Okay, because this is important enough to bear repeating...
news.yahoo.com/s/ap/20080915/ap_on_bi_ge/financial_meltdown

Obama called the news "the most serious financial crisis since the Great Depression" of the 1930s.

I was warned of this last winter. God damn it, Matt was right. We're in for a very bad one, folks.

FECK!
( The Resident Loon Not a demographic. Do not measure., Mon 15 Sep 2008, 19:27, 23 replies, latest was 16 years ago)

I agree
FECK

The last recession was a bump in the road. House prices are falling like acid rain all over the UK. It's only going to get worse.
(TheWeeWitch hasn't been here much recently .., Mon 15 Sep 2008, 19:31, Reply)

It's going to be a bumpy ride folks.
*sings*

Things can only get better
Can only get better
For me and you.


*hopes*
( girlinthehole, Mon 15 Sep 2008, 19:33, Reply)

feck, arse and other bad words
I really, really need someone to buy my house.
(happylittletulip helpless and delicious, Mon 15 Sep 2008, 19:36, Reply)

I'll repeat what I was told last winter.
Currently around the globe our food supply is stretched as thin as it can go, and our financial system is built primarily on credit and number juggling. We have a very large and frail house of cards built up here. This is not just true of the US and England- the ramifications of this span the entire globe.

I was told that if we were extremely lucky it might hold together until the November elections, but it would likely happen before then. The entire fucking global economy is on the edge of collapse. If it happens it will be far worse than 1929.

I said little about it at the time as I didn't want to be Chicken Little, but now it looks like it's happening.

Get ready, folks, it's gonna get ugly.
( The Resident Loon Not a demographic. Do not measure., Mon 15 Sep 2008, 19:38, Reply)

Sorry, no.
I've been reading the financial columns today, and am simply scared. Matt predicted all of this in January, as I recall, and because it sounded so fantastic I let it ride in the back of my mind.

And now, eight months later, all of his predictions have started coming true. His advice at the time was "Learn to grow vegetables and buy a gun."

Feck.
( The Resident Loon Not a demographic. Do not measure., Mon 15 Sep 2008, 19:48, Reply)

I work
for my sins, for one of the largest financial companies in the world. The type with an office in every corner of the globe.

Senior management are shitting themselves. Quietly, at the moment, but probably not for long ....
(TheWeeWitch hasn't been here much recently .., Mon 15 Sep 2008, 19:52, Reply)

Absolutely Frigging Spot On
As I have several guns, lots of ammunition, and 30 days rations stashed, I can gleefully watch the whole edifice come down.

Actually, I can't.

Thanks, US Sub-Prime tosspots. Thanks, pinstriped dickheads with multi-squillion bonuses for getting into those stupid fucking thingmies (non -collateralised whatsits or whatever), thanks Northern Rock for adopting a business plan driven by the carpetbaggers who persuaded you to de-mutualise and whip out the big fucking lard-spoon, thanks for adopting a business plan that involved you lending money for less than you could get it, thanks Broon and Daaahling for bailing your incompetent arses out, as NR has been a long time banker to the unions, thanks for flogging off the gold reserves when the market was at the lowest in the last 50 years, thanks for for attaching ourselves to Dubya's teatowel holder on the hopes of some oil revenue, graaaaararrrrrhhh.

I'm going out tomorrow to buy some fresh cartridges for SWMBO.

But the MPs, diversity advisors, professional trough-guzzlers, activists, politicians, political senior police officers et al will still be here.

"Always look on the bright side of life, ta dum, ta dum, ta dum......"
(osok Rebel without a clue, Mon 15 Sep 2008, 20:28, Reply)

Armed to the TEETH
The potential for a global food crisis is relatively low. Seriously. The current crop yields in the US are strong, the corn crop in particular having an impressive year.

We are actually OVER producing food items like corn and soy because of their convertability to altenative fuels.

The economic crisis is bad, sure. But honestly, if I remember correctly, chicken littles were running around in Sept/Oct of 1999 expecting the world financial situation to collapse and for chaos to erupt in the streets.

It didnt...and while all the talking heads (including Obama...please? Seriously? Loon?! What does HE know? He was a "Community Organizer!") on television are pushing the panic buttons, frankly, it's not the same world it was in the 1920's.

As for me? I AM armed to the Teeth. But that's not specifically because of impending financial crisis. It's because it just makes sense!

Oh, and I have about 6 months of food (rice, beans, fruits and veg and MRE's) just in case...but frankly, MY greatest fear is not that another 100 banks fail. No. MY Greatest Fear is that some radical Islamist gets a suitcase nuke into Baltimore Harbor and touches it off.
( Citadel Because the world needs less morons, Mon 15 Sep 2008, 21:41, Reply)

yeah, I know.
I didn't quote him because he's an expert- though he is a very sharp guy. It just sounded eerily like what Matt said this winter- his exact words were "It will make 1929 look like a walk in the park. Start growing vegetables and stock up on ammo."

Matt is someone whose job is to travel around the world and inspect conditions on the ground and find out financial stuff for himself rather than relying on official figures. He's someone I respect. He's called it exactly so far. If he tells me that it's a global crisis, I believe him.

That said, I agree that radical fundies are an even scarier threat. I'm not as much worried about a suitcase nuke as I am about EMP bombs taking out our power and communications networks. As they can be built using high explosives and materials from Lowe's, I consider that to be one of the biggest threats we face- they could paralyze the country without killing anyone or hijacking airplanes.

Just between us, I really hope that Matt turns out to be wrong and that I'm being scared over nothing. I'd love nothing better than to be proven wrong about this.
( The Resident Loon Not a demographic. Do not measure., Mon 15 Sep 2008, 21:57, Reply)

Hmmmm
I disagree.

Why?

Well the net result of eleven years of financial deregulation and credit craziness has resulted in a 350-400% increase in property prices, yet only a 50% increase in average salaries.

The net result is as obvious as the credit fuelled boom of the twenties - as soon as credit dries up the whole market readjusts.

A lot of people have taken home loans they cannot hope to repay in adverse economic conditions, banks have been hugely irresponsible and governments have actively abetted the situation - yes Gordon Brown's economic stewardship is partly to blame too. He's "adjusted" inflation to fit the targets by manipulation of the official statistics which are used to record the baseline inflation figure - namely he's excluded the goods and services he didn't like the look of from the official inflation rate.

Back to those banks. They've been buying and selling credit and loans left right and centre. Bad debts have simply been "sold" to someone else to pick up the tab.

Right now the housing market is flat because the banks have run out of money to loan and homebuyers - including me - are being forced to save longer to pay for a deposit. Meanwhile, inflation and the cost of living has been hiked thanks to a somewhat clandestine devaluation of the pound about eighteen months ago - Thank you Gordon - and of course taxes will be hiked through the roof in the next couple of years to bail a profligate government out of trouble. Don't forget that governments are also borrowed up to the hilt.

The housing marketplace is simply readjusting itself due to supply and demand. Less money in the system equals less demand for homes, which brings down the asking price.

Otherwise, the UK is in for a rough ride. High taxes for the next three years will lengthen any recession and will stifle early signs of growth. More money going to the government means less money in people's pockets which would otherwise be put into the economy.

The right spending policy will make some swingeing cuts in public spending. Before anyone asks me about "schools and hospitals" it's well worth remembering that public spending is at record levels in the UK. Do we need ID cards? Do we need the 2012 Olympics? Do we need more nuclear submarines? Do we need to spend billions on Road Pricing, self imposed energy targets and some reckless public spending policies. I've just saved thirty five billion pounds in one paragraph, no doubt the 64 billion pound QUANGO economy (doubled since 1999) is ripe for axing, for example what is the point of the the British Potato Council and their generous public grant?

Reduced spending means less taxes and more money in consumers pockets.
(Bicycle Repairman "you're also a bit of a wanker", Mon 15 Sep 2008, 22:31, Reply)

*whistles*
*sharpens knife*

*counts pennies*

*waits for super-cheap houses*
( Cawl, Mon 15 Sep 2008, 23:38, Reply)

Well, I vote for myself as King Of Wessex
Because... Well... I don't know.
( Cawl, Mon 15 Sep 2008, 23:43, Reply)

Yeah!
And we got a reply button at the bottom.
That's good, I guess, even though I liked it the other way.
( Cawl, Mon 15 Sep 2008, 23:52, Reply)

Actually no.
I need to go to sleep, before the Espresso Challenge takes over my life.
( Cawl, Mon 15 Sep 2008, 23:56, Reply)

Night!
*goes to bed*
( Cawl, Mon 15 Sep 2008, 23:59, Reply)

This
new layout is off the chain
( SuperWeasel slightly better than the average weasel, Tue 16 Sep 2008, 1:13, Reply)

Well...
I spent 5.5 years as an investment banker. And while the present financial crisis is, well, bad, I dont think it's as bad as your mate Matt is saying.

Frankly, one of the MAIN reasons I am no longer working in the financial markets is precisely because of the .com bubble and the entry into the financial markets of uneducated individual investors (i.e. day traders). I SAW that with the 'unbridled' and uneducated enthusiasm of Joe Sixpack was going to significantly weaken the markets and that over-exuberance was going to further weaken the overall market.

Now, I am NOT displacing the blame from the IDIOT CEO's that loaned money at near loss, simply to book what appeared to be greater profits for their organization (a la Enron) in teh hopes of expanding the size and value of their golden parachutes as the rest of us sat on a plane with 3 of its 4 engines not only on fire, but mere seconds from an explosion.

This is a correction. One of the reasons that 1929 happened was because there was even LESS (if you can believe it) oversight on the financial markets. That loveable scamp, Joe Sixpack Sr. was borrowing money to buy on margin and wasnt in a position, eventually, to afford the eventual loss. This contributed to a rapidly decreasing value in stocks across the board. Add to that the subsequent panic selling and a 'problem' turns into a 'NIGHTMARE!'

We've got trading curbs in place. We've got a government (globally) that can help prop things up and slow down the panic enough that calmer heads can prevail.

At least that's MY outlook on things. BUt then what the hell do I know? I mean, I DID have my frontal lobe removed when I became a Marine. :)

And for the record: once it DOES crash, if that is what is coming, BUY like a DRUNKEN SAILOR! Take ALL your cash and gold and plunk it down on half decent stocks because, at the end of the day, a 'correction' is just the bottom of a trough...and those that know your economics charts know, a trough is where you Buy Low!

You'll be set for YOUR life and your kids! :)

So dont sweat it Loon. If the shit hits the fan, head up to Annapolis and I will provide you protection in return for your working a piece of my property...we will call it a fief and I shall henceforth refer to you as Vassal Loon.

Deal? :)

Sic Semper Tyrannis!

Citadel/Sean
( Citadel Because the world needs less morons, Tue 16 Sep 2008, 6:54, Reply)

Oh dear..........
Apologies for this but "WARNING, WARNING WILL ROBINSON, RANT ALERT! RANT ALERT".

So one of the main players in the smoke and mirrors of the financial industry has been refused government backing.

Good.

I don't see any other gambling organisation crying over it's collective spilt milk. There's only so long that a parasitic organism can live off a host, this particular one's time is done. There's only so many parasites that an organism can support and we've reached that point.

Good.

Before I get flamed, show me the value that they add. Show me that they pay ALL the tax they should. Justify to me their bonuses they get even when they fuck up. THEN I might have some sympathy. A it is I have none at all.


Rant over
(Captain Placid 24/7 ball gags, brownie mix and clown porn, Tue 16 Sep 2008, 9:44, Reply)

As a Brit I say we invade the nearest country with some half decent resources.

Perhaps Sweden or Norway....
( whenanimalsattackhumans clad in global hypercolour, Tue 16 Sep 2008, 11:27, Reply)

The Captain is right
(and to clarify the points in my previous post for Al)

The market will correct itself, some people have made themselves rich and have gotten their fingers burned.

I'll give an example:

About four years ago a consortium bought a plot of land a few hundred yards from Colchester's main railway station. A series of blocks containing luxury two bedroom flats were built and investors were all told that these flats would be rented for £1000 a month - at the time the average rent in Colchester was circa £400p/m.

Investors fuelled by greed jumped onboard, borrowed to the hilt and waited for the first time buyers priced out of the market "executives" to sign up.

There were unsurprisingly very few takers and the investors all cried "foul" in the local papers as several were declared bankrupt.

Karma.

This happened two years ago. The writing has been on the wall for this current credit/housing bubble for some time.

If the next government, be they Labour, Conservative or Liberal has any sense whatsoever they'll impose restrictions on the housing market to ensure that borrowing remains sustainable. They'll also be forced to slash spending and as a result taxes will fall thus ensuring that consumers have more spending money in their pockets. We'll see our economy growing again within a couple of years.

I remain confident, provided that we have a sea change in political attitude towards both spending and borrowing. The blame for the current mess lies with both banks and central government - the latter has actively worked to encourage inflated housing costs as an alternative to having to fund a pensions black hole in thirty years time.
(Bicycle Repairman "you're also a bit of a wanker", Tue 16 Sep 2008, 12:17, Reply)

I thank you for your reassurances.
It's my hope that Matt is panicking, and that this will be more of a correction than a crash. I really have no way of objectively knowing for myself- I'm not plugged into the financial world, nor have I traveled around the globe to look for myself.

Matt is a very sharp guy and extremely well informed- I wouldn't want to go into more detail about him in a public forum for obvious reasons, but I will say that his information is far better than mine, and his estimates of what will happen are certainly better informed than mine. That said, he is in fact human and prone to errors of judgment like the rest of us.

In short, I really hope that the Captain and Citadel and PJM are correct. Right about now things are already going mad enough in my life that this would be just the fucking cherry on top of the shit cake.
( The Resident Loon Not a demographic. Do not measure., Tue 16 Sep 2008, 13:00, Reply)

The housing market
I'd be fascinated to know how things got so overpriced.
Case in point.
When the estate on which I live (and on which I was born)was built, it was specifically for the skilled workers of the fair city of Coventry. You could always tell how much an average house was worth by looking in the local rag at the "Toolroom average" figures, a weekly reported average of what a toolmaker was paid in the many engineering factories that once graced Coventry. Easy maths, the houses were worth about twice the toolroom yearly salary rate, the semi's a bit more, the two bedroomed terraced a bit less.

The same houses are still there. They are no bigger or better, they haven't suddenly gained extra land in their gardens, they've not been gold plated and studded in diamonds yet, by the same maths I used when I first got my house (I no longer have it, divorce y'know) I'd have to be earning £75k - £90k to buy one now.

How did this happen?
(Captain Placid 24/7 ball gags, brownie mix and clown porn, Tue 16 Sep 2008, 15:11, Reply)

Well, the market's coming back up again today
It's been a rollercoaster for the last few weeks anyway, and although yesterday my stocks were at their lowest I'm not too worried. Yet.
( Batshitmentalist is sane for once, Tue 16 Sep 2008, 17:34, Reply)