oldie:

I am beginning to think it is
I think some smart people out there are trying to scare everybody.
Methinks some rich cats have withdrawn some huge money from the system,
create the pre-determined situation and make so much money out of the chaos and restore the status quo
Knowing that the present American, British and Japenese governments are almost lameducks

Coming back home, the senate is negotiating a N300bn bail-out!
Bail-out from what?
Who benefit from this bail-out?
Same set of people
And what happens to the average Nigerian?

What do you think?

doyin13:

Its a hoax insofar as things are not worse than there were when the times were good

All of a sudden, the world seems to realise it is overleveraged and everyone is worried counterparties
will not be able to service their debts regardless of what credit rating they have.

Hogwash.

Anyways nobody panic. . . . .Until one of the lenders to the most indebted entity in the world(namely the United States)
starts to wonder if it will get paid.

Then people, be afraid, be very afraid.  . . . . . .Buhahahahahahahahahahahahahah

oldie:

I am beginning to think it is
I think some smart people out there are trying to scare everybody.
Methinks some rich cats have withdrawn some huge money from the system,
create the pre-determined situation and make so much money out of the chaos and restore the status quo
Knowing that the present American, British and Japenese governments are almost lameducks

Coming back home, the senate is negotiating a N300bn bail-out!
Bail-out from what?
Who benefit from this bail-out?
Same set of people
And what happens to the average Nigerian?

What do you think?

texazzpete:

Markets are going down, economies are crashing. Banks are going bankrupt, hundreds of thousands of jobs are being cut. Oil prices are crashing, heads of State are frantically calling meetings, Wall Street in turmoilin short the whole financial world is going up in flames.
And you think it's all a 'hoax'

I think you aren't bright enough to think for yourself.

oldie:

between, you don't have to be too bright to make money from the system
Crooks make quick and more money from the system than the bright ones!

debosky:

It is no hoax - things are MUCH worse than when times were 'good' - millions of people have spent more than they can repay, thousands of bankers/lenders have made loans which are not repayable, sold them off to unknowing buyers halfway around the world, and governments have continually relied on more spending to grow economies, not increased productivity per se.

Couple all that with an natural cyclical slowdown in world economies, inflated commodity and energy prices, greedy traders/bankers and a generous dose of fear/paranoia and you have the current mess.

Its not going to be pretty and a heck of a lot of people are still going to be badly affected before this storm dies down - things might never be the same again in the world financial systems.

Note: The senate/government has denied any involvement in a 'bailout' - there is essentially nothing to bail out anyways, Nigerian stocks are simply observing a natural correction cycle after years of bumper growth in share prices not backed by commensurate economic/earnings growth. Speculation and bank loans caused this mess and things have to return to order.

Interestingly enough, there is little/no connection between Nigeria's mini-slump in the stock market and the wider financial crisis rocking the world.

texazzpete:

Brilliant!
In a few short words you have managed to defuse and decipher the global financial crisis, something hundreds of experienced analysts and economists have failed to resolve.
Kindly proceed to Geneva to collect your Nobel Prize.

jay bee:

@oldie
if you don't understand the current tumoil in the financial sector then I'D advice you to ask so u can be enlightened.

oldie:

Thats what I just did
Can you explain the "global" financial crisis is all about?
In a layman's language
And when you are at it, answer my previous questions

doyin13:

Things are worse you say Debo. . . . . .

Where countries have national debts running more than 50% of GDP and have been
for ages. Iceland is just unfortunate it happens to be small enough to fail. Who is going to
dare call in the loans made to the likes of France. The world is built on leverage and has been ever since the
glorious years post the second world war.

doyin13:



Bloody scrotum sack

texazzpete:

No one is saying France will collapse, or the US will collapse. What is happening is that banks in the US, UK and many EU countries are going under. The Markets are taking big hits and many companies are going bust. Along with the demise of the banks, many depositors lose money, many shares portfolios and pension funds lose lots of value. Panic sets in and people are selling and divesting as quick as they can. That is where the crisis comes from. Jobs are being lost like wildfire.
No one is talking about calling in loans made to countries. People are talking about the Global markets taking hit after hit, about people losing life savings, about reduced demand for goods and a spreading fear of the banking sector collapse.

doyin13:

The only institutions that are collapsing are banks. . . . .companies from other sectors of the economy aren't

The point I have been trying to make is. . . . . .the world is no more leveraged than it was two to three years ago
when banks and even hedge funds were lending at close to zero percent.

texazzpete:

And who do banks lend money to?
Who do banks give money to?
Whose money do banks store?

Ans: Everyone out there. Other companies in other sectors. It's a domino effect.
One bank goes down, thousands of small businesses are threatened. Market declines sharply, stock portfolio drops like a rock.
Shares of companies like Toyota and Nintendo are down in Japan. Not because these companies are threatened, but for fear that since this financial woes started, consumers will hold off buying new cars. As banks become unwilling or unable to hand out loans, sales of cars, plasma TVs and other luxury good will be threatened.

It doesn't stop at the banks alone. You have to consider what the effect is on the financial market in it's entirety. Why do u think the US government could not let AIG fail?

doyin13:

The problem in the automotive industry is not GM's alone.
Even the rampaging Toyota has suffered steep losses in market shares
and its stock price as well as those of the other big auto makers in Japan
are at the vanguard of the freefalling Nikkei

Any bad news on GM (number 1 automaker) will surely bring down stocks. Do you know the weighting of GM in DOW jones index? Japanese automakers will fall because of the slowdown in the US market (remember their number 1 export destination)

Oil coming down should be seen as a good thing cause it was largely responsible
for the higher headline inflation numbers that particularly held the unbelievably hawkish
and irrational ECB president in check.

Yes oil prices coming down is a good thing looking @ it from consumer's point of view. But looking @ the other end it might lead to deep and troubling political, economic and environmental consequences
Cheap oil will probably bankrupt the small oil producers and oil equipment companies (I know we had be talking about an alarming cheap rate somewhere in the region of $30 - $40 per barrel)
Cheap oil will further increased the dependence of the West, on foreign oil imports, resulting in larger trade deficits. Do you know that several studies have indicated that there is a negative correlation between the fluctuations in the oil price and the gross national product of Western countries. From 1982 to 1986, when oil prices were high, the economies of the U.S, Japan and Western Europe were expanding, whereas the second half of '80s, when prices collapsed, it was marked by recession.

Development of oil reserves is tied to the global economy. Oil-producing countries must maintain a high level of revenue from oil sales if they are to continue developing their infrastructures and industrial basis, and at the same time invest in their oil industries to maintain and develop their resources to meet worldwide demand. All of this means more jobs in the West, since the oil producers rely on the West for the necessary technology.
Finally, consider the environmental effects of cheap oil. The main culprit of air pollution is fossil fuels, mainly oil, which in the U.S. accounts for 85% of fuel use. There are hidden costs of cheap oil, which we pay for through air and water pollution, global warming and acid rain.
Cheap oil induces people to overuse it and thus discourages development of alternative sources of energy that are environmentally friendly. It affects the economy negatively. It costs us huge sums in health care. It causes social and political instability abroad.


You do have a point, the excesses of the recent credit bubble need to be extinguished from
the system, that said, not at the alarming irrational rate at which the process is going at the moment.
I actually told my friends when dow was close to 14000 that we were due a big correction because everything didn't just add up (all the fundamentals were wrong (high inflation & slowing growth)
Funny thing is i was bearish in dow and had about 10 stakes in it which if i was to cash out would have given me a whopping profit of over £50k (not bad for a side job as i am a casual trader)


All it would take is for some contrarians to take bullish bets on select equities and we might be going up
almost as fast as we have come down.
I won't be 2 confident on that front as the undermining fundamentals of the markets will still remain:

Ongoing part nationalisation of banks (Icelandic banks are being nationalised and it was quoted that some government departments in the UK have exposure of close to 1billion pounds in the iceland bank debargo)

Growth forecast in the good old US of A is not going to change overnight. In fact the current forecast is the next 3 quarters is somewhere in the region of 0 to negative growth

Companies will continue to struggle to meet quarterly forcasts of the financial reports.
Can you just imagine yahoo's shares are currently @ 13 or so dollars when microsoft actually wanted to buy it for $33 per share about 3 or so months ago.

House prices will continue to fall as people will continue to default on their mortgage payment cos of loss of employment/income.