Amadeus Posted September 16, 2008 Share Posted September 16, 2008 Couldn't think of any other fitting picture Tyler Durden: Three minutes. This is it - ground zero. Would you like to say a few words to mark the occasion? Link to comment Share on other sites More sharing options...
slinkydevil Posted September 16, 2008 Share Posted September 16, 2008 Couldn't think of any other fitting picture Tyler Durden: Three minutes. This is it - ground zero. Would you like to say a few words to mark the occasion? What did I tell you?!! The first rule of fight club is.... Link to comment Share on other sites More sharing options...
thebees Posted September 16, 2008 Share Posted September 16, 2008 Tom Wolfe's Bonfire of Vanities Ace book, I think I will re-read it its been a while. My Aunt (94 now) advised me to read it, said I would like it and she was (as ever) right. Link to comment Share on other sites More sharing options...
hboy Posted September 16, 2008 Share Posted September 16, 2008 Never mind at least Alan Bell has assured us that the total meltdown of the worlds financial system won't affect Manx jobs http://www.manxradio.com/readNEwsItem.aspx?id=25440 Link to comment Share on other sites More sharing options...
Chinahand Posted September 16, 2008 Share Posted September 16, 2008 For the first time I've really started to worry about what is happening. Currently we are seeing a huge delevering of debt as banks stop lending to each other and to other businesses. The cost of money is going through the roof which will have very significant real world effects. And then there is moral hazard. The markets are playing a game of chicken with the world's central banks over AIG. They think it is too big to fail, and so don't believe the US Treasury's claim that they won't intervene. AIG is massively involved in default insurance - I thought things were calming down when the monolines stabilized a bit ago, but now this whole issue is right to for again. If the markets don't believe the Treasuries then huge commercial forces can be brought to bear - think about what happened when Soros bet he could break the bank of England over ERM - he did (well not just him - but the market forces he saw building and latched onto). If AIG falls it will really ripple around the world as its bond agreements unwind - but if the US Treasury steps in then the markets will see the fear in their eyes and god knows what will happen then. It shows how the system can get terribly out of sync - its a bit like a bank run - if everyone cooperated and left their money in the bank it might well survive, but this is impossible and so it is perfectly rational to be there rushing to get your money out. What we are almost seeing at the moment is a bank run on the entire system. Sit tight, it might be quite a ride. Link to comment Share on other sites More sharing options...
pongo Posted September 16, 2008 Share Posted September 16, 2008 And then there is moral hazard. The markets are playing a game of chicken with the world's central banks over AIG. They think it is too big to fail, and so don't believe the US Treasury's claim that they won't intervene. The policy of non intervention might be the result of political pressure to kowtow to populist sentiment ... which likely favors the sense that institutions should be allowed to fail, whatever the consequences - and even despite the possibility that tax funded intervention might, in the last resort, be the responsible course of action. I'm only saying maybe. I'm pretty ignorant about finance in general and this particular crisis of confidence - although I understand enough to know that it is the result of happy clappy and irresponsible derivatives selling. EDIT: see below for populist sentiment Link to comment Share on other sites More sharing options...
thesultanofsheight Posted September 16, 2008 Share Posted September 16, 2008 AIG is massively involved in default insurance - I thought things were calming down when the monolines stabilized a bit ago, but now this whole issue is right to for again. This is going to be the real tester, if the default insurance goes then a whole new layer of failures will start happening. The worse thing about all this though is that those at the top of the tree are still making big bets and they won't care if they short your bank to the point of collapse, they don't care that you might lose your savings, and they really don't care whether your employer is in business tomorrow, or your pension fund is completely worthless. They're still making billions of of speculative trading - its one great asset grab so like I said yesterday - at the expense of sounding like Tyler Durden fuck them. Screw the whole fucking bunch of them. They'll all have to disappear off to their own private Islands before long because you won't be able to drive your Aston into Canary Wharf because it will be set on fire with you in it before you get to your gated office compound. I understand they were coming in from the Isle of Dogs yesterday to stand clapping outside Lehmans offices as the newly redundant emerged because the average bloke on the street has known for years that they are pondlife. It will be worse when the job losses hit the 'real' economy and maybe its going to get very ugly for the rich if they carry on because the rest of us will become very, very angry if we lose our life savings and our houses through what really has been the complete financial engineering of the economy to generate stupendous bonuses for the lucky few. Link to comment Share on other sites More sharing options...
Slim Posted September 16, 2008 Share Posted September 16, 2008 They'll all have to disappear off to their own private Islands before long because you won't be able to drive your Aston into Canary Wharf because it will be set on fire with you in it before you get to your gated office compound. I understand they were coming in from the Isle of Dogs yesterday to stand clapping outside Lehmans offices as the newly redundant emerged because the average bloke on the street has known for years that they are pondlife. You've got a very odd view of world markets. Don't you have savings? Don't you have a pension? Do you have any loans or a mortgage? Credit cards? Do you use any of the services of huge multinationals? TV companies, drugs companies, insurance? You're a huge part of this system, as much as the stereotypes you sketch. Link to comment Share on other sites More sharing options...
pongo Posted September 16, 2008 Share Posted September 16, 2008 I understand they were coming in from the Isle of Dogs yesterday to stand clapping outside Lehmans offices as the newly redundant emerged because the average bloke on the street has known for years that they are pondlife. If the average bloke on the street was really such a **** that he would be happy to see people in trouble then I would have no sympathy for the average bloke and his pernicious point of view. But I don't think that most people (and therefore the average bloke) is so horrid. Most of the people who will have lost their jobs, so far, will be junior staff. All of the people who have lost / will lose their jobs will be people just trying to make their way in the world - pretty much like your average bloke. In reality most of the average blokes would have loved to be also part of the world of the big bonuses etc when it was all going well. Anyhow - we are nearly all of us, directly or indirectly implicated in the current uncertainty, to a lesser or greater extent. Link to comment Share on other sites More sharing options...
Chinahand Posted September 16, 2008 Share Posted September 16, 2008 I don't know what to make about the thesultanofsheight bile. Freeing up money to move around from places where it isn't needed to areas where it is is just as important as science and technology in improving our world (along with an impartial legal system where property rights and disputes can be settled). That is the hugely important non-zero sum benefit that finance has brought to the modern world. (If people don't understand what I am going on about talking about non-zero sum transactions I'd really recommend this book: Non Zero by Robert Wright - though it's a bit flakey in parts!) Of course there are always zero sum parts to these transactions - for every extra penny I can get you to pay for a particular piece of paper or promisary note; that is one less penny you will have, and so you will have to hope the uncertain real value of the interest or dividends payments will recoup that cost. But heck you don't have to buy what I am offering - caveat emptor and all that - do your due diligence and your analysis. It is the fact that all these contracts are two sided, with a buyer and a seller, which gives the system its robustness. In my mind the biggest problem in the latest blow up was the rating agents - the sellers used these agencies to price their products, but as a result made them have an interest in selling them. The buyers didn't do the analysis or the due diligence, rather they over trusted the rating agencies. That was stupidity of the highest order, but who's fault is it? The guys flogging the CDOs or the fools over-paying for them: the fools who trusted the ratings agencies even when they had an interest in you buying it. Everyone can be greedy, everyone can be corrupt - as far as they are able to be. And that is why having a counterparty to stop you getting away things is so important - pushing down that zero-sum gap so that both sides maximize the non-zero sum benefit. Modern capitalism is a seriously huge undertaking - and individuals make seriously huge decisions. Three Goldman Sachs analysts argued a year or so ago that Goldman Sachs should pull out of the sub-prime market. Their insight, their initiative, their analysis has made Goldman Sachs billions and billions of dollars. Now these people have profited from that - good for them - I bet many many people seriously wish they had had these people's insight. Matching renumeration to performance is vital and one of the most important problems in finance and I have no problem with people getting a fair share of the wealth they create. I think this system isn't working at the moment and hence the bile and hatred of bankers - I want the system to get fixed and allow people to make shed loads of money in a non-zero sum way. That will create more wealth for the whole world than any amount of hatred and envy. Link to comment Share on other sites More sharing options...
La_Dolce_Vita Posted September 16, 2008 Share Posted September 16, 2008 I think this system isn't working at the moment and hence the bile and hatred of bankers - I want the system to get fixed and allow people to make shed loads of money in a non-zero sum way. That will create more wealth for the whole world than any amount of hatred and envy. It will create more wealth, but wealth that the worker won't see much of Link to comment Share on other sites More sharing options...
Chinahand Posted September 16, 2008 Share Posted September 16, 2008 La Dolce Vita - by almost any measure - time spent to buy a loaf of bread, a car, a TV, longevity, access to medical care, education, higher educaction etc etc etc the "worker" who ever you think that is is better off today than 25 years ago - compared to 50 years ago the change is massive. Even when real income has decreased - which I believe is an issue for the poorest 10% in the last 25 years (though I think that statisticians argue about that) those fewer pounds are able to purchase a more diversified basket of goods. Defining wealth is very difficult, but if you take the narrow view that it is worldly goods the "workers'" wealth have increased - consumer electronics, telecomunications, double glazing, central heating are now available when previously they were not. If you take a broader view I am pretty certain it can be shown that they have access to more educational opportunities, more cultural opportunities, more travel, more ability to change their place of work. How wealth is shared is complex - but the idea you can break society down into workers who are denied acceess to wealth and some other class who monopolizes capital seems to me to be massively simplistic to the point that it is of little use in analysing society. Link to comment Share on other sites More sharing options...
thesultanofsheight Posted September 16, 2008 Share Posted September 16, 2008 quote name='Slim' date='Sep 16 2008, 08:37 PM' post='355727']You've got a very odd view of world markets. Don't you have savings? Yes. But not with a listed company. Don't you have a pension? No Do you have any loans or a mortgage? No Credit cards? No Do you use any of the services of huge multinationals? TV companies, drugs companies, insurance? No, apart from house insurance. I really couldn't give a toss. Chinahand - It is the fact that all these contracts are two sided, with a buyer and a seller, which gives the system its robustness. Not so much. Read Anatole Kaletsky in the Times today. 10 years ago if you had a mortgage it was a contract between you and your bank, Now its about 20 counter party transactions which probably end up back with your bank anyway. Cut the 20 profit centres out of the loop and its clear your contractual relationship stays just about the same. Just less scumbags get their noses in the trough. Link to comment Share on other sites More sharing options...
gazza Posted September 16, 2008 Share Posted September 16, 2008 what gos up must come down, but it go up again, some people will lose millions while others will make millions, bit off topic but sort of the same what i want to know is, all these people that are complaining that thay cant affored to live now as everythings gone up, now while i feel sorry for the real poor ppl of the uk/iom that cant really affored to live, eg, thay dont have 3 trips away a sod off big tv and a 40 grand car out side, when u cant afford to put food on the table or a roof over your head then u may start saying i cant afford to live, but if its because u cant afford to change your tv from a 50in to a 60in then u need to learn the real value of cash!!! Link to comment Share on other sites More sharing options...
Dames Aflame Posted September 16, 2008 Share Posted September 16, 2008 clicky Link to comment Share on other sites More sharing options...
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