Australian (ASX) Stock Market Forum

Wall Street Has Failed - Obama

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Knobby22 said:
Why would you split a monopoly and ruin your profits? That's just dumb.

Give me an example where that has occurred?
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Great point Knobby22.

I can think of one.

When Jeff Kennett privatised The Met in Melbourne and sold off the train lines to competitive tender. All went broke except for one, Connex. Now instead of a well serviced, reliable, affordable public transport system. Melbourne has a frequently unreliable, run-down, expensive, overcrowded private monopoly where commuters are unsafe waiting on ghost town train platforms waiting for the next train, if it arrives on time. :cautious:

Competition my ****!!!!!

Good old Jeff had to sell off a lot State assets because of Pyramid in
Geelong. But the sale of public transport in Melbourne has proved to be dumb.

I wonder if old Jeff has played Railroad Tycoon, Knobby22! LOL :D
 
mayk said:
interesting interview with Peter schiff

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I think Peter Schiff is an outstanding commentator and there a very few in the world who were able to forsee the current economic problems.

He talks about excessive borrowing, over-consumption, lack of saving, speculation in the property market, the errors of bailouts and the subsequent debasement of the US Dollar. It is difficult for anybody to refute his arguments on these points.

However, Mr. Schiff makes no mention of lenders, I mean the over-leveraged must have got their money from someone. Or the legislative structures that were put in place by US Governments which enabled Wall St and a like to lend such money to borrowers.

I would like to hear Mr. Schiffs arguments for or against, on the abolition of the Glass Steagull Act.

Does he believe that this law created too much "red tape" for the banking/financial services industry?

Does he think that the current crisis was merely a result of peoples excess and in no way at all attributable to lenders not making adequate inquiries as to the liquidity and capacity of those that they lent money? Its existed in English common law for centuries, its called the Indoor Management Rule. Its also entrenched in the Corporations Law of Australia.

It would be great to hear his views about the actual frameworks in place that regulate banking in the United States.

I mean Id love to live in a Utopian universe where I could claim an ideal meta-theory about the productive nature of people and the ability of the market to govern itself. Fact is though some peoples eyes get bigger than they're stomachs. You can have any theory in the world you like, but if someone like Bernie Madeoff can have a defacto quasi-control of the SEC through lax regulation. Over $250 million dollars worth of cheques in his office-desk drawer ready to send out of the country the day he is arrested. Also send over a million bucks worth of cartier diamond jewelry and watches to his family while on bail, does he really believe that regulations are not required??

It certainly makes me wonder if the price of freedom from regulation is really worth it.

I mean if someone just robbed a bank and was ready to wire the money to another destination outside of the country, isnt that enough evidence of flight from the crime itself.

The US regulation system is ****** to say the least.

Schiff has said he is against the bailouts, but why did the system come to the point of needing bailouts? Was it just mortgagees and over-consumption? Did big business and the "free-market" make any errors??

The door swings both ways in life.
 
Here is what OB wants to do:
From BBC News.
What caused Japan's recession?
Japan has been suffering stagnant economic growth and a series of recessions for more than 10 years. How has a country once seen as the ruler of the 21st century come to such a pass? And what, if anything, can the government do about it?

Why is Japan's economy in decline?

Japan is still suffering from an economic crisis that hit the country in 1989-90, when the "bubble economy" of high land prices and high stock market prices collapsed.

Both banks and businesses had much of their assets in either land or in cross-shareholdings with companies to which they were allied.

Suddenly, these assets - and therefore the debts on which they were secured - were wiped out.

As a result, banks became burdened with bad debts and lending to companies for expansion dried up.

Gradually, companies which produced in Japan have shifted some of their factories abroad, increasing unemployment.

And as unemployment rose to record levels, people have stopped spending so freely, causing prices to drop.

This makes everyone more reluctant to spend in the hope that they might get even greater bargains in the future.

What might happen next?

Japan has been seriously affected by the world economic slowdown.

In the past, exports by its large and successful companies have helped sustain its economy, but with the US economy wobbling, this is much more difficult.

The day of reckoning for the banking sector is getting closer, with banks being forced finally to declare their non-performing assets.

In addition, Japan is suffering from a large debt overhang from its excessive government borrowing, which will have to be reduced to lower long-term interest rates.

What has the government tried to do?

The government has repeatedly tried to stimulate the economy by spending money on public works.

The result has been some very well-equipped - if often unnecessary - regional infrastructure projects, but relatively little of the money spent reached those who have been made unemployed.

Much of it has in fact gone into the coffers of Japan's huge construction companies, which have very close links to ruling party politicians.

The spending has kept them afloat; without it many might already have gone bust. As it is, the first domino fell in December 2001, as Aoki Construction went under with debts totalling 522bn yen ($4bn).

And the massive outlay means government borrowing has reached 130% of GDP, higher than any other industrialised country.

This means that in the long run Japan will have to reduce its spending levels, at a time when it is facing increased pressures from an ageing population and the increased cost of health care.

And that could prove politically painful.

Can lower interest rates help?

Japan already has near zero interest rates.

It has now said that it will also buy Japanese government bonds to help boost the money supply

But despite the low interest rates, with the worsening economic prospects it is not easy to persuade either consumers or companies to borrow more money.

And long-term interest rates are dragged down by the huge government debt burden, despite the low overnight rates.

What are the prospects for reform?

The Japanese government says it is committed to structural reforms like eliminating its budget deficit and forcing the banks to declare the real extent of their losses.

But its reform programme has been made difficult by the severity of the downturn.

Making more banks insolvent could prolong the economic slowdown and eventually cost the government a lot of money if it has to assist with the bail-out.

And cutting government spending is a tricky political process.

The incumbent Prime Minister, Junichiro Koizumi, is known to be a reformer, and he has stressed his determination to press on with economic reform even if it means short-term hardship.

But there is little evidence so far that Mr Koizumi's words are being put into practice.
 
GumbyLearner said:
Schiff has said he is against the bailouts, but why did the system come to the point of needing bailouts? Was it just mortgagees and over-consumption? Did big business and the "free-market" make any errors??
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Who said the system needs bailing out?

The government is to blame because they encouraged the use of debt through organizations such as Fannie Mae, Fredde Mac and Ginnie Mae.

The system started growing in line with debt, thus debt fueled growth. It has been this way for the past 20-25 years. Its called a super bubble.

Another point to note, every large company on Wall st has be either sold, bankrupt, or bailed out by the government.

Wall St has most definitely failed
 
Naked shorts said:
Who said the system needs bailing out?

The government is to blame because they encouraged the use of debt through organizations such as Fannie Mae, Fredde Mac and Ginnie Mae.
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Not me. Yes government and big business are both complicit in this!

I agree NS Wall St failed.

And the banks bought **** from door-to-door salemans in the form of CDO's, subprime and the Alt-A's that we will hear aboutin the near future.

Again I just want to come back to an integral point.

Why didnt the banks make adequate inquiries about the liquidity and capacity of the people they lent to or the **** mortagages they purchased? Why weren't they 'put on notice' that somthing was surely wrong with the financial situation of those that were loaned money?

That is a lenders responsibility not a governments!!!!
 
GumbyLearner said:
Why didnt the banks make adequate inquiries about the liquidity and capacity of the people they lent to or the **** mortagages they purchased? Why weren't they 'put on notice' that somthing was surely wrong with the financial situation of those that were loaned money?
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Because house prices always go up:p:
 
Naked shorts said:
Because house prices always go up:p:
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Precisely!

So this is where the private sector have determined value that didnt exist. I didnt vote for them and you didnt vote for them. Of course neither of us are US citizens but the point remains that these people assumed to govern an industry for their own purposes without government interference.
And of course they are in the US, but the US market is the greatest and largest of all markets so it affects Australian business and the global economy too!

Well what about the people that weren't involved, that saved their money and now have to wear the burden of these unelected rulers of finance! Should the average responsible fella in the street wear their loss? The US banks knew the game they were in, why should diligent hard-working mom and pop businesses suffer for the sake of these irresponsible lenders!

The rule of law has to come into play to stop this kind of **** from happening again! :)
 
Glen48 said:
What has the (Japanese) government tried to do?

The government has repeatedly tried to stimulate the economy by spending money on public works.

The result has been some very well-equipped - if often unnecessary - regional infrastructure projects, but relatively little of the money spent reached those who have been made unemployed.

Much of it has in fact gone into the coffers of Japan's huge construction companies, which have very close links to ruling party politicians.

The spending has kept them afloat; without it many might already have gone bust. As it is, the first domino fell in December 2001, as Aoki Construction went under with debts totalling 522bn yen ($4bn).

And the massive outlay means government borrowing has reached 130% of GDP, higher than any other industrialised country.

This means that in the long run Japan will have to reduce its spending levels, at a time when it is facing increased pressures from an ageing population and the increased cost of health care.

And that could prove politically painful.
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Some salutory lessons somewhere in that lot for KRudd &Co., perhaps? Especially the bit about getting the country into a big deficit situation then having to slash spending perhaps when the econ and the masses of unemployed, unhealthy, aged people need it most?

Blind Freddie can see the predicted timeline for economic recovery is pushing out every week. The incoming data from World Econs gets worse by the day, verily by the hour. I shudder to think what might come to light if the Fed & CIA start to dig deep into many of Unca Sam's Crooked Company Cookbooks. Maybe they should stay "schtum" and cover up the rest. Do we really want to know how many more Ponzi's and Madeoff's there REALLY are?

Now, even The Great Messiah Obama is making bleak assessments for the Yank-E-Con out to 2010 or longer. Bless him.

Not much hope then, for our dear little OzEcon making the once-predicted strong recovery from the middle of '09 courtesy of a KRuddathon of Spending? Probably nope. Nada. IMO.


aj
 
While CEO can be paid mega $$ PA and transfer every thing in to their Wives name nothing will change. Look at how much money Bond was making each day in Jail and how people like Adler can do their small amount of time an walk free with every thing in tact upon release.
If CEO's and scammers know they are seen as a lesser crim. than a bank robber who get a longer term for less money whats me worry?
 
GumbyLearner said:
Well what about the people that weren't involved, that saved their money and now have to wear the burden of these unelected rulers of finance! Should the average responsible fella in the street wear their loss? The US banks knew the game they were in, why should diligent hard-working mom and pop businesses suffer for the sake of these irresponsible lenders!

The rule of law has to come into play to stop this kind of **** from happening again! :)
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Do you think the people in power wanted this to happen?

And you want to stop people from gaining power? You know just as well as I do that this can never happen. There has always been someone in power since forever.

This is not about to change.

You can:
> Hate the players (even though the players will never go away)
> Hate the game (even though the game will never change)
> Play the game

Im not saying that what has happened is just, it's disgusting to think of all the elderly that have lost all their super. Im saying that this kind of thing can/will happen again, and you'd best be prepared by playing the game.

We have globalization now, this will be the first ever global economic crash. What a time to be alive!
 
Naked shorts said:
Do you think the people in power wanted this to happen?

And you want to stop people from gaining power? You know just as well as I do that this can never happen. There has always been someone in power since forever.

This is not about to change.

You can:
> Hate the players (even though the players will never go away)
> Hate the game (even though the game will never change)
> Play the game

Im not saying that what has happened is just, it's disgusting to think of all the elderly that have lost all their super. Im saying that this kind of thing can/will happen again, and you'd best be prepared by playing the game.

We have globalization now, this will be the first ever global economic crash. What a time to be alive!
Click to expand...

Games without rules usually end in arguments and/or brawls.

Id like to play, WHAT ARE THE RULES? :banghead:
 
Dr Dao - a doctor with patients to serve the next day - was "selected" by United Airlines to be removed from an overbooked plane.

As he had patients to tend the next day he did not think he should leave the plane. So the airline sent thugs to bash him up and forcibly removed him.
The video (truly sickening) went viral. But the airline did not apologise. The problem it seems was caused by customer intransigence.

They apologised after what Tepper and Hearn think was true public revolt, but what I think was more likely the realistic threat to ban United Airlines from China because of the racial undertones underlying that incident.
If a "normal" company sent thugs to brutalise its customers it would go out of business. But United went from strength to strength.

The reason the authors assert was that United has so much market power you have no choice to fly them anyway - and by demonstrating they had the power to kick your teeth in they also demonstrated that they had the power to raise prices. The stock went up pretty sharply in the end.
Oligopoly - extreme market power - not only makes airlines super-profitable. It gives them the licence to behave like complete jerks.

http://brontecapital.blogspot.com/
 
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