[Cheiron]

As prolly most people know, ummm.. the financial investors, dealers, banks and other profit pedling no good sharks playing with honest hard working peoples money tied in houseloans, stocks, savings, pensionplans etc.... have made a little oopsie lately, goading everybody into bigger and bigger loans that are totally unrealistic and living on cloudcastles...with the inconsequential side effect that we have a global financial crisis on our hands where people lose their jobs, their homes, savings whatever and still wind up paying for the smart suits playing around with their destiny....
(takes a deep breath)...
phew, I feel much better now getting that of my chest

The smallest Nordic country, Iceland have been living and spending big time last 20 years or so. A friend of mine visited Iceland a couple of years ago, and he was amazed at what he saw... he said: even the bloody busdriver had two BMW's and a house with swimming pool and whatever. Luxury hotels etc. everywhere, if you wanted a loan you got it, pay later.
From being the poorest european country, maybe a bit better going than Albania it became amazingly rich.... seemingly.

Now they face a catastrophy never seen before, well not that serious at least since Brazil: The whole of country going bankrupt, and in those scenario's IMF takes over. They will be put under strict financial and political control of IMF for ages. It is so bad in Iceland currently that your Visa card can not be used... if you go there bring cash. They have no foreign currency whatever, and foreign banks will not accept account withdrawal to Iceland. Last week the Icelandic government closed the stockexchange and only opened it this week again... only to experience an index fall of 75% as a result


The other nordic countries (Norway, Sweden, Denmark and Finland) have their own problems currently too, but have even said: ok friends, we give you a hand, and each of our countries have given them very huge sums of Euro to help a bit.

Here is what urged me to post and gave me my daily laugh... the latest development in this Icelandic saga:
An icelandic professor in economics came up with this idea today:
How about we drop the icelandic crown (ISK) and go into an economic fellowship with Norwegian currency (NOK)....
I frowned a bit sipping morning coffee, when reporter laconically concluded: "So far there is no Norwegian response"... which caused me to choke on my coffee, and I had to clean my monitor ... HAHA

Generally, to muse a bit further... when I stand at my window and look out on this urban street in autumn bleak drizzling rain with workers scurrying to their work for yet another bloody day at the factory or office... what meets my eye in this cheap side of town with cheap rent etc and that I find symptomatic for a lot of the wrong things we do... ? The streets are crammed with big four-wheel drive cars and all are new. And I have often wondered how on earth do people get the money for those monstreous things? They are expensive in gas, they are expensive to buy, they are expensive in tax.... they are even stupid functionally in a city and they are stupid environmentally. If they have that much money to spend why do they live here and not up north where the rich people live?

The answer is: LOANS and .. if you will indulge me... egocentric megalomania induced by a consumer society that tells the individual: spend, spend spend

... and now we got the wake up call all of us.

Luckily I just finished my bank loan, but I am sure there are very serious repercussions all over the world for families goaded into spending bigtime. Hopefully we can return to a more realistic way of living soon, and actually... do you need the fancy car or whatever to be honest?... Nah I think not.
_________________
Cheiron
______________________________
"Any scientist with respect for himself should start
the day by rejecting his own pet hypotheses".
(Konrad Lorenz)

"Wir müssen wissen
Wir werden wissen"
(David Hilbert)

[Jade]

belt tightening going on all over the world, Ireland has had its most savage budget in 20 or 30 years
Jade

[Studio 12]

Here I was thinking it was only the American government that thought the "Trickle Down Effect" didn't apply to managing financing like an idiot. My bad.

I really need to get out more.
_________________
Never be afraid to try something new. Remember, amateurs built the ark, professionals built the Titanic.

[Cheiron]

yes well, hehe, the world is much bigger than USA , but we are very interested and rightfully so in american politics being one of the primary motors in world economy, as we are interested in chinese or russian politics, cause it affects us directly.

We are a global economy. Everything is connected like a house of cards these days. Not to mention the environmental disaster we have to face all of us, maybe faster than we expect and will bring it all down big time, if we dont work together, and fast.

What baffles me and I am incapable to understand is the way things work with obviously fictional values shuffled to and fro various banks etc.

All governments issue fiscal guarrantees to the financial sectors these days, to stabilize what seems to be 80% psychologically induced problems from investors and dealers that are afraid of risking capital.

Germany issued maybe biggest guarrantee of what was it ... a crazy amount of euros.. also same with rest of europe and USA for that matter. Where is that money? ... well they do not exist. IF it was to be needed, only way would be to raise tax etc heavily on the ordinary folks, cut down on state spending for everything from maintenance of infrastructure to hospitals, science etc, in short all state/government payed expences in society..., and MAYBE it could be pulled off during decades of very tight politically forced economical tightening of the belt, rendering new enterprise useless at the expence of the workforce, lower vagues, lower health insurance, crappy system... you get picture.

One exercise to do is ask yourself, where is the real money and the real power?.. think think think... hmmmm I leave that for the reader to guess about.

The economists say that it is a psychological thing that government do for the banks to make them trust eachother again, and in reality only in worst scenario maybe 10% of the amount stated would be needed.

But still, how does it work?... I am as I said baffled about the Star Trek dream science fiction world of international monetary shuffles.

Bank A lends money to bank B that lends money to C that lends money to A?
And if Bank A doesnt trust bank B the card house collapses, but isnt it fictional ?

hummm... can you enlighten me please, somebody?

Oh btw, for those not familiar with the concept of IMF (International Monetary Fund), here is wiki link:

http://en.wikipedia.org/wiki/International_Monetary_Fund

PS: and Iceland is negotiating a loan from Russia for 30 billion euro. You can then brainstorm on what interest Russia have in that, maybe a little betting contest here, with hypotheses? lol
_________________
Cheiron
______________________________
"Any scientist with respect for himself should start
the day by rejecting his own pet hypotheses".
(Konrad Lorenz)

"Wir müssen wissen
Wir werden wissen"
(David Hilbert)

[Cheiron]

October 24th - a situational weather report from the financial frontlines

a little newsbite for the interested:

All over Europe the stock prices are in a big minus.

The pan-European index, FTSEEurofirst has dropped 8,5 percent and is now on lowest level since 2003.

On the individual stockexchanges in Europe it is same picture. The French CAC40 index has gone down 10%, the German DAX 30 index down over 10% and the Czech stocks also follows with a drop of 10,1%

In London the leading FTSE 100-index has dropped 9%, the Danish OMX20 index is down 6,9%

Trade on the stockexhange in Rumania was suspended at midday due to a huge drop of 15%

In USA the trade on DOW Future got suspended until further notice. Trade was suspended around noon at the Chicago stock exchange after drops had reached exstreme levels.

The American stockexchanges are expected to open as normal today though.

And to sum it all up with a picture that says more than a thousand words, as they say... here is a picture of a stockbroker from Frankfurt that I think says it all, lol:




oooohhhhh shhhhhh*t !!
_________________
Cheiron
______________________________
"Any scientist with respect for himself should start
the day by rejecting his own pet hypotheses".
(Konrad Lorenz)

"Wir müssen wissen
Wir werden wissen"
(David Hilbert)

[Cheiron]

Two part addendum to the thread...

Stewart vs. Cramer
I have always found the american "The Daily Show" a bit... well... "american pop-culture journalism"... however... on this topic... the financial crisis and especially in light of recent stuff with AIG etc AND the ramblings of Jim Cramer posing as a financial advisor in a tv-show in USA... hats off to Jon Stewart...

[the background is a week long media controversy between Jim Cramer and Jon Stewart about Cramers dodgy TV-show and CNBC channel as a whole posing as experts in financial matters, and then Jon Stewart finding it a bit weird and spooky that they pose as that, after all we have seen]

it seems it got pulled from youtube (mysteriously...........), but at comedy central website it is still there... the whole interview in 3 parts:

http://www.comedycentral.com/videos/index.jhtml?collectionId=221532


Musings about Ireland.
Ireland is one of the european countries that has gone from big wealth to very dire straits now.
During 80's and 90's Ireland experienced a big boom in economy... the result was rising prices, rising investments and lower taxes. It was called the "celtic tiger" in financial circles and lots of foreign companies invested in factories... especially IT. Lots of immigration took place too, and not unskilled workers, but highly educated new ones. From the dull shadows of the 50's Ireland became indeed an economic "tiger".

One thing especially was the housing market... they had a growth of housing prices at about 300%.... and the housing market was about 15% of total economy.... way higher than rest of Europe. About every 7-8th irish worker was employed in building market. Irish economists warned about a housing market bubble as soon as 2003, and that if not the irish government stepped in to regulate, it would evolve into a fiscal crisis.

The growth was credit fueled. Now Ireland is among baddest economies in Europe together with Estonia, Latvia, Lithuania, Poland, Hungary and Greece... red lights are blinking all over that a total collapse is looming. Now international investments shun Ireland as other countries that are in big trouble.

The state deficit in Ireland is so huge that the strategy has been to cut wages for public employees... about 7.5 %... which means you go down about 4-500 euro a month as earning an average salary ... AND raise taxes.

That might seem stupid, but due to the Irish state economy they can't use the usual model, the international loans are getting more expensive, so it bites it's own tail in a vicious circle.

In Denmark we do nearly opposite, as most countries do... we lower the taxes and pump out money into the economy... but reason is that we here are not as bad off as Ireland as e.g. And we can only pray that it will work for us, but nothing is sure...


Limerick, the 4th biggest town in Ireland (btw founded by danish vikings in around 850 AD that sailed up the Shannon to make a trading post, (waves to Jade) ,hehe)... is a good example of all this.

Limerick went from nearly 0 to 10% unemployment just in a couple of years, from very low taxes and wealthy people due to high wages to widespread economic stagnation. The town relies majorly on DELL having a huge factory there. They actually at one time produced more microprocessors than Silicon Valley. More than 2000 are laid off, and DELL is moving out, it is a huge problem for the whole area. The perspective next couple of years are bleak to say the least... the mayor of Limerick expects that unemployment may reach 20%. And needless to say... if people don't have money it spreads, so the local restaurant or bar, the shops and whole general economic life suffer.

And of course the common irish workers don't understand why they have to pay.... as prolly a lot of workers around the world are mulling situation over these days too.



In conclusion, as I think my two examples show... let's hope we learned finally from it all and we can act responsibly as societies and stop letting the economy be run by bad judgement, "laissez-faire" economy and greed. After all as Jon Stewart says: It affects the real working people that see their lifetime savings, pensions plans, houses, jobs ... go up in smoke... and with no real reason.
_________________
Cheiron
______________________________
"Any scientist with respect for himself should start
the day by rejecting his own pet hypotheses".
(Konrad Lorenz)

"Wir müssen wissen
Wir werden wissen"
(David Hilbert)

[Jade]

lil ray of sunshine aren't you yep we are all in the same leaky boat with no paddle..the water looks kinda murky but the less said about that the better.
Jade
p.s. to Scots, oops we did it again, i refer to the rugby match