About the global stock market crisis

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About the global stock market crisis




by Christophe » 21/09/07, 10:32

The current crisis explained in a thousand words

Public release GEAB N ° 17 (September 15 2007)

As 2006, the team of LEAP / E2020 researchers, has repeatedly explained, the main driver of the current systemic crisis is in the United States. This "end of the West as we know since 1945" announced by LEAP / E2020 in February 2006, it is above all the collapse in all its dimensions (economic, monetary, financial, diplomatic, intellectual and strategic) of the pillar of the world order of the twentieth century that were the United States. And it is this country that is found in the heart of the financial and banking crisis affecting in a visible way since this summer the whole planet. To take a simple picture, the pillar now rests on quicksand. Which obviously leads the whole global architecture to collapse as a whole first, then to collapse in whole swaths.


The following: http://www.alterinfo.net/La-crise-actue ... 11273.html
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by bham » 21/09/07, 11:29

Nice to have found that! very interesting !
Will we have to stop making our world a virtual world ??
Oh what a shame : Cry:
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by Christophe » 21/09/07, 13:58

Uh I do not know if your comment is ironic but in the virtual context it means money (monetary creation) without material compensation ... so it may be time to re-calibrate the counters given the abuse of any kind (stock market speculation very short term for example ...) ... anyway if we do not do it smoothly, the system become unstable, will do it itself ... and certainly not smoothly ...

It's a bit like the warming finally ...

So nothing to do with the net ... if that's what your : Cry: did you do it?
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FINANCIAL CRISIS • Portrait Gallery of the Guilty




by freddau » 21/09/07, 14:43

From the boss of the Fed to mortgage credit specialists, those responsible for the collapse of the market are legion.

THE CENTRAL BANK
Alan Greenspan, Chairman of the US Federal Reserve (Fed) from 1987 to 2006
The man who sponsored the bubble. After the collapse of the Internet boom in 2000, the September 11 2001 attacks and the accounting scandals, especially at Enron in 2002, the Fed lowered its key rates until they reached 1% in June 2003, where they stayed a year before going up slowly. These historically low amounts (negative in real terms) had the desired effect, which was to support the financial markets, but they also fueled inflation and, more dangerously, a financial and real estate bubble. Housing owners have borrowed and spent, often to buy goods imported from China, aggravating the huge trade deficit of the United States.
The Fed is also responsible for banking regulation, but Greenspan has remained unmoved by the phenomenon of high risk home loans. "Whereas before poor credit applicants were denied a loan, lenders today are able to effectively assess this risk," he declared in 2005, praising the technological and financial innovation that allowed the creation subprime mortgages]. The market share of these at-risk credits has risen rapidly from less than 2% in the early 1990 years to 10%.


THE BIG UK BANKS
Bob Diamond, President of Barclays
The dashing leaders of Wall Street are not alone in having bought and sold reconditioned debt. The big UK banks have also participated in the movement, structuring and selling all these things, investing in potentially toxic credit through obscure financial instruments or developing these products for their customers. Barclays Capital (BarCap), the Barclays investment bank, was at the heart of this rush. The resignation of Edward Cahill, BarCap's specialist in collateralised debt obligations, has raised serious concerns about the merchant banking situation. Bob Diamond, however, assured investors that there was no threat to Barclays' accounts.

SPECULATIVE FUNDS
Jim Simons, founder of Renaissance Technologies
Before becoming the highest paid hedge fund manager in the world, this mathematician began his professional career at the US Department of Defense, where he was responsible for forcing enemy codes during the Vietnam War. Now, its hedge fund, Renaissance Technologies, controls 17 billion euros of assets and bills its 5% customers annually for managing their cash, plus a commission of 44% on returns beyond a certain level.
What customers are paying at this price is software called "black box", which derive tiny profits from millions of automated financial transactions. Quantitative management funds like Renaissance lost billions of dollars during the first week of August after a series of events that, according to the statistical models, should not have occurred, thus helping to spread the panic provoked by the subprime mortgage sector.

THE AUTHORITIES OF TRUSTEESHIP
Christopher Cox, Chairman of the Securities & Exchange Commission (SEC)
The US market authority tried to control the booming hedge fund sector - without success. It is a hard-to-evaluate activity, mostly based abroad to avoid tax and financial reporting regulations, but it is huge, with some 9 000 offshore fund holding assets estimated at 1,5 billion euros. Under Cox's presidency, the SEC demanded that most hedge funds register with it. Many of them are superbly ignorant of this obligation. Since then, the SEC seems distraught.

Investors in debt
Herbert Suess, former CEO of Saschen LB
All these things were bought by someone, and most investors should blame themselves for swallowing that you could make a lot of money without taking any risks. At the end of the chain is the ever-growing class of wealthy individuals - from footballers to entertainment professionals to businessmen - who have been pushed to invest in hedge funds. These funds then bought credit products they did not know well, using money borrowed from the merchant banks. In addition, after the bursting of the Internet bubble, in the late 1990 years, pension funds became suspicious of equities and began investing in fixed income securities. Faced with this insatiable demand for fixed-income and well-rated assets, merchant banks have had every reason to create them by resorting to ever more complex structures.
As always, the market has attracted institutions less able to understand these investments than the hedge fund geniuses. Sluggish German banks like IKB and Sachsen LB have stunned the market by announcing massive losses on risk-backed mortgage-backed securities and the departure of their CEOs, as they were bailed out for more than 20 billion euros. "People would say, 'What I want is little risk and high return', and they buy it all by themselves without really knowing what they're buying," recalls Cass Business Researcher Peter Hahn. School and former boss of Citigroup.

RATING AGENCIES
Kathleen Corbet, President of Standard & Poor's (S & P)
These agencies assign ratings to bonds and debt-related investments based on their level of risk. S&P and Moody's, the two main agencies, have come under fire from both sides of the Atlantic for distributing excellent ratings to bonds and complex credit funds linked to high-risk debt, particularly subprime US home loans. S & P claims to have alerted the market two years ago and rejects any responsibility. As agencies are paid for assigning ratings, the more investments they evaluate, the more money they earn. They are accused of working too closely with the bankers who design the investment products they evaluate, which calls into question the independence of their ratings.
As criticism rained in, Kathleen Corbet, the president of S&P, resigned, but the agency said it was pure coincidence. The European Commission has opened an investigation into a possible conflict of interest involving S&P and Moody's.

INVESTMENT FUNDS
Henry Kravis, founder of Kohlberg, Kravis, Roberts (KKR)
Nearly twenty years after RJN Nabisco's memorable battle for control in 1989, the private equity pioneer was still the king of debt-financed buyouts, but he was in danger of being swept away by Stephen Schwarzman Blackstone. Their rivalry pushed them to embark on ever more gigantic operations. The acquisitions of TXU and First Data by KKR are among the largest purchases financed by the all-time loan at 44 billion and 29 billion respectively. As the loan was fragmented into a thousand pieces and then sold to investors around the world, no one seemed to notice that these operations were becoming riskier, as Henry Kravis and his competitors paid so much for their prices that they reduced their capacity to deal with any trend reversal on the stock market.

WALL STREET
James Cayne, CEO of Bear Stearns
The day this investment bank spent 3,2 billion to bail out one of its hedge funds, its CEO was golfing in New Jersey. The old fox on Wall Street was blamed for failing to grasp the extent of the credit crisis as he ran one of the most exposed institutions in the mortgage-backed bond market. The Bear Stearns funds had invested more than $ 20 billion in the US subprime mortgage market, primarily through borrowing from other Wall Street banks. When the bets turned out bad, in June the funds collapsed. Investors had to recognize that their investments were unsellable, and lenders began to reduce the amount of indebtedness they allow to their hedge fund clients.

MORTGAGE CREDIT ORGANIZATIONS
Angelo Mozilo, Countrywide Financial CEO
It is the emblematic figure of a sector that was distributing loans too good to be true to millions of Americans previously considered too poor or too irresponsible to own. Thanks to the innovative financing from Wall Street, Countrywide, the largest independent mortgage lender in the United States, and its smaller counterparts were able to offer extraordinary call rates, which attracted customers with a rate of variable interest initially very low. Whenever a wave of loans rose to a higher rate, the failures multiplied, until reaching highs. But the worst is yet to come.

Sean Farrell, Sean O'Grady and Stephen Foley
The Independent
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by freddau » 21/09/07, 14:44

My favorite,

it's still the bottom guy who takes a dime per transaction :).

Before the guys who were doing this were under lock and key.

:)
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by bham » 21/09/07, 14:49

Christophe wrote:Uh I do not know if your comment is ironic but in the virtual context it means money (monetary creation) without material compensation ... so it may be time to re-calibrate the counters given the abuse of any kind (stock market speculation very short term for example ...) ... anyway if we do not do it smoothly, the system become unstable, will do it itself ... and certainly not smoothly ...
It's a bit like the warming finally ...
So nothing to do with the net ... if that's what your : Cry: did you do it?

No my : Cry: was not referring to the net, the net is not virtual, it exists and allows lots of things, + or - good but it allows us at least to communicate. No, my remark was ironic of course, I reject this real / virtual world that virtually makes money and wealth on the backs of others to really pocket the dividends. Moreover, if you are interested in the stock market, you can see that rising economic numbers do not always affect the health of equities. It's enough for a Greenspan to piss off 16h00 for the stock markets to collapse, even if the companies' results are good. And then it is enough that an action is oversold so that everyone follows, by collapsing the title and vice versa. The stock market is a bit like a game or tiercé, moreover all the scholars agree to lose to win better. But it is unfortunately this game of dupes that leads the world.
Selected pieces of your article:

"This debt has therefore gradually become, thanks to the inventiveness of the financial operators and to the more or less naive complicity of the entire banco-financial chain (central banks, rating agencies, financial media, politicians, economists, etc ...) , the main production of the United States.

...... public debt, real estate debts, automobile debts, credit card debts [6], ... everywhere debt has imposed itself as the most “produced” good by the so-called dominant economy. And the rest of the world continued to buy this new product "made in the USA", the Western elites in particular being fascinated by the incredible inventiveness of Wall Street and its annex, the City of London. "


And then I reject all "virtual" lifestyles that move away from reality. In less serious but just as shifted (sorry, I am not of the very 1st generation), the video games, the virtual games which, pushed to the paroxysm, disconnect the players from the reality of the life and even allow them to gain strong sums of money. Why ? for the pleasure of the game, of escape?
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by bham » 22/09/07, 09:43

On the same site, to read also:
Link

Selected song:
"Are we going to sit idly by? Faced with this phenomenon of looting property of the populations by a senseless production of new money to allow the rapacity of a few to satiate? Will people still have to wait to have the right to appropriate what is their due, to be able to invest in projects in their favor? For jobs, for a profitable production of goods, serving everyone, for schools, hospitals. Should let wars continue to grow more and more deadly to satisfy the greed of these people, endangering the lives and health of entire populations?
Shall we watch with folded arms the arrival of wanted and prepared crises designed to keep us quiet and thoughtless? Will we accept this development of measures intended to silence any hint of protest? "
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by freddau » 22/09/07, 11:02

Always LEAP2020:

September-GEAB is available! The current crisis explained in one thousand words
The emergence of new industrial centers, the world of production and the production of the world, combined with weakening human resources training in the US, resulted in a dramatic increase in US debt (public and private). Thanks to the creativity of the financial operators, with the more naive complicity of the entire banking and financial chain (central banks, quoting agencies, financial media, politicians, economists, etc ...), this debt progressively became the US main production.

GlobalEurope Anticipation Bulletin N ° 17 - Public announcement



Private Debt Much Higher Than During the Great Depression
America is often called the 'richest nation on earth', but the reality is that the American people are living on borrowed money. There is no sector in the US that has shown any measure of refrain. Government, corporate, and consumer debt are all at record levels. Private debt, which is a debt of a private entity, such as a bank, has passed into the last three decades alone.

eFinance Directory



Fears of dollar collapse as Saudis take fright
United States of America with the US Federal Reserve for the first time, signalling that the oil-rich Gulf kingdom is preparing to break the dollar currency in a move that risks setting off a stampede out of the dollar across the Middle East.

Telegraph



United States versus Iran: Hold-up on the nuclear fuel market
Behind the scenes of the diplomatic game on Iran, some countries want to form a new world order. They take possession of the world market for nuclear fuels. New rules of the International Atomic Energy Agency (IAEA) must prevent the arrival of new competitors.

Short Fool



Mattel apologizes to China for recalls
The world's largest toy maker, Mattel Inc., apologized on Friday for damaging China's reputation after recent massive recalls of its Chinese-made toys, admitting it's targeted some goods that were actually up to scratch. Mattel has come under scrutiny following the recollection of 21.

Reuters



Pound Heads for Third Weekly Drop Again Euro on Rate Outlook
The pound headed for a third weekly decline against the euro on speculation the crisis in credit markets and signs of a slowing economy will prompt the Bank of England to cut interest rates. The pound fell to an 17-month low today as it was reported that inflation was the slowest since March 2006, making it more likely to central bank Governor Mervyn King will follow the Federal Reserve's lead and lower borrowing costs.

Bloomberg



'One can no longer exclude a euro to 1,50 dollar'
How far can the European currency go?
It is very difficult to say. The dollar has become very vulnerable against the backdrop of a slowdown in the US economy, and a crisis in the real estate market in the United States. No one knows how far the greenback will fall, and the euro go up.

Les Echos



Bernanke's Bullet Misses The Mark
So did that 50 basis point cut help anyone? Yes, it helped (only) those in the stock market. It helped Bernanke's banking budget by providing more short term term liquidity. It helps the gold and the gold. But did it do anything to address cash strapped in their heads they can not afford? The answer to that is no ...

Mish
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by Christophe » 24/09/07, 17:22

Hello all

Following the messages I sent about the current financial crisis, a lot of people have written to me asking: can we still avoid the crisis and what to do to protect themselves if it breaks hard and avoid its recurrence Pljus later?

I responded to these persones from my actruekl look of things, and I believe that after all these questions are probably questions that we ask everyone more or less.
So you will find my answer to these questions below. It has no "truth" value of course, but it can nourish your own thinking and help you find YOUR answer.

Sincerely
Philippe Derudder

Read more: https://www.econologie.com/forums/se-protege ... t4070.html
Last edited by Christophe the 02 / 10 / 07, 12: 45, 1 edited once.
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by Christophe » 02/10/07, 12:44

New York Mayor Michael Bloomberg, would he let himself win by the depressed environment that begins to plague on the side of US economic indicators? The former financier and creator of the eponymous financial news agency declares loud and clear thata global economic recession is now possible. Explanation: the former star Wall Street trader who built his fortune in the 80s on his talents as a bond market expert is worried about the "insane" nature of public debt.


http://www.lejdd.fr/cmc/economie/200740 ... 60372.html
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