[Archived] The End Of Global Capitalism?

[AussieinUk]

Well its the end of an era today.. the last two investment banks on WS, have now gained permission to become mainly deposit taking banks.

Quoted

"Goldman Sachs Group Inc. and Morgan Stanley concluded there is no future in remaining investment banks now that investors have determined the model is broken."

Goldman and Morgan Stanley news

This also means that many people inside Goldies, will now have to lose that snobbery, that has been embedded in their culture for literally years.

EDIT: Don't get me wrong, both GS and MS will still keep its core model, just using less leverage

[Billy Castell]

Looks like capitalism is still very much alive after looking at the last few pages. It is annoying how the world's governments have had to bail out these companies by taking on the dodgy debts. Debts that will probably not be repaid, thus leaving a hole in the accounts, leading to tax rises that the super rich can neatly and legally avoid. We will have to pay for the mistakes of these crooks for a long time.

[thenodrog]

Looks like capitalism is still very much alive after looking at the last few pages. It is annoying how the world's governments have had to bail out these companies by taking on the dodgy debts. Debts that will probably not be repaid, thus leaving a hole in the accounts, leading to tax rises that the super rich can neatly and legally avoid. We will have to pay for the mistakes of these crooks for a long time.

Billy ... If you can't beat em (and you can't) then join em.

[Billy Castell]

Hmm, true,but a dangerous lack of money gets in the way of that.. Maybe we should just give up and go for anarcho-capitalism.

[American]

Looks like capitalism is still very much alive after looking at the last few pages. It is annoying how the world's governments have had to bail out these companies by taking on the dodgy debts. Debts that will probably not be repaid, thus leaving a hole in the accounts, leading to tax rises that the super rich can neatly and legally avoid. We will have to pay for the mistakes of these crooks for a long time.

Our government also bailed out the mortgage buyers who bought houses that were beyond their means while the rest of us were actually responsible. I should have taken Drog's advice and joined em!

[AussieinUk]

Our government also bailed out the mortgage buyers who bought houses that were beyond their means while the rest of us were actually responsible.

Agreed American, but you need to place some blame on the mortgage brokers, who were more than willing to get anyone a mortgage, no matter how.. especially in the housing bubble

Home buyer - wants a home on little or no income (sub prime catergory)

Mortgage broker - Will do anything to get commision, so they advise the home buyer to 'bend the truth'

Banks - package these mortgages into every sort or CLO or CDO (Collateralized debt/loan obligation) and trade them into the marketplace

Rating Agencies - Rate these debt instruments on dubious risk analysis (AAA, AAb and so on)

Investor (Retail and/or Institution) buy these instruments, believing these are based on those rating of risk..

Each level has some blame in this..

EDIT: you could also place some on the Fed regulators, for allowing such derivatives, to be traded so easily..

[American]

Agree on all counts. The point being more that the blame shouldn't go solely to corporations. Individuals are being bailed out on my dime as well.

[grizfoot]

Looks like capitalism is still very much alive after looking at the last few pages. It is annoying how the world's governments have had to bail out these companies by taking on the dodgy debts. Debts that will probably not be repaid, thus leaving a hole in the accounts, leading to tax rises that the super rich can neatly and legally avoid. We will have to pay for the mistakes of these crooks for a long time.

I totally agree. The people who are responsible for causing this financial problem will get away with it because like you said they are being balied out by world governments. Whilst the ordinary tax payer both here and in the US will being paying for their mistakes for many years to come.

Also a massive burst of the housing price bubble is expected to come soon. This got me thinking about why there's this sort of obession for everyone to own their own house. With the fluctuating house prices people could be basically losing a lot of their hard earned earnings when the equity in their house decreases. Myself I don't see the problem in renting accommodation or indeed council housing. At least that way people won't constantly be worrying about house prices and mortgages.

[philipl]

Quite astonishing that the largest bank failure in history happened last night and it almost went unnoticed in the press today. Washington Mutual failed and has been picked up by JP Morgan- all share holders wiped out to all intents and purposes.

The carrying ons about the bail-out are interesting. To be honest, I am beginning to wonder whether the bail out really needs to be tacked from the other end- the real economy.

The derivatives are the silent enemy of any bank resscue as the current bail-out is currently predicated upon the values (or lack of them) in the US housing market but the unwinding of the fantasy products is something that I am not getting the impression the current debate in Washington is addressing.

The really big issues facing the world economy are:

1) The appalling state of American Government finances is going to percolate through and real service deliveries to the American people are progressively going bust at the State and local level- pension funds for school teachers, road repairs etc etc which in turn will really stop the American consumer dead in their tracks.

2) There are bubble economies in the newly developing world which have not yet gone pop. If the economic motor that is the Far East stalls then we can all go home and a combination of losses of their savings in the banking crisis plus drying up of demand means that the vast amount of toxic (non-viable) command economy "development" in China could be exposed at any time. A Chinese banking collapse is literally just waiting to happen. If they knew they were systematically poisoning their babies for months and kept saving face, we can only guess at the state of non-life threatening crap investments over there.

Right now, failure to maintain the real economy as opposed to financial assets in the US is the biggest threat around.

[thenodrog]

Quite astonishing that the largest bank failure in history happened last night and it almost went unnoticed in the press today. Washington Mutual failed and has been picked up by JP Morgan- all share holders wiped out to all intents and purposes.

The carrying ons about the bail-out are interesting. To be honest, I am beginning to wonder whether the bail out really needs to be tacked from the other end- the real economy.

The derivatives are the silent enemy of any bank resscue as the current bail-out is currently predicated upon the values (or lack of them) in the US housing market but the unwinding of the fantasy products is something that I am not getting the impression the current debate in Washington is addressing.

The really big issues facing the world economy are:

1) The appalling state of American Government finances is going to percolate through and real service deliveries to the American people are progressively going bust at the State and local level- pension funds for school teachers, road repairs etc etc which in turn will really stop the American consumer dead in their tracks.

2) There are bubble economies in the newly developing world which have not yet gone pop. If the economic motor that is the Far East stalls then we can all go home and a combination of losses of their savings in the banking crisis plus drying up of demand means that the vast amount of toxic (non-viable) command economy "development" in China could be exposed at any time. A Chinese banking collapse is literally just waiting to happen. If they knew they were systematically poisoning their babies for months and kept saving face, we can only guess at the state of non-life threatening crap investments over there.

Right now, failure to maintain the real economy as opposed to financial assets in the US is the biggest threat around.

Who the hell cares about all that stuff Gunner? The New Lab's majoring on getting kids to go to the theatre, the madness of Milliband, Kelly's 'ire' and Gordy's wife saying a few gushing words! Can'y you not just concentrate on the important stuff whilst we all learn to play the fiddle over here?

[jim mk2]

Who the hell cares about all that stuff Gunner? The New Lab's majoring on getting kids to go to the theatre, the madness of Milliband, Kelly's 'ire' and Gordy's wife saying a few gushing words! Can'y you not just concentrate on the important stuff whilst we all learn to play the fiddle over here?

You'll care about at that stuff when the value of your 4 toilets goes down 50 per cent over the next few years.

Philip's wrong anyway : the emerging economies aren't in trouble like the west because consumers aren't up to their eyeballs in debt.

[philipl]

You'll care about at that stuff when the value of your 4 toilets goes down 50 per cent over the next few years.

Philip's wrong anyway : the emerging economies aren't in trouble like the west because consumers aren't up to their eyeballs in debt.

Hope you are right jim, but there are some mighty "toxic" banks in China and India which are a stiff breeze away from collapsing on the back of non-performing loans to industries.

[thenodrog]

Rem it's all relative Victor. You don't lose any money until you sell.

Hope you are right jim, but there are some mighty "toxic" banks in China and India which are a stiff breeze away from collapsing on the back of non-performing loans to industries.

Can some mod please give Philip a 25% warn for over use of the new city / yuppy buzzword.

In fact no wait.............. let him off if he can give us the true origin and then double it if he can't!

[dave birch]

Theno, you're right, in that you don't lose until you sell, BUT, if the Asian (Chinese) economy collapses, then there will be an almighty crash, because that is all that is keeping things afloat at the moment.

The US, based on their selfish "I'm rich and can afford it" attitude has stuffed the rest of the world, your super, my super,and any thoughts anyone in the up and coming world has had for decades to come.

[AussieinUk]

....has stuffed the rest of the world, your super, my super,and any thoughts anyone in the up and coming world has had for decades to come.

There is still a lot of money sloshing around, Dave... but you're correct - those Asian banks collapse and there could be trouble.

Quite astonishing that the largest bank failure in history happened last night and it almost went unnoticed in the press today. Washington Mutual failed and has been picked up by JP Morgan- all share holders wiped out to all intents and purposes.

Honestly Phil, Wamu has been 'dead man walking' for quite a while.. it was more a case of 'when', not 'if' sadly.

[grizfoot]

With all the recent finacial crisis this news stroy as kind of drifted under the radar somewhat, what does everyone make of EDF (85% owned by the French Government) taking over British Energy? Britain and France aren't exactly what you'd call close friends and this takeover puts them in charge of providing a huge chunk of the electricity supply in the UK.

Graph from the BBC:

Very worrying in my eyes. Not exactly what was suppose to happen when the utltitles was priviatized I don't think. God help us if we ever run into any conflict with France or Germany, whats to stop them plugging the plug so to speak?

[jim mk2]

Hope you are right jim, but there are some mighty "toxic" banks in China and India which are a stiff breeze away from collapsing on the back of non-performing loans to industries.

I've no seen or heard stories (yet) of any of the Asian banks being in trouble. I don't see why they should be would be as they're not loaded with toxic (that word again) like US and British banks. Note also none of the Euro banks appear to be in difficulties.

Japan's banks could yet emerge strongest from the global turmoil : Nomura has already bought parts of Lehman (I think).

[jim mk2]

]

Very worrying in my eyes. Not exactly what was suppose to happen when the utltitles was priviatized I don't think. God help us if we ever run into any conflict with France or Germany, whats to stop them plugging the plug so to speak?

Does foreign ownership matter ? There are countless examples in Britain where industries and companies have benefited from European management.

More important is getting new nuclear stations built quickly to reduce energy dependence on Russian gas supplies. Now that lot I do not trust.

[grizfoot]

Does foreign ownership matter ? There are countless examples in Britain where industries and companies have benefited from European management.

More important is getting new nuclear stations built quickly to reduce energy dependence on Russian gas supplies. Now that lot I do not trust.

In this age of globalisation I guess foreign ownership is a good thing. But I firmly believe something as important as utlitities should be in the hands of British companies just on the off chance there's some sort of global conflict. EDF is basically owned by the French government though which is the worrying bit about the deal for me.

But then again I agree with anything that reduces our dependency on Russia.

[jim mk2]

In this age of globalisation I guess foreign ownership is a good thing. But I firmly believe something as important as utlitities should be in the hands of British companies just on the off chance there's some sort of global conflict. EDF is basically owned by the French government though which is the worrying bit about the deal for me.

If the French charge less than my present electricity provider I'll switch ! More competition might also persuade the likes of Powergen etc to pull their fingers out.

All we need now is the Swiss running the railways.

[thenodrog]

If the French charge less than my present electricity provider I'll switch ! More competition might also persuade the likes of Powergen etc to pull their fingers out.

S'funny I'd have thought your old socialist principles would have wanted the whole shabang re-nationalising. Obviously they are not quite as strong an influence on you in these enlightened days are they Jim? I put that down to age replacing base knowledge with infinitely superior wisdom.

I must say although no doubt you'll deny it that like so many of your ilk that you've learned well from Margaret Thatcher's tenure in No 10. From what you've been posting it appears that you've taken to share ownership like a duck to water, and you have now obviously embraced the monetarist policies so bumblingly introduced by Dennis Healey but perfected to the country's great benefit by Thatcher.

Have you ever stopped to think how much you personally owe that woman Jimbo?

[blue phil]

I've no seen or heard stories (yet) of any of the Asian banks being in trouble. I don't see why they should be would be as they're not loaded with toxic (that word again) like US and British banks. Note also none of the Euro banks appear to be in difficulties.

Japan's banks could yet emerge strongest from the global turmoil : Nomura has already bought parts of Lehman (I think).

The Chinese have been investing all over the place - they're bound to be affected and the spiral will continue .

Japan went through an era of turmoil a few short years ago . They will no doubt be in a better position to get through all this as a result .

GB on the other hand have lived through an rea of spending borrowed money - from individuals at the bottom to ill regulated banks and the most irresponsible government of modern times at the top .

[American]

I've no seen or heard stories (yet) of any of the Asian banks being in trouble. I don't see why they should be would be as they're not loaded with toxic (that word again) like US and British banks. Note also none of the Euro banks appear to be in difficulties.

I'm assuming you are excluding (the remaining) British banks from being Euro banks?

[BuckyRover]

Bradford & Bingley has been nationalised....

[jim mk2]

Have you ever stopped to think how much you personally owe that woman Jimbo?

That woman owes me nowt. End of story.