Posted on 09/19/2008 5:52:08 PM PDT by politicket
When government officials surveyed the flailing American financial system this week, they didn't see only a collapsed investment bank or the surrender of a giant insurance firm. They saw the circulatory system of the U.S. economy -- credit markets -- starting to fail.
Huddled in his office Wednesday with top advisers, Treasury Secretary Henry Paulson watched his financial-data terminal with alarm as one market after another began go haywire. Investors were fleeing money-market mutual funds, long considered ultra-safe. The market froze for the short-term loans that banks rely on to fund their day-to-day business. Without such mechanisms, the economy would grind to a halt. Companies would be unable to fund their daily operations. Soon, consumers would panic.
(Excerpt) Read more at online.wsj.com ...
I quoted you from Merriam-Webster. What more do you want? I also have worked the previous seven years in industry dealing with VP's and higher of the major financial houses in this country. And your qualifications are...?
Voting is not the answer to making this nation whole again.
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Well, since we have sunk to pretty low emotional levels...my experience with the development of any bureaucracy is that there is no “reset” button. They won’t go away. So, we have nationalized our financial system, with a promise that we will return to something like a free market sometime. Later. Unless Obama is elected. Or McCain. More hope with the latter.
How should I respond to this, since today is "National Speak Like a Pirate Day"?
:-)
And what exactly is your point?
It certainly doesn't hurt.
Unless you vote for the wrong guy.
I'll try one last time...
I have spent the last seven years working with VP's and higher of the major financial firms in this country. I would like to think that I have a firm understanding of basic economic terms like "speculator".
I have given you my qualifications...what are yours in order that you should call me wrong?
So....should I buy a cow this weekend? From our friends who raise cattle? (meat for the winter)
seriously -are we looking at everything shutting down?
Anyone have a guess at likelihood (percentage-wise) of collapse vs. no collapse?
“I have spent the last seven years working with VP’s and higher of the major financial firms in this country. I would like to think that I have a firm understanding of basic economic terms like “speculator”. “
And do your employers seem to understand what is happening?
What are they doing with their money?
I am a consultant, so I don't have employees.
The biggest thing to remember is: watch the news concerning the derivatives market. That is where the real serious problems that can bring our country to a screeching halt reside. The mortgage issue is related, but just a small subset of the derivatives.
However, I have been investing for years and have been successful.
So now that you have attempted to set yourself up as some kind of all-knowing sage by parading your "credentials" to try to prove your superiority why not just admit that perhaps not all of the people who bought over the last couple of days were fools or "speculators?"
The Miriam-Webster definition does not prove your point. Sorry.
Don't mean to jump in on your comment to another FReeper, but I wanted to stress to you that you shouldn't "freak out" over what is going on. God has it covered.
Make your decisions deliberately and with understanding as to why you are making them.
My advice on sides of beef always falls towards buying it if you can afford it. It's better than what you get in the store, cheaper, and is nice to have when unexpected guests visit.
It sounds like you were one of those speculators and are trying hard to justify yourself.
“The biggest thing to remember is: watch the news concerning the derivatives market. That is where the real serious problems that can bring our country to a screeching halt reside”
ok...and what kind of news about derivatives might cause me to start breathing into a paper bag? :)
Pay attention to how much money the Feds and Treasury pump into the market to create artificial liquidity. Same with the international markets. As those numbers go up it will be time to be wise stewards at home.
Also, watch the value of the U.S. dollar against Gold and Silver. If the precious metals commodities spike then be careful. It could mean that investors are "running" to safety.
There are a lot of other things that concern the derivatives market directly but are pretty complex to explain unless you have a very serious economic background. The two that I mentioned are easy to follow and should help you.
All investors are speculators to some extent. Many of these buyers were long term investors IMO.
It sounds like you were one of those speculators and are trying hard to justify yourself.
There you go trying to be all-knowing again. And you are again wrong.
“There are a lot of other things that concern the derivatives market directly but are pretty complex to explain unless you have a very serious economic background.”
Not sure how serious my background is.
A B.S. in finance - with the required economics courses that went along with that.
But things have changed alot since then.
I know enough to know there is much I do not know (make sense?)
But as I have not worked in the world of finance over the years - have not kept up with much of the lingo I see being bandied about.
So...basic understanding of basic principles here - I know at some point there will be a “panic” button, I’m just not sure I know enough to understand it when it happens (hopefully in time to something useful about it)
I am all cash. Allocated MERK Hard Currency fund (invests in countries with sound economic policy) Swiss Government Bonds 1 year @ 3.5% and 15- 20% Gold and and a little silver Perth mint in Australia. almost all my money is out of the country.
My bet is on the hyperinflation side, if we get deflation I should be ok also maybe some loss on the gold if we deflate.
My best advice though to anybody that it could be financial suicide taking advice from anybody on any forum. There will be rallies and retraces on the way down and you will have time if (maybe) you start researching this stuff yourself as fast as you can - it’s your life savings at risk, make it your responsibility.
Maybe we will muddle through but 10-20% inflation for a few years will take a big bite out of most assets in three or four years
Place you bets...
It proves nothing. Idiots pumping the DOW on false hopes and imagined solutions proves nothing. You say money is moving again. FALSE. Money is NOT moving again. Liquidity is as jammed up as it has been.
I can't say if RTC II, the Sequel will fix the crisis or delay the depression. I just don't know. Yes, the announcement has calmed the masses and served its immediate function which was to restore confidence in the PONZI scheme and prevent a world-wide bank run.
That is where we are and only where we are. Travis McGee and politickit are apparently convinced that deflationary GD II, the Sequel™ is inevitable and all attempts to prevent it are counterproductive. I am giving this plan some hope but only if the costs can stay under $3 or $4 trillion, also assuming that credit continues to be destroyed at a rapid, but controlled rate that does not create a panic. The inflation will be painful but not as painful to most working slobs as GD II™, the Sequel would be.
Don't be fooled by a two-day ass-blast on the DOW at a time when people can't even short the market and the shorts are covering their positions anyway. We've seen plenty of dead cat bounces and bear market rallies that proved short-lived and later broke support. The liquidity crisis is still fully dangerous and money is not flowing well at all. The markets will plunge and confidence is shaken very severely. There is a great flight to safety and a lot of people are going to sit on the sidelines cautiously before jumping back in. Don't be fooled by a single two-day ramp on the DOW. You will regret it.
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