Iceland went bankrupt today...

[wall*e2008]

Haven´t read the entire thread but just wanted to make clear that Iceland is NOT bankrupt. We came pretty close though. All 3 of our biggest banks have been nationalized and we´re going through and extremely rough time, but luckily not bankrupt.

How is your government going to handle $120 billion in bank debt (Iceland was a hedge fund) with a GNP of $20 billion? That is 6Xs the GNP!

 

[Freyja]

How is your government going to handle $120 billion in bank debt (Iceland was a hedge fund) with a GNP of $20 billion? That is 6Xs the GNP!

First of all the government takes over all of the banks assets abroad which actually cover a great chunk of the dept. It will furthermore keep running the banks and thereby take over mortgages and other loans. What seems to have "saved" us is that the government didn´t have any dept, but had actually been run with a profit for quite a few years. As of now it looks like Russia and the IMF will provide us with a loan.

 

[dvcgirl]

For those of you who think this crisis is media generated, you are sadly mistaken. These problems our economy--as well as international economies--is experiencing are related to individuals and companies assuming massive amounts of debt and the creation of exotic financial instruments hustled in the marketplace. (Hey, we've all read posts here, even recently, of people carrying 90K in credit card debt. Don't you really think that's ridiculous? What's that minimum payment look like?) The reason banks can't unload these instruments is that no one wants them; they pretty much have no value. One variety, CDS (credit default swaps) is an insurance but had to be called a swap so the banks could avoid government regulation.

There's an excellent article on the MSN Money Central site written by Jon Markam. Everyone should read it. He details some aspects of the Paulson Plan that Congress finally approved, including provisions placed by the banking lobby to get around the mark-to-market valuations of these derivatives.

While emotion will drive the markets to excess, we're not there yet. Too many of you remain too confident.

We all saw what happened to New Orleans when that city failed to take seriously the warnings that a major hurricane was headed straight for it. See how well ignoring warnings worked for those people. I, personally, want to be informed. I want to know what's coming so I can better prepare myself.

You know, it's kind of funny in a way; I don't recall reading many threads/posts from a couple of years ago (pre-housing bubble burst) where posters complained about the media reporting on how phenomenal the housing or stock market returns were. If the media are unscrupulous now in their reporting, it seems reasonable they were then as well, except investors LIKED those statements.

Oh God, finally a voice of reason. This isn't a game folks. Well, in a way it is a game, a big giant poker game. Think of our economy as a big poker game, with bankers acting as the players. Except in this game we're playing now, the chips are kept off the table, and out of sight from the other players. They bet simply by telling you what they'll pay you if you win the hand. And so if you win, only then will you see if the other player has enough to pay up.

And this is why the game has stopped.....nobody trusts anyone else. The players can only *guess* what the other players hands are, and they can only *hope* that they'll pay up if the other player folds. So, if you've got a strong hand (loads of cash), you just sit out a few hands and wait for the weak players to reveal themselves.

Everything that the governments have tried around the world have only delayed the inevitable. Billions and billions pumped into the world markets to provide liquidity. Not working.....banks are just hoarding the cash. Guess when that happened last? The Great Depression.

Billions and billions in bailouts. None of it has worked. Will things calm eventually? Sure. Should you believe anyone who tells you that this will happen soon? Of course not. Nobody knows....nobody. Keep in mind that Warren Buffet made a 5 billion dollar investment in Goldman over two weeks ago.....the market is down over 20% since then.

Yes, most people are going to work each day, commerce still takes place and life goes on. But this crash will have very, very real effects on our economy. We won't simply bound out of this one and onto the next bubble on our way back to Dow 14,000. This time is different.....

 

[JimFitz]

The world is toast! This is not a dip in the MKT or a correction. The world is leveraged to the hilt and no one is liquid. Greed won.

 

[Bobbysdog]

Your response to people having a desenting view is to kill the first amendment?

Exactly what I was thinking...

The two of you would be well served by reading up on both the intent and the history of the Fairness Doctrine to find out why that is a nonsensical argument.

I would strongly recommend using a different source for your research, since the previous ones that both you relied on to reach your conclusion are doing you no intellectual favors.