US House votes against $700bn bailout

Stev_o

So on a scale of 1 to 9000 how f*cked are we?

Orange69

Stev_o wrote: »

So on a scale of 1 to 9000 how f*cked are we?

2.6

Pj!

Stev_o wrote: »

So on a scale of 1 to 9000 how f*cked are we?

No one really knows.

Somewhere between 3000 and 9000 I'd say.

SimpleSam06

OPENROAD wrote: »

They will come up with another bail out plan possibly later this week imo.

Doesn't matter, they needed more like one and a half trillion to bail things out properly, and thats before the Alt-As and Primes hit. Its well and truly shagged tbh.

Ikky Poo2 wrote: »

Not being the most knowledageable person about US politics, will this have an impact on the election? Will we see republicans going against McCain?

McCain was making a big grandstanding issue of not getting back on the campaign trail until the vote passed, so hes been made to look like the big waffling idiot that he is. Obama was dancing to the tune of wall street all the way through, so its fairly break even. With the elections coming up shortly nobody can afford to piss off the electorate, although possibly they misjudged the feeling on the street, as a lot of people are complaining about this decision. It could go either way, really.

Darragh29 wrote: »

Here's what I can't get my head around???

Say an Irish bank goes bust tomorrow and I have a mortage with that bank... Why don't the rules/legislation not just allow for my mortgage to cease there and then. "Sorry lads it didn't work out for yiz, just send me the deeds of my gaff please when yiz get a chance"???

Why are they not allowed to fail??? No other business is treated like this, health insurance companies have to keep reserves and are regulated, travel insurance companies have to be bonded, how come we are in this situation with the banks???

Front line retail lenders don't magic the money out of nowhere, they need to borrow from larger banks, to put it simply. The people they borrowed from want their shilling.

Stev_o wrote:

So on a scale of 1 to 9000 how f*cked are we?

This one goes all the way to eleven.

OPENROAD

SimpleSam06 wrote: »

Doesn't matter, they needed more like one and a half trillion to bail things out properly, and thats before the Alt-As and Primes hit. Its well and truly shagged tbh.

But the thing is they will act and they will act quickly, whether this will work, well thats another thing.

dsmythy

I see the DOW ended up down 777.7

What message does the 7's send?

SimpleSam06

OPENROAD wrote: »

But the thing is they will act and they will act quickly, whether this will work, well thats another thing.

Theres too much focus on the markets in the media, imho, it makes for pretty pictures and snappy soundbites to watch despairing brokers with their heads in their hands. The context of the larger eceonomic situation is the one to watch; if you inject that much capital into an economy, even one the size of the US, its going to have enormous knock-on consequences for a long time to come. Pat comparisons with the Japanese situation don't really apply since the US is the ultimate upstream lender.

dsmythy

dsmythy wrote: »

I see the DOW ended up down 777.7

What message does the 7's send?

The three sevens would indicate control of all three divisions of mind, conscious,subconscious, and superconscious. Three itself represents purpose or creativity. The numbers diget to 3. Add 777=21, add 2+ 1= 3. Another way to relate to 3 is the trinity, father,son. and holy ghost or spirit. The spirit manifests in each division of mind according to its own function. The person with this tattoo would have consciously or unconsciously chosen a symbol of wholeness.

Pompey Magnus

I've said it before, and I'll say it again: democracy just doesn't work.

Princess Consuela Bananahammock

dsmythy wrote: »

I see the DOW ended up down 777.7

What message does the 7's send?

Sevens are unpredicatility, chaos and challenges, so....

j1smithy

Darragh29 wrote: »

Here's what I can't get my head around???

Say an Irish bank goes bust tomorrow and I have a mortage with that bank... Why don't the rules/legislation not just allow for my mortgage to cease there and then. "Sorry lads it didn't work out for yiz, just send me the deeds of my gaff please when yiz get a chance"???

Why are they not allowed to fail??? No other business is treated like this, health insurance companies have to keep reserves and are regulated, travel insurance companies have to be bonded, how come we are in this situation with the banks???

The reason they are not allowed to fail is that it would be a disaster. Without the banks there would be no money creation. If a bank takes in €10 in deposits and has a 10% retention, it can lend €100 thus adding (creating) €90 to the economy. It is this money creation that keeps everything going as far as i know. When a mortgage defaults the bank sells the house to take back the money it lent, if it cant raise the required amount it takes on a bad debt. When this happens on a large scale it can run out of cash to keep the business going despite having assets. The problem here is that the banks dont know how much bad debt each is exposed to, and are now refusing to lend to each other because they dont know the risk.

Why is this bad for the ordinary person? Think of all the things you get on credit, all the things that companys get on credit? If your employer hits a rough patch because people have stopped buying things because credit is too expensive, he cant get a loan to get the business through the rough patch because its too expensive. Thus the company could be downsized or even wound up, increasing further unemployment and further depressing consumer confidence. Government wont have the tax revenues to help out and we could spiral into a long recession or depression.

What happened today is very serious and unless it gets sorted very quickly, bad times could be ahead for a long time.

The reason you still have to stillpay your mortgage if a bank goes under is that a mortgage is an asset of the bank, when the liquidators move in they will sell on the loan book to another company in order to pay off creditors. This is the same as any other business.Say a timber merchant goes bankrupt the liquidators will sell of all the planks of wood he has in stock, to pay his creditors.

I would also expect one of the big irish banks to be bought out soon, they are going quite cheap at the moment, though another bank may not want the risk of being exposed to our own plummeting housing market.

Darragh29

j1smithy wrote: »

The reason they are not allowed to fail is that it would be a disaster. Without the banks there would be no money creation. If a bank takes in €10 in deposits and has a 10% retention, it can lend €100 thus adding (creating) €90 to the economy. It is this money creation that keeps everything going as far as i know. When a mortgage defaults the bank sells the house to take back the money it lent, if it cant raise the required amount it takes on a bad debt. When this happens on a large scale it can run out of cash to keep the business going despite having assets. The problem here is that the banks dont know how much bad debt each is exposed to, and are now refusing to lend to each other because they dont know the risk.

Why is this bad for the ordinary person? Think of all the things you get on credit, all the things that companys get on credit? If your employer hits a rough patch because people have stopped buying things because credit is too expensive, he cant get a loan to get the business through the rough patch because its too expensive. Thus the company could be downsized or even wound up, increasing further unemployment and further depressing consumer confidence. Government wont have the tax revenues to help out and we could spiral into a long recession or depression.

What happened today is very serious and unless it gets sorted very quickly, bad times could be ahead for a long time.

The reason you still have to stillpay your mortgage if a bank goes under is that a mortgage is an asset of the bank, when the liquidators move in they will sell on the loan book to another company in order to pay off creditors. This is the same as any other business.Say a timber merchant goes bankrupt the liquidators will sell of all the planks of wood he has in stock, to pay his creditors.

I would also expect one of the big irish banks to be bought out soon, they are going quite cheap at the moment, though another bank may not want the risk of being exposed to our own plummeting housing market.

Thanks for explaining that Smithy, I'm a little wiser now...........

................ But I still say fu*k 'em!

TPD

As long as my savings are ok, I dont mind.

earlyevening

Should I take a day off work tomorrow to watch the global financial meltdown live on Sky?
How low will the ISEQ go tomorrow?
Should I buy lots of tinned food, a shotgun and tons of bullets?

Earthhorse

dsmythy wrote: »

I see the DOW ended up down 777.7

What message does the 7's send?

Sounds like this monkey's gone to heaven.

Darragh29

But here's the question....

The timber merchant goes t*ts up, the government won't want to know, well the Revenue will but that's just because they are secured creditors so when the timber is sold, they get their bill in first...

The state or the government won't care about the matter, outside of outstanding Revenue matters being settled.

So if the banks have assets and they have run out of money, then why doesn't the liquidator move in, another bank buys the loan book, why does the state step in to back up the bank but nobody else???

Stheno

Given the banks fear of lending to each other, should we expect interest rates to go up?

If so by how much?

Thanks

Darragh29

I just got this graph off the internet, it shows how the market reacted immediately after hearing this news, this is scary stuff if you ask me...

Orizio

Money will be worthless, everybodies savings will be wiped out, and all the little warmongerers on the continent will be at each other's throats yet again. Thank god nobody gives a **** about the Irish.

History always repeats itself...

ninebeanrows

earlyevening wrote: »

Should I take a day off work tomorrow to watch the global financial meltdown live on Sky?
How low will the ISEQ go tomorrow?
Should I buy lots of tinned food, a shotgun and tons of bullets?

15% could be wiped of the ISEQ tomorrow and some Irish banks could fail before the weeks end.

So Yes:pac:

I've always wanted to rub my arse with a 50euro note

shenanigans1982

Deleted User wrote: »

I've always wanted to rub my arse with a 50euro note

Just make sure to use both sides....we are in a recession incase you didn't know.

Dubh Geannain

silver linings and all that

earlyevening

whisper whisper....we could be living in a Mad Max post apocalyptic world by the end of the week. Pass it on.

Maybe everyone will be shagging in the streets if the markets fall another 20%, the banks all stop lending and the Government collapses through lack of cash.

irish_bob

TPD wrote: »

As long as my savings are ok, I dont mind.

they wont be if things get bad enough , the goverment cant bail out all the banks

BlitzKrieg

https://www.youtube.com/watch?v=zeo0_3gN190

Princess Consuela Bananahammock

Deleted User wrote: »

I've always wanted to rub my arse with a 50euro note

Already done it. It's still in circulation somwhere.

dsmythy

Orizio wrote: »

Money will be worthless, everybodies savings will be wiped out, and all the little warmongerers on the continent will be at each other's throats yet again. Thank god nobody gives a **** about the Irish.

History always repeats itself...

The Brits will give us a slap or something.

ejmaztec

Ikky Poo2 wrote: »

Already done it. It's still in circulation somwhere.

Another satisfied chugger :eek:

SimpleSam06

j1smithy wrote:

If a bank takes in €10 in deposits and has a 10% retention, it can lend €100 thus adding (creating) €90 to the economy.

I think this underlines two of the most serious failings of the current financial system. First of all you have the people who stand to make profits from the money supply, in charge of the money supply, and second they don't actually add any value to the economy, just increase the money supply, which mostly goes straight into inflation (reducing the value of money). I doubt that a major overhaul of the world economy is on the cards no matter what happens, but things are seriously flawed as it stands.

earlyevening wrote: »

Should I buy lots of tinned food, a shotgun and tons of bullets?

Nah, life for most people will go on just as it always has for the next while. You won't see the shockwaves from this hitting the ground for a while yet. This time next year will probably be a different story though.