Bedtime for Capitalism?

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IkarisOne
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Bedtime for Capitalism?

Post by IkarisOne » 17 Sep 2008, 10:48pm

Back in the dotcom era, everyone used to ask me if I played the Stock Market. And I said no, I'm too conservative for that. And everyone laughed like it was a joke. And it wasn't- I remember 1987 quite well, having seen filled to the seams PATH trains empty out for several years. And I also remember the speculation bubble in comics in the early 90s all too well. Well, it looks like the wheels have finally come off.
NEW YORK — Wall Street plunged again Wednesday as anxieties about the financial system ran high after the government's bailout of insurer American International Group Inc. failed to restore investors' confidence in banking stocks. The Dow Jones industrial average lost about 450 points, giving it a shortfall of more than 800 so far this week.

As investors fled stocks, they sought the safety of hard assets and government debt, sending gold, oil and short-term Treasurys soaring.

The market was more unnerved than comforted by news that the Federal Reserve is giving a two-year, $85 billion loan to AIG in exchange for a nearly 80 percent stake in the company, which lost billions in the risky business of insuring against bond defaults. Wall Street had feared that the conglomerate, which has extensive ties to various financial services industries around the world, would follow the investment bank Lehman Brothers Holdings Inc. into bankruptcy. However, the ramifications of the world's largest insurer going under likely would have far surpassed the demise of Lehman.

"People are scared to death," said Bill Stone, chief investment strategist for PNC Wealth Management. "Who would have imagined that AIG would have gotten into this position?"

He said the anxiety gripping the markets reflects investors' concerns that AIG wasn't able to find a lifeline in the private sector and that Wall Street is now fretting about what other institutions could falter. Over the past year, companies including Lehman and AIG have sought to reassure investors that they weren't in trouble, but as market conditions have worsened the market appears distrustful of any assurances.

"No one's going to be believing anybody now because AIG said they were OK along with everybody else," Stone said.

The two independent Wall Street investment banks left standing _ Goldman Sachs Group Inc. and Morgan Stanley _ remain under scrutiny, as does Washington Mutual Inc., the country's largest thrift bank. Morgan Stanley revealed better-than-expected quarterly results late Tuesday and insisted that it is surviving the credit crisis that has ravaged many of its peers.

Lehman filed for bankruptcy protection on Monday, and by late Tuesday had sold its North American investment banking and trading operations to Barclays, Britain's third-largest bank, for the bargain price of $250 million. Over the weekend, Merrill Lynch & Co., the world's largest brokerage, sold itself to Bank of America Corp. in a quickly arranged plan to sidestep further slides in its stock.
Yikes. Yikes, I tell you.
Ailing bank Washington Mutual Inc. appeared headed toward a sale Wednesday after a major investor removed a potential stumbling block and nervous banking regulators began approaching the most logical buyers.
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The New York Times, citing unidentified people familiar with the matter, said an auction of the bank was already under way, and The Wall Street Journal reported Wells Fargo & Co. and Citigroup Inc. expressed interest in a takeover.

WaMu, Wells Fargo and Citigroup all declined to comment.

A concession by investment firm TPG, which injected $7 billion into WaMu five months ago, may have opened the way to a sale — or, failing that, made it easier for the bank to raise another round of capital.
Last edited by IkarisOne on 17 Sep 2008, 11:10pm, edited 1 time in total.

Dr. Medulla
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Re: Bedtime for Capitalism?

Post by Dr. Medulla » 17 Sep 2008, 11:10pm

I know I'm being way to obvious in making the historical parallel, but the choice here is between Hoover and FDR. The guy who thinks things are hunky dory or the guy who'll … well, hell, who knows what Obama will do, really. Not the end of capitalism, but almost surely another couple steps forward for the end of American predominance. Who knows, without all that superpower nonsense, the stakes might come down enough that you guys have something actually approximating a democracy.
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Re: Bedtime for Capitalism?

Post by IkarisOne » 17 Sep 2008, 11:25pm

Dr. Medulla wrote:I know I'm being way to obvious in making the historical parallel, but the choice here is between Hoover and FDR. The guy who thinks things are hunky dory or the guy who'll … well, hell, who knows what Obama will do, really. Not the end of capitalism, but almost surely another couple steps forward for the end of American predominance. Who knows, without all that superpower nonsense, the stakes might come down enough that you guys have something actually approximating a democracy.

Roberts:

"A country that had intelligent leaders would recognize its dire straits, stop its gratuitous wars, and slash its massive military budget, which exceeds that of the rest of the world combined. But a country whose foreign policy goal is world hegemony will continue on the path to destruction until the rest of the world ceases to finance its existence."

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Re: Bedtime for Capitalism?

Post by Dr. Medulla » 17 Sep 2008, 11:33pm

That could be Washington or Jefferson or Eisenhower or …
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Re: Bedtime for Capitalism?

Post by BostonBeaneater » 17 Sep 2008, 11:52pm

Tulip futures anyone?
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Re: Bedtime for Capitalism?

Post by Wolter » 18 Sep 2008, 1:36am

BostonBeaneater wrote:Tulip futures anyone?
None of this will matter once I find the Northwest Passage.
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Re: Bedtime for Capitalism?

Post by eumaas » 18 Sep 2008, 7:59am

Wolter wrote:
BostonBeaneater wrote:Tulip futures anyone?
None of this will matter once I find the Northwest Passage.
:lol:

Anybody notice how many storage places have gone up in the past few months? Good business to be in.
"The only thing that really occurs to me that I can say on this is to point out how fascinating it is that the Hassan-i-Sabbah archetype keeps turning up over and over again ... He disappears up into the mountains and is never seen again. Believe me, he'll never be seen again. He'll live forever because of that."

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Re: Bedtime for Capitalism?

Post by Dr. Medulla » 18 Sep 2008, 9:42am

Am I a bad person for smiling at the thought of all the sad young Wall Street assholes who previously thought they were better than the rest of us, but now are about to lose everything?
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Re: Bedtime for Capitalism?

Post by eumaas » 18 Sep 2008, 9:43am

Dr. Medulla wrote:Am I a bad person for smiling at the thought of all the sad young Wall Street assholes who previously thought they were better than the rest of us, but now are about to lose everything?
It's all coke-fueled anyway.
"The only thing that really occurs to me that I can say on this is to point out how fascinating it is that the Hassan-i-Sabbah archetype keeps turning up over and over again ... He disappears up into the mountains and is never seen again. Believe me, he'll never be seen again. He'll live forever because of that."

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Re: Bedtime for Capitalism?

Post by IkarisOne » 18 Sep 2008, 11:36am

Well, this pretty much says it all. From the BBC (http://www.bbc.co.uk/blogs/thereporters/robertpeston/)
The credit crunch is creating a new world order in banking and finance.

It's striking terror into the hearts of hedge funds, who can see their backers head for the hills at the mere sniff of an investment boo-boo by hedge-fund managers.

Conservative institutions, and those with simpler business models and a history of careful management of their funding sources, are the new superpowers.

It's a world in which Bank of America, JP Morgan, HSBC, Santander and even Lloyds TSB have the whip hand.

It's a world in which the Chinese state, if it co-ordinated the investments of its cash-rich institutions, could end up owning more-or-less the entire financial system of the US and the UK.
Let me just repeat that:

It's a world in which the Chinese state, if it co-ordinated the investments of its cash-rich institutions, could end up owning more-or-less the entire financial system of the US and the UK.

If I were a Bircher, I might wonder if that weren't the idea all along.

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Re: Bedtime for Capitalism?

Post by BostonBeaneater » 18 Sep 2008, 11:44am

IkarisOne wrote:
Let me just repeat that:

It's a world in which the Chinese state, if it co-ordinated the investments of its cash-rich institutions, could end up owning more-or-less the entire financial system of the US and the UK.

If I were a Bircher, I might wonder if that weren't the idea all along.
It's a good thing the Chinese state doesn't co-ordinate and march in lockstep. Wait. Oh shit. :scared:
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eumaas
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Re: Bedtime for Capitalism?

Post by eumaas » 18 Sep 2008, 11:46am

Bitches will be wishing you studied Mao, Lao-Tzu, and Confucius like me.
"The only thing that really occurs to me that I can say on this is to point out how fascinating it is that the Hassan-i-Sabbah archetype keeps turning up over and over again ... He disappears up into the mountains and is never seen again. Believe me, he'll never be seen again. He'll live forever because of that."

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Re: Bedtime for Capitalism?

Post by BostonBeaneater » 18 Sep 2008, 11:47am

eumaas wrote:Bitches will be wishing you studied Mao, Lao-Tzu, and Confucius like me.
You wouldn't last 48 hours in a... ah forget it.
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IkarisOne
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Re: Bedtime for Capitalism?

Post by IkarisOne » 18 Sep 2008, 11:53am

eumaas wrote:Bitches will be wishing you studied Mao, Lao-Tzu, and Confucius like me.
Oh, sure. That strategy worked out well during the Cultural Revolution, right?

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Re: Bedtime for Capitalism?

Post by eumaas » 18 Sep 2008, 12:06pm

IkarisOne wrote:
eumaas wrote:Bitches will be wishing you studied Mao, Lao-Tzu, and Confucius like me.
Oh, sure. That strategy worked out well during the Cultural Revolution, right?
Not sure where you're going with that.
"The only thing that really occurs to me that I can say on this is to point out how fascinating it is that the Hassan-i-Sabbah archetype keeps turning up over and over again ... He disappears up into the mountains and is never seen again. Believe me, he'll never be seen again. He'll live forever because of that."

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