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Old 09-19-2008, 07:32 PM   #1
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Seriously

NYTimes, Sept.19,2008


"Mr. Bernanke and Treasury Secretary Henry M. Paulson Jr. had made an urgent and unusual evening visit to Capitol Hill, and they were gathered around a conference table in the offices of House Speaker Nancy Pelosi.

"The congressional leaders were told,"that we're literally maybe days away from a complete meltdown of our financial system, with all the implications here at home and globally."

Mr. Schumer added, "History was sort of hanging over it, like this was a moment."

When Mr. Schumer described the meeting as "somber," Mr. Dodd cut in. "Somber doesn't begin to justify the words," he said. "We have never heard language like this."

"You have the credit lines in America, which are the lifeblood of the economy, frozen." Mr. Schumer said. "That hasn't happened before. Itís a brave new world. You are in uncharted territory, but the one thing you do know is you can't leave them frozen or the economy will just head south at a rapid rate."

(Excerpted from the NYTimes)


This reminds me that I made an earlier post called, "Somethings Wrong" back in the summer of 2006 I think it was. Someone responded to this by saying if I didn't stop posting this kind of stuff no one "would take me seriously".

boont
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Old 09-19-2008, 07:38 PM   #2
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can you please post the NYT link so we can read the entire article?
thanks
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Old 09-19-2008, 07:41 PM   #3
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Quote:
Originally Posted by boont View Post
This reminds me that I made an earlier post called, "Somethings Wrong" back in the summer of 2006 I think it was. Someone responded to this by saying if I didn't stop posting this kind of stuff no one "would take me seriously".
I don't know about that, but I'm pretty sure repeated posts of "I told you so" will up your standings on the most ignored list.
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Old 09-19-2008, 08:36 PM   #4
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Quote:
Originally Posted by boont View Post
NYTimes, Sept.19,2008


"Mr. Bernanke and Treasury Secretary Henry M. Paulson Jr. had made an urgent and unusual evening visit to Capitol Hill, and they were gathered around a conference table in the offices of House Speaker Nancy Pelosi.

"The congressional leaders were told,"that we're literally maybe days away from a complete meltdown of our financial system, with all the implications here at home and globally."

Mr. Schumer added, "History was sort of hanging over it, like this was a moment."

When Mr. Schumer described the meeting as "somber," Mr. Dodd cut in. "Somber doesn't begin to justify the words," he said. "We have never heard language like this."

"You have the credit lines in America, which are the lifeblood of the economy, frozen." Mr. Schumer said. "That hasn't happened before. Itís a brave new world. You are in uncharted territory, but the one thing you do know is you can't leave them frozen or the economy will just head south at a rapid rate."

(Excerpted from the NYTimes)


This reminds me that I made an earlier post called, "Somethings Wrong" back in the summer of 2006 I think it was. Someone responded to this by saying if I didn't stop posting this kind of stuff no one "would take me seriously".

boont

Here's a link to the NYT article

http://www.nytimes.com/2008/09/20/wa...20words&st=cse



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Repeated?
Old 09-19-2008, 09:31 PM   #5
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Repeated?

"repeated posts of "I told you so""

I'm pretty sure this was the first time I have ever referred to an earlier post of mine suggesting that we had a problem.

The much more important point is to try and understand what the hell is going on. I too had trouble reaching Vanguard this morning and that is not a good thing.

What I would really like is for someone, who is a lot smarter than me, to explain what Credit Default Swaps are.

I can give you a definition and I have read a lot about them but I cannot explain why they are slowly, and not so slowly, destroying the global financial system.

How can Swaps go from billions owed, to trillions owed, as they are sold and resold to various parties?

boont
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Old 09-19-2008, 09:56 PM   #6
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Originally Posted by boont View Post
"repeated posts of "I told you so""

I'm pretty sure this was the first time I have ever referred to an earlier post of mine suggesting that we had a problem.
Hey, you did it again!

Just kidding...
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Old 09-20-2008, 05:28 AM   #7
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[quote=boont;717266What I would really like is for someone, who is a lot smarter than me, to explain what Credit Default Swaps are.

I can give you a definition and I have read a lot about them but I cannot explain why they are slowly, and not so slowly, destroying the global financial system.

How can Swaps go from billions owed, to trillions owed, as they are sold and resold to various parties?

boont[/quote]
I'm not an expert on CDSs, but i believe the reason they fluctuate as you mention is that they are being used in many cases as speculative investments rather than true hedges.

They are financial derivatives, and are not collateralized. As a result, the value can change with perceived creditworthiness. With these changes, gains/losses can change hands as they are resold to various parties. I woudn't say that they go from billions to trillions "owed", but certainly the values gained/lost can go from billions to trillions.
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