Carnage on Wall Street as loans go bad - half a trillion $ losses

Discussion in 'Politics, Religion, Social Issues' started by edesignuk, Nov 13, 2007.

  1. edesignuk Moderator emeritus

    edesignuk

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    #1
    BBC.

    Nothing especially new I realise, but half a trillion dollars. Christ!

    Evidence, as if it were needed, that hugely over paid analysts and associated finance bods are morons. How was this situation ever allowed to happen?
     
  2. bartelby macrumors Core

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    Jun 16, 2004
    #2
    As long as the analysts and finance bods are ok. They don't care about anyone else. Get paid too much for talking crap.

    It's not like they're going to have sub-prime mortgages...
     
  3. edesignuk thread starter Moderator emeritus

    edesignuk

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    #3
    True enough, although since this is a very real crisis creating very real and enormous losses, there is a good chance the absurd over inflated bonuses will not materialise, and they might even wind up without a job. *gets violin out*
     
  4. robbieduncan Moderator emeritus

    robbieduncan

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    #4
    Would that be the world's smallest violin?
     
  5. bartelby macrumors Core

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    #5
    How will they cope?:rolleyes:
     
  6. edesignuk thread starter Moderator emeritus

    edesignuk

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    #6
    Indeed it would.
    Oh it'll be very tough, although the blow might be softened some what by the new Aston in the secure under ground car park of their inner London/New York pads, and a holiday home in Monaco.
     
  7. iBlue macrumors Core

    iBlue

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    #7
    Sadly the people who are most to blame for this will suffer the least for it. How typical.
     
  8. iGav macrumors G3

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    Mar 9, 2002
    #8
    I'm already salivating at the prospect of picking myself up an el'cheapo loft in EC1. :D

    An interest rate rise or two would just about break the camels back. :)

    It's a massive shame that Brown didn't call an election for November, because I was seriously considering voting in the Tories to speed things up a little. ;)
     
  9. Queso macrumors G4

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    #9
    Half a trillion dollars eh? What's that these days exactly? €3.65?
     
  10. Rodimus Prime macrumors G4

    Rodimus Prime

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    #10
    do not forget these does effect foreign countries as well. The foriegn banks big banks had to be taken part in this mess as well. If not directly leading they would be the ones lending money to the lenders so they could cover their loans and with those mortgage companies goes under that means huge losses world wide.

    It is rather insane and the banks/ mortgage companies have no one to blame but themselves. They where the ones giving out loans that they should not of given out at all in the first place. I am not going to blame the people who got loans that they could not afford for the mortgage companies losses because it is the mortgage companies job to make sure they do not give out bad loans.

    Now I do hold the people who got the loans at fault for making their credit but not for hurting the mortgage companies.
     
  11. Ugg macrumors 68000

    Ugg

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    #11

    You also have to remember that this was first and foremost a failure of regulation. In the rush to overcome the dot com bust, the government conveniently overlooked lending practices. It was really little more than a pyramid scheme.
     
  12. Swarmlord macrumors 6502a

    Swarmlord

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    #12
    You mean the people that took out loans they couldn't afford without understanding the terms of the loan? Oh, they'll suffer plenty.
     
  13. IJ Reilly macrumors P6

    IJ Reilly

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    #13
    It's about more than lending practices. The other issue is the repackaging of loans and reselling of them to investors without disclosing the soundness of the underlying debt.
     
  14. mactastic macrumors 68040

    mactastic

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    #14
    A half-trillion? That's not that big a deal, is it? I mean, we're dropping a half-trillion in Iraq and being told it's "a small price to pay". But a half-trillion here and it's the end of the world? That's some fuzzy math if you ask me.
     
  15. leekohler macrumors G5

    leekohler

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    #15
    Uh...no. I believe she meant the people who lent the money in the first place. And don't tell me for a minute that the lenders had any illusions as to what would happen to those loans. Why do you think so many of those loans got sold?
     
  16. pilotError macrumors 68020

    pilotError

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    #16
    Same thing happened in the late 70's.

    They knew Uncle Sam would come to the rescue yet again.

    Your right though, they new EXACTLY what was going to happen. Another case of history repeating itself...
     
  17. Queso macrumors G4

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    #17
    Are you sitting down?

    Ready?

    I agree with you.





    Yeah, surprised me too :p

    It's up to each and every one of us to manage our money responsibly. Borrowing is a risk. The more someone borrows, the bigger the risk becomes, to the point where you may as well be gambling. It isn't the casinos fault if you bet incorrectly. In the same way, it shouldn't be the banks fault if you borrow more than you can ever pay back.
     
  18. leekohler macrumors G5

    leekohler

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    #18
    At the same time, financial institutions shouldn't be telling people they can afford loans when they know they can't. I can't even begin to tell you how many people I knew who got suckered into this. I didn't, but a lot of people did- people I considered to be smart too.
     
  19. Queso macrumors G4

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    #19
    That's what people forgot Lee. The banks aren't there for anybody's benefit but their own shareholders, and interest rates weren't going to stay low forever. If people got suckered, it's their fault for being a mug. Painful for someone losing everything to hear and I've got every sympathy for their current predicament, but it doesn't change the fact they should never have borrowed beyond their means.
     
  20. IJ Reilly macrumors P6

    IJ Reilly

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    #20
    So again, while we focus so much scorn on the people who borrow beyond their means (a cheap and easy target, if ever there was one), we ignore the real reason why this matters -- which is how this debt was repackaged and resold on secondary markets. This problem would be relatively contained to the lenders, if it hadn't been for all these mortgage debt derivatives, which apparently are regulated almost not at all. Wall Street is in such a lather over the breadth of the thing, and what it can do to the credit markets -- not the fact that a lot of people borrowed too much and might lose their homes.
     
  21. leekohler macrumors G5

    leekohler

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    #21
    So what you're saying is that financial institutions bear no burden for leading people to believe they could afford a particular loan? Are you serious? I'm certainly not saying it's all their fault, but they do bear some responsibility here. Again, the reason being is because this kind of thing affects everyone, not just the people involved.

    Also, refer to IJ's post above.
     
  22. xsedrinam macrumors 601

    xsedrinam

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    #22
    "Greed is...good." -- Gordon Gekko (aka. Michael Douglas)
    Wall Street is tailored made to rip what it sews. I really feel for those who've bought/invested in to yet another false hope.
     
  23. princealfie macrumors 68030

    princealfie

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    #23
    guess all that money flowed into the current ops eh?
     
  24. mactastic macrumors 68040

    mactastic

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    #24
    Another aspect of this is the effect on the people who are left in the neighboorhoods after the foreclosures. According to this article, a 1% rise in the foreclosure rate in a neighboorhood correlates with a 2.3% increase in violent crime rates as buildings go unoccupied, vandalized, utilized for prostitution, etc.
     
  25. killmoms macrumors 68040

    killmoms

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    #25
    I can't decide if that was clever wordplay or a horrendous massacre of a common phrase. I'll err on the side of wordplay and assume the best. ;)
     

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