Global financial system implosion begins
- Thread starter Falcon
- Start date
FDIC: Number of troubled banks rises to 702
Marketwatch 23/02/10
I'm still looking for the green shoots.
Marketwatch 23/02/10
I'm still looking for the green shoots.
Seems the pound is continuing it's fall against the dollar this morning. It's now down about 10% in a month. It's unclear exactly how far the pound could fall. A recent report from UBS in the DT stated that a rapid fiscal retrenchment would be treated to a "savage" reaction in foreign exchange markets, and kited the possibility of the pound reaching near parity with the dollar at $1.05 (although how likely that is remains to be seen). What is clear is that inflation and food import prices will spike quite markedly this year, so if you haven't already starting turning a back garden or your community on to local food production, now is the time...while the sun still shines. The few green shoots we are likely to see in the economy are those we grow ourselves.
http://www.telegraph.co.uk/finance/...les-as-prospect-of-hung-parliament-looms.html
http://www.telegraph.co.uk/finance/...f-deficit-cut-too-aggressively-UBS-warns.html
http://www.telegraph.co.uk/finance/...les-as-prospect-of-hung-parliament-looms.html
http://www.telegraph.co.uk/finance/...f-deficit-cut-too-aggressively-UBS-warns.html
kyser_soze
Hawking's Angry Eyebrow
Did you read those articles? One says 'The pound falls on contemplation of a hung parliament because there wouldn't be clarity on cutting the deficit', the other says 'If any govt tries to cut the deficit too quickly, the pound will fall.' So between the two of them they say precisely nothing more than they say.
hipipol
Peckham Wry
"The Sky is Falling!!!"
Spoken by a well known Chicken
Just like H1N1 bird flu, this economic collapse and "End of Capitalism as we know it' seems to be a lot of pointless waffle and no fucking actual event.
It aint all bad, UBS, Citi, BoAMerrill Lynch (or BAML as they have taken to calling themselves), etc, even fucking HSBC have up their base salaries to 'compensate' for the lowered bonus
Because some of the bonus structures were so convoluted we couldn't really bill on em, but on the base, ah well, higher fees.......
As I say, not all bad
Spoken by a well known Chicken
Just like H1N1 bird flu, this economic collapse and "End of Capitalism as we know it' seems to be a lot of pointless waffle and no fucking actual event.
It aint all bad, UBS, Citi, BoAMerrill Lynch (or BAML as they have taken to calling themselves), etc, even fucking HSBC have up their base salaries to 'compensate' for the lowered bonus
Because some of the bonus structures were so convoluted we couldn't really bill on em, but on the base, ah well, higher fees.......
As I say, not all bad
kyser_soze
Hawking's Angry Eyebrow
Well, Stephen Green and his CEO have very different opinions on what they should each be getting this year...SG has said he'll stick with his salary and Mr Geogorghan is arguing that because he managed to steer HSBC through the crash without asking for any bailout £££s he should get his salary plus bonus of about £1.5mn...must be fun at HSBC board meetings...
At least the UK still has the option of letting the pound fall. Unlike the poorer Euro member states, who can't devalue their way out of trouble.
If a falling pounds means we grow more of our own food and stuff, and import less, that's no bad thing, really.
Giles..
temper_tantrum
The beauty of the ride
UK gilts are trading at prices which suggest investors already regard them as having lost their triple-A rating, the FT reports:
http://www.ft.com/cms/s/0/f14fb952-249e-11df-8be0-00144feab49a.html
Interesting quote from a Treasury source: Nobody expects Britain to be downgraded before the election” ...
http://www.ft.com/cms/s/0/f14fb952-249e-11df-8be0-00144feab49a.html
Interesting quote from a Treasury source: Nobody expects Britain to be downgraded before the election” ...
Since the 1960's, the world has entered a severe recession every time the oil price has exceeded $80/bbl and we are on the tipping point of the next as non-OECD demand resumes. The oil price has been hovering at $80/bbl since November 2009. [link, oil price]. Oil future prices for 2015 are now touching $90/bbl. [link, Oil Price Futures].
U.S. Federal debt is touching $4 trillion, on which they are no longer able even to repay the interest from current year receipts. The emergency funds were blown on the last financial market bail outs. There are insufficient new supplies of < $80/bbl oil to offset the 4.1 million barrels a day per year depletion rate beyond 2011.
Financial collapse is fairly well established, with some signs of commercial collapse. Societal collapse has of course been underway for some time now in the US (link, Guardian: "US facing surge in rightwing extremists and militias") and BNP successes will surge once energy and food shortages begin to bite in the UK.
This is really just the false recovery before the next recession. Recession is more or less permanent state now, with worse to come.
U.S. Federal debt is touching $4 trillion, on which they are no longer able even to repay the interest from current year receipts. The emergency funds were blown on the last financial market bail outs. There are insufficient new supplies of < $80/bbl oil to offset the 4.1 million barrels a day per year depletion rate beyond 2011.
Financial collapse is fairly well established, with some signs of commercial collapse. Societal collapse has of course been underway for some time now in the US (link, Guardian: "US facing surge in rightwing extremists and militias") and BNP successes will surge once energy and food shortages begin to bite in the UK.
This is really just the false recovery before the next recession. Recession is more or less permanent state now, with worse to come.
Barking_Mad
Non sibi sed omnibus
Sunray
Its sunny somewhere.
Wolveryeti
Detty Pig
Commodities prices are pro-cyclical. Before any slump they are at an 'all-time high'. I could state a similar fact about pork bellies, aluminium, anything you care to name. It's not a compelling logic for the direction of causation you are trying to imply.
You also can't really home in on a nominal price like $80 a barrel as a reliable indicator of anything, because the real value of those 80 dollars is hugely different decades ago and now. Assuming a yearly rate of inflation of 2%, 80 dollars in 1990 would be worth 118 now, for instance.
This is clearly just not true, though, is it. The debt might be increasing but that is entirely down to the fiscal spending choices made by Washington, rather than inability to pay. The U.S. is also uniquely lucky in that its debt is denominated in a settlement currency that they can print more of. Indeed - inflation has historically been the single most important way of paying off the US national debt.
Sunray
Its sunny somewhere.
Sunray:
lol
Humanity has proven pretty flexible and has responded well to adversity in the past. Even the plague, where 100 million people died, didn't really cause the end of the world.
Some common or garden financial problems will pass in time.
A Dashing Blade
Takes horses to water but can't make donkeys drink
1.02^20 = 1.4856
$80 would have the purchasing power of $118.87 now (ie 1.14856 * 80), it would be "worth" 80 / 1.14856 = $53.84
Wolveryeti
Detty Pig
@Wolveryeti. Oil isn't a commodity. It is the prerequisite for all other commodities. The behaviour you describe is true of commodities only because, for commodities, price rises created by scarcity trigger rationing and substitution. You can readily ration coffee and find substitute sources. Rationing energy forces a system crash (a.k.a "recession") which disables further capacity to respond, and there are no substitutes for energy at the scale at which we now consume it. And the $80 is in real terms, adjusted.
The US Federal Reserve is now creating money and swapping it with the banks for zero value exotic derivative securities. The banks are using the valueless money to support the stock exchange. This is without precedent, and unsustainable.
@Sunray Humanity has until recently been few in number and experienced monotonically rising energy availability. The flexibility you identify is the unremarkable harnessing of that rising energy - energy enables technology, which allows us to solve things.
The population is now large in number and facing monotonically falling energy availability. Using technology to create energy is a reversal of causality for which there is no evidence (the supply chain for everything you think of as "alternative" energy floats on a vast platform of hydrocarbon energy).
I suspect people are assuming (probably unreasonably, in my view) that their future lay somewhere closer to "business as usual" than "end of the world".
The US Federal Reserve is now creating money and swapping it with the banks for zero value exotic derivative securities. The banks are using the valueless money to support the stock exchange. This is without precedent, and unsustainable.
@Sunray Humanity has until recently been few in number and experienced monotonically rising energy availability. The flexibility you identify is the unremarkable harnessing of that rising energy - energy enables technology, which allows us to solve things.
The population is now large in number and facing monotonically falling energy availability. Using technology to create energy is a reversal of causality for which there is no evidence (the supply chain for everything you think of as "alternative" energy floats on a vast platform of hydrocarbon energy).
I suspect people are assuming (probably unreasonably, in my view) that their future lay somewhere closer to "business as usual" than "end of the world".
Excellent article - Readings from a great convulsion - by Bill Jamieson
http://news.scotsman.com/billjamieson/Readings-from-a-great-convulsion.6148885.jp
Sunray
Its sunny somewhere.
Yes I do know, thanks.
not-bono-ever
meh
Insider dealing arrest now involves an employee of Moore Capital
This could be serious stuff - Moore are MASSIVE in the hedge industry
This could be serious stuff - Moore are MASSIVE in the hedge industry
kyser_soze
Hawking's Angry Eyebrow
Well, on the Meet The Chancellors debate on C4 last night, all 3 agreed that tax rises and cuts were coming, and polls conducted for the show prior to that showed that those polled agreed that both are inevitable, but favoured cuts over tax rises.
Which kind of undermines the whole 'politicians and public don't accept the need for cuts and tax increases' argument.
It's be interesting to go back and do a tally of how right CE has been, since he's regularly quoted on here with approving tones, despite the fact he's closer to the Tory position on say, public sector spending.
Plus of course, as I've pointed out, he's an economist, and and we all know what a great track record they've had for the last 3 years...
What won't be said in the UK election contest
This country has £1 trillion national debt, a £250 billion hole in its pension system, a ballooning retired population and a collapsing working population.
We depend macro-economically on oil production for balance of payments, foreign exchange, interest rates and inflation---and it is halving every 10 years.
We have a culture of chronic welfare dependence and crippling public sector pension debt. We siphon hundreds of millions of pounds of public infrastructure investment into the public pension funds of bureaucrats.
We have the highest excess winter mortality in the whole of Europe and a power generation system on the verge of failure after two decades of "market efficiency". We face billions in investment money that we don't have to keep warm in winter.
We eat more food than we grow in a world in which high oil prices will shortly disable globalism. We are three meals away from anarchy, with a host of ne'er-do-wells queueing up to fill the vacuum.
Our financial system is holed beneath the water line while we remain apparently powerless to curb bankers greed. Our fate lies in the hands of people who have an incurable appetite for expense fraud and classify themselves as "taxis for hire".
A rough beast, its hour come at last, slouches towards us. We need a party that has that reality written into its manifesto, with matching manifesto commitments.
I don't see one.
This country has £1 trillion national debt, a £250 billion hole in its pension system, a ballooning retired population and a collapsing working population.
We depend macro-economically on oil production for balance of payments, foreign exchange, interest rates and inflation---and it is halving every 10 years.
We have a culture of chronic welfare dependence and crippling public sector pension debt. We siphon hundreds of millions of pounds of public infrastructure investment into the public pension funds of bureaucrats.
We have the highest excess winter mortality in the whole of Europe and a power generation system on the verge of failure after two decades of "market efficiency". We face billions in investment money that we don't have to keep warm in winter.
We eat more food than we grow in a world in which high oil prices will shortly disable globalism. We are three meals away from anarchy, with a host of ne'er-do-wells queueing up to fill the vacuum.
Our financial system is holed beneath the water line while we remain apparently powerless to curb bankers greed. Our fate lies in the hands of people who have an incurable appetite for expense fraud and classify themselves as "taxis for hire".
A rough beast, its hour come at last, slouches towards us. We need a party that has that reality written into its manifesto, with matching manifesto commitments.
I don't see one.
elbows
Well-Known Member
Make no mistkae, we dont have a culture of 'chronic welfare dependence'. What we have is a significant minority who were screwed decades ago, partly because it was considered more cost-effective and better suited to wider economic goals to have them come to rely on welfare rather than build them a meaningful place in working society.
I consider this to be an example of a disgraceful way to deal with transition (in this case post-industrial), and therefore has lessons for those thinking about transition away from oil.
I consider this to be an example of a disgraceful way to deal with transition (in this case post-industrial), and therefore has lessons for those thinking about transition away from oil.
OK. Public employment as a % of the total labour force in the EU 17, 1980 to 2002. UK remains the highest in the EU. I won't debate the difference between being dependent on public money as a handout or in return for administrative labour - either way, its not making and selling stuff, which is what somebody has to do somewhere if you want to save up enough for your old age.
I'm not sure if you are referring to me, or the political vacuum and practice of telling people what they want to hear and leaving it for the next lot, rather than what they need to hear and tackling it now. If the latter, I agree. If the former, I'm not sure what way of dealing with it you think I'm proposing - I don't really know how you "deal" with it, if that means making tomorrow look like yesterday for a person on welfare or in a loss making firm in a country with a trillion pounds of debt. I'm observing that things are going to run their course and there are going to be a lot of surprised, disappointed and probably quite angry people when the music stops
ymu
Niall Ferguson's deep-cover sock-puppet
We have a massive publicly funded research sector (and hence, for eg, 10% of the world's pharmaceutical R&D activity when we are only 2% of the pharmaceutical market) and the NHS is the 3rd largest employer in the world.OK. Public employment as a % of the total labour force in the EU 17, 1980 to 2002. UK remains the highest in the EU. I won't debate the difference between being dependent on public money as a handout or in return for administrative labour - either way, its not making and selling stuff, which is what somebody has to do somewhere if you want to save up enough for your old age.
Fuck off with yer "administrative labour" bollocks you know-nothing twat.
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