Bear Sterns collapsed
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Topic: Bear Sterns collapsed
Posted By: IVNORD
Subject: Bear Sterns collapsed
Date Posted: March 16 2008 at 21:58
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The # 5 investment bank has been taken over by JP MOrgan Chase at $2 a share. It was $90 just 3 weeks ago, $130 last October.
The consequences are hard to predict.
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Replies:
Posted By: rileydog22
Date Posted: March 16 2008 at 22:00
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That whole thing was a complete disaster. It looks scarily like the events that led to the Great Depression. -------------   |
Posted By: IVNORD
Date Posted: March 16 2008 at 22:15
| It's impossible to guess how many banks will follow. The Fed creates new liquidity out of thin air, and the dollar is being crushed because of that. We are facing hyperinflation of unprecedented proportions. |
Posted By: rileydog22
Date Posted: March 16 2008 at 22:19
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I'm no expert, but I'm not convinced that the Fed actually helps anyone by printing money and using that to try to stop the recession. It seems to me that all they can really do is hurt US interests in the international market.
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Posted By: IVNORD
Date Posted: March 16 2008 at 22:40
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Printing money in a contracting economy is like pouring water into wine - you get more of it but it tastes like sh*t. That's probably what we'll get in the long run. |
Posted By: Slartibartfast
Date Posted: March 17 2008 at 06:15
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Don't you just love it when a company is "too big to fail" and we get stuck with the bill? Free market, my ass.
------------- Released date are often when it it impacted you but recorded dates are when it really happened... 
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Posted By: Padraic
Date Posted: March 17 2008 at 12:45
| Bernanke is a student of the Great Depression and is trying to apply what he learned of it to his current decisions - namely, the Fed making very aggressive moves to stop the bleeding. Only time will tell if his philosophy has merit. |
Posted By: MikeEnRegalia
Date Posted: March 17 2008 at 12:48
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We're not living in the 1920s/1930s ... so much has changed in this world, I think it's unlikely that models based on the big recession apply to our times.
------------- https://awesomeprog.com/release-polls/pa" rel="nofollow - Release Polls Listened to: 
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Posted By: Padraic
Date Posted: March 17 2008 at 13:05
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http://www.doctorhousingbubble.com/3-reasons-why-this-credit-bubble-is-worse-than-1929-precursors-to-a-recession-complicit-fed-population-involved-and-greater-dependence-on-credit/ - http://www.doctorhousingbubble.com/3-reasons-why-this-credit-bubble-is-worse-than-1929-precursors-to-a-recession-complicit-fed-population-involved-and-greater-dependence-on-credit/ |
Posted By: IVNORD
Date Posted: March 17 2008 at 13:50
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Slartibartfast wrote:Posted By: IVNORD
Date Posted: March 17 2008 at 13:58
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Posted By: Jim Garten
Date Posted: March 19 2008 at 08:27
I agree - it's too simplistic to extrapolate "this happened then, so this could happen again now"; the current world economy is completely different now to the late 1920s. I think we will see further failures to compare with Bear Sterns, both in the USA & the UK - a while ago in the UK we had a smaller scale (by comparison) collapse in Northern Rock; smaller scale, but same basic causality: sub-prime lending. Commonly blamed on the US economy, the UK are by no means guilt free - similar over-lending led to a housing market crash in the late 1980s, from which the market took nearly 5 years to recover. The problem we are currently facing is that lenders have become too complacent/blase in the last few years - I sincerely hope we will not see another housing crash, but only time will tell 
Unsettling times, certainly, but no need (yet  ) to forecast market meltdown.
I hope. ------------- 
Jon Lord 1941 - 2012 |
Posted By: bhikkhu
Date Posted: March 19 2008 at 12:50
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What gets me is how no one will say that there is a recession. Face it, it's true. I have watched the value of my investment portfolio go down since last sumer. I think we've passed that six month downturn marker. Economies go through cycles. We've been through recessions before. We just have to ride it out. ------------- a.k.a. H.T. http://riekels.wordpress.com" rel="nofollow - http://riekels.wordpress.com |
Posted By: Finnforest
Date Posted: March 19 2008 at 13:07
True. And yet there is a saying, "those who ignore history are doomed to repeat it." I don't believe our coming depression will *look* like the one from the 30s, but it could still be as devastating. Our currency is dropping like a rock, the Prez keeps dumping billions into his war sewer, and the aging population will have astronomical medical cost needs. ON top of that, our citizens (in USA) are not as hardy and frugal as our grandparents. We're pretty spoiled. We are a people now who consider cell phones and cable TV as essential needs, not wants. My father was happy if they had shoes. I know people already who are pulling money out of stocks and taking some assets out of major banks. These are actions that would have been laughed at 6 months ago. My sense is that this is no joke, but I hope I'm wrong. ------------- https://www.youtube.com/shorts/sQD8uhpWXCw" rel="nofollow - It's a beautiful day in the neighborhood...Road Rage Edition |
Posted By: progaeopteryx
Date Posted: March 19 2008 at 19:06
I think the main reason no one says we are in a recession is because we're waiting for the National Bureau of Economic Research to announce it. They are the so-called official source on when and if we are in one. Their president Martin Feldstein has already made statements that we could be "facing a severe recession." According to NBER's web site it could take from 6 to 18 months to determine if we are "statistically" in a recession. I'm afraid I don't know why this takes as long as it does, but yes, from where I live and what I hear about other locations, it sure does feel like a recession. That's not to say that other parts of the country aren't doing well. I have my doubts that that is so, but I honestly don't know. I could be wrong. A recent CNN poll says that 3/4 of the people polled thought we were in one. Whether that means anything is arguable, but it does mean a good number of people are concerned and the economy is strongly affecting them in negative ways. |
Posted By: IVNORD
Date Posted: March 19 2008 at 21:12
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Posted By: IVNORD
Date Posted: March 19 2008 at 21:36
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Posted By: IVNORD
Date Posted: March 19 2008 at 21:38
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Posted By: Finnforest
Date Posted: March 19 2008 at 21:53
If I knew I'd be out there digging with my shovel  Kidding aside, some of the younger folks moving assets out of stocks are either moving to lower paying but stable money market/CD investments, or simply using it to pay down their mortgage which gives a tangible return. The people I know who are actually removing cash from the bank....I have no idea where they're putting it. Hopefully they have a safe or something. ------------- https://www.youtube.com/shorts/sQD8uhpWXCw" rel="nofollow - It's a beautiful day in the neighborhood...Road Rage Edition |
Posted By: rileydog22
Date Posted: March 19 2008 at 21:56
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It's better to have it in a CD or even T-Bill, as either of those will most likely beat inflation for you. With the Fed dumping bills into the economy, the cash sitting in your safe is slowly but surely wasting away.
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Posted By: IVNORD
Date Posted: March 19 2008 at 22:06
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Posted By: IVNORD
Date Posted: March 19 2008 at 22:10
P.S. Once using rough calculations, I figured that every $100 of the 30-year bond at average interest of 6% will return $27 in combined pricipal and interest adjusted for inflation if held thru the life of the bond, i.e. 30 years. Given that my calculations were done during my morning commute, the error could be significant, but even if the error is 100%, the payout of $54 on every $100 in 30 years is still a sweet deal
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Posted By: rileydog22
Date Posted: March 19 2008 at 22:10
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Are CD's FDIC insured as well?
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Posted By: Padraic
Date Posted: March 19 2008 at 22:11
** Hand raised ** I'm one of these people. The whole Bear Stearns thing spooked me sufficiently such that I want to sit on the sidelines for a while and see how this whole thing shakes out. Even more extreme, a friend of mine is so negative that he's 100% short in the stock market. |
Posted By: Finnforest
Date Posted: March 19 2008 at 22:12
The kind of people pulling money out of the bank out of fear of economic catastrophe are not reassured by an FDIC backing. If it all goes, FDIC can't save everyone, especially with our government being so whacked with debt. Folks who remember the Depression believe banks and government safety nets are far from infallible in the face of the masses needing them all at once. ------------- https://www.youtube.com/shorts/sQD8uhpWXCw" rel="nofollow - It's a beautiful day in the neighborhood...Road Rage Edition |
Posted By: Padraic
Date Posted: March 19 2008 at 22:12
Yes, provided the issuer is a member. |
Posted By: IVNORD
Date Posted: March 19 2008 at 22:20
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Posted By: IVNORD
Date Posted: March 19 2008 at 22:22
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Posted By: Padraic
Date Posted: March 19 2008 at 22:23
Like I said, it's extreme. Way too risky for me. |
Posted By: rileydog22
Date Posted: March 19 2008 at 22:25
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My dad was telling me about a fund called "market neutral" or something where in each sector they buy the "best of breed" and short-sell a mediocre stock, so that way you should make some money independent of overall market fluctuations. I'm not sure if that'll beat inflation or not, but it sounds like a fairly solid investment at this point.
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Posted By: IVNORD
Date Posted: March 19 2008 at 22:26
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Posted By: Padraic
Date Posted: March 19 2008 at 22:29
Not sure what the advantage is over something like a money market - sounds like the yield couldn't be too much higher than cash or a reasonably safe bond fund. |
Posted By: Padraic
Date Posted: March 19 2008 at 22:31
Know other people who have gotten out of stocks and dollars...they've invested in primarily gold and yen. Note how much the yen has shot up lately (of course it hasn't, just another measure of the dollar falling). |
Posted By: IVNORD
Date Posted: March 19 2008 at 22:36
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Posted By: Padraic
Date Posted: March 19 2008 at 22:42
| ^^ Funds like FXY and GLD, I believe. |
Posted By: Finnforest
Date Posted: March 19 2008 at 22:45
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How does a person in the States invest securely in the Yen? Is there a way to do it from home without involving brokers, etc? Actually I have the best strategy. I invest in Italian prog mini-lp sleeves. Guaranteed to go WAY up.  ------------- https://www.youtube.com/shorts/sQD8uhpWXCw" rel="nofollow - It's a beautiful day in the neighborhood...Road Rage Edition |
Posted By: IVNORD
Date Posted: March 19 2008 at 22:47
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Posted By: Slartibartfast
Date Posted: March 20 2008 at 08:31
 ------------- Released date are often when it it impacted you but recorded dates are when it really happened...
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