US bailout-bill defeated.

[Hetzer]

Well there's one in the teeth for the filth on Wallstreet. Maybe if the criminal US administration had promised to prosecute, convict and imprison for life every last one of those parasitic Mu-huther FUHKERS the American people would have gotten behind it. But as usual they were expected to carry on funding the wealth and privilage of the few at the expense of the many (many of whom are now houseless).

Keep bringing it on, let's see the entire global sh!thouse brought crashing down. DJ has been down over 700 points already tonight. Fingers crossed for 7000.
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"There's the horizon! Ride hard, ride fast and cut down all who stand in your way!"

[igiyf]

the bill would have made it worse

[headlamp]

[cestrian]

I'm chuffed. A financial Chernobyl is just what we need right now.

[Itchy]

The Invasion of Iraq was actually a clever move , in that in the near future resources will be scarce , it now takes more energy to extract coal / oil / gas than before ie diminishing resources...

Thus game theory as said he who grabs the resources is strengthened to grab further resources in the future...

Those who do not grab resources are weakened since they didn't get it...


We are in the opening shots though where there are undisputed resources...

ie the US goes after Iraq and the only opponents are the remainants of the Iraqi army...

The future when resources start getting really scarce its either let loose the genetically engineered super viruses to reduce resource pressure (which is bad as you need infantry to grab resources) , or go to war since 2 nations try to grab the same resource..
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Spain 2008France 2007Big one 2009 We all die. The goal isn't to live forever, the goal is to create something that will. In the end, your life will flash before your eyes. Make sure it is worth watching.

[Itchy]

[D O G]

Some relevant posts there Itchy

Currently there is no consistency in the markets since no-one actually knows what the fuck is going to happen. The on-off nature of this US saviour pakage is causing the huge volatility in the share markets, which are normally stable since everyone pretty much knows what is likely to happen in the medium term. At the moment they have no idea what will happen in the short term.

It could be that that the banks get out of the $700bn, which would clearly enhance the value of the banks (and so shares soar when the deal looks as if it goes through). It also could be that they do not get out of this debt, and as such share price would then fall to a level to value any institution with the amout of shitty debt in there. This is not necessarily a bad thing, and would at least focus the banks to manage the debt, rather than passing it to the government, which is like asking the dvla to take charge of all car servicing in the UK - which it lacks the relevant experience to do so.

Personally I don't see the point in the Govt bail out, I think it will be worse in the long run.

Not all of the $700bn will go bad, the losses will not be that much, and the banking sector as a whole could absorb whatever loss that arises. Sure, there will probably be some failures along the way, which will either result in some collapses of institutions, or more likely the distressed takeovers we have been seeing recently. Even banks with a shitload of bad assets have a lot of good assets - which some other institution would want to get their hands on at a cut price.

Personally, I believe that there shoudl be no bail out, the banks shoudl deal with their own shit. My view on the consequences which would follow:

- Some people will lose their jobs through no fault of their own, which is tough, but c'est la vie.

- There will be a big correction in the value of institutions (and other companies who rely on significant debt financing in their operations), and smaller corrections when the actual potential bad debt unwinds itself, and a clearer picture of the situation emerges.

- Effective interest rates will go up, for sure, as the banks will want to cover their arses more (i.e. assign a greater risk premium
to any debt), and also make more money to cover their losses.

- Availability of credit will be restricted (although I can't imagine it will get much worse than it is now), but credit will still be granted, as the banks still need to make money.

- This will have an adverse knock on effect to the economy as a whole, since virtually all businesses need credit in their operations, particularly expansion plans, and as such limited credit means limited growth.

- Credit to individuals will also be restricted (no bad thing at all), which in turn will hamper economic demand and therefore growth.

- Costs of existing debt will increase (like mortgages ect), as the bank increase their effective rates. Not good for a lot of people, and also restricting demand in the economy and therefore growth. People and press hype this, saying that there will be many, many reposessions etc etc. Yes, there will be more (otherwise we wouldn't have a hill of dodgy debt, as ultimately it is these loans which are dodgy), but the banks will be focussed on not foreclosing unless they have to - because that would be yet another hit to their P&L.

- Increased regulation on the banking sector (like the Sarbanes Oxley shizzle that came in after Enron), which will give more work to professional advisor firms.

In summary, a recession most probably, lasting about as long as it takes to flush through the bad debts and confidence to return to the sector. Maybe 2-3 years of recession, then back to growth I would have thought, but not based on fairly reckless spending through cheap credit.

I seriously doubt there will be a catastrophe.*



*Disclaimer: this is my opinion, and my opinion alone. I am not a professional economist, geez, I'm hardly even professional. Don't come knocking at my door if anarchy ensues, I'll stove your face in and steal your gold teeth.

[D O G]

Oh yeah, and the bill in totality is not defeated, just this form. There's likely to be another vote before the weekend. Congress is open again on Thursday to debate again (there's nothing like a three day week now is there ). Expect some more markeyt mayhem before then as everyone speculates as to what is going to happen.

[ColdInsomnia]

This bill is about much, much more than 'just' a $700bn bail-out for the American banks. It also introduces new legislation;

[Fawbish]

Ok, didnt see this. My thread shall die a contented death, my answers shall be found here
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"Oh....it looks like Average Joe's is forfeiting the match!" - "Yeah, its a risky strategy but lets see if it pays off for 'em Cotton."

[ColdInsomnia]

We can only hope and pray that the American people who put the pressure onto their representatives keep it up. The Bush Admin fully intend on doing a "European Referendum" on the American people, and simply rewording this bill slightly and once again trying to push it through.

The section which I underlined in my above post... is one of the most alarming pieces of legislation I've ever seen in my life. How anyone could support such a dictorial move is beyond me. The fact that most of congress are being urged / forced to vote Yes on the bill without having chance to fully understand, or in some cases even read the bill, is nothing short of despicable.

Please, any Americans that happen to stumble upon this post, if you value your country, you will not ease up on the pressure on your representatives. This "yes" vote is not a victory. It is just a stall.
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Yamaha YB100 | Yamaha TZR125 | Yamaha XJ600S | Suzuki GSF600
"Our society is run by insane people for insane objectives. I think we're being run by maniacs for maniacal ends and I think I'm liable to be put away as insane for expressing that. That's what's insane about it."
John Lennon

[UnknownStuntm...]

ok then since you lot seem to be the fountain of all knowledge, let me explain my sphincter-twitching situation for your appraisal:

I earn a reasonable amount of cash, my employer seems reasonable stable at the moment, despite being somewhat tied to the housing market (selling tools and building products). I bought a house at the beginning of last year on a five year fixed interest only deal. One of those 105% mortgages, where you just pay back the '10% loan'. At the end of this time, I reckon I'm gonna be out of a house, cos no fecker is gonna want to give me 95% of what I bought the house for, when in fact the house *will* be valued at about 70% (at best...) of what I paid for it.

I'm stuck with it. IMHO the Yanks have control of where I live in three and a half years. All I can do is sit and wait for something to happen....

[panrider_uk]

Why are you going to be out of your house?

As long as you can keep up the mortgage payments nothing changes.

House prices are only an issue if you're in the market to buy or sell.

Mark
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Current bikes: Honda ST1100 Pan European. Moto Guzzi V85 TT Travel

[UnknownStuntm...]

My thought train is that I'm not going to be able to get a mortgage offer... I like my house, it's cool - I could live here for a very long while. But I bought it when prices were highest, and got a 105%er from Northern Rock. So I can't imagine many lenders tripping over themselves to give me as much as 95% of it's original purchase value.... Yagetme?

[D O G]

[D O G]

[D O G]

[ColdInsomnia]

[D O G]

[D O G]

[igiyf]

Damofo D.O.G.

[ColdInsomnia]

The Fed usurped the government back in the days of Wilson, he says these exact words himself. I'll happily admit, I clearly made a mistake with how I've worded the last few posts (which you've happily pounced upon) - but if you're asking me to support a bill which will ultimately remove the judiciarily from economic decisions, then that will never happen.

I'll be totally honest - I have no history as a treasurer; I do not implicity know what is going to happen if this bill is passed / failed. All I have to go on is what I've seen happening... and I have absolutely no reason to believe that the same government that introduces legislation such as The Patriot Act, Military Tribunals Act, etc, truly has it's citizens best intentions at heart.
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Yamaha YB100 | Yamaha TZR125 | Yamaha XJ600S | Suzuki GSF600
"Our society is run by insane people for insane objectives. I think we're being run by maniacs for maniacal ends and I think I'm liable to be put away as insane for expressing that. That's what's insane about it."
John Lennon

[D O G]

[igiyf]

[Fawbish]

I question it on the basis that if they suddenly have $700 billion lying around to help, why the fuck did it happen in the first place.

And, i'll assume its not lying around, so it's gotta come from somewhere. Someone has to get fucked over. And guess who it's going to be?

So if they dont pass this bill (which, by all accounts, sounds like its on a knife edge) anyone got a general idea of what will be the eventual chosen course?
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"Oh....it looks like Average Joe's is forfeiting the match!" - "Yeah, its a risky strategy but lets see if it pays off for 'em Cotton."