Money matters....

AutumnRain · 10-08-2008, 04:49 PM

A while back I made a comment or 2 about how america borrows money with bonds and never pays it back and then when america has financial troubles the rest of the world suffers...I was scoffed at and laughed at... yet oddly enough look at todays financial world... USA are in trouble and *gosh* everyone else faces the backlash!
I'd like to take this opportunity to smirk and say "TOLD YOU SO"

sorry about that...

But I'm serious.. look at poor Iceland, look at Germany, Look at this wee country ! we are all being hit by americas tidal wave of debts

Enjoy your day night whatever..
I'm not around for a bit cos big hospital meeting tomorrow, then chemo /radiation starts soon..

ttyal and be good to one another
*hugs*

Vinnie · 10-08-2008, 04:59 PM

Umm AR what exactly is your point here? All governments borrow money that they "do not pay back. In actual fact they do these are the gilt bonds. The UK government is possibly the worst candidate for this with the 1.5% government bonds issued during the war and which are still outstanding. Most govt backed securities are dated and give a fixed return. It's nice to think that all our problems are down to someone else or some other country but the fact is we are the authors of our own downfall. If you use credit or buy on the never never then you are no different from the US citizens.

Flynn · 10-08-2008, 06:14 PM

AR

The biggest problem with the financial markets is their assets are devaluing and that is a direct result of the American banking system allowing borrowers to borrow 110% on housing loans.

The next biggest problem is the English banks saw how much money American banks were making so their imitated the trend to allow borrowers to borrow 110% on their housing loans.

All good until the housing market slumps and house prices fall.

Vinnie is wrong about personal responsibility to the extent that bankers permitted this to go on and actually encouraged it and so did the government politicians and officials who continued to give approval for a system that was in self destruct mode.

Itsnotgonnaspankitself... · 10-08-2008, 06:36 PM

Quote:

Originally Posted by AutumnRain

A while back I made a comment or 2 about how america borrows money with bonds and never pays it back and then when america has financial troubles the rest of the world suffers...I was scoffed at and laughed at... yet oddly enough look at todays financial world... USA are in trouble and *gosh* everyone else faces the backlash!
I'd like to take this opportunity to smirk and say "TOLD YOU SO"

sorry about that...

But I'm serious.. look at poor Iceland, look at Germany, Look at this wee country ! we are all being hit by americas tidal wave of debts

Enjoy your day night whatever..
I'm not around for a bit cos big hospital meeting tomorrow, then chemo /radiation starts soon..

ttyal and be good to one another
*hugs*

Oh, please...who would possibly scoff at such an important topic...?!?!

SpiderWeb · 10-08-2008, 06:38 PM

another reason is because Banks/Ins. Companies would lend money based on a non tangible asset .... if the loan was not repaid there was no asset to use as collateral ...... hence many lending institutions and Insurance Companies failing ....

Vinnie · 10-08-2008, 06:45 PM

Not entirely. One of the main problems with banks failing is that they have lent out their depositors funds and these loans are not repayable yet. The UK banks have lent between 90 and 177% of their depositors funds out. If they have a run on the bank then the bank is unable to pay out every one. Now almost all these loans will be repaid with interest (the default on these loans is about 0.2%) but they cannot be repaid NOW. Thus there is doubt as to the solvency of the banks.
Ins companies are in a bind partially because their assets are bound up in stocks which are uite volatile at the moment. The bond markt is more secure (particularly gilts) but the return on them is porer (or was until recently).

SpiderWeb · 10-08-2008, 07:05 PM

Quote:

Originally Posted by Vinnie

Not entirely. One of the main problems with banks failing is that they have lent out their depositors funds and these loans are not repayable yet. The UK banks have lent between 90 and 177% of their depositors funds out. If they have a run on the bank then the bank is unable to pay out every one. Now almost all these loans will be repaid with interest (the default on these loans is about 0.2%) but they cannot be repaid NOW. Thus there is doubt as to the solvency of the banks.
Ins companies are in a bind partially because their assets are bound up in stocks which are uite volatile at the moment. The bond markt is more secure (particularly gilts) but the return on them is porer (or was until recently).

I realize that ... I lived through a bank here that went down and had money in it. .... however, it wasn't Federally insured ... just STATE insured. That changed the banking here in Maryland!!! I actually was working for another bank at the time and had money in the failed bank. It was quite interesting too .. as the bank I worked for ... I was a customer service representative, so I had to tell the customers exactly what the bank wanted me to say whether it was the truth or not ...

However, the banks lending depositors money has been the long standing policy ..... I mean look at the movie "It's A Wonderful Life". This is just a part of the problems .... there are way too many because it was a snowball affect ... as well as the CEO's screwing the public while they walk away with their millions

Vinnie · 10-08-2008, 07:14 PM

I have a problem with the rewards bankers get for their work however how do you stop it? I have heard much about forcing them to take a risk to justify their big rewards but if their actions make million for the bank why do they not get rrewarded? How do you impose a risk on the traders. They will lose thier job if it goers wrong but that's hardly much comfort to those who lose their savings....

The situation here is slightly better with the majority of savings in the big 4 clearing banks. None of these banks will go down because if any of them did, the economy would collapse. Letting them go is just not possible. I wish the govt would make this clear. Alastair darling was on the radio this morning almost doing that but he still shied away from making a true comitment.

SpiderWeb · 10-08-2008, 07:57 PM

I have a problem with any company/corporation CEO walking away with millions as they do.

Take USF&G for instance, The CEO in the late 80's, early 90's made very bad investments and USF&G was rip for a take over. It ended up that out with the old "Mosley" and in with the new "Norm Blake" ... well good ol' norm was suppose to come in and turn it around and start making profits again. All Norm did was lay off thousands of workers countrywide and sold us off to the St. Paul Co. (well they said it was a merger, but it really wasn't). While he did this ... good ol' Norm walked away with 44 million and lots of angry people.

This is what I don't think is fair. If the company has money to pay a person like that, then why can't the employees who were left to keep it working and trying to improve it be rewarded above and beyond the CEO's.

I know ... in my own little dream world ... I'll wake up in a little bit.

Flynn · 10-09-2008, 05:59 PM

Quote:

Originally Posted by Vinnie

Not entirely. One of the main problems with banks failing is that they have lent out their depositors funds and these loans are not repayable yet. The UK banks have lent between 90 and 177% of their depositors funds out. If they have a run on the bank then the bank is unable to pay out every one. Now almost all these loans will be repaid with interest (the default on these loans is about 0.2%) but they cannot be repaid NOW. Thus there is doubt as to the solvency of the banks.
Ins companies are in a bind partially because their assets are bound up in stocks which are uite volatile at the moment. The bond markt is more secure (particularly gilts) but the return on them is porer (or was until recently).

Of course " The banks " lent out their depositors money.

They lent it to investors to buy assets that now have a value which is less than the purchase price and those investors don't have the income to service the loan and put money back in the bank.

That's why the American and English governments have to put cash into the banking system. So you're right about a run on the bank, without an injection of government cash there would be no cash to withdraw.

10-08-2008, 04:49 PM	#1 (permalink)
AutumnRain Senior Member Join Date: Mar 2005 Location: ma hoose Posts: 3,071	Money matters.... A while back I made a comment or 2 about how america borrows money with bonds and never pays it back and then when america has financial troubles the rest of the world suffers...I was scoffed at and laughed at... yet oddly enough look at todays financial world... USA are in trouble and gosh everyone else faces the backlash! I'd like to take this opportunity to smirk and say "TOLD YOU SO" sorry about that... But I'm serious.. look at poor Iceland, look at Germany, Look at this wee country ! we are all being hit by americas tidal wave of debts Enjoy your day night whatever.. I'm not around for a bit cos big hospital meeting tomorrow, then chemo /radiation starts soon.. ttyal and be good to one another hugs __________________ Light travels faster than sound. That's why some people appear bright until you hear them speak.

10-08-2008, 06:14 PM	#3 (permalink)
Flynn Senior Member Join Date: Jan 2005 Posts: 5,270	AR The biggest problem with the financial markets is their assets are devaluing and that is a direct result of the American banking system allowing borrowers to borrow 110% on housing loans. The next biggest problem is the English banks saw how much money American banks were making so their imitated the trend to allow borrowers to borrow 110% on their housing loans. All good until the housing market slumps and house prices fall. Vinnie is wrong about personal responsibility to the extent that bankers permitted this to go on and actually encouraged it and so did the government politicians and officials who continued to give approval for a system that was in self destruct mode. __________________ It's always easier to get forgiveness than permission.

10-08-2008, 06:45 PM	#6 (permalink)
Vinnie Senior Member Join Date: Oct 2006 Posts: 5,104	Not entirely. One of the main problems with banks failing is that they have lent out their depositors funds and these loans are not repayable yet. The UK banks have lent between 90 and 177% of their depositors funds out. If they have a run on the bank then the bank is unable to pay out every one. Now almost all these loans will be repaid with interest (the default on these loans is about 0.2%) but they cannot be repaid NOW. Thus there is doubt as to the solvency of the banks. Ins companies are in a bind partially because their assets are bound up in stocks which are uite volatile at the moment. The bond markt is more secure (particularly gilts) but the return on them is porer (or was until recently). __________________

10-08-2008, 07:14 PM	#8 (permalink)
Vinnie Senior Member Join Date: Oct 2006 Posts: 5,104	I have a problem with the rewards bankers get for their work however how do you stop it? I have heard much about forcing them to take a risk to justify their big rewards but if their actions make million for the bank why do they not get rrewarded? How do you impose a risk on the traders. They will lose thier job if it goers wrong but that's hardly much comfort to those who lose their savings.... The situation here is slightly better with the majority of savings in the big 4 clearing banks. None of these banks will go down because if any of them did, the economy would collapse. Letting them go is just not possible. I wish the govt would make this clear. Alastair darling was on the radio this morning almost doing that but he still shied away from making a true comitment. __________________

10-08-2008, 07:57 PM	#9 (permalink)
SpiderWeb A Premium Jokaroo'er Join Date: Feb 2004 Location: Far, Far Away ... the Queen has corrupted me.... Posts: 35,388	I have a problem with any company/corporation CEO walking away with millions as they do. Take USF&G for instance, The CEO in the late 80's, early 90's made very bad investments and USF&G was rip for a take over. It ended up that out with the old "Mosley" and in with the new "Norm Blake" ... well good ol' norm was suppose to come in and turn it around and start making profits again. All Norm did was lay off thousands of workers countrywide and sold us off to the St. Paul Co. (well they said it was a merger, but it really wasn't). While he did this ... good ol' Norm walked away with 44 million and lots of angry people. This is what I don't think is fair. If the company has money to pay a person like that, then why can't the employees who were left to keep it working and trying to improve it be rewarded above and beyond the CEO's. I know ... in my own little dream world ... I'll wake up in a little bit. __________________

10-08-2008, 04:59 PM	#2 (permalink)
Vinnie Senior Member Join Date: Oct 2006 Posts: 5,104	Umm AR what exactly is your point here? All governments borrow money that they "do not pay back. In actual fact they do these are the gilt bonds. The UK government is possibly the worst candidate for this with the 1.5% government bonds issued during the war and which are still outstanding. Most govt backed securities are dated and give a fixed return. It's nice to think that all our problems are down to someone else or some other country but the fact is we are the authors of our own downfall. If you use credit or buy on the never never then you are no different from the US citizens.

10-08-2008, 06:38 PM	#5 (permalink)
SpiderWeb A Premium Jokaroo'er Join Date: Feb 2004 Location: Far, Far Away ... the Queen has corrupted me.... Posts: 35,388	another reason is because Banks/Ins. Companies would lend money based on a non tangible asset .... if the loan was not repaid there was no asset to use as collateral ...... hence many lending institutions and Insurance Companies failing ....

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