ISEQ crash deepens - down over 70%

[ZANU-FF]

We would far prefer to borrow the money on terms favourable to our shareholders from a Fianna Fail Government.

Anthing but a new issue of Capital.

Yes, I agree, but I am drawing attention to his wreckless mouthing off, that causes the dumb money to flee because even they can read between the lines. (the smart cash has long departed bank stocks)

Bank shares became valueless the Tuesday morning Lenihan et Cowan rolled out the bank guarantee, the tragedy for our granchildren is that they also guaranteed the loans and debts of said banks.

Bank shares are WORTHLESS because they will be nationalised in due course, I have ran the models, they are destined for failure, I just hope the regulator has data records for the last 6 months and hopefully is collecting same everyday.

Shareholders are wiped

[Vega1447]

So much for those who scoffed when I said the Euro was all done. 1.26 now against the dead duck dollar. On PMs to some I advised to get travellers cheques in yen & swiss and this has turned out well. A smaller percentage into Russian, Canadian and Australian. this has not worked out well so far but it is early days yet. For those who bought the coins they are in good shape as it is very difficult to buy coins at anyplace near spot, here at least.

The value of the euro reminds me of the iseq at 9000. Nobody could believe that it would drop this far except a few. The politicians have already sold ye down the Swanee because when the bailouts started on a small scale nobody of any stature had the brainpower to figure out cause and effect so the easy fix was applied. When the people showed themselves to be as thick as bricks it was then full steam ahead. Now whatever few bob ye have left loses 1% a day and they are clueless. Yet when the ESB bill comes in they are wailing. Who says you can't fool all of the people allof the time

So Eurozone would be better off with Euro at $1.50??

Damn sight easier to export with Euro lower..

So why is it a disaster if Euro drops?

It was below 1$ for a while and we survived..

[youngdan]

My object is to issue a warning. If it is not taken it is no skin off my nose.

Where did it come from this mentality of it being great news that a currency falling in value is good because it stimulates exports. If this made any sense then the people in Iceland must be thrilled out of their skulls.

All those old people screaming up up at Gilmore and Kenny the other day seem to have one thing in common. They don't appear to have figured out how their life saving has been reduced to a pittance due to inflation. Both of these crooks are part of the problem. Most there would have spent more on a sandwich that day than they got paid for their first week's work.

Mark my words there is a currency crisis fast approaching.

The decision has been made to print money rather than accept the bankruptcies. Rather than have the guilty suffer the consequences of their actions it is politically easier to skin everyone and buy some time. Not only is it theft but it is sowing the seeds of a ton of misery shortly as those who might have some funds to get things moving will be broke as well. There is a lot of violence ahead now and we shall see what the government does to close this budget gap.

A good idea is to think about the Euro dissappearing and save yourself.

[youngdan]

I thought I had seen it all. Now I see the soldiers are crying as well. They will join the students, grannies, teachers, farmers and who know what others.

Invest in hankies

[Catalpa]

My object is to issue a warning. If it is not taken it is no skin off my nose.

Where did it come from this mentality of it being great news that a currency falling in value is good because it stimulates exports. If this made any sense then the people in Iceland must be thrilled out of their skulls.

All those old people screaming up up at Gilmore and Kenny the other day seem to have one thing in common. They don't appear to have figured out how their life saving has been reduced to a pittance due to inflation. Both of these crooks are part of the problem. Most there would have spent more on a sandwich that day than they got paid for their first week's work.

Mark my words there is a currency crisis fast approaching.

The decision has been made to print money rather than accept the bankruptcies. Rather than have the guilty suffer the consequences of their actions it is politically easier to skin everyone and buy some time. Not only is it theft but it is sowing the seeds of a ton of misery shortly as those who might have some funds to get things moving will be broke as well. There is a lot of violence ahead now and we shall see what the government does to close this budget gap.

A good idea is to think about the Euro dissappearing and save yourself.

Yes exactly YD - mega billions are being pumped in by Governments as if money can be produced like rabbits out of a hat (not your furry friend of course).

So either they had all these mega billions stashed away in the State coffers and never told us, or they borrowed it from the Banks (who are in dire straights by all accounts) or its printed off by the billions to prop up ailing financial institutions.

As the last seems what is happening that can only mean the intrinsic value of each unit of currency will drop as all this extra cash works its way into the respective economies

- thus after a few months an upward inflationary spiral develops that combined with plummeting economies spells…

Trouble with a Capital T.

As I am no Economist please correct me if I'm way off the mark here.

[Sidewinder]

It's not quite as simple as that though. Even though the governments and central banks are printing vast amounts of imaginary money, these amounts pale into insignificance compared to the wholesale destruction of imaginary money happening every day on the markets - especially the exotic derivatives, where trillions in imaginary money has gone up in smoke, with trillions more still to vanish.

And that's why the banks are all bust. They are all carrying vast amounts of this worthless paper and refusing to mark it down to its true market value (the square root of f*** all).

The mortgage/builder collapse is small beer compared to the utter havoc happening higher up in the esoteric occult world of the derivatives traders.

I think the net effect will be deflationary. And prolonged.

[BodyofEvidence]

It's not quite as simple as that though. Even though the governments and central banks are printing vast amounts of imaginary money, these amounts pale into insignificance compared to the wholesale destruction of imaginary money happening every day on the markets - especially the exotic derivatives, where trillions in imaginary money has gone up in smoke, with trillions more still to vanish.

And that's why the banks are all bust. They are all carrying vast amounts of this worthless paper and refusing to mark it down to its true market value (the square root of f*** all).

The mortgage/builder collapse is small beer compared to the utter havoc happening higher up in the esoteric occult world of the derivatives traders.

I think the net effect will be deflationary. And prolonged.

Credit Default Swap market : $53trillion (thats $53,000,000,000,000) .....maybe Brylcreem Lenihan will cover that as well...

[KungFugazi]

Credit Default Swap market : $53trillion (thats $53,000,000,000,000) .....maybe Brylcreem Lenihan will cover that as well...

Of course he will. He is the kinda guy that walks into a packed pub and shouts: "DRINKS FOR EVERYBODY, ON ME". Have faith in your leaders, they work for you.

[Catalpa]

It's not quite as simple as that though. Even though the governments and central banks are printing vast amounts of imaginary money, these amounts pale into insignificance compared to the wholesale destruction of imaginary money happening every day on the markets - especially the exotic derivatives, where trillions in imaginary money has gone up in smoke, with trillions more still to vanish.

And that's why the banks are all bust. They are all carrying vast amounts of this worthless paper and refusing to mark it down to its true market value (the square root of f*** all).

The mortgage/builder collapse is small beer compared to the utter havoc happening higher up in the esoteric occult world of the derivatives traders.

I think the net effect will be deflationary. And prolonged.

OK thanks.

[Dasayev]

According to this story, the Chinese may be about to "dynamite" the US economy.

How China could wreck the US economy

Mutually Assured Destruction (MAD)

What is worrying the Americans is that China accounts for about one-fourth of the global forex surpluses and are the counterparts of the US current account deficit. Put simply, while China accumulates forex reserves, the US accumulates a corresponding debt. And the Americans are aware that it is the Chinese are the biggest accumulators of the US treasury bonds.


What is indeed intriguing is that a country -- the US -- that prides on being 'independent' of other countries, especially in security affairs, is now caught in a quagmire as it has to be constantly in the good books of the Chinese government if it wants to avoid a sudden shock.
Countries that hold large US dollar denominated forex reserves have a powerful tool in their arsenal -- they could wreck American financial markets at a mere click of a mouse by selling their dollar holdings. Imagine China with a holding nearly $2 trillion worth of treasury bonds seceding to sell the same overnight.


And that could instantaneously dynamite the global financial system as it could suck out liquidity and cause interest rates to shoot through the roof. Remember, the $700 billion package announced last week by the US is precisely aimed at addressing the liquidity crunch within the US.
China, of course, might have no sinister intent, as this would be at a huge cost. But the Chinese know that no country can ever become a global superpower without a cost. As and when the Chinese decide to take a hit on their dollar holdings, global finance could indeed take a roller coaster ride.


Obviously, the Americans' borrowing from China and the Chinese supply of money to the US is indeed an intriguing geo-political game. Surely, this cannot be simple economics by any stretch of imagination.
Given this paradigm, till date experts opine that both are locked in a tight bear hug. According to Lawrence Summers, 'It is a new form of mutually assured destruction that has quietly emerged over the last few years. This implies that China needs the US (for its exports and to park its forex reserves) as much as the US needs China (for imports and borrowings).
So have the Americans played into the hands of Chinese?


Recent events in the US have turned this 'MAD paradigm' upside down. It is in this context that the recent bailout package needs to be viewed, which seeks to increase liquidity over a period of time by the US government taking over sub-prime assets from financial institutions. That, according to the American thinking, is expected to provide liquidity to the US economy.
But it is all these happenings within the US that makes this accumulation of forex reserves by China extremely interesting.



It may be noted that the Chinese, unlike the others, have always questioned the global order with the US at the helm of affairs. And the Chinese accumulation of forex reserves is surely a strategy that perhaps has an ominous side to it.


All this is not pure economics as it is made out to be. Rather, it was and remains a well-planned economic, political and military strategy of the Chinese. And in a way it is the mirror image of the Star Wars programme that the then US President Reagan unleashed on the erstwhile USSR in the early eighties that eventually bankrupted the later within a few years as it engaged in competitive arms build-up with the former.


Statecraft is all about engaging other countries at one's own terms, pace, time and cost. This is what the US did to the USSR in the eighties and succeeded in dynamiting that country. And that is what China could do to a vulnerable US in the coming months. Crucially, if it doesn't, from the Chinese perspective it might well rue this moment forever.


The US till date was depending on the Chinese for imports and to finance them as well for such imports. Now they will have to be considerably dependent on the Chinese to protect their currency as well as to ensure liquidity in their money markets. And that completely alters the existing global order.