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Post by Barbara on Oct 9, 2008 12:04:51 GMT
does anybody who isnt a banker, i said banker, or politician really know what the hell is going on with the banks and money markets, and if they do, will they please explain it to me, in laymans terms,
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Post by Tig on Oct 9, 2008 12:36:40 GMT
All I know is that we are all deep in the brown stuff Barbara thanks to a lot of overpaid @ankers (insert any letter you think fits!) It won't get any better today or tomorrow, it will take some time methinks and a fair bit of pain will be felt by all of us in the interim to get through it  Here is a laymans guide to some of the terms used - it may help  news.bbc.co.uk/1/hi/magazine/7642138.stmx Tig |
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Post by Barbara on Oct 9, 2008 13:58:23 GMT
after reading the explanations for *dead cat bounce* and derivatives * my eyes glazed over.  |
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Post by Barbara on Oct 9, 2008 19:26:23 GMT
The thing is, if there was £10,000,000,000,000,000,in the banks last week, unless somebody threw it down a grid, where has it gone, how can everyone be broke. |
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Post by Ruthie on Oct 9, 2008 19:35:14 GMT
I think it's 'cos share prices have gone down and down and down. I read somewhere that the value of all the stocks and shares was previously more than all the money in the world.........unsustainable. Now they are worth less, on paper there is far less money so the banks are going bust and will take all us little people with them. I invested my pension lump sum last October knowing that share prices can go up or down and so could my investment, but I never thought we'd have such a crisis!
I asked my IFA at the time...........what effect do you think the American sub-prime problems will have and he dismissed it as a short term problem. That's what started all this. The US banks lending to people who were unlikely to repay their loans and selling those debts worldwide. Then it all overloaded and collapsed. We're all now feeling the repercussions.
Hindsight of course is a wonderful thing!
The above is the uninformed opinion of a non financial individual and must therefore be taken as such ;D
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Post by Barbara on Oct 9, 2008 19:40:36 GMT
I read that as uniformed at first, and thought you were a clever clogs. ;D
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Post by nightowl on Oct 10, 2008 9:09:16 GMT
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Post by Barbara on Oct 10, 2008 11:23:34 GMT
all the big bankers, who have given themselves massive bonuses, for years, should be named and shamed, when the dust settles,one things for sure, in America they will be locking them up.
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Post by Plocket on Oct 10, 2008 17:14:51 GMT
Hia Barbara - OH works in Pensions and seems to understand this situation much much better than me. This is what he's just dictated to me:
The banks have bought dodgy securities (technically they are collateral debt obligations) which they thought were worth lots of money. Because they now look to be worthless securities and nobody knows who has what securities, the banks are scared to lend to other banks, businessess etc. etc. because they don't trust anyone. The banks have assets but some are worthless and some are valuable so the banks don't actually know how much money they have.
What's also happened is the people who give insurance (credit default swaps) are now worried they are going to be wiped out by the bad claims, which will affect the insurance market and the ability to insure loans.
If you are a weak company the bank won't lend you money with out insurance that you can pay the money back, or collateral.
Does that make sense?
And I agree that those who caused this problem by selling sub-prime mortgages in the US, and got them rated as good debts, and people bought them as good investments - those "bankers" (beginning with W) should be made to pay in one way or another. And the bankers shouldn't be able to trade in such a way either.
Oh and those that had huge bonuses aren't necessarily at fault (in this country anyway) but they shouldn't be encouraged to do underhand dealing.
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Post by nightowl on Oct 10, 2008 19:05:37 GMT
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Post by Plocket on Oct 10, 2008 20:28:15 GMT
I've got no idea, but I don't think it's to do with hard cash - it's more to do with trust. So why it's costing us as taxpayers I've got no idea!!!  |
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Post by Tig on Oct 10, 2008 23:17:47 GMT
It might be something to do with the fact that our government sold off gold reserves (which were once used as guarantees that banks could meet their commitments!) It would be like taking out an equity release scheme on your home and still expecting your children to have an inheritance from it when you depart! How valuable is paper by the way? The response to the BoE interest rate cut by most banks/BS seems to be 'hike up interest rates to fulfill shareholders dividends' - leave savers getting less interest for their money and screw higher mortgage rates out of borrowers! Not that this financial gobbledegook is of any consequence to me  Anyone watch Working Lunch - I'm missing Adam ;D |
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Post by Shrubrose on Oct 11, 2008 8:55:05 GMT
And what chances have we got that Banks will change their behaviour? The day after it was announced that 'we' were going to bail them out, they're handing out invitations to take out £25k loans. I'm a numpty really where economics is concerned but my gut reaction to that was 'God help us!'.
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Post by Barbara on Oct 11, 2008 11:59:53 GMT
my son watches every thing to do with all the goings on at the moment, he was watching a programme last week and a fat cat banker was asked about the 45 million pounds he had taken out of the banks, and he said i think your figures are wrong it was only 44.million. and we the tax payer are bailing these people out  |
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The figures they talk about are just too ginormous to get my head around 
