|
http://www.techcrunch.com/2008/09/16/the-mess-on-wall-street-four-trillion-dollars-down-the-drain/
Personal Responsibility?
our debt just doubled
+ Show Spoiler +"The collapse of so many major financial institutions in the past year, and over the past few days especially, is hard to fathom in its enormity. Sometimes you need a good visual to put things in perspective. The New York Times has an interactive graphic up on its site that pretty much says it all. It shows that $4 trillion has been wiped off the total market capitalization of the U.S. stock market since last October. Of that, nearly $1 trillion is from the decline in the financial sector alone.
Each box in the graphic is proportional to the size of the market capitalization of the biggest financial firms then and now. As you mouse over the squares, you can see how much each value each company lost between October 9, 2007 and September 12, 2008. Here are some of the individual losses by market cap:
Citigroup: $236.7 billion to $97.8 billion.
Bank of America: $236.5 billion to $150.2 billion.
AIG: $179.8 billion to $32.3 billion
Goldman Sachs: $97.7 billion to $61.3 billion
American Express: $74.8 billion to $45 billion.
Morgan Stanley: $73.1 billion to $41.1 billion.
Fannie Mae: $64.8 billion to $700 million.
Merrill Lynch: $63.9 billion to $24.2 billion
Freddie Mac: $41.5 billion to $300 million.
Lehman Brothers: $34.4 billion to $2.5 billion.
Washington Mutual: $31.1 billion to $2.9 billion
It is staggering when you look at it all together, and when you realize that the companies still standing like Bank of America and Citgroup, have seen bigger market cap declines than some of the institutions that have gone under (Lehman Brothers) or that had to be bailed out (Fannie Mae, Freddie Mac). For the estimated 150,000 financial sector employees who have already lost or will lose their jobs this year, the outlook is bleak. (Although, First Round Capital and Union Square Ventures are already openly trying to recruit a select few of them for their portfolio startups—quant jocks are especially welcome)."
Although it says $4 trillion, apparently it's $5 trillion now.
|
Don't worry, Bill Gates will save us.
|
Where does all that money go? does that mean recession or something
|
|
|
Thanks god the fundamentals are strong and that its mostly mental
|
The thieves in the American government are taking most of it.
|
|
|
the financial sector is only a small part of the economy, but the government shouldn't keep bailing out these companies. "moral hazard"
|
|
|
Why is this happening, are we in recession.
|
On September 18 2008 08:54 Caller wrote:
buy gold and silver
people have been saying to buy gold for some time now but ive never quite understood why. can you or someone else explain please?
|
On September 18 2008 08:51 kpcrew wrote:
the financial sector is only a small part of the economy, but the government shouldn't keep bailing out these companies. "moral hazard"
the problem is, every sector in the economy relies on the financial sector. only a very very selected few companies have no bank loans (or dont need one. ie microsoft and berkshire hathaway). most companies rely on bank's money to finance their operations and growth. if the financial sectors get raped up the ass, guess how are they gonna make up for it?
bailouts are a moral hazzard but the US gov have no choice. loans and mortgages are backed by collaterals and are teh most secured of all investments. if the US gov dont back em, no other investment in the US is safe. foreign investors are gonna doubt the US econ too. China and Japan will stop buying US bonds (cause the US gov wont back em up) when that happens... the US econ will b fucked beyond anything you can imagine.
|
On September 18 2008 08:43 thoraxe wrote:
Don't worry, Bill Gates will save us.
He's rich as fuck but he doesn't have that much money unfortunately. His net worth is like 50-something billion $$$. Which is a penny compared to 4 trillion O_O
|
On September 18 2008 08:59 statix wrote:people have been saying to buy gold for some time now but ive never quite understood why. can you or someone else explain please?
gold and silver are the universally accepted currency. the US dollar is backed by the US econ, when the US econ fails, US dollar is just paper money. gold and silver is different. the price of gold relative to US dollar changes each year due to strenght of US econ, but if you compare gold to bread and butter, you will see that the value of gold always raises consistently or stay about the same. 1 once of gold can buy u 100 loaf of bread in 1900, it can still buy you 100 loaf of bread today. in contrast, 1 us dollar buy you 10 loaf of bread in 1900, it buy you 1/2 of a loaf of bread today. thus, when in doubt, covert you cash to gold.
thus, unlike paper money (ie US dollar), gold is a hard asset. gold also has alot of industrial and commercial use, so the value of gold never plumets in real term.
|
i know.
i said shouldn't because they only encourage risky behavior
but i do understand that the government has to, to prevent an economic meltdown. but if the next crisis is even worse, and people expect the government to bail these institutions out again, then there might be no solution to the problem and the only outcome would be economic failure.
also people say buy gold because gold retains its value, currency does not due to inflation. currency is a guarantee by the government that this rag contains purchasing power and you can exchange it for goods and services
|
On September 18 2008 09:08 kpcrew wrote:
i know.
i said shouldn't because they only encourage risky behavior
but i do understand that the government has to, to prevent an economic meltdown. but if the next crisis is even worse, and people expect the government to bail these institutions out again, then there might be no solution to the problem and the only outcome would be economic failure.
also people say buy gold because gold retains its value, currency does not due to inflation. currency is a guarantee by the government that this rag contains purchasing power and you can exchange it for goods and services
the problem with the US dollar now is that with so much gov debt outstanding, you need to pay alot of interest on that money and so with many companies to bail out, you need even more money. the amount of output in the US econ is relatively fixed in the short run (ie +/- 4% year over year). if the US needs another $500B to bail out companies, the US econ needs to produce $500B worth of goods to back it up. if not, then there will be inflation.
this is a downward spiral. because after the US gov bail em out, the US gov incur more debt. the debt incur more interest, the gov will be forced to print more money, which lead to even higher interest and even more debt and we are back to square 1.
|
On September 18 2008 08:59 statix wrote:people have been saying to buy gold for some time now but ive never quite understood why. can you or someone else explain please?
If you have physical gold and silver, when the fiat currency we now have becomes worthless, you will still have a viable source of money. That's the idea.
To the OP it's not just one person that is responsible. It's the heads of unimaginably greedy companies that made loans, which should never have been made, to make their own pockets fatter. They were giving 200k+ loans to people who made 30k a year. How the fuck are they going to pay that off? Especially when that 2.5% APR jumps to a 9.5%?
|
I read this somewhere, and I thought it was a really good assessment of the actions of the Fed on investment companies. The Fed's new motto?
Privatize gains, socialize losses.
By not letting risky firms fall we are saving a credit crash, but also giving a bad message to corporations that if they make enough and factor in large enough to the American economy, they can take all the risks they want.
|
you know, this is kinda like bank robbery.
a bunch of managers walked into a bank, blew open the vault to enrich themselves. they tried to walk out with the money, but failed. now they hold the public as hostage and threaten to kill the US econ. the Feds had no choice but to grant amnesty. the managers walk away free and the public ends up paying for all the damage.
|
On September 18 2008 09:45 dybydx wrote:
you know, this is kinda like bank robbery.
a bunch of managers walked into a bank, blew open the vault to enrich themselves. they tried to walk out with the money, but failed. now they hold the public as hostage and threaten to kill the US econ. the Feds had no choice but to grant amnesty. the managers walk away free and the public ends up paying for all the damage.
as an addendum, the managers actually walk away free and with an endless amount of green
|
|
|
|
|
|
EPT
