cacruden
Senior Member
This is of course one of the reasons for a credit squeeze - and of course if you increase the capital requirements right now - you will have just made the squeeze worse.
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Financial Crisis
- Thread starter BobBob
- Start date
kEiThZ
Superstar
Ultimately, the simplest avoidance I could see was for Greenspan to have kept rates higher and let the economy go deeper into recession in 2002. It would have kept the discipline about the market, and millions of uncreditworthy individuals would not have been able to afford even the ARMs. Really, having a negative real interest rate was ridiculous......
kEiThZ
Superstar
Agreed, this is not the solution for right now. But down the road, there should certainly be some re-evaluation of the capital requirements. Perhaps if banks are going to be allowed to dabble in risky investments they should have higher capital requirements. That would still leave non-bank players like AIG. And I don't know how one could prevent that kind of a case short of outright prohibition of insurance companies investing their funds, which of course is rather impractical.
There's also the Fannie Mae/Freddie Mac issue. It never ceases to amaze me that the US federal government backs two private mortgage insurers, allows them to set their own policies, gives them mandates that do not make financial sense (Bush's ownership society madness), allows them to compete with each other and then when all that fails bails them out without so much as a slap on the wrist (being investigated is hardly a consequence). They would be so much better off with an arms length state owned enterprise like CMHC. If they ever get over the lunatic views that government should never be involved in the market, maybe they'll finally have that solution.
cdr108
Senior Member
cacruden
Senior Member
My target is 9,000 - which is about where I think the market will bottom out. Panic is usually just before the bottom.
Solaris
Senior Member
Toronto Star - TSX down more than 1,000 points
eeeks
**********
Pessimism puts Dow, TSX below 10,000 for first time in more than 4 years
Oct 06, 2008 10:11 AM
Kristine Owram
THE CANADIAN PRESS
The Toronto stock market plunged Monday amid a global stock-market slump and falling crude oil prices, which slid below $90 a barrel for the first time since early February.
The S&P/TSX composite index fell more than 1000 points to below 10,000, as crude oil was down $2.83 to $91.05 a barrel after earlier going as low as $88.89.
Oil prices have tumbled about 40 per cent since peaking in July, on fears the spreading financial crisis will aggravate a worldwide economic slowdown and cut demand for energy.
The TSX Venture Exchange plunged 70.45 points to 1,229.78 while the Canadian dollar fell 0.95 cent to 91.51 cents US.
In New York, markets were also lower amid deepening bank-sector woes and investor worries that the Bush administration's $700-billion rescue plan for financial institutions won't unfreeze credit markets.
The Dow Jones industrial average fell below 10,000 while the Nasdaq composite index lost 53.9 points to 1,893.49. The S&P 500 was down 30.35 points to 1,068.88.
In economic news, the value of building permits issued by Canadian municipalities tumbled 13.5 per cent in August compared with July. On a year-to-date basis, permits are down 0.7 per cent from 2007.
And in fresh steps to ease the credit crisis, the U.S. Federal Reserve announced it will begin paying interest on commercial banks' reserves and will expand its loan program to squeezed banks.
The $700-billion bailout bill signed Friday by President George W. Bush gave the Fed the power to pay interest on those reserves for the first time.
Anxiety remained high in credit markets. The yield on the three-month Treasury bill slipped to 0.4 per cent from 0.5 per cent late Friday.
On the TSX, the energy sector lost 7.3 per cent. Suncor Energy (TSX: SU) was down $3.49 to $32.95 while Canadian Natural Resources (TSX: CNQ) fell $6.78 to $57.14.
The gold sector was up 4 per cent as bullion gained $40 to US$873.20 an ounce on the Nymex. Goldcorp (TSX: G) was up $1.74 to $30.60 while Barrick Gold gained $1.70 to $30.56.
The metals sector fell 4.5 per cent. Sector heavyweight Teck Cominco (TSX: TCK.B) was down $1.43 to $21.65.
Coalcorp Mining Inc. (TSX: CCJ) was down 17 cents to $1.13 after Swiss group Pala Investments Holdings Ltd. more than doubled its stake in the company to 44 per cent with a $52.9-million share purchase.
Jean Coutu Group (TSX: PJC.A) shares were down 32 cents to $7.10 after a summer-quarter net loss of $39.1 million, dragged down by its $73.1-million share in the loss of American drugstore chain Rite Aid Corp. Revenue from Coutu's Canadian operations rose five per cent to $567.5 million.
Overseas, the FTSE 100 index was down 2.9 per cent, while Germany's DAX index fell 5.2 per cent and the French CAC-40 dropped 5.6 per cent after European governments acted to limit the damage from the growing global financial crisis.
Over the weekend, governments across Europe rushed to prop up failing banks. The German government and financial industry agreed on a massive bailout for commercial property lender Hypo Real Estate Holding, while France's BNP Paribas agreed to acquire 75 per cent of Fortis's Belgium bank after a government rescue failed.
The governments of Germany, Ireland and Greece also said they would guarantee bank deposits.
In Asia, the Nikkei 225 closed 4.25 per cent lower.
In U.S. corporate developments, Wells Fargo & Co. said its takeover of Wachovia Corp. will go forward after a state appeals court blocked a lower court ruling that favoured rival bidder Citigroup Inc.
And Eli Lilly & Co. said its board approved an acquisition of ImClone Systems Inc. for more than $6 billion.
eeeks
**********
Pessimism puts Dow, TSX below 10,000 for first time in more than 4 years
Oct 06, 2008 10:11 AM
Kristine Owram
THE CANADIAN PRESS
The Toronto stock market plunged Monday amid a global stock-market slump and falling crude oil prices, which slid below $90 a barrel for the first time since early February.
The S&P/TSX composite index fell more than 1000 points to below 10,000, as crude oil was down $2.83 to $91.05 a barrel after earlier going as low as $88.89.
Oil prices have tumbled about 40 per cent since peaking in July, on fears the spreading financial crisis will aggravate a worldwide economic slowdown and cut demand for energy.
The TSX Venture Exchange plunged 70.45 points to 1,229.78 while the Canadian dollar fell 0.95 cent to 91.51 cents US.
In New York, markets were also lower amid deepening bank-sector woes and investor worries that the Bush administration's $700-billion rescue plan for financial institutions won't unfreeze credit markets.
The Dow Jones industrial average fell below 10,000 while the Nasdaq composite index lost 53.9 points to 1,893.49. The S&P 500 was down 30.35 points to 1,068.88.
In economic news, the value of building permits issued by Canadian municipalities tumbled 13.5 per cent in August compared with July. On a year-to-date basis, permits are down 0.7 per cent from 2007.
And in fresh steps to ease the credit crisis, the U.S. Federal Reserve announced it will begin paying interest on commercial banks' reserves and will expand its loan program to squeezed banks.
The $700-billion bailout bill signed Friday by President George W. Bush gave the Fed the power to pay interest on those reserves for the first time.
Anxiety remained high in credit markets. The yield on the three-month Treasury bill slipped to 0.4 per cent from 0.5 per cent late Friday.
On the TSX, the energy sector lost 7.3 per cent. Suncor Energy (TSX: SU) was down $3.49 to $32.95 while Canadian Natural Resources (TSX: CNQ) fell $6.78 to $57.14.
The gold sector was up 4 per cent as bullion gained $40 to US$873.20 an ounce on the Nymex. Goldcorp (TSX: G) was up $1.74 to $30.60 while Barrick Gold gained $1.70 to $30.56.
The metals sector fell 4.5 per cent. Sector heavyweight Teck Cominco (TSX: TCK.B) was down $1.43 to $21.65.
Coalcorp Mining Inc. (TSX: CCJ) was down 17 cents to $1.13 after Swiss group Pala Investments Holdings Ltd. more than doubled its stake in the company to 44 per cent with a $52.9-million share purchase.
Jean Coutu Group (TSX: PJC.A) shares were down 32 cents to $7.10 after a summer-quarter net loss of $39.1 million, dragged down by its $73.1-million share in the loss of American drugstore chain Rite Aid Corp. Revenue from Coutu's Canadian operations rose five per cent to $567.5 million.
Overseas, the FTSE 100 index was down 2.9 per cent, while Germany's DAX index fell 5.2 per cent and the French CAC-40 dropped 5.6 per cent after European governments acted to limit the damage from the growing global financial crisis.
Over the weekend, governments across Europe rushed to prop up failing banks. The German government and financial industry agreed on a massive bailout for commercial property lender Hypo Real Estate Holding, while France's BNP Paribas agreed to acquire 75 per cent of Fortis's Belgium bank after a government rescue failed.
The governments of Germany, Ireland and Greece also said they would guarantee bank deposits.
In Asia, the Nikkei 225 closed 4.25 per cent lower.
In U.S. corporate developments, Wells Fargo & Co. said its takeover of Wachovia Corp. will go forward after a state appeals court blocked a lower court ruling that favoured rival bidder Citigroup Inc.
And Eli Lilly & Co. said its board approved an acquisition of ImClone Systems Inc. for more than $6 billion.
cacruden
Senior Member
BTW that was DOW 9000 - Canadian exchange was much more inflated due to resources. Ours depends on resources
Dichotomy
Banned
Okay, now I wish I'd put my money under the mattress two months ago.
Prometheus The Supremo
►Member №41+⅜◄
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the biggest threat to america is not terrorism, illegal immigration or introduction non-christian values such as allowing gay marriage or secular initiatives like trying to get 10 commandment monuments moved off of public property . the biggest threat to america is its self. these banks have done more damage to america than bin laden could have ever hoped to do.
Urban Shocker
Doyenne
I love a good financial meltdown as much as the next guy, but ours isn't yet anywhere near as bad as the one brewing in Britain - where I just spent a couple of doomy and gloomy weeks. House prices have fallen by 12% over the past year, people have been shifting their savings to Irish banks, and voters are so desperate they may actually turn to the Conservatives for salvation.
Mot
Active Member
How about you start by telling us how right wing Laissez-Faire captalism is not at fault for this serious economic crisis. Some right wingers on here a few short weeks ago claimed it wasn't that serious a crisis.
When you let the fox run the hen house this is what happens.
Dichotomy
Banned
I said this before and I will repeat it: economic conservatives and social liberals make strange bedfellows.
More than just the bankers are at fault here. Everyone who has demanded lower prices through Wal-Mart or bought a foreign built car are complicit here: how else did you think America (and to a lesser extent, Canada) were going to pay for this huge current account deficit that we have been running for the past several years?
Do the math: if all the 'real' jobs are off-shored and all we are left with are paper jobs (oh, and those great "would you like fries with that?" jobs), how are we supposed to pay the bills?
The chickens have come home to roost, is all.
More than just the bankers are at fault here. Everyone who has demanded lower prices through Wal-Mart or bought a foreign built car are complicit here: how else did you think America (and to a lesser extent, Canada) were going to pay for this huge current account deficit that we have been running for the past several years?
Do the math: if all the 'real' jobs are off-shored and all we are left with are paper jobs (oh, and those great "would you like fries with that?" jobs), how are we supposed to pay the bills?
The chickens have come home to roost, is all.
Glen
Senior Member
Absolutely correct!
The nonsense from both sides is ridiculous. We don't want our companies to have poor labour and environmental regulations, yet we freely allow such practices by proxy. It is time for Canada (and the West) to except that such ideals have a cost. We can pay up front, by means of higher prices but keep jobs here or we can pay lower prices and face job losses. The first choice would mean that we actually care about the ideals espoused. The second choice proves that it is lip service. WTO polices that do not account for price and currency fixing along with collusion taken together with misguided policies like Kyoto is what is ruining Canada.
cacruden
Senior Member
Just hope the markets don't do any more bouncing back yet (for 5 days), my money is in transit from Term Deposits to a brokerage account as we speak
cdr108
Senior Member
Just hope the markets don't do any more bouncing back yet (for 5 days), my money is in transit from Term Deposits to a brokerage account as we speak
Why would you put your money in a brokerage account at this time, in this environment, unless you're planning to short or do some trading.
It's way too early to go long .... catching a falling knife.
The markets will do bounces in the short term, ie. bear market rallies, but economic fundamentals are not there for recovery and growth.