Posted on 11/03/2007 3:25:26 AM PDT by HisKingdomWillAbolishSinDeath
The world’s financial system came precariously close to seizing up recently.
In fact, as far as some big banks and financial institutions were concerned, for a moment in time, the system was in a full-blown cardiac arrest. Liquidity, the flow of money—the lifeblood of today’s economic structure—came uncomfortably close to clotting up in August this year.
Defibrillators sizzling and money flowing, central banks around the world acted in concert to jump-start financial markets, slashing lending rates and injecting nearly a half trillion in dollar steroids into the economic pulmonary system.
But contrary to what the big media outlets may have reported, it is actually inconsequential whether or not central bankers succeeded in temporarily stabilizing markets.
Irrevocable damage to America’s economic system has taken place.
And because the world’s largest economies are so closely intertwined, the effects will not be limited to the United States. Confidence in the world’s financial system—a system based on the dollar as the reserve currency—is failing, not because of a liquidity crunch, a popping housing bubble, or the myriad of other commonly cited economic causes, but because of broken faith. The result in the end will be a new world financial order—one without America at the head.
(Excerpt) Read more at thetrumpet.com ...
Japan survived something similar, as did the rest of capitalist Asia. We'll do fine in the long run.
I think these things tend to operate in cycles.
Gee, I'm confused what with the sky constantly falling on my head over the years.
I don’t think so, but all right
Some of their financial institutions were late getting into their local scene and bought the funny stuff from the US to catch up on comparative returns.
As of right now, nobody knows how bad the loan portfolios are because they are so mixed with good and bad.There are a lot of subprime borrowers who are not defaulting.
I question why some of the financial institutions are writing off such big hits without real knowledge of what they got. Is it to be able to buy back their stock at a low price and later reinstate earnings when the portfolios perform?
Boy, you read an article like that and you panic, then you read comments from the smart FR board and your heart beat slows to normal again:)
I’m grateful for the balance that people here post.
Please continue to expand on this subject as I really want to know the truth of what’s going on.
Slowly step away from the TV and read a book or something.
Everything will miraculously be fixed and the perceptions will
suddenly change as soon as another Clinton is in the White House.
All this worry is a complete fabrication by the National Media.
If more people understood this phenomenon, no Democrat would ever sit in the oval office, but they never understand it.
We are truly a Nation of Sheep.
Either this article is a true picture of what is going on, or it is designed to be anti-American.
I don’t know enough to tell the difference.
Oh, I get it! The United States is conveniently someone to blame! That fits everything else that’s been going on for the last few decades.
“We are truly a Nation of Sheep.”
Evidently God thinks so. The 23rd Psalm says: “ He maketh me to lie down in green pastures”.
Ditto.
:-)
I’m 1992 the American people elected Bill Clinton to cheers that “Character Doesn’t Count”. Does character count yet?
ping to read later
If the dollar collapses the whole world would be rushing to buy our American made products.
Price/demand cyclical changes occur because they must occur. It is the nature of the beast and in mortgages, it goes back and forth between commercial property development and residential. In each case, when the supply finally exceeds the demand, the prices fall and someone is left out on a limb.
The housing situation was exacerbated by younger upwardly mobile people engaging in what is now called “House flipping”.
Years ago, this practice was confined more to professional investors and real-estate agents. This time, there was a fad that developed that involved less mature and experienced people who tried to make a fast buck. They got burned by the same sort of loan arrangements that burned many investors back during the Carter administration when rates skyrocketed to more than 18%.
These things will continue in perpetuity. Financing angles will continue to be used by some buyers, and balloon mortgages, adjustable and interest only arrangements are all legitimate vehicles for the variety of different needs that purchasers have.
In my opinion, there is likely not a single buyer in this last housing mess that did not have all the facts about what they were doing. The risks are always explained, but somehow when things go bad the fingers always wave. Nobody ever thinks it will happen to them.
As far as I am concerned, the whine and cheese is human nature. They will take their lumps and with little or no down payment,the lumps are not great and the damage is confined to their credit ratings. The lenders all have various hedges and insurance and will survive via mergers and or refi...Portfolios are being rebalanced.
In twenty or thirty years, it will all repeat again as institutional memories are quite short these days. The next crisis will be a repeat of the commercial problems we had in the 70s and eighties.
As the world churns............................
” Muslims outside the United States interpret America’s policies in the Middle East not as an effort to spread democracy but as a blatant neocolonialist attempt to solve its economic problems by force. Arabs and Persians alike argue that America’s fiscal irresponsibility has forced the nation to seek solutions through military aggression.
Many believe that America’s misguided adventure in Iraq was a desperate attempt to capture both a reliable source of cheap oil and a major export market for the United States. ...” bla bla bla
This article is from Hamid Varsi,a muslim, who is from Iran. The above is a snippet of his anti american rantings.
” Muslims outside the United States interpret America’s policies in the Middle East not as an effort to spread democracy but as a blatant neocolonialist attempt to solve its economic problems by force. Arabs and Persians alike argue that America’s fiscal irresponsibility has forced the nation to seek solutions through military aggression.
Many believe that America’s misguided adventure in Iraq was a desperate attempt to capture both a reliable source of cheap oil and a major export market for the United States. ...” bla bla bla
This article is from Hamid Varsi,”
Bad case of projection......this what the Muslims would do in the fourteenth century. Hey Muslims...learn how to develop an economy, not steal or destroy one.
Apparently not............It is still relative and undefined or constantly redefined situationally.
REAGAN came along and blew away the facade of lies entombing America... his words shredded the clouds and let the light of truth illuminate the “Shining City upon the Hill”. There is nothing new in this crap writing... nothing that I have not been told before... and over decades. Some FReepers must be spending too much time watching Dancing With the Stars or The Bachelor.
LLS
A weak dollar may help spur foreign investment but it sure does nothing for the average American's buying power.
Exactly! Even 'flipping' houses isn't new - just a new name. We knew a lot of people in the 70's who moved every other year, building on the increasing value of their homes - it worked for them till the interest rates skyrocketed in the 80's. That created a huge bust in the construction industry nationwide that lasted for years (my parents, as contractors, nearly lost everything) until rates and prices came back in balance. The 'flippers' of the day ended up in their latest, largest, most expensive home, heavily mortgaged because they didn't see the end of the market, and had to stay put for 10 years. It's part of having a free market that cycles come and go, and people tend to forget the lessons of earlier times. That's partly because our education system refuses to teach economics or anything else that involves critical thinking...
Chicken Little Society *ping*
Your buying power is a reflection of your income more than the relative value of the dollar. No job = no buying power. As the dollar falls, Eurocrats are begging us to do ANYTHING to bring it ‘back up’. THey know we are taking their markets away from them - we may even be so lucky as to compete with china gobally. The fall of the dollar smells of international collusion between those who would do us harm. Unfortunately for them, they have failed.
Typical gold-bug non-economics. In other words, total BS. It starts with the big lie (”The world’s financial system came precariously close to seizing up recently.”) and goes downhill. I hope to make lots of money on the people who believe this stuff.
This does sound suspicious. It sounds like they were giving attractive packages that actually had something bad hidden inside.
It's like a pitcher trade in baseball where the trading team knows that the traded pitcher has a medical condition that will blow his arm out, but they don't reveal it.
“Gee, I’m confused what with the sky constantly falling on my head over the years.”
I’ve been paying attention to the “we’re running out of energy!” propaganda on the news lately. The American public is being brainwashed and it’s working very well. We’re playing right into the hands of the environmentalists and energy producers who want higher prices and more restrictions on American consumers.
We ARE NOT running out of energy. Many sources of energy have been set out of bounds for political reasons. Boy, are we ever going to wake up.
Brilliantly written stupidity.
“If the dollar collapses the whole world would be rushing to buy our American made products.”
What products??
Doomsday is nigh.
Been nigh for a long time now, in fact.
But it’s really, truly here this time. Eventually.
Space,
The people who are trying to pass this off as some form of anti-Americanism or anti-Bushism are whistling past the graveyard imo. Here’s an article you might find illuminating.
http://articles.moneycentral.msn.com/Investing/SuperModels/AreWeHeadedForAnEpicBearMarket.aspx
Disclaimer: I’m no financial maven, but I’m no naif either. Both articles ring true to me. YMMV.
James
I happened to be a sentient being then, and opined (mimicking the Judean People's Front in "Life of Brian") that, yeah, except for the price controls, gas lines, unemployment, crumbling cities, decaying infrastructure, bad hair, stupid clothes and horrible cars...it is just like it.
Sheesh. And the media is doing their best to whip up panic. Gotta get people living in a state of fear.
All true except that apparently, up until now, there has never been the degree of outright fraud foisted upon the rest of the world that, up until now, considered the soundness of U.S. economy beyond question. Brokers of mortgage securities and those that rate those securities burned the very people that depend on the honesty the US economy implies. I know of no other time in the history of this country where the integrity of this country's economy was so seriously called into question. And to compound the damage, I don't think there has been any other time in this country's history when we depended almost entirely upon other countries financing our economy.
Any comparisons made with past bubbles or spikes are now meaningless and amount to whistling very nervously while continuously looking over your shoulder past the graveyard.
Not trying to be a wise a$$ here, but what would those products be? Where are the factories that will manufacture these products and where will the workers come from? The country started on the shift from a manufacturing economy to a service economy in the Carter years....that’s thirty years of momentum that will have to be reversed.
ROTFLMAO!
Europe is like a spoiled child, when times are great they’re right behind you but when you hit a bump they’re off the wagon. Remember the old adage “You can always depend on France to be there when they need us” same goes for the rest of them. Have no fear they’ll be back. Where else are they gonna go?
In fact the British real estate market just recently reached its peak, and is only now starting to soften.
America is like one huge subprime debtor. Except our “Countrywide” is China.
What’s going to happen to the fired Merrill Lynch CEO who is getting a $159 million severence package now that they discovered Merrill attempted to hide $8 billion in losses by diverting them to hedge funds? Will he skate because he was Jesse Jackson’s affirmative action hire? Let’s see if Spitzer has as much outrage over him as he did over Dick Grasso.
The US does not make products anymore.
Asian markets, The EU, emerging markets, etc.
“another sign of what precarious times we are living in.”
In which era where the times were not precarious?
That’s what I was saying!
And right now, the media believes that it's in their "best interest" to do all they can to shake the confidence of the public in ALL governmental instituions. In order to bring "their gang" into office.
Mark
Yeah, until Bush and the decrepit "republican" congress came along and spent like, well, your typical American. They wasted whatever was leftover from Reagan's accomplishments and Gingrich's "Contract With America". All gone with a yearly stroke of the pen.
And as sheep we are to “Beware of false prophets, who come to you in sheep’s clothing, but inwardly are ravenous wolves”.
Matt 7:15
It does if it keeps most of us employed.
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