Posted on 09/15/2008 1:16:57 PM PDT by illiac
Bad day for Wall Street
(Excerpt) Read more at finance.google.com ...
The entire situation we’ve seen unfolding this past year strikes me as social/economic engineering of the highest order, culminating (so far, anyway) with drop in the Dow today.
These kinds of unprecedented financial events we’ve witnessed in 2008 — involving the movement of trillions of dollars, breathtaking repudiation of laws and limits of authority granted, which in turn affect the economies and lives of hundreds of millions of people (if not billions), don’t happen accidentally and they don’t happen without consequences — consequences that somebody very smart has already “gamed” out and knows what impact they’ll have. I’m sorry, but this smacks of major manipulation from parties beyond the law, beyond governments, re-shaping the entire global financial landscape.
You think that’s a bit dramatic? Well tell me — who so far has STOPPED them?
NOBODY.
This ISN’T conspiratorial - it’s the Art of War, it’s the Great Game for the 21st century, it’s an intellectual chess-game of the highest order and somebody somewhere has ensured it’s off to a rousing start. Others here see a desperate government making desperate moves — I see very smart folks making very shrewd, calculated moves for exactly the intended effect, *masked* by desperation. What they are effectively doing is manipulating and re-jiggering the entire modern financial system in BROAD FRACKING DAYLIGHT and they’re doing it under the guise of “saving” the system — with, get this — the BLESSING of the very system they are transforming and/or undermining!
Fracking brilliant. I just wish I knew who to applaud?
Then tell me if this isn’t a very old and powerful truth being implemented right before our eyes: create fear, create panic, create confusion, and the people will welcome your “solution”. Plenty of dictators in history have mastered the art, and it’s never failed them.
Some have written many an outraged rant, shocked at the level to which events are proceeding and wondering why nobody in positions of responsibility are stopping it. Well I don’t think they can. Consider that this all happened within the span of ONE YEAR. That should be a tip-off right there — the timing works very well for inducing a panicked psychology. This is SHOCK & AWE of the financial kind, and with events unfolding so quickly — with each “save” getting bigger than the last — who the hell really understands the situation anymore? Who can speak out when you’re now talking the basic survival of the modern financial system is stake? No politician has balls that big.
Tell me I’m wrong.
(Sanitystream - Ticker Forum)
What does “unwind” mean - I keep reading that phrase, but don’t know what it means.
Romney advising outlook nice
Why is AIG in trouble?
This is the Fault of the Democrats and their socialist and commie friends who are trying to Destroy America’s Economy just so they can win the election.
Well put.
No matter how badly things may go in the free market, increased government involvement always makes it worse.
Always.
A university economic study even indicated that the Great Depression would have been shorter and shallower if the Govt. had left it alone.
On CNBC -- did I hear right?
this list is deceptive - the 2000 drop was after a huge bubble in the market.
either the 97 or 98 was related to severe drops in asian markets. I cannot remember what the other one was related to (the one that tripped the breakers and closed the mkt?, 97 i guess), even though I was trading that day.
Ok keep in mind that you are talking to someone who does not get any of this. All I am trying to do is formulate talking points for soft McCain/Obama voters who bring this up. You did help to educate me on some things. But other parts fly right over my head as it will with my targets.
I appreciate that my proposal may have been a little too “pollyannaish” How about this:
We have have to change the way that we do business in this country in regard to loans. Recent events prove that our banking laws in general need review. John McCain is by far the better choice to oversee this overhaul due to his experience in the financial ebb and flow over the last two decades as a US senator. Barack Obama will not be up to this challenge as a constitutional professor.
I am talking to elderly retired professional folks from a rainbow of backgrounds. Please help me modify this message. Thanks.
Wrong...Not when it comes to lending tens of thousands of dollars.
The poor slobs that went looking for loans had absolutely zero, zip, nada authority in regards to loan approval decisions. Of course everyone knows this.
The fact is, the bankers, lenders, and everyone else in finance would have lent money to a ham sandwich back then. Those greedy financial industry idiots were only seeking loan commissions etc, and lost all sight of their professional lending and standards ethics.
Wrong...Not when it comes to lending tens of thousands of dollars.
The poor slobs that went looking for loans had absolutely zero, zip, nada authority in regards to loan approval decisions. Of course everyone knows this.
The fact is, the bankers, lenders, and everyone else in finance would have lent money to a ham sandwich back then. Those greedy financial industry idiots were only seeking loan commissions etc, and lost all sight of their professional lending and standards ethics.
In addition, that would be like some illegal, or slob that has little or no money down, tiny income, and wanting to borrow 400k from you for a home or whatever.
You going to "tango" with this guy and give um the loan?
The turmoil in housing and credit markets has hammered AIG, largely because of contracts it sold protecting others against losses tied to subprime loans and other risky assets. AIG's stock has fallen nearly 80% this year. It reported a second-quarter net loss of $5.36 billion last month after a first-quarter loss of $7.81 billion.
I'm in the position of Trustee of my elderly (87 with Alzheimers) mother's assets, and I absolutely despise that part of the job. Dad died one year ago at 94; wifey and I had dug into their assets a couple of years before that and were appalled at where their money was "at".
Charles Schwab - or whoever - had talked them into tons of very long term, low yield bonds...and the rest was in stocks that the parents "liked the name of", like GM, Ford, Microsoft, bla bla bla.
I'd gotten very tired of watching the assets go down the toilet over the past years so finally pulled the trigger about 6 weeks ago and had Schwab dump ALL the stocks and most of the bonds and just put it into the cash account.
She ain't earning much now, but those monthly statements showing 10K down the toilet are gone.
.................Shoulda done the same with my own Janus funds. It's mattress time. I'm 61 so the "next cycle" theory is iffy, at best.
If misery loves company, this is going to be a bigger love fest than the original Woodstock.
I agree with that assessment.
To “unwind” in financial lingo means to back out of a complicated position.
If you have a simple bond or stock in your portfolio, you simply sell it.
But what happens if you have a bond or stock, and then you have options written against that bond or stock? Well, you now have to sell off (or buy back) various aspects of the position in a particular order.
eg: Let’s say you have a stock, and you’ve written covered calls against it, and then used the proceeds of the call to buy a protective put. You want to wash your hands of the whole thing because the company is going bankrupt in a week (or they’ve been bought up, or something else). To do this, you typically need to:
1. Buy back the call.
2. Sell the put.
3. Sell the stock.
Unless your broker allows you to sell naked calls, you cannot do 3 before you do 1. 2 you can do before you do 3, but some option programs will close both option pieces of the position for you.
That’s “unwinding.”
Bingo...you are so right....does the CFR come to mind? (Council on Foreign Relations)?
I believe Rev. 18 describes America to a tee. Christ bought my “insurance” 2000 years ago on a cross, and all my faith and hope is in Him, not the dollar. I don’t know how other people get through the fear and uncertainty at times like these without Him.
That’s a very simplistic talking point and I suppose it would do unless you have someone like me in your audience. I’m not a finance professional. I’m just a retired engineer and then a retired farmer.
Part of the problem, I would add, is that many to most older folks in financial markets (both on and off Wall Street) are unfamiliar with the surge in derivatives and derivative exposure in the world. Understanding the instruments themselves is difficult enough; understanding the impact during times like this is even harder.
Too many people, both in DC and on Main Street, no longer have a functional understanding of how the current banking system really works. In the last 10 years, the financial markets have rapidly evolved far, far beyond the instruments that were available and involved in the market crash of 1987. Wall Street is going to need to be re-regulated to control the systemic risk that their new instruments create.
Who should do this regulation (the Fed or the Treasury) is a matter for the next administration.
THE problem, IMO, is that DC is just so far behind the learning curve of how Wall Street is creating and peddling these new derivative instruments, that Congress might as well be the caveman club attending a lecture on particle physics.
This entire liquidity crisis has been historic from the moment the housing crash commenced. We are in completely uncharted waters. Why do you think I keep saying I THINK we will experience a long, deep recession. I just can’t completely eliminate the possibility of depression caused by massive deflation.
Yes, absolutely this is historic. But not because massive financial institutions became insolvent, but because leverage and debt were run to historically catastrophic levels years ago.
We will continue to see history made for years. I’m just afraid it will all be to the downside. I would prefer not to see that kind of history.
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