Popping Bubbles: 2009

[bangladiver]

Originally Posted by Benjy

Surely that's why you would have already agreed an overdraft limit? Its not a limit if you can go over it. They wouldn't let you go over your limit on a credit card.

With a Bank account they can (try) to charge you what they want because they control your bank account, the only people who would think that accidentally going over your limit by a couple of $ buying a pair of socks should entitle them to $35 are the Banks.

I think its wrong as do many, which is why in the UK they are being forced to pay back millions in unfair charges.

we obviously fundamentally disagree

the overdraft and the buffer are as per the terms that are agreed

iirc the unfair charges cases relate more to to the level of fees (i have no problem with the banks profitering on it anyway tbh) rather than anyone actually not knowing a fee is payable for spending money you haven't got and i don't recall anyone's claim being that they shouldn't be charged fees as they didn't keep track of their balance

if i am so dumb i don't know i am enabling the banks to charge me a fee because of the terms of an account i hold with them or i don't know i have no money (or credit) left i shouldn't be allowed out of the house on my own anyway

banks are many things but seems like the blame is misplaced when customers moan about fees

[bangladiver]

Bernard Madoff gets 150 years in prison - Times Online

Madoff 150 years

tho understand his wife was allowed to keep $2.5 mil?
http://dealbook.blogs.nytimes.com/20...oats-and-cars/

is she liable for his legal fees?

[Rex7777]

Originally Posted by bangladiver

Bernard Madoff gets 150 years in prison - Times Online

Madoff 150 years

tho understand his wife was allowed to keep $2.5 mil?

It doesn't make much sense, does it? She keeps $2.5 million of what is probably stolen money, and Madoff's victims are left with not much at all. I guess in certain quarters, $2.5 million is considered pocket change.

[cake]

also - is Madoff going down on his own becasue surely there is no way he could pull a scam off of this size without any help or anyone else being at least suspicious of the scheme

[Dupree00]

If I was one of those who lost their life savings because of MadeOff I would go Kaiser Solzy on their ass. Wives, children, siblings, aunts, uncles, dogs, cats, guppies, etc. 555

[marc26]

Originally Posted by cake

also - is Madoff going down on his own becasue surely there is no way he could pull a scam off of this size without any help or anyone else being at least suspicious of the scheme

well, thats the big thing
he completely stonewalled them and will not cooperate with them in ratting other out
hopefully they end up finding out

[marc26]

Originally Posted by Dupree00

If I was one of those who lost their life savings because of MadeOff I would go Kaiser Solzy on their ass. Wives, children, siblings, aunts, uncles, dogs, cats, guppies, etc. 555

it is horrible and i feel bad for them but i find it crazy anybody in this world would have all their money in one place
some people saying they eat dog food and stuff like this now

bizarre

[Dupree00]

Originally Posted by marc26

it is horrible and i feel bad for them but i find it crazy anybody in this world would have all their money in one place
some people saying they eat dog food and stuff like this now

bizarre

Same as the ENRON employees that had all their retirement in one stock. Most people are just lazy and ignorant when it comes to investing. But I think with MadeOff it was also a Jewish trust thing with most of his clients.

[bangladiver]

UK economy shrinks at fastest rate for 50 years - Times Online

[JayBee]

Originally Posted by bangladiver

UK economy shrinks at fastest rate for 50 years - Times Online

And the markets are up 1.1% on the news! 55555.....

[LivinLOS]

China's banks are an accident waiting to happen to every one of us - Telegraph

[11]

That China story is downright frightening - a Chinese banking crisis would be a massive wild card.

UK - for the GBP sensitive types out there might want to think that GBP has had a nice recovery and lock in some nice gains (or ship THB in if needed) - Brown's raiding of all the departmental budgets so he can build some 100k social housing is last gasp of lunacy for his defunct government ... and Cameron expecting riots! (He better be careful what he wishes for).

[JayBee]

Originally Posted by LivinLOS

China's banks are an accident waiting to happen to every one of us - Telegraph

8% growth target! 5555..... Haven't they heard about the recession?

[LivinLOS]

Originally Posted by JayBee

8% growth target! 5555..... Haven't they heard about the recession?

That is chinese recession !!

If they can keep 8% with the flood of people going to the urban cnters they might have major unrest, an with the way its run thats major risky.

[JayBee]

Originally Posted by LivinLOS

That is chinese recession !!

If they can keep 8% with the flood of people going to the urban cnters they might have major unrest, an with the way its run thats major risky.

They are going to have to adapt. Or buy twice as much US debt! 5555.....

8% growth is unsustainable.

[Benjy]

Originally Posted by JayBee

They are going to have to adapt. Or buy twice as much US debt! 5555.....

8% growth is unsustainable.

Well they've had an average of well over 9% for the last 30 years or so, In my opinion its only unsustainable once you are the top of the pile, GDP per capita is still tiny.

[11]

Originally Posted by Benjy

Well they've had an average of well over 9% for the last 30 years or so..

Tad overstating there:

[Benjy]

lol, Do you know how graphs work, Look how steep that growth is from 1980 onwards from 150 or so billion to 18,232 billion in 24 years.

Here is growth in 30 years from 77 to 2007, I believe the average growth would actually be closer to 10% than 9%, but not by much.


1977 7.6
1978 11.7
1979 7.6
1980 7.8
1981 5.2
1982 9.1
1983 10.9
1984 15.2
1985 13.5
1986 8.8
1987 11.6
1988 11.3
1989 4.1
1990 3.8
1991 9.2
1992 14.2
1993 13.5
1994 12.6
1995 10.5
1996 9.6
1997 8.8
1998 7.8
1999 7.1
2000 8.0
2001 8.3
2002 9.1
2003 10.0
2004 10.1
2005 9.9
2006 11.1
2007 11.4

[11]

Originally Posted by Benjy

lol, Do you know how graphs work ...

Probably!

[11]

Another Stirling Crisis Looming?

Sterling Crisis Looms as U.K. Unraveling Points to Budget Cuts - Bloomberg.com

[LivinLOS]

Originally Posted by 11

Another Stirling Crisis Looming?

Sterling Crisis Looms as U.K. Unraveling Points to Budget Cuts - Bloomberg.com

Hope so... Missed the last one

[JayBee]

Originally Posted by Benjy

Well they've had an average of well over 9% for the last 30 years or so, In my opinion its only unsustainable once you are the top of the pile, GDP per capita is still tiny.

I don't believe that this is a case of where the past is necessarily an indicator of the future. During the past 30 years, growth of exports to the Western nations was rampant. Was there any year in which exports dropped evern 1%, let alone by 25% or more, which is likely what we will see this year, unless I miss my guess.

Also, as the GDP numbers get bigger, and bigger, that kind of growth becomes more and more difficult to sustain. Finally, I think a point is reached where only inflation will sustain those kind of numbers on a continuous basis.

[LivinLOS]

Originally Posted by JayBee

Also, as the GDP numbers get bigger, and bigger, that kind of growth becomes more and more difficult to sustain. Finally, I think a point is reached where only inflation will sustain those kind of numbers on a continuous basis.

But isnt that the 'China story' ?? So many of them from such a low level that even a tiny tiny development in living standard powers that engine for a very long time..

Dont confuse that statement with me being a China equity bull tho..

[Benjy]

Originally Posted by JayBee

I don't believe that this is a case of where the past is necessarily an indicator of the future. During the past 30 years, growth of exports to the Western nations was rampant. Was there any year in which exports dropped evern 1%, let alone by 25 or more, which is likely what we will see this year, unless I miss my guess.

Also, as the GDP numbers get bigger, and bigger, that kind of growth becomes more and more difficult to sustain. Finally, I think a point is reached where only inflation will sustain those kind of numbers on a continuous basis.

Internal demand starts taking up the slack as those exported goods eventually become less competetive, for exactly the same reason those goods are more expensive (higher wages, better standard of living etc..).

Its exactly what happened with almost all developed economies, The UK and the USA where also great exporters of products at one time.

Didn't the Chinese market become the largest market in the world for new car purchasers just this year?

I'm sure there will be a blip this year as there have been before, but I'd expect Chinese growth to continue in the 8-9% rate until their GDP per capita almost reaches a similar level to Japan.

And why not? They are among the most astute business people in the world, they work incredibly hard and they have the largest marketplace in the world which is only just in its infancy in regards to consumerism.

Two of the fundamentals that drove the USA economy for so long where exactly those same things.

[11]

Originally Posted by Benjy

And why not?

Because with China at Japanese type levels (per capita) - they would be gobbling though the worlds resources at at rate which the US would nuke them or head into economic & social oblivion.

Don't deny that BRI(I)C economies will continue to relatively outperform US/EU over the next decade or so (but tensions will unescapably escalate).

[JayBee]

Originally Posted by Benjy

Internal demand starts taking up the slack as those exported goods eventually become less competetive, for exactly the same reason those goods are more expensive (higher wages, better standard of living etc..).

The key word there is eventually. I think you will see more than a few bumps along the way as they head down that road.

Originally Posted by Benjy

Its exactly what happened with almost all developed economies, The UK and the USA where also great exporters of products at one time.

And that really is my point. That large sort of growth is associated with the expansion of exports. Once the level of exports contracts, the domestic demand won't be able to pick up the slack at the same rate. The phenomenal growth of Chinese exports has driven the domestic growth for 30 years. I think growth of exports is peaking(in real terms), or, if not that, will certainly dip during this recession. Growth will also be greatly affected by the amount of credit they are willing to extend the US and other Western debtor nations, but they are already expressing concerns about the value of Western debt.

[Benjy]

But China will be (is?) the USA's biggest market? Its not as simple as that.

Once the solar stuff is developed soon by the USA, people have just got to tighten up on recycling etc... (the Chinese are very good at this already)

[11]

Bubble loans are back ... from the US Government!

Fannie, Freddie to Refinance Larger Underwater Loans (Update3) - Bloomberg.com

Fannie Mae and Freddie Mac will begin refinancing mortgages with loan-to-value ratios of as much as 125 percent as the Obama administration seeks to boost participation in its anti-foreclosure programs.

Here we go again ...

[The Loop]

GS have been credited with creating the last 6 speculative bubbles:

"The first thing you need to know about Goldman Sachs is that it's everywhere. The world's most powerful investment bank is a great vampire squid wrapped around the face of humanity, relentlessly jamming its blood funnel into anything that smells like money"

The Great American Bubble Machine | Corrente

[11]

Originally Posted by The Loop

GS have been credited with creating the last 6 speculative bubbles ....

Just 6 .... Hummm

Between 2003 and 2008, the amount of speculative money in commodities grew from $13 billion to $317 billion, an increase of 2,300 percent.

Poor old China ... they are next for the GS 'treatment'.

[JayBee]

Originally Posted by 11

Bubble loans are back ... from the US Government!

Fannie, Freddie to Refinance Larger Underwater Loans (Update3) - Bloomberg.com



Here we go again ...

Your statement is completely false and misleading. These loans in no way are comparable to the loose lending that led to the real estate bubble, and could in no way lead to a "here we go again" scenario. Did you bother to read the article? If you did, how could you make those comments?

The "up to 125% LTV" loans are for people who already own a home that is mortgaged above the value. The idea is to try and help these people get a lower rate, to make their payment more affordable, so that maybe they will keep the home and keep paying for it, instead of just walking away from it. These are not "bubble loans," but an attempt to refinance the "bubble loans." The bubble loans were the loans used to buy the property. Now that the property is not worth the amount of the loan , if they can help people to keep paying off their debts by getting them a lower interest rate, then they are helping prevent foreclosures by helping make it possible for honest people live up to the commitments they made, when they purchased the home.

Believe me, from someone currently fighting in the trenches of this war, there are no easy-to-get loans out there for purchases anymore. The difference in what it takes to get a purchase mortgage on a house between now and 9 months ago is like night and day. There are no more "bubble loans." That is ancient history in today's market.

[11]

Originally Posted by JayBee

Did you bother to read the article?

I dont post what I have not read ... (just so we dont get into post 'tennis' - this is my thots) ...

Government (via Fannie/Freddie) allowing (up to) 125% LTV - the story doesnt make clear if thats on re-appraised value or on original purchase value.

At any rate since property prices have declined (and still are in many cases) this approach of still not allowing the market to find true value does present even a degree you must admit of tax payer support of the market. Perhaps this is waranted, but isnt lending beyond true value how we got into this mess in the first place to a large extent.

I'm pleased to hear that lending practices have tightened up - some thing just may have been learnt.

[11]

Better wake up when senior BoE official starts thinking 'bubbles':

Banking system like South Sea bubble, says senior Bank of England official | Business | guardian.co.uk

[LivinLOS]

Originally Posted by JayBee

Your statement is completely false and misleading. These loans in no way are comparable to the loose lending that led to the real estate bubble, and could in no way lead to a "here we do again" scenario. Did you bother to read the article? If you did, how could you make those comments?

The "up to 125% LTV" loans are for people who already own a home that is mortgaged above the value. The idea is to try and help these people get a lower rate, to make their payment more affordable, so that maybe they will keep the home and keep paying for it, instead of just walking away from it. These are not "bubble loans," but an attempt to refinance the "bubble loans." The bubble loans were the loans used to buy the property. Now that the property is not worth the amount of the loan , if they can help people to keep paying off their debts by getting them a lower interest rate, then they are helping prevent foreclosures by helping make it possible for honest people live up to the commitments they made, when they purchased the home.

Believe me, from someone currently fighting in the trenches of this war, there are no easy-to-get loans out there for purchases anymore. The difference in what it takes to get a purchase mortgage on a house between now and 9 months ago is like night and day. There are no more "bubble loans." That is ancient history in today's market.

What bollox.. If the people cant afford the damn houses and have teaser rates they can never pay, and or a loan amount thats way over thier head, get them out of the homes !! And let the market find its real value with homes being 3 - 5 times annual incomes..

The longer you try to prop up a market, hold it up by creative means, the longer the pain will take to flush this through.. It guarantees years or slow downward grind.

[JayBee]

Originally Posted by LivinLOS

What bollox.. If the people cant afford the damn houses and have teaser rates they can never pay, and or a loan amount thats way over thier head, get them out of the homes !! And let the market find its real value with homes being 3 - 5 times annual incomes..

When the govt. is bailing out banks to the tune of trillions, why not give the honest person a chance to bail himself out. If a person has the integrity to take a position of "I borrowed the money, I will do my darndest to pay it back," instead of the more common position of "fvck it, I'll get out from under this, cut my losses, which are minor, and buy back into the market for less in 2 years," then I applaud that person, and think they should get a little help, as well. We need more people like that, so let's give them a boost for their efforts, rahter than a swift kick in the behind.

The longer you try to prop up a market, hold it up by creative means, the longer the pain will take to flush this through.. It guarantees years or slow downward grind.

The sort of a policy you are advocating is a "take from the poor, give to the rich" approach. It favors a complete and utter collapse of the housing market(and the economy along with it). In that sort of scenario, a small number of very wealthy people end up picking up the pieces of a shattered market for dimes on the dollar, when even the little guys who have been conservative are too scared to jump in, or can't get a bank to finance them. The 3% who control 50+% of the wealth then gains control of 90% of the wealth, conceivably.

Besides, what is the big hurry? It was that hurry-up attitude of not being willing to suffer a bit of recession, trying to rush through a down cycle, and into the next up cycle that got us in this mess. Some number of years of inflation in wages, and real estate will emerge once again as a solid investment. In the meantime, no need to throw more fuel on the fire, and fan the flames, which is exactly what your preferred policy would do.

It is the surest way down the road to social unrest and civil violence. Of course, probably would do wonders for the price of gold/silver, so I can see why you favor that approach.