# Depression greater than 1929 a possibility



## MrBurns (16 November 2008)

For all you bulls out there that think this is all overcooked, for all the property bulls that think property will survive and grow in the medium term read what the *President of the United States of America *said at the G20 summit today and try to take it in - 



> Bush says summit leaders agree to cooperate better
> By TOM RAUM – 11 hours ago
> 
> WASHINGTON (AP) — *President George W. Bush, closing an emergency economic summit, said Saturday that decisive action had been required in recent weeks to save the United States from possibly falling into "a depression greater than the Great Depression."*
> ...


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## robots (16 November 2008)

hello,

didnt mention property

thankyou
robots


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## Glen48 (16 November 2008)

Pity all the experts couldn't arrive at a solution instead of leaving this mess drag on at least GWB will be out of the picture and on a fat pension.
No much confidence to inspire the rest of us to think they have been working on the problem and  a depression some thing I suspected since early this year.
So what do we do next buy what???? sell what????


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## nunthewiser (16 November 2008)

japan


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## numbercruncher (16 November 2008)

The bulls say, the G20 are n00bs, we know better !!


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## MrBurns (16 November 2008)

robots said:


> hello,
> 
> didnt mention property
> 
> ...




He was asked about St Kilda but started crying uncontrollably while giving a thumbs down muttering something about worse than 911 or something like that.


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## MrBurns (16 November 2008)

numbercruncher said:


> The bulls say, the G20 are n00bs, we know better !!




When the President of the USA uses language like that you have to listen, see how that hits the DOW this week.


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## cutz (16 November 2008)

A message for all paralysed with fear,

No guts, no glory.


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## IFocus (16 November 2008)

The situation is a good case for prevention being better than the cure.

The numbers are simply to big for a cure so all they can hope for (G20) is to up confidence that they will do some thing.

2009 will be rough


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## MrBurns (16 November 2008)

IFocus said:


> The situation is a good case for prevention being better than the cure.
> 
> The numbers are simply to big for a cure so all they can hope for (G20) is to up confidence that they will do some thing.
> 
> 2009 will be rough




It hasn't really hit the streets here yet, the large shopping centers are chockas I'm told.

Interest rates down, a bit of cash coming their way, petrol prices down it's all reasonably ok at present unless you had your Super (in shares) or are trying to sell a house or commercial property.

I'm not looking forward to it hitting the real economy.


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## robots (16 November 2008)

MrBurns said:


> He was asked about St Kilda but started crying uncontrollably while giving a thumbs down muttering something *about worse than 911 or something like that.*




hello,

whats 911? getting porsches when I type it into yahoo australia whats porsches got to do with it

thankyou
robots


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## MrBurns (16 November 2008)

robots said:


> hello,
> 
> whats 911? getting porsches when I type it into yahoo australia whats porsches got to do with it
> 
> ...




Try a real search engine - www.google.com.au


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## jman2007 (16 November 2008)

MrBurns said:


> For all you bulls out there that think this is all overcooked, for all the property bulls that think property will survive and grow in the medium term read what the *President of the United States of America *said at the G20 summit today and try to take it in -




World Leaders and the throng of press and media are reported to have taken little comfort in George W. Bush's closing remarks: "My esteemed friends and colleagues, although having only recently been informed of what the G20 actually was, we must now move forward together and never let the right hand forget what the left hand is doing".

George W. Bush also downplayed the apparent scuffle in the conference foyer between Australian Prime Minister Kevin Rudd and himself, in which Bush allegedly tried to strangle one of Rudd's aides with a telephone cord, saying "Kelvin Rodd and me go back a long way, it just a case of two friends having a frank exchange of ideas".

:::


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## drsmith (16 November 2008)

The week the markets were crashing in October I remember hearing GWB saying something about the economic crisis. I can't remember specifically what it was but he did sound very worried.

My impression is that to some extent world leaders are still trying the chase the evolving situation down and that the stock market bottom is still yet to come and that this week inparticular could be quiet negative. That being said the bottom of the market is by definition the point at which investors are most pessimistic.


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## tech/a (16 November 2008)

The US of A is in dire straights.
Its printed more money than most can imagine.
Its financial system is in so much chaos that it could well plung into a depression greater than 1929.

Your comparing a watermelon with a strawberry.

This is truly the country of opportunity and those who don't take advantage of what it has to offer,by *actively seeking out that opportunity *in times which most see as hopeless *will be and have been the true losers.
*
They WILL fulfill their prophecy.
They will look back on life with regret.
They will look at those who DARED to question their rational with bitterness and prejudiced views, and hope often passionate hope that those who DARE----fail.

"If I get knocked down I'll get up again 
Nothings going to keep me down"

I know which position I'd rather be in facing the impending armageddon!
I and those like me know who they'd rather have controlling their Destiny/Future.---Ourselves.

While most debate endlessly we will be doing something about our situations and it will and has been vastly different to the doomsdayers present in these types of threads! *We are vastly better equiped.*


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## cutz (16 November 2008)

tech/a, some truly inspirational words.


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## Glen48 (16 November 2008)

Just to help those out Robots was talking about a front and rear Porsche and it should be 000 not 911.
Hope that clears up the confusion.
I glad we had KRudd and Wayne over the to help us out and when March comes around all will be good in paradise.
I sold all my shares on Friday, sold my house in September and all I am left with is cash in the bank, one burning one turning and nothing on the gauge but the makes name wots me worry?


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## MrBurns (16 November 2008)

cutz said:


> tech/a, some truly inspirational words.




I agree and well said but before you plan to deal with something you have to know what it is and we havent got a clear picture yet.

The purpose of the post was simply my amazement that Bush would even usr the D word, things may be worse than we are led to believe and until we get a clearer picture I'll wait THEN yes, onto the opportunities, there will be many but you need to be careful.

I have no debt and plenty of cash so I'm ready to go when the time is right.


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## nunthewiser (16 November 2008)

Totally agree with tech/a

another top post

with every cloud there is the sun behind it , you just got too search for it

personally looking behind the clouds towards japan 

doesent mean im right but i can sure see a ray of sunshine there the more i look

many more opportunitys out there if one can break out of the box and look beyond the gloom

focus on the gloom and all you see are clouds

sounding a bit "out there" perhaps but at least i know when one door closes there is another open not too far away


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## Glen48 (16 November 2008)

Putin is trying to get elected again, maybe he knows USA is on its knees and he could be the Top Dog???
Some one said the market could drop another 20-25% looks like this could be it.


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## nunthewiser (16 November 2008)

Also , not just overseas , what about the person with patience and foresight .

5/10/15/20 years down the track what if one is waiting ? waiting to rejoin the cycle that is and has always been . waiting to rebuy them positively geared propertys again , waiting for that large block of industrial aceraege that will sit there becoming cheaper, waiting for the markets to finally change there trend.....

so many opportunities can pass one bye if all they can see is the gloomy side of the situation

ok sorry if stating the obvious 

off my soapbox and back to the convent until im shown a sign


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## juddy (16 November 2008)

After all the rubbish that has come out of the mouth of this goose over the last 8 years, why should this statement be taken so seriously?


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## drsmith (16 November 2008)

Glen48 said:


> Some one said the market could drop another 20-25% looks like this could be it.



On October 12 the IMF’s chief economist predicted that shares could slump by another 20% before stabilising. This was directly after that bad week in October. The context was in the following few weeks so this to some extent is now old news.

http://business.timesonline.co.uk/tol/business/economics/article4926584.ece


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## cbacamden (16 November 2008)

What ever way you look at it, it sure is interesting times.

I personally think its all a big setup. You need a very big disaster  to allow them to get everyone to accept the maor changes they are going to come up with. 

Expect the new reforms to come out of this to be big and Bad. One world currency ?(maybe  closer than we think)

Interesting Times


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## brty (16 November 2008)

hi,

Mr Burns....



> until we get a clearer picture




When is the right time to buy??

Is it when all the news is good or it's all bad??

I've heard people waiting for clearer pictures, things to improve, market to turn around etc for over 20 years. The problem is that when things do get better, the same people then want to wait for a pullback because prices have risen too far...

Of course this time it's different.

brty


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## cbacamden (16 November 2008)

A good point 

The few guys I know of that have serious money started to buy a few weeks ago and are slowly getting in NOW and over the comming mth.

If it falls another 15-20% i think they woud be happy just to keep buying

Who knows ?


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## tech/a (17 November 2008)

Take a look at the difference in leadership quality shown by Obama when comparing to Bush and Rudd.

Obama---*We CAN do it*.--Frankly many feel they can.

Rudd---Things are going to get worse---They will!!!

Who would you want leading your place of employment---let alone your country!


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## MrBurns (17 November 2008)

brty said:


> hi,
> 
> Mr Burns....
> 
> ...




When the markets settle again unless you want to take a risk and jump in now , might be ok might not.

The only reason I'm not buying in now is because of the chance that things may get significantly worse, may happen, may not but there's too much bad news around for me to take that risk, yet.

You may not pick the bottom but who cares I'd rather be safe than sorry.


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## Mofra (17 November 2008)

juddy said:


> After all the rubbish that has come out of the mouth of this goose over the last 8 years, why should this statement be taken so seriously?



Bingo. A halfwit who didn't even know what the G20 was says something _could_ happen, and we're supposed to dig a shelter because something _might_ occur.


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## MrBurns (17 November 2008)

juddy said:


> After all the rubbish that has come out of the mouth of this goose over the last 8 years, why should this statement be taken so seriously?




When the US President says the US may have gone into a deeper depression than 1929, you have to take note.

He may not be the brightest apple in the barrel but he has access to advice that you dont so to think you know better would be a mistake.


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## Bushman (17 November 2008)

A bull market in 2010 is also a possibility. 

Would've hoped that the chief alarmist would have started dealing in probabilities by now. 

Probabilities - 
1. that Iraq had WMD - low. But is was possible! 
2. that financial WMD like CDO's would continue to rise in value indefinitely - low; but it was possible! 
3. that a major hurricane would not breach New Orleans levy system - low. But is was a possibility!

He is a cretin - the worst statesman since, well, I cannot think of one in modern Western history. He is also the ultimate symbol of the golden debt-fuelled bull. You would not elect someone like him if you were not riding a high and political risk was mispriced along with evertyhting else in the capital system.

We will not have another Great Depression. What has happened this time that did not happen in the 1930's - a co-ordinated injection of liquidity by Central Banks across the world. Off-setting this, it is true, has been the exponential rise of derivative products. So it will be bad - but it will not be the Great Depression. 

Only in financial markets, where the only crowd emotions seem to be at the extremities of human behaviour (ie irrational optimism or irrational pessimism) will participants trawl through the history books to find the best-case or worst-case scenario to support their mental state. So it is a depression but, in this case, it is in the minds of the participants that it is occuring. 

Stop wasting energy on worst-case scenarios now - the worst-case has already occured and we are now going through the process of confirming it statistically.


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## tech/a (17 November 2008)

Good Post Bushman.
I agree.


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## Ageo (17 November 2008)

Bushman said:


> We will not have another Great Depression. What has happened this time that did not happen in the 1930's - a co-ordinated injection of liquidity by Central Banks across the world. Off-setting this, it is true, has been the exponential rise of derivative products. So it will be bad - but it will not be the Great Depression.




So do you believe what the central banks did (injecting trillions of dollars) was a good idea?


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## MrBurns (17 November 2008)

Bushman said:


> We will not have another Great Depression. What has happened this time that did not happen in the 1930's - a co-ordinated injection of liquidity by Central Banks across the world. Off-setting this, it is true, has been the exponential rise of derivative products. So it will be bad - but it will not be the Great Depression.
> 
> Stop wasting energy on worst-case scenarios now - the worst-case has already occured and we are now going through the process of confirming it statistically.




I dont believe there could be a depression alla soup lines like the Great Depression I dont think anyone thinks that but things could get a lot worse, you say the worst is over ? brave call, put your money on it , I'll wait a bit longer.

As far as Bush goes I'm not sticking up for him but the advice he gets may be worth considering , thats what I've been saying, I get sick of people jumping on the bash Bush wagon every time his name is mentioned , it's just bloody boring.


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## Sean K (17 November 2008)

Bushman said:


> Stop wasting energy on worst-case scenarios now - the worst-case has already occured and we are now going through the process of confirming it statistically.



I agree with this to some extent, but it's no certainty. Worst case predictions of business losses/closes and job losses is just a prediction. Could be worse (or better) than the overall sentiment. I think you are tipping that the worst is factored in. You might be right.


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## BradK (17 November 2008)

I agree with some posts who think that George W Bush only uses the politics of fear to push through unpopular legislation.... and I agree, something BIG is about to come. 

Obama, like Roosevelt, believes in a solution... whereas Bush is trying to employ the shock doctrine to push something through... 

The only thing to fear is fear itself... I hope interest rates get to 3% and inflation takes off so that I own my house quicker! Stuff all you savers!!! I will then get into more debt for another investment property... saving is for LOSERS! 

Brad


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## numbercruncher (17 November 2008)

BradK said:


> I agree with some posts who think that George W Bush only uses the politics of fear to push through unpopular legislation.... and I agree, something BIG is about to come.
> 
> Obama, like Roosevelt, believes in a solution... whereas Bush is trying to employ the shock doctrine to push something through...
> 
> ...








lol nice outburst .....


Speaking of fear, seems deflation has you edgy ?


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## Bushman (17 November 2008)

MrBurns said:


> you say the worst is over ?
> .




The worst has been priced into the stock market. Those smashed by the credit crunch are slowly forming bottoms ala ANZ $13.07 (52-week low, P/E ratio 6.17, dividend yield 10.34%), NAB ($18.33 52-week low, P/E ratio 7, dividend yield 10.54%) etc. Based on FY08 earnings, these are stock prices that have priced in some serious nastiness. 

In terms of main street (ie unemployment, small business bankruptcy, Aussie housing declines) the worst is yet to come. This will be confirmed by stats over the next three to six months. 

The liquidity injection was a necessary response given Lehman had collapsed. No point torching the farm after the horse has bolted. The issue was with earlier deregulation of the banks and the unfetered political belief in Adam Smith's 'invisible hand'. That I do not believe in ... liquidity flow should be unencumbered by short-term profit objectives. 

Long-term - well cheap debt got us into this position so the only historical certainty we know in all this, the asset valuation cycle, will kick back into an upward surge. Hopefully increased scrutiny/regulation will ensure it does not get to the top too quickly otherwise we will have yet another bubble bursting. 

My 2c only...


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## MrBurns (17 November 2008)

Bushman said:


> The worst has been priced into the stock market. Those smashed by the credit crunch are slowly forming bottoms ala ANZ $13.07 (52-week low, P/E ratio 6.17, dividend yield 10.34%), NAB ($18.33 52-week low, P/E ratio 7, dividend yield 10.54%) etc. Based on FY08 earnings, these are stock prices that have priced in some serious nastiness.
> 
> In terms of main street (ie unemployment, small business bankruptcy, Aussie housing declines) the worst is yet to come. This will be confirmed by stats over the next three to six months.
> 
> ...




Not sure if the worst has been factored into the share market yet, I wish I believed that, I'm busting to buy something but everything is just too volatile at this point.

Yes there will be another bubble after all this is over, there's no one out there with enough smarts or the will to stop it.


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## Spek (17 November 2008)

BradK said:


> I agree with some posts who think that George W Bush only uses the politics of fear to push through unpopular legislation.... and I agree, something BIG is about to come.
> 
> Obama, like Roosevelt, believes in a solution... whereas Bush is trying to employ the shock doctrine to push something through...
> 
> ...




Supply and demand - when everyone is borrowing there is money to be made in saving and visa versa.

If you follow the herd you will end up average joe at best.  On the bright side you wont be lonely.


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## basilio (17 November 2008)

It's very hard to consider the possibility that there will be far more severe economic times than  is already occurring. For a start this is our financial and social future we are talking about and its .....ing scary to contemplate the  poverty, meanness and desperation that will be part of a financial collapse.

*Trouble is Australias' indebtedness has never been higher. *If you check the situation in 1890 and 1929 you'll find that borrowings while excessive were still substantially less than we currently have. It's this overhang that is going to destroy peoples lives, the economic base of the financial institutions (as loans fall over) and undermine consumer spending for years.

*We've been conned.* By banks, financial advisers, market commentators and in the end ourselves. We somehow believe that simply because enough people have been thrown enough money to bid up prices on property, shares or vintage cars that our wealth has actually increased. Its just a lot of figures. You can get lots of dollars in Zimbabwe. Just not worth much.

The real kicker (unfortunately) is that within a relatively short period of time  permanent reductions in cheap energy and the material effects of climate change (drought, floods, destruction of viable ecosystems) will crucify both our industrial capacity and our natural resources.

Came across an excellent video recently about Peter Schipp. He has consistently stated that America was facing a disaster because of its ridiculous home lending practices and that the banks were all headed for a fall. Check out his steadfastness on this video. Great balls.

On a constructive and bright note there is an outstanding book called "The Geography of Hope - a tour of the world we need "by Chris Turner.  Just a fantastic  exploration of the practical ways we can create a quality, sustainable future simply with the technologies we currently have. Also includes some great investment opportunities...


References
Peter Schiff was right
http://www.youtube.com/watch?v=2I0QN-FYkpw&eurl=http://paul.kedrosky.com/ 

Analysis of Australias  debt position
http://www.debtdeflation.com/blogs/2008/11/02/debtwatch-no-28-november-2008-what-is-really-going-on/

Truly worth a read. Unfortunately it is out of stock. Very popular book
http://www.readings.com.au/product/9780679314660/the-geography-of-hope


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## basilio (17 November 2008)

http://www.worldchanging.com/archives/008997.html

Just thought I would add a piece of writing from Chris Turner (the Geography of Hope). Hope it whets your interest

Cheers


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## Julia (17 November 2008)

BradK said:


> The only thing to fear is fear itself... I hope interest rates get to 3% and inflation takes off so that I own my house quicker! Stuff all you savers!!! I will then get into more debt for another investment property... saving is for LOSERS!
> 
> Brad



Just can't help being unnecessarily unpleasant, can you, Brad.
Selfish doesn't cover it.


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## BradK (17 November 2008)

numbercruncher said:


> lol nice outburst ....
> 
> Speaking of fear, seems deflation has you edgy ?




Hi Number... nah, just having a joke and winding up all the people on here who seem to think that ANYONE with ANY debt spends it all on plasmas and pokies. 

Not blow off at all... just a little sense of humour 

Cheers
Brad


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## numbercruncher (17 November 2008)

BradK said:


> Hi Number... nah, just having a joke and winding up all the people on here who seem to think that ANYONE with ANY debt spends it all on plasmas and pokies.
> 
> Not blow off at all... just a little sense of humour
> 
> ...





haha good one 

Im sure it had the desired effect and raised a few eyebrows !


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## tech/a (17 November 2008)

BradK said:


> Hi Number... nah, just having a joke and winding up all the people on here who seem to think that ANYONE with ANY debt spends it all on plasmas and pokies.
> 
> Not blow off at all... just a little sense of humour
> 
> ...





I'd have thought that those who are averaging down would have better returns currently from pokies.85c for every $ invested in the long term.


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## skc (17 November 2008)

tech/a said:


> I'd have thought that those who are averaging down would have better returns currently from pokies.85c for every $ invested in the long term.




Pokies investors are very short term traders (probably 30 seconds between each investment) so their -15% return would be much worse off than the dollar-averaging investors at the end of the day. BTW, I think the return on casino floor pokies are better compared to pubs and RSLs...


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## tech/a (17 November 2008)

skc said:


> Pokies investors are very short term traders (probably 30 seconds between each investment) so their -15% return would be much worse off than the dollar-averaging investors at the end of the day. BTW, I think the return on casino floor pokies are better compared to pubs and RSLs...




They are.

They are set at 95c/$
Some set at 98c/$
Other 85c/$

all to suck you in!


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## MR. (17 November 2008)

tech/a said:


> Obama---*We CAN do it*.--Frankly many feel they can.
> 
> Rudd---Things are going to get worse---They will!!!
> 
> Who would you want leading your place of employment---let alone your country!




Exactly....  Rudd should be talking things up.  Governments should have done more when they could.  It is not the time now to warn people.  Encouragement is what is needed.

20 years ago I remember an add on tv.  It was a Victorian Government add warning about debt.  It used the purchase of a Holden Commodore and explained that if you took a loan, by the time you have paid it off you had paid for the car more than twice.

I have not seen anything similar since.  I guess it would be frowned apon, perhaps non-productive.  However these adds should have already been run.

Wonder if they will appear again in the near future?

(Also, don't believe the thread title.)


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## Julia (17 November 2008)

tech/a said:


> Take a look at the difference in leadership quality shown by Obama when comparing to Bush and Rudd.
> 
> Obama---*We CAN do it*.--Frankly many feel they can.
> 
> ...



Have been thinking the same thing.   Fear is contagious enough without the Prime Minister fostering it the way he is.   What can he be thinking!
Blasting through the surplus in an attempt to stimulate spending and at the same time emphasising that it's all going to get a lot worse.  If people believe that  - and they do/will - they will save rather than spend.
Hard to understand how the polls score him highly.  It can only be the indifferent performance of the Opposition.


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## GreatPig (17 November 2008)

skc said:


> Pokies investors are very short term traders (probably 30 seconds between each investment)



Shorter term than that. A spin on the pokies is probably no more than 5 seconds now.

GP


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## chops_a_must (17 November 2008)

MR. said:


> Exactly....  Rudd should be talking things up.  Governments should have done more when they could.  It is not the time now to warn people.  Encouragement is what is needed.



I disagree.

I think it's time to be alarmed, not alert.

I also feel it's time to for another hotline.

I think those towel heads might be stealing my money.


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## MrBurns (17 November 2008)

Rudd is a drama Queen, he revels in the notion that he is leading the country from disaster, he loves posing with world leaders, he will blow the surplus no problems he also loves spending money that he had no hand in making.

When this is over he's got a part in Days of Our Lives lined up.


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## nunthewiser (17 November 2008)

no offense intended but hey we all entitled to our opinions 

this is from wiki re jap asset bubble , circumstances sound familair ?? oh one thing tho ... according to other data , OURS , USA , UK asset /property bubble been for MUCH longer , MUCH higher and MUCH more debt propelled 

personally think YES there is cause to be VERY alarmed but hey each to there own


In the decades following World War II, Japan implemented stringent tariffs and policies to encourage people to save their income. With more money in banks, loans and credit became easier to obtain, and with Japan running large trade surpluses, the yen appreciated against foreign currencies. This allowed local companies to invest in capital resources much more easily than their competitors overseas, which reduced the price of Japanese-made goods and widened the trade surplus further. And, with the yen appreciating, financial assets became very lucrative.

With so much money readily available for investment, speculation was inevitable, particularly in the Tokyo Stock Exchange and the real estate market. The Nikkei stock index hit its all-time high on December 29, 1989 when it reached an intra-day high of 38,957.44 before closing at 38,915.87. The rates for housing, stocks, and bonds rose so much that at one point the government issued 100-year bonds. Additionally, banks granted increasingly risky loans.

Prices were highest in Tokyo's Ginza district in 1989, with choice properties fetching over US$1.5 million per square meter ($139,000 per square foot). Prices were only slightly less in other areas of Tokyo. By 2004, prime "A" property in Tokyo's financial districts had slumped and Tokyo's residential homes were a fraction of their peak, but still managed to be listed as the most expensive in the world. Trillions were wiped out with the combined collapse of the Tokyo stock and real estate markets.

With the economy driven by its high rates of reinvestment, this crash hit particularly hard. Investments were increasingly directed out of the country, and manufacturing firms lost some degree of their technological edge. As Japanese products became less competitive overseas, the low consumption rate began to bear on the economy, causing a deflationary spiral. The Japanese Central Bank set interest rates at approximately absolute zero. When that failed to stop deflation some economists, such as Paul Krugman, and some Japanese politicians, advocated inflation targeting.[1]

The easily obtainable credit that had helped create and engorge the real estate bubble continued to be a problem for several years to come, and as late as 1997, banks were still making loans that had a low guarantee of being repaid. Loan Officers and Investment staff had a hard time finding anything to invest in that would return a profit. They would sometimes resort to depositing their block of investment cash, as ordinary deposits, in a competing bank, which would bring howls of complaint from that bank's Loan Officers and Investment staff. Correcting the credit problem became even more difficult as the government began to subsidize failing banks and businesses, creating many so-called "zombie businesses". Eventually a carry trade developed in which money was borrowed from Japan, invested for returns elsewhere and then the Japanese were paid back, with a nice profit for the trader.

The time after the bubble's collapse (崩壊, hōkai?), which occurred gradually rather than catastrophically, is known as the "lost decade or end of the century" (失われた10年, ushinawareta jūnen?) in Japan. Recently, the Nikkei 225 stock index reached a 26-year low 6994.90.



please read and compare how many similarities to the props/failing institutions etc etc  


anyways , always light in any tunnel and reckon theres plenny out there if you look


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## MrBurns (17 November 2008)

nunthewiser said:


> no offense intended but hey we all entitled to our opinions
> 
> this is from wiki re jap asset bubble , circumstances sound familair ?? oh one thing tho ... according to other data , OURS , USA , UK asset /property bubble been for MUCH longer , MUCH higher and MUCH more debt propelled
> 
> personally think YES there is cause to be VERY alarmed but hey each to there own




I know it's coming the tsunami warning bell has rung but I cant feel it yet, interest rates down, petrol down, except for the silent thousands piling on the unemployed list every month you'd never know anything was wrong.

I guess we better enjoy Christmas because next year may be a horror.


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## BradK (17 November 2008)

Julia said:


> Just can't help being unnecessarily unpleasant, can you, Brad.
> Selfish doesn't cover it.




Hey Julia, 

Get a sense of humour. We mortgage holders have to endure the pokies and plasma jibes. Really really really sorry if I caused you any offence! I was seriously having a bit of a joke. Again, sorry.

Brad


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## nunthewiser (17 November 2008)

anything in this article sound familiar ?

Debt deflation

Crowd at New York's American Union Bank during a bank run early in the Great Depression.Irving Fisher argued that the predominant factor leading to the Great Depression was overindebtedness and deflation. Fisher tied loose credit to over-indebtedness, which fueled speculation and asset bubbles. [8] He then outlined 9 factors interacting with one another under conditions of debt and deflation to create the mechanics of boom to bust. The chain of events proceeded as follows (1) Debt liquidation and distress selling (2) Contraction of the money supply as bank loans are paid off (3) A fall in the level of asset prices (4) A still greater fall in the net worths of business, precipitating bankruptcies (5) A fall in profits (6) A reduction in output, in trade and in employment. (7) Pessimism and loss of confidence (8) Hoarding of money (9) A fall in nominal interest rates and a rise in deflation adjusted interest rates.[8]

During the Crash of 1929 proceeding the Great Depression, margin requirements were only 10%. Brokerage firms, in other words, would loan $9 for every $1 an investor had deposited. When the market fell, brokers called in these loans, which could not be paid back. Banks began to fail as debtors defaulted on debt and depositors attempted to withdraw their deposits en masse, triggering multiple bank runs. Government guarantees and Federal Reserve banking regulations to prevent such panics were ineffective or not used. Bank failures led to the loss of billions of dollars in assets.[9] Outstanding debts became heavier, because prices and incomes fell by 20–50% but the debts remained at the same dollar amount. After the panic of 1929, and during the first 10 months of 1930, 744 US banks failed. (In all, 9,000 banks failed during the 1930s). By 1933, depositors had lost $140 billion in deposits.[9]

Bank failures snowballed as desperate bankers called in loans which the borrowers did not have time or money to repay. With future profits looking poor, capital investment and construction slowed or completely ceased. In the face of bad loans and worsening future prospects, the surviving banks became even more conservative in their lending.[9] Banks built up their capital reserves and made fewer loans, which intensified deflationary pressures. A vicious cycle developed and the downward spiral accelerated.

The liquidation of debt could not keep up with the fall of prices which it caused. The mass effect of the stampede to liquidate increased the value of each dollar owed, relative to the value of declining asset holdings. The very effort of individuals to lessen their burden of debt effectively increased it. Paradoxically, the more the debtors paid, the more they owed.[8] This self-aggravating process turned a 1930 recession into a 1933 great depression.

Macroeconomists including Ben Bernanke, the current chairman of the U.S. Federal Reserve Bank, have revived the debt-deflation view of the Great Depression originated by Fisher.[


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## nunthewiser (17 November 2008)

So yes GWB maybe a goose , Yes kevin 747 maybe a goose.........BUT they only relaying whats in front of them


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## nunthewiser (17 November 2008)

but hey like a few here have mentioned ... always an opportunity somewhere for those willing to search and put there nuts out on it


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## Santoro (17 November 2008)

MrBurns said:


> He was asked about St Kilda but started crying uncontrollably while giving a thumbs down muttering something about worse than 911 or something like that.




Hahahahahahahahahahahahahahahahahahahahahahahahahahahahahahaha  funniest hing I've read for a while.......


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## sammy84 (17 November 2008)

MrBurns said:


> Not sure if the worst has been factored into the share market yet




If we start factoring worse then we are in big trouble. It wont only be our share portfolios that would be in trouble, capitalism would be dead ANZ for e.g, I think their P/E is around 8.7, that's a lot of bad news factored in. A P/E that low is enough for me to be buying


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## MrBurns (17 November 2008)

sammy84 said:


> If we start factoring worse then we are in big trouble. It wont only be our share portfolios that would be in trouble, capitalism would be dead ANZ for e.g, I think their P/E is around 8.7, that's a lot of bad news factored in. A P/E that low is enough for me to be buying




We are in big trouble.

Share prices for banks are only a reflection their new depreciated value based on decreased profits, P/E of 8.7 is only based on todays share price compared to yesterdays earnings, not realistic or correct in real terms.


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## IFocus (17 November 2008)

Bushman said:


> The worst has been priced into the stock market. *Those smashed by the credit crunch are slowly forming bottoms ala ANZ $*13.07 (52-week low, P/E ratio 6.17, dividend yield 10.34%), NAB ($18.33 52-week low, P/E ratio 7, dividend yield 10.54%) etc. Based on FY08 earnings, these are stock prices that have priced in some serious nastiness.





Ahh Bushman attached charts for ANZ  that's no bottom! 



> In terms of main street (ie unemployment, small business bankruptcy, Aussie housing declines) the worst is yet to come. This will be confirmed by stats over the next three to six months.




Yep serious falls in the market and we are still to see it flow into the real economy i.e. rising unemployment etc. Then it could get nasty if housing gets hit then impact on banks capital

Tech your talk of opportunity I find confusing if I think like a trader

When the conditions favor I go risk seeking when the conditions flag WTF is happening I become risk adverse

Doh forgot the chart see next post


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## IFocus (17 November 2008)

ANZ chart...........................


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## juddy (17 November 2008)

nunthewiser said:


> So yes GWB maybe a goose , Yes kevin 747 maybe a goose.........BUT they only relaying whats in front of them




Lordy, Lordy, you have great faith in our elected. You mean there is no spin at all?


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## chops_a_must (17 November 2008)

IFocus said:


> Yep serious falls in the market and we are still to see it flow into the real economy i.e. rising unemployment etc. Then it could get nasty if housing gets hit then impact on banks capital



What I don't get...

I can buy stocks in XYZ company, and be relatively sure I may get whatever yield over the long term. Same with cash, precious metal lending rates, whatever.

Yet... If I buy property, I will NEVER be able to get over the costs of owning it in return. That doesn't even take into account the risks of doing so.

Can someone explain to me under these market circumstances, how on earth property isn't going to fall to such a point where the likely returns become somewhat equitable? 

I just can't see it, because long term investment decisions just seem like a complete no brainer to me at current pricings.


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## nunthewiser (17 November 2008)

juddy said:


> Lordy, Lordy, you have great faith in our elected. You mean there is no spin at all?




personally thought howard was a goose too .... spin ?


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## nunthewiser (17 November 2008)

chops_a_must said:


> What I don't get...
> 
> I can buy stocks in XYZ company, and be relatively sure I may get whatever yield over the long term. Same with cash, precious metal lending rates, whatever.
> 
> ...




what happens when earnings drop and they cut the divvies m8 ?

and re property there is always a time to return to it and produce a positive return in the form of cap gains/PLUS rental% to cost 

that time is not now


i read your post wrong pay no heed


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## noirua (17 November 2008)

Australia in 1929:  http://en.wikipedia.org/wiki/1929_in_Australia


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## chops_a_must (17 November 2008)

nunthewiser said:


> what happens when earnings drop and they cut the divvies m8 ?
> 
> and re property there is always a time to return to it and produce a positive return in the form of cap gains/PLUS rental% to cost
> 
> that time is not now



It's irrelevant if cuts are made to divvies etc. because there are products which will always provide some return.

And your conclusion in regards to property is exactly the point I'm making. Even if cuts are made to earnings, divvies et al. it doesn't matter at all, because chances are, you will get some return as opposed to not ever being able to get a return on the prices.


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## noirua (17 November 2008)

Australian Government, "The Great Depression": http://www.cultureandrecreation.gov.au/articles/greatdepression/


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## tech/a (17 November 2008)

> Tech your talk of opportunity I find confusing if I think like a trader




Why?

If you think like a trader find something thats trending and trade in the direction of that trend.
There is nothing long that I can find (in stocks) so I'm not trading.
But there are shorts IB has many.
There are Forex trades,Eminis.

Opportunity is there.Even for traders.


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## shaunQ (17 November 2008)

> Exactly.... Rudd should be talking things up. Governments should have done more when they could. It is not the time now to warn people. Encouragement is what is needed.




Ah, yes, the glory days of Howard and Liberal deception, where you covered it all up, deny all freedom of information requests, smile and blame it all on the Asians or Muslims. 

Yes, can see it now... Everything is wonderful citizens, ignore Iceland, Europe, USA, New Zealand... we Australia, and therefore completely and utterly immune. Go out and loan more, splash out this christmas - we've got the dole if you lose your job... she'll be right.


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## IFocus (17 November 2008)

tech/a said:


> Why?
> 
> If you think like a trader find something thats trending and trade in the direction of that trend.
> There is nothing long that I can find (in stocks) so I'm not trading.
> ...




Tech for some reason I though you were talking outside of the market, just re-read your post again I guess you were generalizing

My thinking is that this current situation is the worst in terms of our generation and the bias is to the down side of even that so a defensive position or risk adverse position is the high probability play. 

I am talking about dept levels etc, I am no dooms dayer by any means but the numbers currently are extreme. We are still to see that transfer though to the real economy.

As for the markets, best currency moves I have ever seen throw in oil and its been for me at least a great year looking forward to the same volatility levels to continue.


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## IFocus (17 November 2008)

chops_a_must said:


> What I don't get...
> 
> I can buy stocks in XYZ company, and be relatively sure I may get whatever yield over the long term. Same with cash, precious metal lending rates, whatever.
> 
> ...




Chops I was in the same position in 1987 after returning from a 12 month trip overseas, jaysers am I that old.

I don't know when it will happen but property should return to the long term mean it did for me in the 90's in fact its likely to over shoot to the down side.

Its not now, when? no idea but it will come like BHP being $20 who would have thought


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## Macquack (17 November 2008)

tech/a said:


> Take a look at the difference in leadership quality shown by Obama when comparing to Bush and Rudd.
> 
> Obama---*We CAN do it*.--Frankly many feel they can.
> 
> ...




I prefer the truthful person to the bull sh-t artist.

Has anyone noticed, no one tells the truth anymore. In business, if your not a bull sh-t artist, then you are not maximising your profit.

I say to the politicians - "Tell it to us straight and stop treating the public like children".


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## Bushman (17 November 2008)

numbercruncher said:


> Speaking of fear, seems deflation has you edgy ?




Why do people fear deflation when central banks are pumping trillions into the system? I just don't get it?  

You are seeing a process of liquidation at the moment whilst banks hoard cash as they re-assess risk and repair balance sheets and business/consumer confidence plummets due to cash starvation. Governments around the world *will not *tolerate this for much longer especially now that banks have been socialised. It will be toughest in the US, easiest in BRIC with its 'unsophisticated' banking system and slighthly less entrenched adherence to free market principles. Banks will be forced to pull the levers sooner rather than later. 

So we will all be awash with cash again...coming soon to an outlet near your! Who feeds on cheap debt - it is our inflation monster off course. I am giving it 12-15 months and you will have piroutte Swan talking up razor gangs again.  Hooray for gold, for agriculture, for hard commodities and for property. Hoard cash at your peril, especially US dollars. 

Still, as this thread alludes to, rather an inflationary monster in 18 months than a Great Depression. Lehman, AIG forced their hands - now everyone blow those bubbles as we reflate growth and employment, stocks and property.  Awwwppppfffff, awwppppffff...


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## chops_a_must (17 November 2008)

IFocus said:


> Chops I was in the same position in 1987 after returning from a 12 month trip overseas, jaysers am I that old.
> 
> I don't know when it will happen but property should return to the long term mean it did for me in the 90's in fact its likely to over shoot to the down side.
> 
> Its not now, when? no idea but it will come like BHP being $20 who would have thought



No doubt.

It'd be pretty sweet if I could buy an apartment in the city with cash. 


Macquack said:


> I prefer the truthful person to the bull sh-t artist.
> 
> Has anyone noticed, no one tells the truth anymore. In business, if your not a bull sh-t artist, then you are not maximising your profit.



Indeed.

And I too have had conversations with people about honesty in the market being punished, moreso than than the outright liars in the same industry. Seems like it is taken as a sign of weakness. I just don't get it at all.


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## moXJO (17 November 2008)

I was reading a thread on the possibility of a depression and realized it was from 1999. Some interesting stuff among the chaff and much the same questions as today.

http://www.greenspun.com/bboard/q-and-a-fetch-msg.tcl?msg_id=000z68


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## Glen48 (17 November 2008)

What is the general opinion of the G20?


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## Julia (17 November 2008)

Glen48 said:


> What is the general opinion of the G20?




Hard to tell, given they have not come out with any specific results of their intelligent discussions.

Perhaps that it was fun to get together, have a bit of a chat, and resolve most importantly to do it all again in eighteen weeks.

All up, really inspires confidence in the populace, does it not?

Let's hope that when Obama gets actively involved some of the grandstanding (notably from the Australian PM) might give way to some constructive planning.


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## Ageo (17 November 2008)

Glen48 said:


> What is the general opinion of the G20?




To me it felt like a bucks party (Mr Bush was the buck finally leaving the high flying life) so they all got their talking about **** (which is what they all have been doing for so long) but of course it had to sound cool "G20" More like G20 the top 20 of worlds biggest gangsters getting together.

I cant see why they cant let all these major companies fail and let the market fix itself (as it always has).


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## sinner (18 November 2008)

Excerpts taken from (dear lord please forgive me for linking Jon Nadler)
http://www.kitco.com/ind/nadler/nov172008A.html

Full text: http://www.whitehouse.gov/news/releases/2008/11/20081115-1.html

1. We, the Leaders of the Group of Twenty, held an initial meeting in Washington on November 15, 2008, amid serious challenges to the world economy and financial markets. We are determined to enhance our cooperation and work together to restore global growth and achieve needed reforms in the world's financial systems.

2. Over the past months our countries have taken urgent and exceptional measures to support the global economy and stabilize financial markets. These efforts must continue. At the same time, we must lay the foundation for reform to help to ensure that a global crisis, such as this one, does not happen again. Our work will be guided by a shared belief that market principles, open trade and investment regimes, and effectively regulated financial markets foster the dynamism, innovation, and entrepreneurship that are essential for economic growth, employment, and poverty reduction.

Root Causes of the Current Crisis

3. During a period of strong global growth, growing capital flows, and prolonged stability earlier this decade, market participants sought higher yields without an adequate appreciation of the risks and failed to exercise proper due diligence. At the same time, weak underwriting standards, unsound risk management practices, increasingly complex and opaque financial products, and consequent excessive leverage combined to create vulnerabilities in the system. Policy-makers, regulators and supervisors, in some advanced countries, did not adequately appreciate and address the risks building up in financial markets, keep pace with financial innovation, or take into account the systemic ramifications of domestic regulatory actions.

4. Major underlying factors to the current situation were, among others, inconsistent and insufficiently coordinated macroeconomic policies, inadequate structural reforms, which led to unsustainable global macroeconomic outcomes. These developments, together, contributed to excesses and ultimately resulted in severe market disruption.

Actions Taken and to Be Taken

5. We have taken strong and significant actions to date to stimulate our economies, provide liquidity, strengthen the capital of financial institutions, protect savings and deposits, address regulatory deficiencies, unfreeze credit markets, and are working to ensure that international financial institutions (IFIs) can provide critical support for the global economy.

6. But more needs to be done to stabilize financial markets and support economic growth. Economic momentum is slowing substantially in major economies and the global outlook has weakened. Many emerging market economies, which helped sustain

the world economy this decade, are still experiencing good growth but increasingly are being adversely impacted by the worldwide slowdown.

7. Against this background of deteriorating economic conditions worldwide, we agreed that a broader policy response is needed, based on closer macroeconomic cooperation, to restore growth, avoid negative spillovers and support emerging market economies and developing countries. As immediate steps to achieve these objectives, as well as to address longer-term challenges, we will:

* Continue our vigorous efforts and take whatever further actions are necessary to stabilize the financial system. * Recognize the importance of monetary policy support, as deemed appropriate to domestic conditions. * Use fiscal measures to stimulate domestic demand to rapid effect, as appropriate, while maintaining a policy framework conducive to fiscal sustainability. * Help emerging and developing economies gain access to finance in current difficult financial conditions, including through liquidity facilities and program support. We stress the International Monetary Fund's (IMF) important role in crisis response, welcome its new short-term liquidity facility, and urge the ongoing review of its instruments and facilities to ensure flexibility. * Encourage the World Bank and other multilateral development banks (MDBs) to use their full capacity in support of their development agenda, and we welcome the recent introduction of new facilities by the World Bank in the areas of infrastructure and trade finance. * Ensure that the IMF, World Bank and other MDBs have sufficient resources to continue playing their role in overcoming the crisis.

Common Principles for Reform of Financial Markets

8. In addition to the actions taken above, we will implement reforms that will strengthen financial markets and regulatory regimes so as to avoid future crises. Regulation is first and foremost the responsibility of national regulators who constitute the first line of defense against market instability. However, our financial markets are global in scope, therefore, intensified international cooperation among regulators and strengthening of international standards, where necessary, and their consistent implementation is necessary to protect against adverse cross-border, regional and global developments affecting international financial stability. Regulators must ensure that their actions support market discipline, avoid potentially adverse impacts on other countries, including regulatory arbitrage, and support competition, dynamism and innovation in the marketplace. Financial institutions must also bear their responsibility for the turmoil and should do their part to overcome it including by recognizing losses, improving disclosure and strengthening their governance and risk management practices.

9. We commit to implementing policies consistent with the following common principles for reform.

* Strengthening Transparency and Accountability: We will strengthen financial market transparency, including by enhancing required disclosure on complex financial products and ensuring complete and accurate disclosure by firms of their financial conditions. Incentives should be aligned to avoid excessive risk-taking.

* Enhancing Sound Regulation: We pledge to strengthen our regulatory regimes, prudential oversight, and risk management, and ensure that all financial markets, products and participants are regulated or subject to oversight, as appropriate to their circumstances. We will exercise strong oversight over credit rating agencies, consistent with the agreed and strengthened international code of conduct. We will also make regulatory regimes more effective over the economic cycle, while ensuring that regulation is efficient, does not stifle innovation, and encourages expanded trade in financial products and services. We commit to transparent assessments of our national regulatory systems.

* Promoting Integrity in Financial Markets: We commit to protect the integrity of the world's financial markets by bolstering investor and consumer protection, avoiding conflicts of interest, preventing illegal market manipulation, fraudulent activities and abuse, and protecting against illicit finance risks arising from non-cooperative jurisdictions. We will also promote information sharing, including with respect to jurisdictions that have yet to commit to international standards with respect to bank secrecy and transparency.

* Reinforcing International Cooperation: We call upon our national and regional regulators to formulate their regulations and other measures in a consistent manner. Regulators should enhance their coordination and cooperation across all segments of financial markets, including with respect to cross-border capital flows. Regulators and other relevant authorities as a matter of priority should strengthen cooperation on crisis prevention, management, and resolution.

* Reforming International Financial Institutions: We are committed to advancing the reform of the Bretton Woods Institutions so that they can more adequately reflect changing economic weights in the world economy in order to increase their legitimacy and effectiveness. In this respect, emerging and developing economies, including the poorest countries, should have greater voice and representation. The Financial Stability Forum (FSF) must expand urgently to a broader membership of emerging economies, and other major standard setting bodies should promptly review their membership. The IMF, in collaboration with the expanded FSF and other bodies, should work to better identify vulnerabilities, anticipate potential stresses, and act swiftly to play a key role in crisis response.

Tasking of Ministers and Experts

10. We are committed to taking rapid action to implement these principles. We instruct our Finance Ministers, as coordinated by their 2009 G-20 leadership (Brazil, UK, Republic of Korea), to initiate processes and a timeline to do so. An initial list of specific measures is set forth in the attached Action Plan, including high priority actions to be completed prior to March 31, 2009.

In consultation with other economies and existing bodies, drawing upon the recommendations of such eminent independent experts as they may appoint, we request our Finance Ministers to formulate additional recommendations, including in the following specific areas:

* Mitigating against pro-cyclicality in regulatory policy; * Reviewing and aligning global accounting standards, particularly for complex securities in times of stress; * Strengthening the resilience and transparency of credit derivatives markets and reducing their systemic risks, including by improving the infrastructure of over-the-counter markets; * Reviewing compensation practices as they relate to incentives for risk taking and innovation; * Reviewing the mandates, governance, and resource requirements of the IFIs; and * Defining the scope of systemically important institutions and determining their appropriate regulation or oversight.


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## Temjin (18 November 2008)

Has anyone heard of the "alternative" non-conventional monetary policies that the US Federal Reserve would take if conventional measures fail to reinflate their economy?

http://www.usagold.com/gildedopinion/bernanke.html

More details on these "alternative" policies from the links in that article.

All these talk about deflation will definitely occur. But at the end of the day, it is all up to how far Ben & Co would take to fight it. Like fill bottles with cash and hide them in the mines was one.


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## Glen48 (18 November 2008)

Volker and his mates are preparing for tent cities.


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## MR. (18 November 2008)

MR. said:


> Exactly....  Rudd should be talking things up.  Governments should have done more when they could.  It is not the time now to warn people.  Encouragement is what is needed.






shaunQ said:


> Ah, yes, the glory days of Howard and Liberal deception, where you covered it all up, deny all freedom of information requests, smile and blame it all on the Asians or Muslims.
> 
> Yes, can see it now... Everything is wonderful citizens, ignore Iceland, Europe, USA, New Zealand... we Australia, and therefore completely and utterly immune. Go out and loan more, splash out this christmas - we've got the dole if you lose your job... she'll be right.




and then there's Rudd's mate Swany, everytime we see him he looks as if he's just **** himself. 

It's really too late to be warning the population now. 

For the population some will now make the hard decisions and others will hope things will be ok.   

When I look back over the last 4 years I have kept 80% invested in cash deposits because of the level of personal debt and few appeared to be holding cash. What financial adviser (in the past) tells you to hold 80% in cash?  As I am not a trader (should have been) I still lost some in the markets.  So if I had 20% invested long term I was putting a 1 in 5 chance of continued growth. 

Now it is all about unimployment.  That is "the" factor to keep an eye on.


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## arco (18 November 2008)

Whoops....................

MACQUARIE Group's first-half net profit fell 43 per cent as the bank took a hit from the turmoil in global financial markets.

http://www.news.com.au/business/story/0,27753,24668444-462,00.html


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## IFocus (18 November 2008)

Glen48 said:


> What is the general opinion of the G20?




I think the key thing was the lack of stress and urgency, seemed to be a feeling of no immediate threat, they will all go away and act in their own best interests as they see no motivation to act together.

Time will tell if the threat has receded


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## Calliope (18 November 2008)

It doesn't seem right that the world has to suffer the financial crisis for two months longer than necessary just because Obama cannot take the reins now.

It places an unfair load on Mr Rudd to have to take on this burden alone of leading the world out of depression.


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## tech/a (18 November 2008)

Calliope said:


> It doesn't seem right that the world has to suffer the financial crisis for two months longer than necessary just because Obama cannot take the reins now.
> 
> It places an unfair load on Mr Rudd to have to take on this burden alone of leading the world out of depression.





This is tongue in cheek isnt it!


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## nunthewiser (18 November 2008)

LOL no offense to anyone .BUT .geez has obama already got a superman cape tailored or should i lend him mine for when he steps in ?

You guys cant seriously be expecting everything to be fixed when he comes into power ?


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## basilio (18 November 2008)

No Obama doesn't have a superman cape but everyone sure as hell wants him to start flying.....

He does look really good. On the face of it he seems to be a person who could make good decisions and most importantly inspire confidence and create leadership.

Read something recently about the way that calm, confident ,decisive leaders can create very effective action in times of emergency. Can you see anyone else out there who could fill this void? And this situation is unraveling so quickly we need a circuit breaker.


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## nunthewiser (18 November 2008)

Totally agree obama the best man for the job BUT can only use the cards he has been dealt  , he isnt the saviour of the financial world boys and girls .

BUT i believe he will build the U.S.A as a nation and make them stronger, big difference .


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## MrBurns (18 November 2008)

2 things about Obama, he seems ok but so did Rudd, he'll have a honeymoon period but it may be very short. we are yet to see if the deeds will match the words.

Also - He isnt President yet, only President elect, there will be plenty of nuts out there not wanting a black man to become President so this is a dangerous time for him, if anything happens it will be the last straw for the USA.


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## Glen48 (18 November 2008)

Did some one else see were the Feds want to pump $$$ into helping car yards?
Spoke to a bloke who works for Holden they are selling 8 PM when it use to be 40PM


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## sam76 (18 November 2008)

30 indicators of the coming great depression

America's credit rating may soon be downgraded below AAA 

Fed refusal to disclose $2 trillion loans, now the new "shadow banking system" 

Congress has no oversight of $700 billion, and Paulson's Wall Street Trojan Horse 

King Henry Paulson flip-flops on plan to buy toxic bank assets, confusing markets 

Goldman, Morgan lost tens of billions, but planning over $13 billion in bonuses this year 

AIG bails big banks out of $150 billion in credit swaps, protects shareholders before taxpayers 

American Express joins Goldman, Morgan as bank holding firms, looking for Fed money 

Treasury sneaks corporate tax credits into bailout giveaway, shifts costs to states 

State revenues down, taxes and debt up; hiring, spending, borrowing add even more debt 

State, municipal, corporate pensions lost hundreds of billions on derivative swaps 

Hedge funds: 610 in 1990, almost 10,000 now. Returns down 15%, liquidations up 

Consumer debt way up, now at $2.5 trillion; next area for credit meltdowns 

Fed also plans to provide billions to $3.6 trillion money-market fund industry 

Freddie Mac and Fannie Mae are bleeding cash, want to tap taxpayer dollars 

Washington manipulating data: War not $600 billion but estimates actually $3 trillion 

Hidden costs of $700 billion bailout are likely $5 trillion; plus $1 trillion Street write-offs 

Commodities down, resource exporters and currencies dropping, triggering a global meltdown 

Big three automakers near bankruptcy; unions, workers, retirees will suffer 

Corporate bond market, both junk and top-rated, slumps more than 25% 

Retailers bankrupt: Circuit City, Sharper Image, Mervyns; mall sales in free fall 

Unemployment heading toward 8% plus; more 1930's photos of soup lines 

Government policy is dictated by 42,000 myopic, highly paid, greedy lobbyists 

China's sees GDP growth drop, crates $586 billion stimulus; deflation is now global, hitting even Dubai 

Despite global recession, U.S. trade deficit continues, now at $650 billion 

The 800-pound gorillas: Social Security, Medicare with $60 trillion in unfunded liabilities 

Now 46 million uninsured as medical, drug costs explode 

New-New Deal: U.S. planning billions for infrastructure, adding to unsustainable debt 

Outgoing leaders handicapping new administration with huge liabilities 

The "antitaxes" message is a new bubble, a new version of the American 
dream offering a free lunch, no sacrifices, exposing us to more false promises


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## robots (18 November 2008)

hello,

exactly, the joints a hole man forget about it

thankyou
robots


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## Dowdy (18 November 2008)

These post about Obama making the situation better are laughable.

Recession is unavoidable. Putting all these 'stimulus packages', billion dollar funds to prop up companies etc will turn it into a depression


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## Beej (18 November 2008)

The only thing I know for certain is that internet forums, and in particular threads like this, quickly fill up with a complete load of crap!



Beej


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## noirua (18 November 2008)

Is "depression" only an extended "recession" or are the words often attached "deep recession" or "deep depression", extended recession, short recession, just attempts to prevent one being seen as the other.

In the 1930's there was a depression with unemployment peaking at 32% and I suppose that was a deep depression as it went on for many years.

Japan has been in a recession on and off since 1987.  This has been over an extended period but was never referred to as a depression.  The Japanese DOW peaked at around 38,000 in 1986/7 and is still below 9,000 today.  A type of recession brought about by an inflated index with PE Ratios around 40 -60 that could not carry on. 
Banks artificially quoted values of their assets including shares at the peak prices and created a false situation.
When the collapse set in the Japanese saved their money and never really started spending at the same rate again.

Today we have an artificial market in Banks and everything interconnected with them. Trust has gone and may not return, in some countries, for 10 years or more. 
Negative inflation, and interest rates down to 0% to 2%, may stay in place for up to 30 years, as in Japan.
All the artificial spending boosts from Governments will require higher taxes in 2,3,4 or 5 years time and will hold economies back.

Overall the world will be in recession with depression in parts of Europe, perhaps for more than 10 years. Africa will fall into a starvation situation as stronger economies keep money at home.  Gradually countries will not put so much money with the IMF and protectionism in many disguised forms will take place.  Commodity prices may not recover strongly ever again as alternative energies arrive over the next 10 years.


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## MrBurns (18 November 2008)

noirua said:


> Is "depression" only an extended "recession" or are the words often attached "deep recession" or "deep depression", extended recession, short recession, just attempts to prevent one being seen as the other.






> In economics, a depression is a sustained, long downturn in one or more economies. It is more severe than a recession, which is seen as a normal downturn in the business cycle.




http://en.wikipedia.org/wiki/Depression_(economics)



> Considered a rare but extreme form of recession, a depression is characterized by abnormal increases in unemployment, restriction of credit, shrinking output and investment, numerous bankruptcies, reduced amounts of trade and commerce, as well as highly volatile relative currency value fluctuations, mostly devaluations. Price deflation or hyperinflation are also common elements of a depression


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## basilio (18 November 2008)

There are lots of really clear and obvious reasons why we will fall into a bottomless depression which will crush the life out of our souls,  destroy the world as we know it  ect, ect, etctera...

But it is also worth remembering the power of will, confidence and refusal to quit. When England was alone in 1940 against Germany with the rest of Europe conquered it seemed to have a snowballs chance in hell of surviving. Many politicians  in fact were looking for a settlement with Germany. It took a  completely pig headed bastard like Churchill to hold England together and in effect shape the world we live in. Worth thinking about.

Incidentally on the other side of the picture the German Wehrmacht was also a very determined force. I remember in analysis on the results on many battles, the Germans prevailed simply because in numerous  small firefights  their soldiers would keep on fighting, even when seriously out manned, a bit longer than the Yanks or English (or even Aussies). It was that simple. Keep fighting, don't give up, refuse to give in. Very effective strategy.

I suggest these are worth considering when it comes to considering  how bad economic times might become and what might be done to tackle them. Strong leadership, a common sense of purpose, a (relatively) united people. Given the **** we are going to go through I think  we need this perspective.


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## Calliope (18 November 2008)

tech/a said:


> This is tongue in cheek isnt it!




Yeah. It's called sarcasm.


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## Glen48 (18 November 2008)

What do you do when your broker knocks on the door?


Say thank you, hand him the money and take your Pizza.


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## brty (18 November 2008)

Hi,

A little perspective and understanding of history would not go astray in this thread.

In the '30's depression, the factors that caused it were a restriction of credit by banks and a contraction of government spending (being prudent in tough times).

So far we have the contraction of lending, but governments are spending up big, creating money out of thin air, M3 money supply rising. Plus the governments have bailed/socialised many banks where necessary. When the governments tell the banks to lend/jump, the answer can only be "how high", as they now effectively control them (especially with the guarantees).

At the very least this will lead to different outcomes to the '30's crash.

Deep recession/stagflation, yep easily possible, with the savings (Super) of the baby boomers being destroyed in the process, is my tip for the immediate future.

Too many politicians care about the votes they would lose for anything else to happen ie depression.

brty


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## arco (19 November 2008)

*Losses of $30bn feared from commodities cutbacks*

SLUMPING commodities markets could slash $30 billion from Australia's biggest exports -- coal and iron ore -- next financial year.

Analysts are giving steep downgrades to price forecasts based on worsening demand in China

As mining chiefs also become increasingly pessimistic, Goldman Sachs JBWere yesterday issued big, across-the-board downgrades for Australian miners and Macquarie slashed its BHP Billiton profit estimate for next financial year by a staggering $US13 billion ($20.2 billion). 

http://www.theaustralian.news.com.au/story/0,25197,24672741-643,00.html


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## MrBurns (19 November 2008)

brty said:


> At the very least this will lead to different outcomes to the '30's crash.
> 
> brty





Of course it wont be the same as the 30's people in those days were living very simple lives anyway so the depression as bad as it was could be handled by people in the main, they were used to hardship.

It wont take much at all to shock the present generation of overfed spoiled brats into the fetal position when the **** hits the fan, they think hard times are giving up Foxtel, it will be a very painful learning curve.

People have been pampered ad ad nauseum by successive administrations that just give everyone as many lollies as they like to get votes.


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## nunthewiser (19 November 2008)

MrBurns said:


> Of course it wont be the same as the 30's people in those days were living very simple lives anyway so the depression as bad as it was could be handled by people in the main, they were used to hardship.
> 
> It wont take much at all to shock the present generation of overfed spoiled brats into the fetal position when the **** hits the fan, they think hard times are giving up Foxtel, it will be a very painful learning curve.
> 
> People have been pampered ad ad nauseum by successive administrations that just give everyone as many lollies as they like to get votes.




hahahahahahahah i must say i enjoy your posts regardless if they incorrect, irrelevant, one eyed .

but at least your posts do have creativity and often contain a great deal of truth within the rant 

cheers mr burns may your cockles be warmed daily


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## MrBurns (19 November 2008)

nunthewiser said:


> hahahahahahahah i must say i enjoy your posts regardless if they incorrect, irrelevant, one eyed .
> 
> but at least your posts do have creativity and often contain a great deal of truth within the rant
> 
> cheers mr burns may your cockles be warmed daily




wise nun my posts are always correct, relevant and balanced.

have a heavenly day


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## Calliope (19 November 2008)

MrBurns said:


> Of course it wont be the same as the 30's people in those days were living very simple lives anyway so the depression as bad as it was could be handled by people in the main, they were used to hardship.
> 
> It wont take much at all to shock the present generation of overfed spoiled brats into the fetal position when the **** hits the fan, they think hard times are giving up Foxtel, it will be a very painful learning curve.
> 
> People have been pampered ad ad nauseum by successive administrations that just give everyone as many lollies as they like to get votes.




Your observations are spot on. Consider this item in the Brisbane C-M today in regard to storm damage in one of Brisbane's wealthier suburbs.



> Some voiced disappointment at the levels of help offered to them
> Others lined up for government financial assistance at an Ashgrove church where they could also receive counselling




As the area has been declared a national disaster, those living in their oversized, overpriced jerry-built house who have no insurance coverage will probably be bailled out by the taxpayer. If they had spent their mortgage money in building smaller stronger houses in less "leafy" suburbs they would still have their roofs.

The only people recession proof here are the councellors.


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## MrBurns (19 November 2008)

Calliope said:


> Your observations are spot on. Consider this item in the Brisbane C-M today in regard to storm damage in one of Brisbane's wealthier suburbs.
> 
> 
> 
> ...




If the recessioin is bad enough it will be like boot camp to these people, many won't make it through, those that do will be better people for it.

That seems a strange thing to say but in a way it's true.


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## prawn_86 (19 November 2008)

MrBurns said:


> they think hard times are giving up Foxtel, it will be a very painful learning curve.




Funny you mention that, we just bought Foxtel, due to the good offers they have happening at the moment 

No debt, yearly holidays and still save 15 - 10% of our incomes. And yes we are one of the "overfed spoiled brats" of the current generation you refer too :


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## MrBurns (19 November 2008)

prawn_86 said:


> Funny you mention that, we just bought Foxtel, due to the good offers they have happening at the moment
> 
> No debt, yearly holidays and still save 15 - 10% of our incomes. And yes we are one of the "overfed spoiled brats" of the current generation you refer too :




You sound ok, well done, dont be fooled into leveraging yourself into the St Kilda property market by robots


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## Glen48 (19 November 2008)

One good thing about a depression a lot of people will have a change of heart and suddenly find some compassion once they find their Beamer and Harvey Normal Plasma TV is not an asset.
I was at a Dr. one day and some mother was complaining how Nick Webster wouldn't sign the daughter Cd because it was not purchased from NW herself.
The DR said imagine how I feel when I have to tell some one they have X amount of time to live. 
Bring on the down turn lets get it over and done with.
Any one know how RE is going in Victorian  Mafia area's?


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