Economics, economies and has the world gone mad.

[tigger]

Ugly, for sure, but the excesses and mistakes of recent years have to be allowed to unwind...hopefully in a fairly orderly fashion.

[matthew261]

It's a mess. Now...where's my cigar. :cool:

[northo]

Send lawyers guns and money.

[anacostiakat]

As Ulysses Everett McGill would say: "Damn! We're in a tight spot!" :-D

[phxkev]

I'm not worried. Sarah Palin will fix it.

And as a member of The Keating Five, McCain knows all about bank bailouts.

I don't mean to get political (and I won't) but the concerns expressed here ARE POLITICAL.

You can't have Bush waste a $3 Trillion surplus, create a $3 Trillion deficit, while cutting taxes, borrowing from China to buy oil from the mid east, spending tax money giving oil companies tax breaks and hand outs resulting in record profits, ruining the value of the dollar because of global uncertainty brought on by US policy, reward companies to send jobs overseas, create inflation because of oil prices caused again by instability, wrecked housing and credit markets because of poor or no regulation, and not think the economic conditions are POLITICAL. And I have barely touched the tip of the iceburg. Taxes were raised. Your kids and grandkids just haven't got the bill yet.

Thanks W.

[cvm4]

» and credit markets because of poor or no

» regulation, and not think the economic conditions are POLITICAL. And I

» have barely touched the tip of the iceburg. Taxes were raised. Your kids

» and grandkids just haven't got the bill yet.

»

» Thanks W.

Clinton started the deregulation of financial institutions.

Bush doesn't run the Fed or the Treasury.

[Ken Gargett]

and we are back with the politics.

good thing too.

[El Presidente]

Lets stay off the political blame.

You could thread a convincing line that what is occuring now is an extension of the Dot Com boom and collapse (as much to do with previous administration as current).

Regardless, focus must be on how to fix system so that it does not occur again.

A good place to start would be Minimum set cash reserves for investment banks as a % of their book (as per retail banks).

[cvm4]

Oil is down :-D

Trading $94 now

[El Presidente]

» Oil is down :-D

»

» Trading $94 now

Interestingly Oil and the USD decoupled overnight for the first time in a long time. Both went down.

[cvm4]

» » Oil is down :-D

» »

» » Trading $94 now

»

» Interestingly Oil and the USD decoupled overnight for the first time in a

» long time. Both went down.

I noticed that too. I believe the USD strength against the Euro is because the Euro is being repriced and not the USD. Notice the Euro losing against other currencies.

[Chaki]

»

» Regardless, focus must be on how to fix system so that it does not occur

» again.

»

Unfortunately, these things (bear markets, economic slowdowns) will occur again. In fact, they do need to occur for the system to work.

Indeed, why do people think markets are rational, fully functioning only when asset prices go up? Why is it a problem if Lehman goes bust and Merrill Lynch is bought by BoA? The market is redistributing assets (people in this case) to those who can use it better or signalling that these assets should go somewhere else (I feel sorry for Lehman staff -I have friends there- but they new the rules when they joined the investment banking industry).

When risk is not properly priced, people do stupid things like NINJA mortgage (lending money to people with No Income No Job no Asset). Interest rates were too low for too long (why is another debate) so Lehman did the rational thing: leverage like crazy, get enormous profits (phony it turns out), pay itself huge bonuses. The same could be said of Bear Stearns, Fannie Mae and Freddie Mac. Now the market is telling us that the game is over and we should stop doing stupid things.

The market is also rational, fully functioning when asset prices go down. When they reach a new equilibrium level, a new cycle will kick in. It's just that the lesson is never a pleasant one.

[aavkk]

The hedge funds are to blame for much of both sides of the market shifting. My best clients are the ones responsible for the naked short-selling and other maneuvers that are shady but offers great opportunities to make a buck.