The credit crisis visualised

This is an interesting animated film on the origins of the crisis, it holds with the view that banks were only ever a part of the problem and not necessarily the sole cause. Central banks have a lot to answer for, as does all of society because when you stop saving and instead spend somebody else’s savings it means that eventually, when it comes time to repay your loans that not only is the money not there, but the productivity has likely suffered as well – income based on lending gives the artificial appearance of wealth but it is a mirage.

part 2

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Jim Rogers, David Frost interview

Jim Rogers talks to Sir David Frost about the role of Government and Central Banks in the current crisis, he believes that the ethos of ‘not letting anybody fail’ actually magnifies problems because doing this means the bubble continues to inflate far beyond the size it would have done otherwise.

Jim has a very simple and straightforward way of explaining things that make him ever popular, although some of the medicine he prescribes is considered quite harsh. His point about letting the market do what it must is of the libertarian strain and for all anybody knows, he may be right (right as in ‘correct’ not as in ‘wing’), if so then everything being done to counteract the crisis is the inverse of what we should be doing.

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A simple way to understand Liberty & the Free Market

This is a simple video, and yet a compelling one about some of the fundamental rights of people and of our right to self determination. How does this tie into mortgages or economics? Simply put it shows that the government of a country don’t have the right to force the state to underwrite banks, in fact, it only rewards bad behavior and the end result is that we all pay for a business issue which we did not create, if a bank lends you money it does so by choice, when in reverse (such as our state bailout plan) we were never given any right or choice as to how it would work, or if it was even a good idea. The guarantee was given first and conditions attached last, ill thought out and moral hazard is merely the beginning of it all.

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A simple way to understand Liberty & the Free Market

This is a simple video, and yet a compelling one about some of the fundamental rights of people and of our right to self determination. How does this tie into mortgages or economics? Simply put it shows that the government of a country don’t have the right to force the state to underwrite banks, in fact, it only rewards bad behavior and the end result is that we all pay for a business issue which we did not create, if a bank lends you money it does so by choice, when in reverse (such as our state bailout plan) we were never given any right or choice as to how it would work, or if it was even a good idea. The guarantee was given first and conditions attached last, ill thought out and moral hazard is merely the beginning of it all.

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Don't follow me down this road. Contrarian moves.

The markets took the single biggest battering since the 20% fall off experienced in the 1987 crash. It came on the back of a rejection of the $700 billion bailout plan in the USA. The markets had earlier rallied based on the belief it would go ahead. The S&P dropped 8.8%, the Dow is down 7%.

This is first for me, I was alive and well in 1987 but I wasn’t in the workforce and did not have a full appreciation for what was happening. This is the first big crash I will have worked through, the dotcom crash was no fun, but it was not as big as the mess we seem to be seeing form in the finance world.

In belief that everybody will run scared I am choosing to stay, tomorrow I will buy Irish financial stocks (Tuesday 30th Sept), I’m saying this on record, so if I lose then I lose, that can’t be glossed over. My intention is to get a small portion of the most distressed shares I can buy and to purchase them …

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Don’t follow me down this road. Contrarian moves.

The markets took the single biggest battering since the 20% fall off experienced in the 1987 crash. It came on the back of a rejection of the $700 billion bailout plan in the USA. The markets had earlier rallied based on the belief it would go ahead. The S&P dropped 8.8%, the Dow is down 7%.

This is first for me, I was alive and well in 1987 but I wasn’t in the workforce and did not have a full appreciation for what was happening. This is the first big crash I will have worked through, the dotcom crash was no fun, but it was not as big as the mess we seem to be seeing form in the finance world.

In belief that everybody will run scared I am choosing to stay, tomorrow I will buy Irish financial stocks (Tuesday 30th Sept), I’m saying this on record, so if I lose then I lose, that can’t be glossed over. My intention is to get a small portion of the most distressed shares I can buy and to purchase them …

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Will we get a rate reduction? Not if the ECB does it’s job we won’t.

I have seen articles in the news and economists from large lending institutions are saying they believe we will see two rate reductions in 2008. There are various reasons being put forward for this, and personally I would be delighted to see this happen, however, the flip-side is that if the ECB drop rates then to a degree they will just undermine their own credibility. Why? Because the ECB are not there to save the market just because there is a credit crisis, they were willing to inject liquidity in order to ensure that credit kept flowing, but in the area of Base Rates their only tenet is to control inflation at ‘near or just below 2%‘.

Rate reductions are inflationary, more money starts to move about the economy and there is an upward movement on prices, at the moment inflation is already above the stated target so cutting rates would only exacerbate that, if we get a …

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Will we get a rate reduction? Not if the ECB does it's job we won't.

I have seen articles in the news and economists from large lending institutions are saying they believe we will see two rate reductions in 2008. There are various reasons being put forward for this, and personally I would be delighted to see this happen, however, the flip-side is that if the ECB drop rates then to a degree they will just undermine their own credibility. Why? Because the ECB are not there to save the market just because there is a credit crisis, they were willing to inject liquidity in order to ensure that credit kept flowing, but in the area of Base Rates their only tenet is to control inflation at ‘near or just below 2%‘.

Rate reductions are inflationary, more money starts to move about the economy and there is an upward movement on prices, at the moment inflation is already above the stated target so cutting rates would only exacerbate that, if we get a …

Read More