During the Olympics I suggested to the New World Order and their minions to start training for running for their lives.
I hope they heeded my warning, for if the comments on The Guardian website are anything to go by the proposal to bail out the banks with a national bad debt bank is going down like a lead fish.
People are not stupid.
People can see the harsh injustice.
People are very, very unhappy and angry.
Therefore, start running for your lives.
The whole idea is so transparent and unimaginative.
They reap the profits and hide them overseas to avoid tax, but when their greed leads to problems and they want bailing out the 'ordinary' taxpayer is supposed to pull their pants down and bend over.
It doesn't work like that anymore on planet Earth.
Game over.
Full article and comments are below.
======================================================
from http://www.guardian.co.uk/business/2008/sep/19/marketturmoil.stockmarkets?commentpage=1
Banking crisis: Shares soar on US rescue planThe dramatic rally in London has added £95bn to the value of the UK's top 100 companiesAll comments (36) Richard Wray guardian.co.uk, Friday September 19 2008 11:15 BST Article historyShare prices have soared in London, with the FTSE 100 index rising more than 400 points - its best performance since the index was created in 1984 - on hopes that the American government will ride to the rescue of distressed banks.
The mood was also lifted by a ban this side of the Atlantic on the practice of short-selling.
The dramatic rally in the FTSE 100 index has added £95bn to the value of the UK's top 100 companies.
Wall Street shot up by more than 400 points last night as news emerged that the US Treasury and the country's central bank are trying to put together a government-sponsored firm - dubbed "bad bank" - which would take control of toxic financial assets and clean up the banking system.
Hopes that the move will stop the contagion which started with the collapse of Bear Stearns last year and reached a dramatic crescendo this week, pushed shares in London higher with the FTSE 100 index of the UK's top companies rising well over 400 points by late morning.
By 11am BST the index of leading shares stood at 5281.3, a rise of 401.3 points.
That is a rise of 8.22% and if the market were to close at these levels its would be the index's biggest rise since it was created by the Financial Times and London Stock Exchange in 1984. Before the FTSE 100 was created, the Financial Times tracked a smaller basket of shares called the FT 30.
It would beat the index's best one day performance to date, which was on October 21 1987 when it rose 7.89%, rallying after a two-day crash which had seen the index plunge 23%.
Rob Carnell at ING Financial Markets said the American government's plan for "bad bank" "is giving equity markets a rare chance to be far more optimistic". "What is being talked about is a vehicle for lancing the boil of bad property related assets that is causing banks to stop lending to one another – and leading to the aggressive shorting that has already claimed some high profile names."
"It could draw a line under what has been described by some as the worst financial crisis since the Great Depression."
The market was also pushed higher by last night's unprecedented move against short-sellers - people who sell shares they do not own on the hopes of pushing the price lower and buying them back at a profit.
New rules brought in by the Financial Services Authority which banned new so-called "short positions" being taken - or existing positions being increased - in financial services stocks, from midnight last night.
Anyone with an existing short position - essentially betting that a stock price will go down - has until next Tuesday to close down that position by buying shares, or they must disclose their positions to the regulator.
This rule opens the way to naming and shaming of short-sellers, who as a rule prefer to retain some degree of anonymity, and as a result many have been closing their positions by buying shares in the market this morning, which has helped boost stocks.
The Irish financial regulator also banned short positions being taken in Bank of Ireland, Allied Irish Banks, Irish Life and Permanent or Anglo Irish Bank.
In London, shares in the banking sector soared with Lloyds TSB and its proposed merger partner HBOS both rising strongly, up over 35%. The share price rise has pushed the value of Lloyds TSB's rescue takeover back above the original price it was worth when announced yesterday morning.
Share prices in London are also being boosted by the scheduled quarterly expiry of a number of futures and options contracts later today - a process known as "triple witching".
Triple witching takes its name from the residents of the heath in Shakespeare's Macbeth, because it involves three characters that can bring discord.
The characters are actually different classes of financial derivative which all come to the end of their trading period at the same time - stock index futures, index options and stock options. Their expiry can greatly increase volatility in the market. In fact it should now be called quadruple witching, as the process now includes the expiration of single stock futures as well.
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Business
Market turmoil · Stock markets · FTSE
UK news
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United States
Money
Shares We will clean up the City - Brown
FSA prohibits 'active creation or increase' of short positions in financial companies for three months
Rescue plan relieves last banks standing
US government floating plans to create a federal 'bad bank' to mop up toxic mortgage-related debts
Explained
What is short selling?
How powerful hedge funds take huge bets on falling share prices
FSA's list of banned shorted companies
The Financial Services Authority's list of companies in which it is prohibited to take short positions in
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About this articleClose Banking crisis: Shares soar on US rescue plan
This article was first published on guardian.co.uk on Friday September 19 2008. It was last updated at 11:36 on September 19 2008. Comments and related information follow Ads by Google
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muzikluv
Sep 19 08, 9:59am (about 3 hours ago)
Yet more 'stimulus packages' by governments. After the last two or three attempts, the markets went on to tank lower some days later. I await the next massive fall!
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Clip | Link mahavati
Sep 19 08, 10:17am (about 2 hours ago)
So let me get this straight. The government intend to gather up all these toxic financial products and dump them in the trash can and give the holders real money (what ever that is!). No doubt the recipients of this largesse will quickly spirit away the dosh to some off-shore bank shouting "Suckerrrrrs!!!!!" and then claim every tax dodge and allowance and exploit every tax loophole to avoid even the slightest hint of paying any tax on their ill-gotten gains. Then claim that Britain is not a good place to carry on business and they may leave.
The Government is making a big mistake bailing this shower of shysters out.
Ah well, c'est la vie, these days, I suppose.
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Clip | Link Bobnottm
Sep 19 08, 10:28am (about 2 hours ago)
This so called new package, creating a vehicle to rescue or take Government control of toxic assets is nothing new at all. After the 1929 crash the US Government created Freddie Mac and Fannie Mae, so they already have the vehicle in place.
This seems nothing more than positioning to show some semblence of control over a collapsing free market system. If they really wanted to instil some confidence they must use the situation to put in place an alternative system, one that protects the 'little man' instead of using the 'little man's' taxes to prop up the greed of the few, very wealthy.
I found it absolutely disgusting watching TV news last night, that they can pump $180b into an unfair, irrational system and in the next news slot, pump just $100m into poverty stricken countries.
@ Muzikluv
I totally agree and what's more disgusting is that, once this $180b gets the markets going again, even if shortlived, the balance sheets of those receiving banks will show improvement and 'justify' CEO's muti million bouses; like they've 'earnt' it?!*
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Clip | Link Ambient
Sep 19 08, 10:35am (about 2 hours ago)
Risk taking entrepeneurs! Its time to come out and play roulette again. Mommy and Daddy have bailed you out once again. The state comes to the rescue once again. Say thank you to the taxpayers because we know that you aren't one.
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Clip | Link lolwhites
Sep 19 08, 10:43am (about 2 hours ago)
So much for "you can't buck the market"
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Clip | Link booker
Sep 19 08, 10:50am (about 2 hours ago)
This is a disgrace. Markets are amoral. A corporation has the same behaviour as a psychopath and only wants to make money for the elite few. This is how a business works, which is fine, we are in a capitalist society but now unfortunately we have THE GOVERNMENT PLC and they won't be able to swim in the amoral waters of business without being murdered. They are considered mugs by the business community. Cheers Gordon for lining the already well tailored pockets of the elite, you fool.
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Clip | Link MWinMilan
Sep 19 08, 10:52am (about 2 hours ago)
dead cat bounce
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Clip | Link danielcb2k
Sep 19 08, 10:55am (about 2 hours ago)
I'm really not surprised the stock markets have soared considerably. If my 'rich uncle' decided to bail my cousins and I out on some bad gambling I'm sure we'd all be ecstatic too.
What really get me, is that the government has to set up this rescue plan to stimulate the economy for the rest of us, or every other industry will suffer as a result of these bad decisions. These problems result from a few people at the top turning a blind eye to what was going on in their own businesses, at the expense of many. It's classic capitalism at its best! And they will get out of it, along with their bonuses intact, only to be rehired by other banks.
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Clip | Link Slurper
Sep 19 08, 10:56am (about 2 hours ago)
Come on, all you sourpusses.
All we need is for the taxpayer to buy the toxic debt at face value, and then everyone can get on having a fine old time and making money.
Where's the downside in that?
On a more serious note, one problem may be that in order to sell the toxic debt to the taxpayer, a price will have to be put on it.
And the last thing banks want is for a price to be put on these "assets", since they then have to use that price to estimate the value of all the similar "assets" they hold. And their balance sheets will turn to ****.
So don't be surprised if there turns out to be surprisingly little will amongst the banks to sell their toxic debt to the taxpayer.
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Clip | Link porsupuesto
Sep 19 08, 10:59am (about 2 hours ago)
What if the value of these toxic debts is not several hundred billion as has been implied to date, but runs into trillions? Where do they stop - and if they stop do they return to case by case moral hazard judgements on failing institutions?
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Clip | Link sidewaysthinker
Sep 19 08, 11:00am (about 2 hours ago)
So that's how free-market capitalism works!
How nice to know that they can survive without any intervention and we all have nothing to worry about.
We are supposed to trust these people???
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Clip | Link teganjovanka
Sep 19 08, 11:00am (about 2 hours ago)
Nationalise the profits and benefits = communism. Nationalise the losses and debts = fascism!
Still, it won't last long. What's been proposed is rather like hiding a corpse under a carpet. You can push the lump under the sofa or behind the wardrobe, but it's still there. So the banking system doesn't go bust, but the country does. Nice.
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Clip | Link socialistMike
Sep 19 08, 11:04am (about 1 hour ago)
Hurrah, the wealthy speculators are making money again! Banner headlines and joy unconfined.
Isn't this ecstatic response to the market going up a part of the whole delusional problem that equates spivs and gamblers winning as the general good being served?
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Clip | Link Indysradio
Sep 19 08, 11:06am (about 1 hour ago)
Marx talked about the collapse of capitalism before socialism can find its feet again. Perhaps the nationalisation of the financial system is where this process begins.
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Clip | Link robbirch
Sep 19 08, 11:10am (about 1 hour ago)
So both the US and British governments are papering over the cracks of a devalued and morally bankrupt system. A system that time after time breaks down with the effect of only hurting those who can least afford it. They will never learn!
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Clip | Link paradigm
Sep 19 08, 11:14am (about 1 hour ago)
Today many traders/gamblers have made money as stock values rise.
The markets have risen as a result of another bailout paid for by every taxpayer.
Once again the many are supporting the few.
Are we going to accept this? We should be taking to the streets. If we do nothing then those in positions of power and influence will continue to fleece all of us.
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Clip | Link henleaze
Sep 19 08, 11:20am (about 1 hour ago)
If you read the free market bible, Adam Smith's 'The Wealth Of Nations', there was always meant to be a 'benign and wise disposer of all things' to sit on top of the market and ensure its' security.
The American Govermnent seems to have remembered this when it suited them
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Clip | Link Indysradio
Sep 19 08, 11:27am (about 1 hour ago)
Good post Henleaze. An ethos no doubt later incoporated into Friedman's Chicago school of thought which Thatcher embraced before the privatization of England, or as paradigm puts it 'the fleecing of us all'.
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Clip | Link ChrisWoods
Sep 19 08, 11:31am (about 1 hour ago)
It`s rather amusing to watch the authorities throwing more money into this mess, it probably wont work too well. The problem is too big and expecting the idiots in the City to stop gambling `because there is a problem` wont happen without legislation. Try and put out the fire with idiots throwing more petrol on every now and then in different places and just as you start to rake up the cinders you find there is more burning underneath.
A temporary ban on short selling is a short term measure only, the long term problem of solvency and lack of cash is very long term and everyone knows it. This still has not been addressed and without the govt lending basically permanently, it will all kick off again.
The bank stocks are taking a hammering because in all reality, they bloody well deserve it. They are what we called `bust`. If no one wants your company because of this dont blame `the system` its the free market baby, take the good with the bad. Something is only worth what someone is going to pay for it, you cant force people to think these banks are worth something. Please govt, dont invent some other `vehicle` to store bad debt for these morons to help them, we the taxpayer ultimately are going to pay for their stupididy and I personally am sick of it.
This reminds me of something about the financial system that is completely insane. The US and UK economies rely so heavily on the financial markets that of course there is really no choice but to bail out all these banks. We rely on banks for everything, its the countries life support system. How is it possible not to have any kind of regulation to prevent self destruction when its critical for survival?
Roll on the govt to save us all LOL.
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Clip | Link Lia91
Sep 19 08, 11:35am (57 minutes ago)
Socialism is where it's at.
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Clip | Link ORourKe
Sep 19 08, 11:35am (57 minutes ago)
Why does nobody blame all the people who are defaulting on their mortgages? How about that for irresponsible? Why buy a house if you can't afford the payments? Isn't that at the root of all this?
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Clip | Link ddddj
Sep 19 08, 11:40am (52 minutes ago)
I don't really understand tax issues but surely the decision to bail out any institution should always be done in relation to the amount of tax these institutions should pay in the future?
"You want to be bailed out? Sure, but from now on you have to pay tax in the UK and your tax rate has just gone up to 50%... " then at least the tax payer would get some benefit from socialising the cost of 'free' markets.
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Clip | Link Scorf
Sep 19 08, 11:47am (46 minutes ago)
Seems to me that the US and UK governments are showing a refreshing pragmatism to events rather than clinging onto ideology.
Not that the same could be said for so many of the posters on here, who cling to their Marxism and are doubtless desperate for the crisis to escalate.
Its not "fair" that banks etc can be propped up in this manner, but when has life ever been fair. I'd rather the authorities stepped in and acted.
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Clip | Link Martin04
Sep 19 08, 11:57am (35 minutes ago)
Looking at the massive share prices today 5RBS up 40% as I type) you can only reflect on what a great deal Lloyds TSB got on Tuesday. Imagine if they had to pay 40% more.
I presume this purchase windfall will be allocated to improving 40,000 redundancy payslips
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Clip | Link sminky
Sep 19 08, 12:02pm (30 minutes ago)
As a person who's never showed the slightest interest in finance or money markets etc, lately I've tried to look into what all this talk of massive crisis is all about. I'm still confused by the whole thing, but it seems to me that the world we live within is controlled by people who gamble with other people's labour. I wish I'd never looked into it now, seeing as the system is so unbelievably greedy and self-serving. Looking at this latest story today, I realise that I'm going to be paying towards bailing out these greedy, self-serving parasites out of my wages.
It's all utterly depressing - so I'll be burying my head in the sand again, going to work, enjoying my hobbies in my time off as best I can with what's left of my wages, all in the hope that some other better system that warrants my belief in it comes along and ousts this disgusting thing we're ruled by.
Over and out.
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Clip | Link leftrightleft
Sep 19 08, 12:02pm (30 minutes ago)
Let me get this straight. Banking is the economys underpinning, the system of veins and arteries through which money flows and grows. Fulfilling this function the various banking institutions and corprations make handsome profits, from which, in a variety of different, lubricating ways, the entire economy benefits. So far so good.
Then the banking/stock market entities are liberalised to allow them to profit even more massively from their own money generation by a relaxing of state interference and an ending of the separation of its many components, so to speak. Hurrah! at last the free market can function freely and do what it does best – sort the wheat from the chaff and punish the feeble and foolish. Money flows unhindered into the economies of the western world via free-for-all mortgages and interest free credit, which gives rise to supposedly steady economic growth for many years.
Sadly, in an all too human way, everyone gets drunk on this freedom and party a little too hard. Cracks begins to show. There is a run on a bank. Some investment banks collapse – Big Ones. Markets panic. Systemic collapse threatens. People got too carried away, they say, made errors of judgement in their greed. Action has to be taken.
To prevent systemic collapse from occuring the state steps in (again and again) and props up the nervous, tottery mass the financial world has become with yet further money generation, and promises to set up an organ, a nationalised bank that will take care of any mess the moneyholics make, thereby stabilising the system for ever. With taxes.
Where do taxes from from? From a healthy economy. If the profits of a healthy economy are siphoned off via taxes to cover the arses of those addicted to speculation and adrenalin-fired risk-taking, how can this be good? Its as if a giant money-magnet has been placed at the very dizzy top of society which sucks money inevitably upwards, towards itself, turning money into a ballooning, looming cloud whose lightning strikes hit only the poor.
If I am near the truth with this (somewhat dramatic) sketch, what the f*ck is going on!?
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Clip | Link houses
Sep 19 08, 12:05pm (27 minutes ago)
There's nothing they won't stoop to in order to retain this disgusting economic system. Taxpayer buys banker's bad debt, would you like yur shoes shined into the bargain, Guv'nor. Horrible, horrible injustice.
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Clip | Link sensato
Sep 19 08, 12:10pm (23 minutes ago)
ORourKe: "Why buy a house if you can't afford the payments? Isn't that at the root of all this?"
Subprime failures were just an early, visible symptom. Where debt = assets, and leverage is unlimited, the problem is systemic. It's usually called a Ponzi scheme.
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Clip | Link WJohnC
Sep 19 08, 12:16pm (16 minutes ago)
Greed got them there, greed will always be their motive.
They should all have beena llowed to go to the wall and allow us to go and laugh at them through the slits of the workhouse.
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Clip | Link ghofi
Sep 19 08, 12:17pm (15 minutes ago)
The FTSE is bound to rise today as all those short sellers close their positions. This will naturally result in anyone holding a short position having to buy back the shares they initially sold (without actually owning them). This means that demand is high and a great deal of short sellers (be them individuals, institutions or hedge funds) will lose quite a bit of cash. Not that that is a bad thing, no-one complains when they make money.
The buying is nothing more than a blip. It is a correction whilst shorters close positions. It will not actually change the market significantly in the longer term, it is simply a readjustment before the inevitable falls once more next week. The only thing is that people will not be able to profit from the falls, meaning that any economic recovery will take even longer to come about...
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Clip | Link Emmm
Sep 19 08, 12:17pm (15 minutes ago)
Surely by now you all realise that we are all a gaggle of geese to be plucked and effed in any and every way that the predators can think of, which doesn't result in their actual demise. That's capitalism. It is fair, though, and plunders and obscenely destroys every kind of living being - ask the fish, farm animals, and people. For good measure, it will also disfigure the planet, and possibly destroy it, if the greed totally overrides common sense.
This planet's existence in based on predation, and until that changes - most unlikely - the law of the jungle will continue to operate.
As for the disgusting, soulless Brown, Blair, Bush, Berlusconi (hm, a lot of b's there!) and their many cronies - they are mere facilitators, who will pick up their rewards from the financiers when they leave their jobs.
So, Paradigm, the fleecing continues.
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Clip | Link KevinbinSaud
Sep 19 08, 12:18pm (14 minutes ago)
Oh well, no need to worry. Brown will be swept away soon and the People's champion David Cameron and his chum George "Lord Snooty" Osbourne will come along to sort out all these corrupt businessmen and their obscene practices..........
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Clip | Link Indysradio
Sep 19 08, 12:19pm (14 minutes ago)
Nice post leftrightleft. Type into google 'chomsky bewildered herd' and there you might find the answer as to why the rich and powerful financial insitutions are able to get away with they do. The less people know about how the country functions, the better it is for business plans, or the wealthy few. It is also argued that media frenzy, shock doctrines help this cause.
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Clip | Link AnObserver
Sep 19 08, 12:19pm (13 minutes ago)
@ORourKe,
Well, one reason people took on large mortgages is that the houses we have in this country are too small, in the wrong places, or surrounded by dodgy neighbours and schools. The rising market would hopefully buy a way into addressing these problems.
Let's also note that the problem is often with fixed-rate deals ending, that is, people buying a house and hoping that at the end of it something will turn up. This is as true of the banks as the mortgagees.
You see, it's okay for people to act like "I told you so" now, but there's huge numbers out there who would like to be more socially-mobile (remember that?), or who see their peers make a mint and hope that the gravy-train lasts just long enough to reach them.
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Clip | Link KevinbinSaud
Sep 19 08, 12:23pm (10 minutes ago)
ghofi - I don't think that a closed circle of scum in the city getting rich from short selling would improve the overall economy. The real economy needs real solutions, not some smoke and mirrors sleight of hand that creates an imbalance in the wider community through a minority receiving excessive rewards for creating nothing of any value.
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Clip | Link timx
Sep 19 08, 12:27pm (5 minutes ago)
All those toxic debts also include the bonuses and commissions to those that sold them.
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