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First it was the era of mergers and aquisitions.
Now it is total collapse.
The American Government had to intervene with takeovers,interest rate cuts and the $700billion bail out.

Could this be the end of capitalism.

The fact remains that a lot of money that does not exist has been and is being spent in the world.
I remember asking in the chit chat forum how the world economy grows and money in circulation grows owing to the fact that money is not being printed anyhow.

God save our country.

I doubt it.

But it could be the end of the Laissez-faire capitalist system as one french economist claimed.

One Aminu Aliyu,an economist formerly with BUK predicted these collapses. He told me during those totalfina-elf, chevron-texaco, Exxon-mobil mergers that the big ones are yet to come. A time when companies like citibank etc will go down under.

I do hope that.

That issue and other economic related news have been hitting headlines for days now.

Where is Jack Fulcher,the economist,to comment on this issue.

The two wars are taking a toll on the American economy and they are exproting the problem to the world forcing countries to lower their rates.
Interestingly the middle east economies are booming. Faduwar wasu tashin wasu.

Let all those skeptical investors come to Nigeria and invest.Our banks are making hundreds of percentage profits.

Quote from: gogannaka on October 09, 2008, 12:49:09 PM
Where is Jack Fulcher,the economist,to comment on this issue.

The two wars are taking a toll on the American economy and they are exproting the problem to the world forcing countries to lower their rates.
Interestingly the middle east economies are booming. Faduwar wasu tashin wasu.

Let all those skeptical investors come to Nigeria and invest.Our banks are making hundreds of percentage profits.

Havent u heard? Foreign investors are divesting  their assets in Nigeria in order to shore up their own countries' economies .

Well its obvious that their economies are not as healthy as they are supposed to be.
Isn't this global financial crisis artificially created kuwa,just like the global food crisis?
The media is propagating the thing like if you go to the US you would see beggars on the streets.


But i seriously fault the $700 billion bailout. How could you use govt funds to give wealthy corporations.
Ko da yake su ba sa bukatar titi da wutar lantarki.

Quote from: gogannaka on October 09, 2008, 03:10:45 PM
Well its obvious that their economies are not as healthy as they are supposed to be.
Isn't this global financial crisis artificially created kuwa,just like the global food crisis?
The media is propagating the thing like if you go to the US you would see beggars on the streets.


But i seriously fault the $700 billion bailout. How could you use govt funds to give wealthy corporations.
Ko da yake su ba sa bukatar titi da wutar lantarki.

I just finished listening to that program 60 mins in which they talked at length on this. Ko da yake nowadays ba inda za ka kunna news baka ji the main topic of the day is this global economic meltdown ba.

Anyway what it was was pure greed on the part of the investment banks. The main thing is that these investment houses have been deregulated since the time of Reagan. So in effect, there is no govt control or influence on how these markets operated. It started with the subprime mortgage loans where by ppl who were known not to have the means to pay back loans were given mortgage loans to buy houses at interest rates that they couldnt possibly commit to. Secondly, the giant investment houses like Lehman Bros and Bear Stearns then bought those loans repackaged them and began to sell them as securities. In order to get ppl to buy them, the investment houses included a kind of insurance they called Credit Default Swap, which was also sold separately or together (not sure).

This  Credit Default Swap was not called an insurance policy in order  to avoid its being regulated by the US govt. Thus a scenario was set up in which the unsuspecting layman buys securities for which there was inherent protection against loss. What the investment houses didnt do was make sure that they had enough reserve capital set aside if the securities failed. These securities were sold by almost all the US investment banks, the mortgage banks like Freddie Mac and Fanny Mae, the insurance group AIG. They were also sold globally wherever these US banks had branches or affiliations.Therefore the unsuspecting investor wherever he may be (Asia, Europe, South America, South Africa), was encouraged to buy them by his broker. The trade in these securities and CDS is thought to have amounted to approximately 60 trillion dollars.

When the home owners in the US began to default on their payments, the investment banks couldnt come up with the money to make good their promises of paying off the investors in those securities, and thus began the house of cards collapses suffered by the investment banks and this is the reason why not only the US banks but  banks all over the world suffered.

Quote from: HUSNAA on October 09, 2008, 04:20:17 PM

Quote from: gogannaka on October 09, 2008, 03:10:45 PM
Well its obvious that their economies are not as healthy as they are supposed to be.
Isn't this global financial crisis artificially created kuwa,just like the global food crisis?
The media is propagating the thing like if you go to the US you would see beggars on the streets.


But i seriously fault the $700 billion bailout. How could you use govt funds to give wealthy corporations.
Ko da yake su ba sa bukatar titi da wutar lantarki.

I just finished listening to that program 60 mins in which they talked at length on this. Ko da yake nowadays ba inda za ka kunna news baka ji the main topic of the day is this global economic meltdown ba.

Anyway what it was was pure greed on the part of the investment banks. The main thing is that these investment houses have been deregulated since the time of Reagan. So in effect, there is no govt control or influence on how these markets operated. It started with the subprime mortgage loans where by ppl who were known not to have the means to pay back loans were given mortgage loans to buy houses at interest rates that they couldnt possibly commit to. Secondly, the giant investment houses like Lehman Bros and Bear Stearns then bought those loans repackaged them and began to sell them as securities. In order to get ppl to buy them, the investment houses included a kind of insurance they called Credit Default Swap, which was also sold separately or together (not sure).

This  Credit Default Swap was not called an insurance policy in order  to avoid its being regulated by the US govt. Thus a scenario was set up in which the unsuspecting layman buys securities for which there was inherent protection against loss. What the investment houses didnt do was make sure that they had enough reserve capital set aside if the securities failed. These securities were sold by almost all the US investment banks, the mortgage banks like Freddie Mac and Fanny Mae, the insurance group AIG. They were also sold globally wherever these US banks had branches or affiliations.Therefore the unsuspecting investor wherever he may be (Asia, Europe, South America, South Africa), was encouraged to buy them by his broker. The trade in these securities and CDS is thought to have amounted to approximately 60 trillion dollars.

When the home owners in the US began to default on their payments, the investment banks couldnt come up with the money to make good their promises of paying off the investors in those securities, and thus began the house of cards collapses suffered by the investment banks and this is the reason why not only the US banks but  banks all over the world suffered.

Gogannaka, I think the major problem with the U.S bailout plan was what you have highlighted earlier. There is no rational whatsoever to use tax payers money and settle an ailing economy that is in shambles! Goerge Bush, McCain and co were the people that contributed largely to the U.S dwindling economy. They have been ravaging the economy overtime without recourse to their unchequred history.

I do not see any sense in expending about $10-13 billion monthly on war in Iraq whereas your country's economy is in dire need of $700 billion to be bailed out. If for instance you can invest that money into the economy, believe you me the problem will be solved in less than a year. This is simple arithmetic my dear, which Bush McCain and co deliberately fail to understand.

For Husnaa, the trouble with wall street in the U.S is quite unwholesome to U.S's economic savvy. Why do they (the economy policy makers)want to rescue the wall street whereas the main street is endangered economically? I do understand all your explanations about the U.S stock exchange and share markets. Look at how the NASDAQ is fairing today. Look at the main wall street marketability performance indicators. So the question still boils down to Gogannaka: Is this going to be the end of capitalism or rather the beginning of the end of mercantile capitalism?

I remain loyal. Cheers!!!

Quote from: Nuruddeen on October 10, 2008, 09:24:02 AM

Quote from: HUSNAA on October 09, 2008, 04:20:17 PM

Quote from: gogannaka on October 09, 2008, 03:10:45 PM
Well its obvious that their economies are not as healthy as they are supposed to be.
Isn't this global financial crisis artificially created kuwa,just like the global food crisis?
The media is propagating the thing like if you go to the US you would see beggars on the streets.


But i seriously fault the $700 billion bailout. How could you use govt funds to give wealthy corporations.
Ko da yake su ba sa bukatar titi da wutar lantarki.

I just finished listening to that program 60 mins in which they talked at length on this. Ko da yake nowadays ba inda za ka kunna news baka ji the main topic of the day is this global economic meltdown ba.

Anyway what it was was pure greed on the part of the investment banks. The main thing is that these investment houses have been deregulated since the time of Reagan. So in effect, there is no govt control or influence on how these markets operated. It started with the subprime mortgage loans where by ppl who were known not to have the means to pay back loans were given mortgage loans to buy houses at interest rates that they couldnt possibly commit to. Secondly, the giant investment houses like Lehman Bros and Bear Stearns then bought those loans repackaged them and began to sell them as securities. In order to get ppl to buy them, the investment houses included a kind of insurance they called Credit Default Swap, which was also sold separately or together (not sure).

This  Credit Default Swap was not called an insurance policy in order  to avoid its being regulated by the US govt. Thus a scenario was set up in which the unsuspecting layman buys securities for which there was inherent protection against loss. What the investment houses didnt do was make sure that they had enough reserve capital set aside if the securities failed. These securities were sold by almost all the US investment banks, the mortgage banks like Freddie Mac and Fanny Mae, the insurance group AIG. They were also sold globally wherever these US banks had branches or affiliations.Therefore the unsuspecting investor wherever he may be (Asia, Europe, South America, South Africa), was encouraged to buy them by his broker. The trade in these securities and CDS is thought to have amounted to approximately 60 trillion dollars.

When the home owners in the US began to default on their payments, the investment banks couldnt come up with the money to make good their promises of paying off the investors in those securities, and thus began the house of cards collapses suffered by the investment banks and this is the reason why not only the US banks but  banks all over the world suffered.

Gogannaka, I think the major problem with the U.S bailout plan was what you have highlighted earlier. There is no rational whatsoever to use tax payers money and settle an ailing economy that is in shambles! Goerge Bush, McCain and co were the people that contributed largely to the U.S dwindling economy. They have been ravaging the economy overtime without recourse to their unchequred history.

I do not see any sense in expending about $10-13 billion monthly on war in Iraq whereas your country's economy is in dire need of $700 billion to be bailed out. If for instance you can invest that money into the economy, believe you me the problem will be solved in less than a year. This is simple arithmetic my dear, which Bush McCain and co deliberately fail to understand.

For Husnaa, the trouble with wall street in the U.S is quite unwholesome to U.S's economic savvy. Why do they (the economy policy makers)want to rescue the wall street whereas the main street is endangered economically? I do understand all your explanations about the U.S stock exchange and share markets. Look at how the NASDAQ is fairing today. Look at the main wall street marketability performance indicators. So the question still boils down to Gogannaka: Is this going to be the end of capitalism or rather the beginning of the end of mercantile capitalism?

I remain loyal. Cheers!!!

Nura, the US govt   has no choice but to rescue wall street at the expense of main street. Granted they must make certain stringent clauses so that wall street doesnt get off so easily and also the tax payers' money is safeguarded, but if u look at it, essentially Bush's initial bail out plan involving 700 billion did go through at the end of the day. All it took was for the members of the house of reps to convince their constituencies of the need for the bail out even though it not palatable to the tax payers. This whole thing is analogous to Nazi concentration camps, whereby  Nazis gas  Jews to death and then make other Jews remove the bodies from the gas chambers.
The point is that if the banks dont have money, then there will be no money for firms and other enterprises to borrow in order to pay off workers, start or continue with projects e.t.c. This will lead to job losses if industries are forced to lay off their workers due to cash constraints. The next step will be the start of an economic recession.

Despite this, the  investment bank failures  must be viewed in the same light as the ENRON meltdown and the same measures taken accordingly.
PS this is not the end of capitalism, but it is the end of excessive deregulation in the banking sector as we know it today and the beginning of more government big brotherism. Some analysts think that this might spell the beginning of the end of US domination in world economic affairs, given that China today is the major exporter of goods in the world and much of it ends up in the US. It took 2 yrs for the US market to regain back its losses after the crash of 1987, so God knows how long it will take for the markets to regain their balance after these shock waves. One thing is for certain though, there has been a massive loss of confidence in the stock markets all over the world and with very good reason. Every single day sees fresh fluctuations and jitters all over the world. So I think investors will probably start looking for alternative sources of investments and they will also start paying attention to the small print on the contract sheets and spending more time getting blow by blow explanations of exactly what will happen with their hard earned cash.

Quote from Husna

"It started with the subprime mortgage loans where by ppl who were known not to have the means to pay back loans were given mortgage loans to buy houses at interest rates that they couldnt possibly commit to. Secondly, the giant investment houses like Lehman Bros and Bear Stearns then bought those loans repackaged them and began to sell them as securities".

My question here is, I cant just figure out how commercial banks and Inv bank dont have money. From the quote above we understand commercial banks issued mortgage loans to individuals whom might not be able to pay back may be due to the interest charged or the customers credit worthiness. However you mentioned these loans are sold to investment banks (that means the commercial banks have got their money back). Secondly, the investment bank repackaged these loans and sell them as securities, which I believe they were all bought (thus the investment banks have gotten their money back).

Second question, why use tax payers monies for bail out? From the quote above we understand the banks know or were careless in issuing these loans. We have also realise the banks got their money back from the above argument. So why not give this $700b to these customers who are deflauting in their in payment, the money is theirs' anyway (they pay the tax). Let them use it and pay the loans, thus investment bankers can pay off those investors in their securities.

MY POINT OF VIEW ON THESE CR CRISIS
Common individuals are the oil that run the economic engine. However these individuals are sucked up with varieties of payments: interest payments on  credits, not to mention the principal sum. The gready bankers issue credit cards, graduate loan, business loan, personal loan, mortgage, car loans and what have you. The gready business moguls tie customers to 12months contracts even 18months now, where customer whether he/she enjoys the service has to pay for these obligations, pays late payment fine if paid late even when you are broke. These payments for the services are usually neccessity good i.e car insurance, internet service, telephone, mobile, satterlite. There are other hidden cost associated with these contracts. Because of competition high street shop issue customers' credit card where individuals shop with shop-card on credit apart from the credit-card issued by banks. Another way of sucking these oil is prepayment,individual customers make prepayment for some of his/her obligation.

So basically the money/oil is drained out of the common man's hand. In a long run (which is now) people will no longer have any money left to pay for anything at best they pay the interest not the principal so the business will definately see a downturn and the stockmarket will continiou pointing down. Whole economy runs in credit and the only way out is porfiet these credit and carry on from here or the government pay it off for the masses is their savings with the government anyway

Just after I post the one above I saw on TV blomberg to be presice. You know thats investors TV (LOL). The TV presenter was showing a chart of market sectors but all the sectors are in red-negetive i mean all down, guess what he said "thanx to food sector" thats the only one thats is up, the food sector is subdivided in a piechart all the other part of the pie is red showing negative figures except for Tobacco and alcohol they are the subdivision in the food sector that is doing well.

As an investor you will think thats where i should invest my money now. But as a reasonable man you know people are fraustrated thats why they are consuming more alcohol and smoking more because they are depress financially and other wise

Quote from: IBB on October 15, 2008, 03:34:24 PM
Just after I post the one above I saw on TV blomberg to be presice. You know thats investors TV (LOL). The TV presenter was showing a chart of market sectors but all the sectors are in red-negetive i mean all down, guess what he said "thanx to food sector" thats the only one thats is up, the food sector is subdivided in a piechart all the other part of the pie is red showing negative figures except for Tobacco and alcohol they are the subdivision in the food sector that is doing well.

As an investor you will think thats where i should invest my money now. But as a reasonable man you know people are fraustrated thats why they are consuming more alcohol and smoking more because they are depress financially and other wise

Lol thats a very good observation IBB!