Credit Crunch

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Posted: Fri Oct 10, 2008 6:41 pm

Quote:

where does all the lost money go

There is no money to begin with, all speculations and high prices cause the stock does/did so well.
One trick used I posted here as a "joke" Stock market for dummies
I have a better, more technical, closer to reality one as a pps file, but nowhere to upload those online?

Baiting Guru Joined: 31 Jan 2007 Posts: 12237

packman wrote:

EDIT for many typos.

I thought you worked for Merriam-Webster. Very Happy

Posted: Fri Oct 10, 2008 7:02 pm

<--Slaps Pastor Frank with a dead trout. Laughing

Posted: Fri Oct 10, 2008 7:17 pm

The "money" is basically just what a stock is valued. So, it's not like the money disappears. It's like having a car. Let's say a Honda Accord is worth $10k. Then, tomorrow, someone says, "No more Accords are going to be made." Then, the Accords might go up in value. Nothing has changed about that car. Still the same car. Just worth more. Then, if Honda says, we are doubling our production, the value goes down. Again, not because the car is different. But because the perceived value of what one Honda Accord is worth.

Make sense SP?

Posted: Fri Oct 10, 2008 10:30 pm

Our financial system is sick ever since the national banks decided to print money without gold reserves backing it's value. Gold seems to be the only steady value .. god knows why, they're only metal lumps .. but ok ..

After that things got worse by make beliefs and hypes .. overvalued stocks, much more lended out money by banks than savings from other customers in the banks .. printing more and more currency bills, resulting in inflation and occasional stock exchange crashes .. It's a weird system, but will probably blow over in a couple of years .. I hope .. if the financial institutes are supervised a bit more solidly ...

Posted: Fri Oct 10, 2008 11:03 pm

I'm lucky. The mortgage is paid off and I work for myself in a trade that is always in demand. But I live quite a simple and frugal life style and don't run a car. I knew this was coming a good year or so ago through my work which has proved an eerily good indicator of (over) spending habits and confidence in the economy in general. This is the third downturn of the economic wheel I've seen during my working life and it's going to be bad I'm afraid.
I restore furniture, mostly for the trade but some private customers too, and the rubbish that was coming through my door the last three or four years to be tarted up was amazing. Even more incredible were the high prices they paid for it. And they were paying too much with borrowed money that didn't even exist. Crazy. Now the quality stuff is coming back in force as money will go there for genuine longterm security.

I've never trusted city speculators or the stock market. I won't give a complete stranger my hard earned, so he can skip off down to the bookies to play with. I have my small nest egg in national savings. The returns are low, but if the day ever comes when you can't get hold of your money from the government it won't be much use to you anyway.

I expect banking and investing will change out of all recognition after the dust has settled from this monumental mess.

Posted: Sat Oct 11, 2008 12:24 am

Lucky for us the mortgage is paid off but the super (pension/401K/etc) has taken a bath. Basically nearly all the gains made over the last 5 years are gone but - so far - the original lump sum investment is still just about OK. We are just circling the financial wagons, have cancelled what would have been an expensive overseas trip early next year, I won't be replacing my old rattler of a car, and we are generally being frugal which isn't necessarily a bad thing.

We are looking to retire in about 10yrs time and by then some calm, sanity should have returned. Markets always bounce back - eventually. I feel very sorry for those people who were planning to retire in the next year or so and know a couple of guys who will now continue working instead but while the short term view is pretty bleak, the mid to long term prognosis is that things will get better. I just keep repeating that to myself. We are also lucky to live in Australia where the crash happened too but our underlying economy is still relatively robust and well regulated, including the financial institutions and banks.

And the people who are in DEEP crapola are those who listened to "advisers" who told them to borrow money to put into their pension scheme because the market was booming.

Meanwhile I hear that Warren Buffet is on a buying spree...

Master Baiter Joined: 07 Oct 2008 Posts: 116

One of my hobbies is geocaching, which can use a lot of gas. So I'm going out with groups more, even though I enjoy hunting alone. And I try to find groups of caches so I can feel like I'm getting my money's worth.

Also I have a 24-year-old son with autism who comes home to visit one weekend a month. He really likes to ride in the car so I save all my big errands and volunteer delivery work for that weekend, and we can easily put on 200 miles in 3 days. So I am trying to cut him back a little bit because we just can't afford that much gas at these prices. Lately, and this might sound stupid unless you have a quirky person in your household - we go to the nearest large mall, one mile all around the inside, and I push him in a wheelchair while I walk 5 times around. Ma gets exercise, Junior gets a free ride, and we save 75 miles on the car.

I expect other effects to trickle down at some point. Voiceovers, my chosen field, is heavily dependent on advertising, which is one of the first things that companies cut when they're not making money. And of course, having a family member in a residential care situation, budget cuts could put him out at any time. Then it would be very hard for me to work because he is a high maintenance guy. The workshop where he and his friends build birdhouses might see orders decline because who can afford a $60.00 birdhouse if they're unemployed?

For my honey, he's a tenured professor so it'll be business as usual, except parents may get even more crotchety if they think their little darling is not getting a good enough grade for the dollars invested. We've lived together for 9 years but I do not think that he would be able to handle having my son here full time, so my housing situation would change a lot for the worse if budget cuts forced the group home to close.

Posted: Sun Oct 12, 2008 6:18 pm

Kacky wrote:

One of my hobbies is geocaching, which can use a lot of gas. So I'm going out with groups more, even though I enjoy hunting alone. And I try to find groups of caches so I can feel like I'm getting my money's worth.

HomerJFong wrote:

iMike wrote:

Geocaching

Alright! Another one who uses multi-billion dollar satellites to hunt Tupperware containers in the woods.

Taken from a previous 'What other hobbies do you have' topic.

I'm lucky - there's a lot of good walking country near where I live, & loads of caches. Don't use much diesel (gas?), just lots of boot leather.

here's a view from one of my favourite cache sites.

Master Baiter Joined: 07 Oct 2008 Posts: 116

WOW, that's why we do it, right there. Well that and having a secret. I even love the lampposts & guardrails because it's something that's right there with everyone passing by and they don't even know it. Twisted Evil

Back on topic - when I met Steve, I was walking up to 10 miles a day but I had no other life. Now I just don't want to put that kind of time in, so I use more gas now than I did then - but he still walks 6 miles round trip to work. It's an Asperger thing. Money wise, we spend a little more on food than your average Mainer because we try to always eat whole food and fresh things. We do the garden co-op thing which is not the cheapest way to get your veggies. We also try to buy American whenever we shop for clothing or household stuff - also more expensive and very tempting to relax those standards when money gets tight. So I hope it doesn't come to that. We already shop more but own less just from trying to find USA-made. There is room to own even a little less than we do.

Posted: Mon Oct 13, 2008 2:25 am

Ironically, my retirement pension started in September.

Posted: Mon Oct 13, 2008 2:29 am

^^^Congrats! Very Happy

Posted: Mon Oct 13, 2008 3:21 am

My co-worker told me today that their minister told them in Church that on Tuesday, October 14th there will be a glich in the computer communication of banks and that the banks will shut down for 2 to 4 days. Why are people preaching doom and gloom? I would think a minister would realize they shouldn't create a panic among their congregation.

Has anyone else heard this?

Posted: Mon Oct 13, 2008 7:42 am

Well "October 14" happens here a day and a half before it happens in the US so I'll let you know. So far (6.45pm Oct 13) the Australian stock exchange is a sea of green and has bounced back some 6% from Friday's close. Go figure.

Posted: Mon Oct 13, 2008 9:00 am

Thanks for the book tip, and the words of consolation... Not so bad yet, although the wife may be made redundant today. Time to sell one of the cars Laughing

Posted: Mon Oct 13, 2008 10:24 am

Now might be a good time to read The Grapes of Wrath again.

Next year the endowment policy was supposed to pay out a wopping terminal bonus at the end, to pay off our mortgage after putting money in for 25 years.

The money is all investested in 'safe' shares, like, er, banks......

Posted: Mon Oct 13, 2008 10:42 am

The Aussie Govt has guaranteed ALL bank deposits for the next 3 years which has certainly calmed a few nerves, hence the market mini recovery - although there's still a long way to go. Without getting political, have any other Govts taken similar steps?

Posted: Mon Oct 13, 2008 10:54 am

There's a hoax email in circulation referring to a possible 1 week shutdown on the US banking system. Something that would only make the banking crisis worse of course.
www.snopes.com/politics/business/bankholiday.asp

Phishers are exploiting the present situation too.
www.ftc.gov/bcp/edu/pubs/consumer/alerts/alt089.shtm

Posted: Mon Oct 13, 2008 2:45 pm

I have nothing to fear after this reassuring email from Barclays Bank:

Quote:

Due to collapse of financial markets, Barclays Bank PLC, Treasury, Bank of England and Financial Services authority launch a protection program to ensure the safety of your personal savings, loans, personal and business accounts. Barclays Bank PLC is fighting to ensure that non of our customer will suffer any damage on they personal accounts. Is imperative for all Barclays Bank PLC customers to take this protection program very seriously. This will be made in 2 easy steps, log-in in your Barclays Personal banking or Business Banking and follow the instruction. Please note that after you complete the steps you will be contacted by a Barclays Bank PLC representative in 24 hours. Thank you very much for your understanding into this matter and remember this is for personal safety.

Do not let the financial markets collapse affect your life in any way. Protect yourself by clicking the link below right now:

IP address [?]: 202.82.231.29 [Whois]
IP address country: Hong Kong
IP address state: n/a
IP address city: Central District
IP address latitude: 22.283300
IP address longitude: 114.150002
ISP of this IP [?]: PCCW Business Internet Access
Organization: The British Council

I have emailed the British Council and asked them why their Hong Kong branch is sending out phishing emails?

Posted: Mon Oct 13, 2008 3:41 pm

Gnasher:

The US has increased the guarantee from $100K to $250K, but there are so many ways to increase that limit it is really an unlimited insurance.

If, for example, me and Mrs. The Man are both on the account we each get a separate $250K insurance so we are at $500K. If you then put money in a different bank you get the $250K insurance there too, and so on.

EDIT: and at just before noon New York Time our Dow is up over 500 points or about 5% or a bit more.

Posted: Mon Oct 13, 2008 4:03 pm

Turns out that because of the credit crunch as of this morning I now work for the British Government.

Wonder if I can claim those nice civil service perks?

Master Baiter Joined: 16 Jul 2008 Posts: 146

As an indirect result of the credit crunch, I have been thinking about joining my works pension scheme and was wondering if anyone could explain the difference/pro's and con's of the following:-

Cash Fund
Fixed Interest Fund
Index-Linked Gilt Fund
Consensus Fund
Ethical Fund
UK Equity Index Fund

Baiting Guru Joined: 31 Jan 2007 Posts: 12237

Scam Patroller wrote:

I don't understand any of this financial stuff at all, where does all the lost money go Confused

@SP, I came across this today, it is an interesting read.

Really long link

Posted: Tue Oct 14, 2008 5:53 am

Unaffected. I was always skint. My own small business began to fail a long time ago, just after I started it. However, it pisses me off mightily that vast, unimaginable sums can be snatched out of thin air to bail out people whose greed and mismanagement got them (and us) into this mess in the first place. I don't intend that as a political statement, but this is a discussion about how the crash has affected us, and that's how it's affected me.

Posted: Tue Oct 14, 2008 12:00 pm

419/Credit Crunch joke currently doing the rounds...

An elderly lady receives an e-mail from the son of a deceased (but wealthy) African general, asking whether he could transfer millions of pounds into her bank account in return for a 20% cut. All the son needs is the sort code and account number. Not realising she is the victim of a Nigerian 419 fraud, she e-mails back the details. A couple of minutes later she receives an e-mail back from the general's son: 'Icesave?!' What is this, some sort of scam?"