's happened, we've still done fucking well.

yeah u guys havnt gone to bad.

i know of people who have gone alot worse than i

[ADD_Boy]

GOLD Dboy !!! GOLD!!

[mrj]

lolz Dboy

[ulyssian]

my superannuation.....

[same o]

my superannuation.....

my advise is dont touch it atm.

as withdrawing will only mean u loose money.
u aint lost the money till u have taken it out innit

[deviant]

i'm not sure i agree with that at all Saintberry. buy up the houses using taxpayers money and then give them to people who were foolish enough to take on debt that they couldn't service? isn't that just rewarding stupidity and mismanagement?

plus a sudden influx of 100% free houses in the economy would kill property prices everywhere even more than what has happened already = stagflation. Declining asset prices + inflation..

there is a middle ground that Australia has used to a great degree of success... it's call the first home owners grant


Which was upped from $7000 to $14000 in 2000 (or 2001 ) which helped us avoid a recession very successfully.

[FoundationStepper]

huh? I thought all it did was artifically inflate housing prices?

[Hardy]

my superannuation.....

my advise is dont touch it atm.

as withdrawing will only mean u loose money.
u aint lost the money till u have taken it out innit

The man speaks truth.

You gotta remember, it's a long term investment. The only people that are going to get fucked over in regards to super are those who are retiring, or those transferring funds to other super companies.

[ulyssian]

wont be doing anything with super. . . Got another 40ish years of watching it go up n down. It was just sad to look at my statement! Bless australian shares not faring to badly at the moment at least and property investment.
I do feel for self managed retirement schemes, especially for those who are nearing the age and investing heavily in high risk options. Silly US.

[ADD_Boy]

Yrp. Hold tight.

buy shares!! everythings so cheap right now.. I'm just deciding what to buy now..

[almax]

lol Russell you fool, surely this has been mistyped, seems too obviously wrong

Russell Crowe's cure for US crisis

Russell Crowe has an Oscar and is co-owner of the Sydney Rabbitohs rugby league team, but maybe his next job should be US treasury secretary.

The New Zealand-born actor announced, during a US TV talkshow appearance, a plan to cure America's financial crisis.

"I have been intently watching the political process," Crowe told talkshow host Jay Leno.

Crowe believes the US government should give each American $US1 million ($1.26 million).

His reasoning is the US has a population of about 300 million, so the $US300 million outlay is a fraction of the $US700 billion financial bailout package rejected by politicians in Washington DC yesterday.

"I was thinking," Crowe said.

"If they want to stimulate the economy and get people spending so they can look after their mortgage ... give everyone $1 million."

Crowe is in the US to promote his new spy thriller with Leonardo DiCaprio and director Ridley Scott, Body of Lies, which opens in Australia on October 9.

The actor is preparing for another film with Scott, Nottingham, based on Robin Hood, and has grown his hair past shoulder length.

"I'm going to play Maid Marion," Crowe, twirling his long hair, told Leno.

Crowe will play the Sheriff of Nottingham and Siena Miller has been cast as Maid Marion.