Financial Meltdown (The World)

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baloo
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Financial Meltdown (The World)

Post by baloo » 15th Sep, '08, 09:33

Going.........Going.........Won't be long now.

The scariest thing is that no one really knows what destruction this is going to cause. Hang on to your hats, especially those who are still invested in the stock markets despite the wise sages of this forum telling everyone to get into cash nearly a year ago..
So…if you wish to wish a wish, you may swish for fish with my Ish wish dish.

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Re: Lehman Brothers

Post by baloo » 15th Sep, '08, 15:08

baloo wrote:Going.........Going.........Won't be long now.....
Gone. Filed for Chapter 11.

And Merril Lynch bought by Bank of America.

AIG also looking in big trouble.

....It's the end of the financial world as we know it....
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Re: Lehman Brothers

Post by Fat Bob » 15th Sep, '08, 15:11

Don't worry, the black hole is just around the corner.

Wonder if all the other black holes in the universe were made by scientists saying "nah, it's really low odds we'll create one"?

OK, so what does all this mean? How can I make money out of it? How many UK banks will be closing down? I suppose it's a good reason to have your interest credited monthly instead of annually....
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Re: Lehman Brothers

Post by baloo » 15th Sep, '08, 15:21

Fat Bob wrote:OK, so what does all this mean? How can I make money out of it? How many UK banks will be closing down? I suppose it's a good reason to have your interest credited monthly instead of annually....
Only the very brave or very foolish would try and play the markets now. Cash is King. Just make sure it's under your mattress.
So…if you wish to wish a wish, you may swish for fish with my Ish wish dish.

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Re: Lehman Brothers

Post by Kooky » 15th Sep, '08, 15:35

Doomed. We're all doomed.

Bobbity/anybody - how long do you think before the UK property market hits the bottom? Too much tax relief to lose if we buy now in Oz; thinking of buying in the UK.

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Re: Lehman Brothers

Post by Lichtgestalt » 15th Sep, '08, 15:41

The big ones in the UK seem to be fine (or rather fine). Your deposits are also guaranteed by the BoE up 30 or 35K GBP. UK housing market will go down for a few more years although the real estate agents always try to talk it up.

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Re: Lehman Brothers

Post by cromasaig » 15th Sep, '08, 15:44

I'm hearing the words "perfect storm" being chucked around.

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Re: Lehman Brothers

Post by baloo » 15th Sep, '08, 15:46

Kooky wrote:Bobbity/anybody - how long do you think before the UK property market hits the bottom? Too much tax relief to lose if we buy now in Oz; thinking of buying in the UK.
I'm not Bob and not Fat but....

In every market there are sub-markets so one area might actually increase while something 10miles down the road might collapse. In saying that, the latest financial crisis is effecting credit. As credit gets harder to find, there will be a lot less buyers. Less buyers will typically mean lowers prices.

2010 is my uneducated guess.
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Re: Lehman Brothers

Post by Burbage » 15th Sep, '08, 16:06

I'm not up with the UK market, but my father wants to sell and now he says he'll have to wait two years at least. That doesn't mean the same thing as bottoming out of course, that could already have happened.

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Re: Lehman Brothers

Post by Fat Bob » 15th Sep, '08, 17:15

Depends why you are buying or selling. If you are selling to move into a new place, then as long as you can get credit it shouldn't be a problem. Reasoning? Well, if the rpice of your house has gone down, more than likely so has the price of the other house you are buying. Unles s you have local fluctuations like Lichty says.

If you are buying for a long-term investment: it's a long-term investment, so even if you drop by 10-20%, over 10 years that will be regained. The rental market is also on the up (houses are still too expensive to buy, people are more mobile in the UK) so again, you can get 5-10% more on an annual return.

If you are selling to cash in on the profits from the last 10 years. Well, work it out based upon your last 10 years worth of data. If you can annualise the return, you might still think it's good even though it's not the top $ (or £ or Euro) you may have been able to get 12-24 months ago.

Only issues are if your mortgage is worth more than the house or lots more than you put in. With recent SGD:GBP exchange rate swing, I've "lost" GBP6k. However, bank is not asking for it back. Let's hope the USD brings the SGD down a little in the mean time to "regain" some of that.

I'm in a very positive mood today, eh?

edit - or I'm deluded!
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Re: Lehman Brothers

Post by daffodil » 15th Sep, '08, 20:00

Mate of mine reckons Canary Wharf is funereal today.

Although the wine bars will be doing big trade tonight methinks

Edit : Or this afternoon morelike....!
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Re: Lehman Brothers

Post by Spike » 15th Sep, '08, 20:15

Cash is not necessarily the answer. Why not invest on a dollar cost averaging basis. The latest investment I committed to was a unit trust via Zurich Life where I pay in the same amount every month to buy units. So, when the market is low my dollars buy more units, when it's high my dollars buy less. Evens out the risk but still maintains investment in the stock market, which historically, over the long term, provides the greatest returns.
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Re: Lehman Brothers

Post by baloo » 15th Sep, '08, 21:22

DCA (Dollar Cost Averaging) is a nice little ploy invented by "Financial Advisors" to keep people thinking they're ok when the instrument they hold nose dives. DCA doesn't even out any risk. It just means you hold more of the same investment that is now worth less than when you originally bought it for. Just because it's less now doesn't mean it's a better buy.

The one lesson in investing I learnt the hard way and will never try to ignore again is "never catch a falling knife".
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Re: Lehman Brothers

Post by BoD » 15th Sep, '08, 21:25

I am just rather glad that I got turned down for a job at Lehman's last year :)
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Re: Lehman Brothers

Post by baloo » 15th Sep, '08, 22:05

Just saw the Chapter 11 papers. Lehman's biggest creditor was Citibank with a whopping 138 BILLION Dollars. That's staggering.
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Re: Lehman Brothers

Post by Lichtgestalt » 15th Sep, '08, 22:17

Lehman won't be the last ones, there are certainly others gonna be dragged down as well. Citibank had some problems in the past so let's hope there isn't something in the making. They recently sold their retail business in Germany

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Re: Lehman Brothers

Post by skank-la » 16th Sep, '08, 06:50

Full scale destruction by the looks of it, Dow Jones loses over 500 points -worst day since 9/11

Baloo is right hold on to your cash & gold. This is going to be one hell of a ride

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Re: Lehman Brothers

Post by avatarless » 16th Sep, '08, 08:08

well, if you had heeded my advice to heed nouriel roubini, you would be making some serious coin right now. Long live SKF, SDS, QID. [smilie=up.gif] [smilie=bananaparty.gif] [smilie=bananalama.gif] [smilie=meclap.gif] [smilie=bananen_smilies046.gif]

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Re: Lehman Brothers

Post by Sardonicus » 16th Sep, '08, 08:20

this is truly awful - I have friends working there, and I almost went there at one point, and we're all wondering if we're next, or next after next

plus this floods the market with people at a time many of us are looking for a change
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Re: Lehman Brothers

Post by avatarless » 16th Sep, '08, 08:27

Sardonicus wrote:this is truly awful - I have friends working there, and I almost went there at one point, and we're all wondering if we're next, or next after next

plus this floods the market with people at a time many of us are looking for a change

live by the sword, die by the sword. you liked capitalism just fine when you were on the right side of the trade...

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Re: Lehman Brothers

Post by baloo » 16th Sep, '08, 08:44

As much as I had to admit it, the man without a picture is right. The Investment banking industry is a place for high coin and high bonus, moreso than most other industries. There is a reason for that and people are starting to remember why the good times are really good in IB, it's because when the times are bad, it's really bad.
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Re: Lehman Brothers

Post by slinky » 16th Sep, '08, 08:57

OK, I have a question of sorts.....

Seems to me these banks spent a lot of time making risky loans of large money to a lot of people and now those risky loans aren't being paid back, hence the current mess. Doesn't that make the current situation on Wall St. a correction of sorts??

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Re: Lehman Brothers

Post by Sardonicus » 16th Sep, '08, 09:06

typical response of no value, and pretty insensitive - not all people working at those places are the "capitalists" your broad brush paints
avatarless wrote:
Sardonicus wrote:this is truly awful - I have friends working there, and I almost went there at one point, and we're all wondering if we're next, or next after next

plus this floods the market with people at a time many of us are looking for a change

live by the sword, die by the sword. you liked capitalism just fine when you were on the right side of the trade...
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Re: Lehman Brothers

Post by avatarless » 16th Sep, '08, 09:09

slinky wrote:OK, I have a question of sorts.....

Seems to me these banks spent a lot of time making risky loans of large money to a lot of people and now those risky loans aren't being paid back, hence the current mess. Doesn't that make the current situation on Wall St. a correction of sorts??

slinky, that's a big question with a complex answer, but it boils down to systemic financial risk. if you really want to get a handle on the current situation, I would highly recommend starting with nouriel roubini's blog.

http://www.rgemonitor.com/roubini-monit ... ppearances

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Re: Lehman Brothers

Post by avatarless » 16th Sep, '08, 09:10

Sardonicus wrote:typical response of no value, and pretty insensitive - not all people working at those places are the "capitalists" your broad brush paints
fair enough.

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