Springbok Posted August 16, 2007 Report Share Posted August 16, 2007 (edited) Credit crunch leading to freeze fearshttp://www.news.com.au/heraldsun/story/0,2...326-664,00.htmlFinancial markets may be at a tipping point, with the credit crunch threatening to drag down global economic growth after wiping another $45 billion off the Australian stock market. Deutsche Bank chief economist Tony Meer said global financial markets were in danger of freezing up because banks were worried about lending money...If the Americans stop shopping, then panichttp://business.timesonline.co.uk/tol/busi...icle2260546.eceThe fact that the sale of groceries at Wal-Mart was up 14 per cent was, itself, a worrying sign. It suggests a surge of Americans seeking out Wal-Mart’s famously low prices because they are so worried about their weekly shopping money that they can no longer afford to go to their regular, fancier supermarket...so the message is - don't overextend yourself with debt and unnecessary personal spending. Then everything should be alright.This blog by Nouriel Roubini sums up what's going on in credit markets today:Current Market Turmoil: Non-Priceable Knightian “Uncertainty” Rather Than Priceable Market “Risk”http://www.rgemonitor.com/blog/roubini/210688“Today any wealthy individual can take $1 million and go to a prime broker and leverage this amount three times; then the resulting $4 million ($1 equity and $3 debt) can be invested in a fund of funds that will in turn leverage these $4 millions three or four times and invest them in a hedge fund; then the hedge fund will take these funds and leverage them three or four times and buy some very junior tranche of a CDO that is itself levered nine or ten times. At the end of this credit chain, the initial $1 million of equity becomes a $100 million investment out of which $99 million is debt (leverage) and only $1 million is equity. So we got an overall leverage ratio of 100 to 1. Then, even a small 1% fall in the price of the final investment (CDO) wipes out the initial capital and creates a chain of margin calls that unravel this debt house of cards. This unraveling of a Minskian Ponzi credit scheme is exactly what is happening right now in financial markets.”Shocking isn't it.... Edited August 16, 2007 by Springbok Quote Link to comment Share on other sites More sharing options...
Nilo Posted August 16, 2007 Report Share Posted August 16, 2007 Springbok,Die flippen goed is confusing!!! Dit klink however baie scary!!Ons koop kontant, maar weet jy dan is dit ook seker nie slim nie ne! Hulle se mos bere jou cash en koop met 'n ander ou se geld. Veral hier in Oz waar mens maande se "intrest" free kry.???Nilo Quote Link to comment Share on other sites More sharing options...
Springbok Posted August 16, 2007 Author Report Share Posted August 16, 2007 Springbok,Die flippen goed is confusing!!! Dit klink however baie scary!!Ons koop kontant, maar weet jy dan is dit ook seker nie slim nie ne! Hulle se mos bere jou cash en koop met 'n ander ou se geld. Veral hier in Oz waar mens maande se "intrest" free kry.???NiloJust live within your means, as simple as that.Bankiers is lief daarvoor om hul wêreld ingewikkeld te laat klink, want hoe minder die algemene man op straat daarvan verstaan, hoe meer kan banke in hul sakke steek deur die publiek te laat verstaan dat al daai wonderlike bankprodukte tot hul (die publiek se) eie voordeel is... 'n uitstekende boek oor die wêreld van "money & banking" is die volgende by Amazon.com:"The Creature from Jekyll Island: a second look at the Federal Reserve", deur G. Edward Griffin.'n Lywig boek van net oor die 600 bladsye, maar baie opvoedkundig. En baie toepaslik gegewe wat op die oomblik in finansiële markte aan die gang is, hoofsaaklik die gevolg van die Amerikaanse Federal Reserve (reserwebank) se "easy money policy" tydens die afgelope Greenspan-jare. Die Fed is in 1913 tot stand gebring met die sogenaamde doel om die ekonomie te stabiliseer, maar dit het juis die teenoorgestelde bereik die afgelope 94 jaar! So lees hierdie boek en lees hom weer.Book Description"Where does money come from? Where does it go? Who makes it? The money magicians' secrets are unveiled. We get a close look at their mirrors and smoke machines, their pulleys, cogs, and wheels that create the grand illusion called money. A dry and boring subject? Just wait! You'll be hooked in five minutes. Reads like a detective story — which it really is. But it's all true. This book is about the most blatant scam of all history. It's all here: the cause of wars, boom-bust cycles, inflation, depression, prosperity. Creature from Jekyll Island will change the way you view the world, politics, and money. Your world view will definitely change. You'll never trust a politician again — or a banker." Quote Link to comment Share on other sites More sharing options...
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