Jump to content

Will the Govt's actions work?


Recommended Posts

Various governments are trying different tactics to stablise the present economic siuation.

(Mostly, throwing money at the problem. OUR money!)

 

Will it work, or will things continue to get worse?

 

I suspect that, despite all the cash injected, and support being promised, it wont make much difference to the markets and further falls are coming.

I also believe that what we have heard so far is just the tip of the iceburg.

 

Early next week look for RBS (Royal Bank of Scotland) to be partly or wholly nationalised by the UK Govt. (They should never have taken over ABN Amro-and certainly not at the price paid.)

 

I hear that one or to other major banks are also in the mire, and with numbers that have far too many zeros!

 

What is the general opinion?

 

Will things now get back to "normal" or is more trouble on the way?

 

As a secondary point, what will this do to the Philippines?

Link to post
Share on other sites
  • Replies 38
  • Created
  • Last Reply

Top Posters In This Topic

  • JohninCebu

    9

  • MattFromGA

    6

  • ckfm

    6

  • mattwilkie

    3

Top Posters In This Topic

Posted Images

Continuing the policies that caused the problems will only make bigger problems. Printing more money will only make things worse. We should go back to the fiscal policies of Grover Cleveland the 22nd and 24th US president. http://en.wikipedia.org/wiki/Grover_Cleveland His portrait hangs in the office of Congressman Ron Paul. They should make him the Sec of the Treasury.

 

Both presidential candidates voted for the bailout so no matter who wins the election the economy will continue to slide. Does the bailout make sense? Pres. Bush comes out on national television and says the sky is falling and he needs $700B real quick! This is supposed to calm the markets? The sky is falling. No wonder stocks dropped so fast.

 

I am not an economist, but didn't low interest rates and easy credit cause this? Then this week the Fed cuts 1/2 per cent on their rate. This is not going to be the last bailout. Less than a year from now they will probably ask for a additional and larger bailout of a trillion dollars. It's a real mess and it's doing to hurt no matter what they try.

Edited by M.Morey
Link to post
Share on other sites

This weekend has been frantic, yet again. The G7, IMF et al have vowed to support their banks , which must be done nationally bacause a global solution is not possible but they can hold hands.

 

This will give the markets a bit more confidence and allow the credit markets to function. The reason this is vital is because at the moment international trade is grinding to a halt. If you want to export goods, you need a bank's letter of credit from the purchaser which is then presented to your bank as a guarantee of payment. Banks are not accepting each others letters of credit so ships are not moving. This is serious, like I mean in two weeks there would be nothing in the shops unless it was produced in your own country. This includes oil etc.

 

The FT has this on UK banks as Alan mentioned:-

 

http://www.ft.com/cms/s/0/153e175e-9883-11...0077b07658.html

 

So UK banks, other than Barclays who are playing for time and HSBC who don't need help, will have the UK taxpayer is it's major stockholder because while the capital injections are small compared to assets, the current prices have fallen so far that the capital value is a small fraction of what they were only a few months ago.

 

In my opinion this will get banks to lend to each other and provide credit becuase if they don't they will be forced to by effectively being nationalised on a global scale and of course all the directors would be sweeping the streets.

 

What will happene to stock markets. I think there will be a bounce this week - a relief rally. The trillions sitting in cash will start to flow. How long will it last? Days, weeks but unlikely to be months before we dive again and this one will be the capitulation downtrend. The reason is because the effects of all this has not been felt in Main Street. Saving the banks whilst essential is not going to save our economies from inflation/stagfaltion/depression. We are in a recession and no one knows what the overall effect will be to what parts of the world.

 

My personal view is that this is the start of the flow of wealth from West to East. With the flow of credit the chances are the dollar will start to fall as supplies of dollars/foreign exchange will increase. If I had US dollars I'd think about selective sales to take advantage of the current exchange rate with the peso. If I had Aussie $ I'd wait. I've got UK pounds and haven't the faintest idea what to do, lol. I think it will be trashed even against the UD$

 

But as ever, time will tell. Please don't think I know what will happen, I just read people who know a hell of a lot more than me and they've been warning about this for 3+ years. Always do your own research and decide accordingly.

 

Good luck to us all.

Link to post
Share on other sites
So UK banks, other than Barclays who are playing for time and HSBC who don't need help, will have the UK taxpayer is it's major stockholder because while the capital injections are small compared to assets, the current prices have fallen so far that the capital value is a small fraction of what they were only a few months ago.

Not quite the BBC's take - it says here that Barclays needs to raise 8 Billion Pounds.

 

What will happene to stock markets. I think there will be a bounce this week - a relief rally.

That's called a "dead cat bounce" I believe.

 

 

Mark

Link to post
Share on other sites

NY Times:

 

With the U.S. bond market and all Japanese markets closed Monday for holidays, British policy makers appeared to be speeding up plans to inject capital into their troubled banks. At the top of the list is Royal Bank of Scotland, whose market value has fallen to below

Link to post
Share on other sites
MattFromGA

John, I might suggest stepping back and taking a breather from all the conjecture going on in the media. There has never been a time where some theorist wasnt writing about the demise of the world. Everything works in cycles, so this down side wont last forever. Focus on the positives in life and stay within what Steven Covey calls the "circle of influence". Worrying too much about things outside of your circle of influence is something that can create unwarranted stress in your life.

 

It can be loads of fun to chat up the theories, and if thats all you're doing here, then its different than what I'm saying. However, I'd hate to see you add an extra albatross around your neck from the news hype of the day.

 

I can definitely relate to the stress that a lack of income can generate in ones life (i.e., not enough money to cover the budget you'd like to live by). Regardless of world events, you still have to adjust your life to your situation. If you reduce stress and stay open to positive possibilities coming your way, you'll be more likely to get the upper-hand in the budget balance.

Link to post
Share on other sites
John, I might suggest stepping back and taking a breather from all the conjecture going on in the media. There has never been a time where some theorist wasnt writing about the demise of the world. Everything works in cycles, so this down side wont last forever. Focus on the positives in life and stay within what Steven Covey calls the "circle of influence". Worrying too much about things outside of your circle of influence is something that can create unwarranted stress in your life.

 

It can be loads of fun to chat up the theories, and if thats all you're doing here, then its different than what I'm saying. However, I'd hate to see you add an extra albatross around your neck from the news hype of the day.

 

I can definitely relate to the stress that a lack of income can generate in ones life (i.e., not enough money to cover the budget you'd like to live by). Regardless of world events, you still have to adjust your life to your situation. If you reduce stress and stay open to positive possibilities coming your way, you'll be more likely to get the upper-hand in the budget balance.

Thanks Matt I know what you mean but unfortunately the market is how I make my fun money. Been doing it for 8 years now so it is my day job.

 

Personally, I always want to be ahead of the curve if at all possible, that's just me. I know from the past, if you just relax and let it flow so it will and in these times it will be down the river, lol

Link to post
Share on other sites
Not quite the BBC's take - it says here that Barclays needs to raise 8 Billion Pounds.

That's called a "dead cat bounce" I believe.

Mark

Yes Mark, they acknowledge they need to raise capital but have not as yet commited to the governments plan, they are still trying other methods.

 

I used the phrase "relief" as it will be but yes, dead cat bounce will do as well, lol :blink:

 

Something on the letter of credit aspect - http://www.financialpost.com/story.html?id=866522

 

And Paol Rogers to really cheer us up:-

http://www.cnbc.com/id/15840232?video=884520270&play=1

Edited by johnrainey
Link to post
Share on other sites

It's all leading up to a North American Union which will join with the European Union and other continental unions to form a world union of communism.

 

Who is engineering this (part 1 of 5):

Link to post
Share on other sites

Just put enough 000 behind the numbers and all will be fine. Hey, somebody had that idea 79 years ago.

 

.

Link to post
Share on other sites

A prescient photo! It's the UK Chancellor of the Exchequer by the way

post-1149-1223898705_thumb.jpg

Edited by johnrainey
Link to post
Share on other sites

The only reason why the bailout will work this time is because the US government has the highest credit rating. Money supply is the key word, as long as they have that rating, all is fine. I wonder what it does to inflation? With the current inflation-driving decisions 20-25% $ inflation (thus all-time highs) are almost guaranteed for 2009, or in 2010 at the latest.

 

.

Link to post
Share on other sites
'Alan S' post='71325' date='Oct 12 2008, 01:50 PM']Various governments are trying different tactics to stablise the present economic siuation.

(Mostly, throwing money at the problem. OUR money!)

 

Will it work, or will things continue to get worse?

 

I suspect that, despite all the cash injected, and support being promised, it wont make much difference to the markets and further falls are coming.

I also believe that what we have heard so far is just the tip of the iceburg.

 

Early next week look for RBS (Royal Bank of Scotland) to be partly or wholly nationalised by the UK Govt. (They should never have taken over ABN Amro-and certainly not at the price paid.)

 

I hear that one or to other major banks are also in the mire, and with numbers that have far too many zeros!

 

What is the general opinion?

 

Will things now get back to "normal" or is more trouble on the way?

 

As a secondary point, what will this do to the Philippines?

 

 

Relative to the Philippines :

 

Depends on you you read as to what transpires in the Philippines . Gloria of course says the Philippines is the best positioned country in Asia for foreign investment , despite the fact that it is dead last in foreign investment . But maybe the theory is there is only one way to go , up . :D

 

The Philippine stock market is down roughly 34% for the year but the local bourse says the Philippine market is the most " resislent " in asia . :blink:

 

Of greater concern might be the OFW factor . When economies bottom jobs are lost and discretionary spending in particular is lost ( read , house help , resturant help , etc ) and fact is a large portion of Philippine OFW work force fits into those categories . Personally , i think the Philippines will get hit hard though probably won't show as much here until 2009 - 2010 . Just an opinion .

 

http://manilatimes.net/national/2008/oct/1...081014top4.html

Edited by Daisy
Link to post
Share on other sites

John, that link only appears to work for those who use google-mail.

Link to post
Share on other sites
Guest
This topic is now closed to further replies.

×
×
  • Create New...

Important Information

By using this site, you agree to our Terms of Use, Privacy Policy and Guidelines. We have placed cookies on your device to help make this website better. You can adjust your cookie settings, otherwise we'll assume you're okay to continue..

Capture.JPG

I Understand...