The Global Financial Crisis

Fairlane · 09-10-2008, 12:38 AM

http://www.abc.net.au/news/stories/2...08/2385893.htm

Man this stuff is getting heavy, having done quite a bit of economics at Uni, this is some pretty insane stuff. Lack of liquidity, people scared to death to invest in shares/bonds and unable to invest in fixed interest due to low rates. Stagflation back due to an Oil shortage and Food shortage and a chaos of deregulation in the US.

People running back to gold, all very very bad signs. Im just happy i moved my money into propety, but this is going to beyond all of us soon. Australia is going to cop it very soon. The US aint going to come out of this soon, especially with the government so far in debt and its houses worth 4 trillion dollars less than the money owed on them.

Cant see this boding well for our favourite car makers Ford & GM either, where are they going to get their restructuring money from when they are so sick already, and no one with anyone near the cash or expetise to buy them and the US government unlikely to have the cash save them like Chrysler in the 80s

Bit heavy for AFF i know, but this is going to hit all of use soon enough.

bodes-sh · 09-10-2008, 12:47 AM

yep. had to happen, everything took off so quickly, it couldn't stay like that forever...

jaydee · 09-10-2008, 01:21 AM

Yep, 6 months ago we couldn't decide whether to make a loan to buy shares or property.
Luckily we went property or I'd be crying like a baby right now.
I think thre's a lot worse to come yet, I just hope our banks unlike the UK and some other Europeans don't fold.
Imagine no money in the bank, living from pay to pay (I know some people are doing this already but me and the Mrs have been working hard for a long time and would hate to lose our bank).

mr smith · 09-10-2008, 08:26 AM

Ford shares hit a low of $2.10.

DOC · 09-10-2008, 08:49 AM

Some of the wealthiest people in history's past started out in times like these, lay in the gutter and look at the mud, or look up at the stars.

These times are not doom n gloom but opportunity for those who don't run around like sheep.

4Vman · 09-10-2008, 09:03 AM

Aussie dollar down to $.64c US yesterday...

YOOT · 09-10-2008, 09:14 AM

Quote:

Originally Posted by 4Vman

Aussie dollar down to $.64c US yesterday...

Good, give the tourism market a boost for cheap Aussie holidays. Also our exports will increase as its cheaper to buy from us than other countires, also it mean interest rates are coming down, which means real estate is going up.

Mostly good news if you ask me.

And the lower the share market goes, the cheaper it is to make more money over the next few years.

:

4Vman · 09-10-2008, 09:18 AM

Quote:

Originally Posted by YOOT

Good, give the tourism market a boost for cheap Aussie holidays. Also our exports will increase as its cheaper to buy from us than other countires, also it mean interest rates are coming down, which means real estate is going up.

Mostly good news if you ask me.

And the lower the share market goes, the cheaper it is to make more money over the next few years.

:

Lower aussie dollar is great for Aussie manufacturing.. what's left of it...

The problem is so much has gone off shore in the past 2 years that we maybe forced to pay allot more for things now that we have to import because we no longer manufacture them here.....

mr smith · 09-10-2008, 09:30 AM

Dollar is not all bad news.
But share price drop will see people holding off on retirement, selling investment properties ( again retired people who dont have time to wait for bigger capital gains and need money to live on now) and jobs will start to dry up over the next 6/12 months.

So mostly bad news if you ask me.

fmc351 · 09-10-2008, 12:40 PM

Make of it what you will.

Keepleft · 09-10-2008, 01:19 PM

Tis unfolding, tis not at all good. . . .

King Nothing · 09-10-2008, 01:57 PM

Yep, looks like it's going to hell in a handbasket at a fair rate of knots. Already one job at work has been called off as the client doesn't want to spend a large sum in this uncertainty (large primary goods producer in Canada). Didn't the USA do the same thing as the RBA and lower rates significantly just a few months ago before all this started?

I know a couple of financial journos, who work with some senior economists. There was a hell of a lot of concern for BankWest when HBOS (the parent bank in the UK) was in trouble, guys there were taking their money out of bankwest. It seems ok now that CBA has bought it, but you never know.

I also believe property prices will fall significantly. Already many baby boomers I know have lost a major whack of their super and will need to sell investment properties to finance their retirement, there's just no other option. So there may be a large influx of property coming onto the market in the near future.

Now some would say that low interest rates means more people will borrow. But with all the banks either getting burnt and tightening lending criteria (I'm sure this will happen), or simply not having the ability to give the loan (not so much of a problem in Aus though I think), then there will be less buyers. So a large influx of property, with no-one to buy at such large prices (we have some of the most expensive housing in the world), then prices will have to come down. Apparently a similar chain of events happened after the 1987 stock crash.

Interesting times, that's for sure. Hopefully us Gen Y's might actually be able to afford a house! With 2 incomes, me and my fiancee at best could afford a nice 2 bedroom unit. But we would be struggling if one of us is out of work, and even worse when we have kids.

charles_wif_xf · 09-10-2008, 11:26 PM

This is the beginning of a massive $hite storm. Batten down the hatches people...

Yellow_Festiva · 10-10-2008, 08:27 AM

The whole country of Iceland has just gone belly up... while oweing a ton of money to the UK....

From what I'm reading and hearing on the radio, we are the 2nd strongest economy in the world behind Canada...

So for now at least we are still going strong.

**Charliewool** · 10-10-2008, 08:35 AM

Just heard GM US lost 30% and Ford US 20% overnight... Thems is huge hits!

mr smith · 10-10-2008, 08:43 AM

China is slowing, less resources required.
Resource prices coming down, could the great Aussie engine room be about to throw a rod?

fmc351 · 10-10-2008, 02:44 PM

Quote:

Originally Posted by Yellow_Festiva

The whole country of Iceland has just gone belly up... while oweing a ton of money to the UK....

From what I'm reading and hearing on the radio, we are the 2nd strongest economy in the world behind Canada...

So for now at least we are still going strong.

BBC, April 2008

Quote:

But Fitch said that Iceland's banks had sufficient liquidity and were able to operate without recourse to global capital markets for "some months to come".

BENT_8 · 10-10-2008, 02:51 PM

7% wiped off ASX in early trading from a news report..

fmc351 · 10-10-2008, 03:57 PM

Quote:

Originally Posted by mr smith

China is slowing, less resources required.
Resource prices coming down, could the great Aussie engine room be about to throw a rod?

China can slow, their growth has been huge, even a 50% drop in their growth is still better than ours, and ours was good. Problem is Chinas is all exports, they need to work on internal growth more given their export market is now going to shrink. I dont think Chinas slowing will be catastrophic for us, probably more like drop a couple of cylinders due to plugs at the bottom of a steep hill than throw a rod. Thats my take on it anyway.

Quote:

Originally Posted by Yellow_Festiva

The whole country of Iceland has just gone belly up... while oweing a ton of money to the UK....

From what I'm reading and hearing on the radio, we are the 2nd strongest economy in the world behind Canada...

So for now at least we are still going strong.

Do you have a link to the Canada and Australia reference?

Yellow_Festiva · 10-10-2008, 04:47 PM

Quote:

Originally Posted by fmc351

Do you have a link to the Canada and Australia reference?

Sure do! It was tough to find.. as that was the one I heard on the radio:

http://www.reuters.com/article/newsO...4981X220081009

Quote:

CANBERRA (Reuters) - Canada has the world's soundest banking system, closely followed by Sweden, Luxembourg and Australia, a survey by the World Economic Forum has found as financial crisis and bank failures shake world markets.

And info regarding Icelands situation...

http://business.timesonline.co.uk/to...cle4894904.ece

http://www.nowpublic.com/world/icela...lapse-disaster

http://www.theaustralian.news.com.au...0-2703,00.html

http://money.ninemsn.com.au/article.aspx?id=644712

fordnut1961 · 10-10-2008, 06:27 PM

i heard yesterday that China will be dropping steel buying by up to 40% on the radio,is that fact or fiction?if its true there will be a lot of Australian mines cutting back on production which = loss of jobs

fmc351 · 10-10-2008, 07:00 PM

Quote:

Originally Posted by Yellow_Festiva

Sure do! It was tough to find.. as that was the one I heard on the radio:

http://www.reuters.com/article/newsO...4981X220081009

Interesting read, although the US being 6.1 out of 7 kind of puts the scale into perspective. :monkes:

Quote:

Originally Posted by fordnut1961

i heard yesterday that China will be dropping steel buying by up to 40% on the radio,is that fact or fiction?if its true there will be a lot of Australian mines cutting back on production which = loss of jobs

Speculation, note it said 'up to'. There will be a drop as demand for Chinese goods drops, people dont want to spend in this climate, how much depends on a lot of things like how much internal demand China has or can generate, and how much we can do without what they sell.

*rayman* · 10-10-2008, 07:26 PM

IMPORTANT NEWS: CRISIS HITS JAPAN

Just received this alert from our head of research:

Following the problems in the sub-prime lending market in America and the run on Northern Rock in the UK, uncertainty has now hit Japan .

In the last 7 days Origami Bank has folded, Sumo Bank has gone belly up and Bonsai Bank announced plans to cut some of its branches.

Yesterday, it was announced that Karaoke Bank is up for sale and will likely go for a song, while today shares in Kamikaze Bank were suspended after they nose-dived.

While Samurai Bank is soldiering on following sharp cutbacks, Ninja Bank is reported to have taken a hit, but they remain in the black.

Furthermore, 500 staff at Karate Bank got the chop and analysts report that there is something fishy going on at Sushi Bank where it is feared that staff may get a raw deal.

Barry_v · 10-10-2008, 07:30 PM

haha, that was awesome ray.

*rayman* · 10-10-2008, 07:32 PM

Haha, yeah, it got emailed through to me today... seemed fitting as I work in a financial planning practice.

MITCHAY · 10-10-2008, 07:58 PM

All I know is the ar$e has dropped out of my super account over the last 1.5yrs as it is, so I'm not looking forward to my account summary in January with the events of recent weeks. Lucky I'm no where near retirement yet, only 21

:

StAndArdAU · 10-10-2008, 08:22 PM

Well with a bit of luck the low prices will mean BHP can finally buy RioTinto, which means our pay will have to be matched to theirs, which means an extra $20k a year for me! then i can finally start saving...

irlewy86 · 10-10-2008, 08:36 PM

Quote:

Originally Posted by StAndArdAU

Well with a bit of luck the low prices will mean BHP can finally buy RioTinto, which means our pay will have to be matched to theirs, which means an extra $20k a year for me! then i can finally start saving...

Don't forget the extra 10k a year bonus BHP employees get. Yes, it'll be a great day when BHP take over.

**CAT600** · 11-10-2008, 02:19 AM

Username "seefour" in the other thread was referring to the 10% drop (to 7800) in the Dow Jones on Friday morning's opening trade in NY.

The Dow has recovered back to 8500 as at 10am New York time.

This will be interesting

Daniel

220XR8 · 11-10-2008, 02:39 AM

Time to buy more shares shortly, "buy in doom -- sell in boom" great to have spare funds at the moment....