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gmc: No doubt they could find a few low ranking scapegoats, but the point you are making is correct, I think: Senior management rarely takes the blame. The buck stops somewhere else as far as the fat cats are concerned. It'll probabaly emerge that the Board was paid 80 billion trillion dollars in bonuses for their amazing skill in dealing with the issues in the last financial year. I'd put them in silly uniforms sweeping the streets at £5 an hour 'til they've paid it back.

I don't mind these people making shed loads of dosh that frankly they waste. What peeves me is the arrogance that goes with it. No doubt they'll be on the boards of other institutions with seven or eight figure salaries within the year. My opinion of these sort of people has been known to rise as high as contempt.

I comlpetely agree, whats happening should put paid once and for all to the nonsense that the people at the top of the global finacial system are worth the extremely large amounts of money they get paid, they have driven the system onto the rocks with their stupidity and greed, and should pay the price. Unfortunately it would be self-defeating to allow the banking system to collapse, but certainly it would not be beyond the realms of possibility to make sure that at least some heads will roll to set an example, certainly board members and CEOs will face some difficult questions from shareholders who are about to lose an awful lot of money indeed. I have heard it mentioned that banks globally may have lost between 1 to 2 trillion dollars in capital through their foolish lending practices and lax rules and regulations, that's a lot of money and its going to hurt. Events are moving quite rapidly at the moment, so its hard to know how all of this is going to pan out, the mood might improve over the week, but given what I am hearing, I don't think this is going to be over soon, and it will probably get a lot worse before it gets any better.

In the long run it may all be to the good. We had allowed the banking industry to be too greedy and get away with it. Profit is all has never been a good recipe for long term success in any business.

Given that my "retirement fund" is my money invested through a reputable high street bank (I'll get little or nothing from the state), the current crisis is a worry. I'm just hoping that what goes down will go up again over the next few years.

The big concern is that G. Bush is in charge. It may be useful for the business interests that back him to have a moron in charge who they control, but when those business interests are exposed as the blinkered accountants they are, with no understanding of anything outside a ledger, then the potential for disaster is limitless. Eg: it really looks as though Cheney and Rumsfield (sp?) genuinely believed the USA would make money out of the reconstruction of Iraq.

They should read some history.

Chuckle. "There was an Englishman, a Scotsman and an Irishman, and before them all the world's problems dissolved." :-2

How do you get the little flags next to your names on your posts?

Clodhopper;806974 wrote: Chuckle. "There was an Englishman, a Scotsman and an Irishman, and before them all the world's problems dissolved." :-2

How do you get the little flags next to your names on your posts?


Hmmn, yes well taking about it is one thing, having to be responsible and actually do something about it is something entirely different.



For the flag I think you have to go into profiles and click on an option for your country, if you click England you will get a St Georges flag up, at least thats what I think happens. I can't really remember.

Galbally;806943 wrote: [...]Now this isn't all about the Iraq war, the very unsound practice of basing economic leverage on domestic property prices that are artificially made high through profligate lending are more to blame, but all that money that has been blown in Iraq would be extremely useful right now to help prop up the American economy, unfortunately its gone, and in fact its borrowed money from abroad so it makes things worse. [...]


gmc;806946 wrote: The thing that puzzles me is how come none of the management in the banks responsible have been fired or called to account.
Galbally wrote: Because they are allowed to regulate themselves by complacent and aquiescent governments
I wish this subject had been given its own thread, but I'm just as much to blame for that as anyone, eh?

This has to happen -- inevitable result and all that. The reason the gov't is standing back is because, despite the schoolbook version of history, government programs did not stop the Great Depression, it prolonged it ten years longer than it needed to be. We were still suffering long after Europe had recovered.



This is what happens when people overextend themselves financially. We've stopped being responsible for ourselves. Hell, we've stopped feeling responsible for ourselves. Just the other day one guy called another "tight" because he waited to buy a car until he could pay for it in full. I haven't bought a car on financing since 1982. Being financially responsible is a punchline now.



I skimmed this timeline and noticed some scarey parallels, such as President Hoover saying in 1929, "Any lack of confidence in the economic future or the basic strength of business in the United States is foolish." We're going to repeat history because of individual, institutional, and government financial irresponsibility. I just hope it doesn't last too long.

Accountable;806996 wrote: I wish this subject had been given its own thread, but I'm just as much to blame for that as anyone, eh?

This has to happen -- inevitable result and all that. The reason the gov't is standing back is because, despite the schoolbook version of history, government programs did not stop the Great Depression, it prolonged it ten years longer than it needed to be. We were still suffering long after Europe had recovered.



This is what happens when people overextend themselves financially. We've stopped being responsible for ourselves. Hell, we've stopped feeling responsible for ourselves. Just the other day one guy called another "tight" because he waited to buy a car until he could pay for it in full. I haven't bought a car on financing since 1982. Being financially responsible is a punchline now.



I skimmed this timeline and noticed some scarey parallels, such as President Hoover saying in 1929, "Any lack of confidence in the economic future or the basic strength of business in the United States is foolish." We're going to repeat history because of individual, institutional, and government financial irresponsibility. I just hope it doesn't last too long.


I agree that this deserves a thread of its own, so you start it off there. I think that some of the points you make are certainly very valid, my own instincts would be similar about fiscal responsibility and accountabillity being the main problem, the US government (and other western governments as well) are always going on about not interferring in markets until of course very large financial institutions get into trouble, then they get into the very socialist practice of using vast amounts of tax payers money to prop up a system that is fundamentally flawed. Basically using taxpayers money to bail out a system that has seen the real earnings of most people decrease, caused a huge property speculation bubble, and re-inforced the doctrines that have enabled for the de-industrializaion of the western world and created an unsustainable economy based in the main on land values.

Sure, in the short term, companies have been making a fortune, but in the long-term they have suceeded in eroding the economic position of the majority of particularly US citizens, who are generally much more indebted than they were 30 years ago, and with (in general) worse, more insecure, less economically productive, lower paid jobs, with the pyramid of housing equity keepnig the illusion that everyone was getting richer going. In my opinion its been allowed to happen because there is not nearly enough direct accountability in Wall Street, corporate business, or government for these more crazy financial ideas. Subrpime being what I will imagine become a textbook definition of an insane finanical idea, bound to end in diaster, so the companies that have made small fortunes running this type of scam going should face the full consequences, no matter how big they are. So major investment banks, property companies, and hedge funds and derivatrives traders that have allowed themselves to get into this position should bear the consequences, (i.e. they should go to the wall) unfortunately it does mean that a lot of people will lose their jobs and the economy will nose dive over the short term, but in the long-term a healthier system should be the result, and thats much more beneficial for the future.

Scrat;808234 wrote: Here's a good article, it states a lot of facts and is a good perspective. I noticed that the talks between Russia and the US in Moscow basically resulted in nothing, Condi Rice, Gates and The Supreme Chimp were basically snubbed, they never should have even went. No one has any respect for them anymore.


That article is pretty alarming stuff if your American, 53 Trillion, jaysus, thats a lot of money! :-2

What really galls is we got sucked in to this mess as well.

Scrat: Most interesting article. Thanks.

Galbally: Trouble is it's not just the USA - we are all affected since I understand that we are all tied together financially: if America goes into recession then so does the global economy, and if we have another Great Depression what chance do we have of dealing with the issues involved with climate change? I'm not sure exactly what they'll be, but one thing you can guarantee is that they will cost a lot of money.

I have trouble with billions and trillions. Is 53 trillion 53,000,000,000,000? However much it is, it is more than I can imagine.

gmc: Is there any way we could not have been involved? Doesn't the state of the US economy has a major effect on the world economy, and since we are a part of the world economy... Or am I missing something here (very possible!)?

Clodhopper;808358 wrote: Scrat: Most interesting article. Thanks.

Galbally: Trouble is it's not just the USA - we are all affected since I understand that we are all tied together financially: if America goes into recession then so does the global economy, and if we have another Great Depression what chance do we have of dealing with the issues involved with climate change? I'm not sure exactly what they'll be, but one thing you can guarantee is that they will cost a lot of money.

I have trouble with billions and trillions. Is 53 trillion 53,000,000,000,000? However much it is, it is more than I can imagine.

gmc: Is there any way we could not have been involved? Doesn't the state of the US economy has a major effect on the world economy, and since we are a part of the world economy... Or am I missing something here (very possible!)?


Oh I know its not just the USA, the point was that it is where the major problems have arisen, for whatever local reasons. But yes certainly, it will effect everyone, and Britain probably more than anyone else, as the economy is so tied into the U.S. one (again Britain's choice as ever) and the City of London is the centre of the Euro Dollar market and where most of the large American Financial Corportations and Investment houses have their offices and business. These events will have repercussions around the world, and already are, my own country Ireland willl be effected as will the rest of Europe, and Asia.

There is a difference nowadays however, in that the American economy by itself no longer makes up such a huge proportion of the entire world market as it once did, the overall EU economy is now bigger than the US one, and of course Japan, and other developed countries have large economies, and now of course we also have China, and India, as well as a handful of other developing economies, and that means that where once the US economy accounted for 75 percent of the entire world economic activity (just after WW II when Europe was in Ruins), it now only accounts for about 25 percent of the world economy, so its not quite as serious as it might be. What you are seeing is a rapid change in where the economic power is in the world, mostly from the West to the East, there was a certain amount of inevitable change going to happen anyway, but unfortunately for the US the policies persued by the US Administration and also the profligate wasting of capital on a property bubble by big Wall Street firms seems to be accelerating the US's relative decline.

In the long run, it might be no bad thing, as it could act as a wake up call for the US, and also Europe to a certain extent, in that the old realities of taking the position and power for granted no longer apply in the way they once did. Some realism about the world situation is long overdue anyway, particularly in the States, where people seem so disconnected from what is happening in the wider world and cynical politicians have used this to pursue dangerous policies.

Oh and 53 Trillion is 53,000 billion, or 53,000,000,000,000. And yes, it is an abolutely gobsmacking amount of money, probably more than the entire GNP of all the planet for one year (though I am not sure about that).

The article Scrat posted pretty much nails it. We've overextended and been poor managers of our wealth. Now the question is will we pull back to a more manageable level and rebuild, or will we go down frothing at the mouth insisting that the world can't survive without our protection?



We are playing right into radical Islam's hand.

Galbally: Would it be going too far, do you think, to say that the future of the human race over the next hundred years depends on India and China and how they deal with their industrialisation?

I've been to India a few times and think it's a wonderful place, but the politicians do not inspire confidence...on the other hand, neither does G. Bush, though if he's personally corrupt I'm not aware of it.

All I know about China is that I don't know much. My impression is that the place is reminiscent of Victorian Britain in terms of rapid industrialisation, terrible pollution, and horrible exploitation of the workforce creating great wealth for the few. Whether modern Communism can deal with this better than Victorian capitalism is surely an open question.

$53,000,000,000,000 just...GONE. Amazing.

Accountable: chuckle. At least China and India are not fans of radical Islam! (Though they might well be happy to see the US and UK making fools of themselves...)

Clodhopper;808380 wrote: Galbally: Would it be going too far, do you think, to say that the future of the human race over the next hundred years depends on India and China and how they deal with their industrialisation?

I've been to India a few times and think it's a wonderful place, but the politicians do not inspire confidence...on the other hand, neither does G. Bush, though if he's personally corrupt I'm not aware of it.

All I know about China is that I don't know much. My impression is that the place is reminiscent of Victorian Britain in terms of rapid industrialisation, terrible pollution, and horrible exploitation of the workforce creating great wealth for the few. Whether modern Communism can deal with this better than Victorian capitalism is surely an open question.

$53,000,000,000,000 just...GONE. Amazing.


I think the future of the human race depends on us realizing that the world is better off as a commonwealth, a globally responsible community that shares the responsibility for our collective well being and the resources; if not loving each other while doing so, at least cohabiting the planet with a healthy level of respect and cooperation where possible.

On our little planet there are a lot of people, a lot of nations, a lot of cultures, and a lot of states, but only a limited amount of resources, we have to work out how to share them less conflictually with each other.

But its no wiser depending on the Chinese than it is on the Americans, we need to take responsibility for ourselves, in Europe that means us taking responsibility for our bit of the planet and trying to do what is right and best for ourselves primarily while contributing in whatever way we can to promoting peace, stability and environmentally sustainable prosperity across the world.

There is no point in either blaming the Americans for everything, or hoping that the Chinese will save our bacon, we have a lot of power ourselves, so we should use it wisely to our own, and the common good.

I think that despite the negatives in the world, there are a lot of positives, America is not going to collapse completely, and there are a lot of good people there, who want to make their own still very powerful country and the world a better, more stable place; Europe used to be at constant war with itself and now is a zone of general peace and prosperity under law and democracy, China and India are emerging again, and while there are many problems (particularly in China), its generally a good thing for everyone; Russia and the US no longer threaten everyone else with global nuclear armageddon; even in the Middle East there is hope for change for the better, I hear that Saudi Arabia is considering allowing a Catholic Cathedral to be built there as a sign of religious conciliation with Christians, thats refreshing.

There is an impending environmental catastrophe, its undeniable, but there are changes starting to happen, and the human race is usually surprisingly good when faced with adversity, who knows what technology may produce over the next 20 years, the scientific and engineering community are fully engaged with the climate destabilization problem even if the politicians haven't quite gotten there yet. I am not denying there are massive problems, there certainly are, but ever was it thus, being alive is risky we can't avoid it.

So although at a glance the world can look like a grim place there is always a reason to hope for the better, at least for now.



Oh, and just to stop the panic a little, that 53 trillion is what the US government owes to other countries apparently, its not gone, its just owed. The estimates on what have been lost in the credit crunch are between 1 to 3 trillion, which although still an astronomical amount of money, not quite as disasterous as 53 trillion.

Posted by clodhopper

gmc: Is there any way we could not have been involved? Doesn't the state of the US economy has a major effect on the world economy, and since we are a part of the world economy... Or am I missing something here (very possible!)?


I meant being sucked in to the war but also many the dodgy lending as well. UK banks with american subsidiaries let them get involved in this kind of lending as well. But in the UK the regulator did nothing to curb UK institutions like Northern rock or indeed very much to control banks at all. Part of the problem is the the FSA don't understand what is gong on and tend to defer to the bankers "superior" knowledge.

All I know about China is that I don't know much. My impression is that the place is reminiscent of Victorian Britain in terms of rapid industrialisation, terrible pollution, and horrible exploitation of the workforce creating great wealth for the few. Whether modern Communism can deal with this better than Victorian capitalism is surely an open question.


Communism, socialism and liberal democracy are as much a product of rapid industrialisation and social change as is capitalism. They are all interrelated not mutually exclusive. Chinese communism has shown itself to be very adaptive-it might not be communism as we know it but it's always been a flawed political theory anyway. Victorian style capitalism didn't last very long either.