Great Depression ...Another one??

[Miami]

I am not sure if some of you have heard in the recent news of two banking companies in the US failing due to the credit crunch, and so on..

The latest outbreak of financial turmoil sent London's FTSE 100 Index plunging nearly 4%.
It forced the Bank of England to pump an extra £5bn into panicked money markets.
The European Central Bank added a further £25bn in a bid to calm traders.

The future of around 4,500 UK staff of 158-year-old Lehman bank looked bleak as PriceWaterhouseCoopers (PwC) were called in as administrators of four UK subsidiaries. Lehman Brothers now joins nationalised Northern Rock and US rival Bear Stearns - which hit trouble in March - on the casualty list following a year of turmoil.
Fellow US investment bank Merrill Lynch - another victim of heavy losses linked to the US housing market - was also bought by Bank of America in a deal worth $50bn (£28bn).

There were also fears giant US insurer AIG could face collapse.

The firm, whose shares nearly halved last week, is taking steps to raise money amid reports it is seeking a $40bn emergency loan from the Fed.

In other words, share prices have recently been dropping, alot.. All the employees of Leyman bank, something over 25,000 were all layed off and lost their jobs..

Last week, it posted a third quarter loss of £2.2bn with a £3.9bn hit from sliding commercial property and sub-prime mortgage investments - sending its shares plummeting more than 90%.

London's major banking stocks took a stock market pounding, with Halifax Bank of Scotland down more than a third at one point before closing 18% down.
Royal Bank of Scotland and Barclays fell 12% and 10% respectively after recovering from heavier falls earlier.

This is beginning to look like the reccession in 1929.. The Great Depression.
Companies and Banks are failing.. and people looseing money.. Pension funds dropping

If it continues to drop - the stock market will crash.. resulting is a massive blow the economy worldwide.

What are all your views of this?
What do you think will happen? With already two banks failing, one of them completly bankrupt.. do you think the stock market WILL crash and result in another Great Depression?

[FlameMan]

Ye i just 5 minutes ago heard this information in Polish TV.
It reminds me great stock exchange crunch (dunno it in english, i learned about it in History lesson) in 20th century, what has done much, much bad things in whole world..

I really hope it will not finish the same...

[JayL]

I am pissed off with that. I invested in stock here in Brazil, and due to all that crysis of these banks the stock went -10% yesterday in the Stock Exchange... I'm loosing a lot of cash...

Bye my sweet money...  :money: :money: :money:

And yes, the Stock Market is fucked up already. And it's getting worse.

I lost craploads of cash in the last days... God damn it.

[Mclovin]

I have a feeling that everything will be ok 
i hope this is the end of failing banks 
It does remind me of when i read about this in history of it happening years ago
but hey look in the brightside at least we have some money unlike those in starving countrys 

[Cr4ig0]

hmz, i've been saving up for rock band and i'm hopefully gonna get it for xmas but by then maybe it will be like 300 pounds or something

[schfifty]

ALERT: The US Federal Government has just granted AIG, the largest Insurance company in the United States, an emergency loan of 85 Billion Dollars in light of the worries that it may also go bankrupt.

This is a great depression, only this time, we have a plan and security measures to keep our economies afloat. This happened in the 80's and we got out of it then and we will now too.

There is one difference though. When the great depression hit, in the years before, the stock market kept climbing and climbing and climbing. You could literally put money in, and expect to gain money out of it within a month. It was a great way to make cash. Then, suddenly, it fell instantly. People rushed to sell their stocks which ruined things even more. Then, people ran to withdraw all of their money from the bank. The banks soon ran out of money. The government could do nothing. Unemployment rate = EXTREMELY HIGH. People committed suicide because they felt like failures. Kids left home. Failure to do crop rotation soon caused a massive dust storm to wipe out a large supply of crops. Farms were lost. Homes were lost. The current president was blamed. A new one comes in and creates a plan to get us out. Supreme court rules it unconstitutional. He appoints several more of his own judges. Things begin to semi-stabilize but the great depression rolls on. WORLD WAR TWO HITS. Hundreds of Thousands of jobs are created for everyone in America and the world alike. By the end of world war two, the depression was over.

You can probably tell several differences. For one, the stock market hasn't crashed though, in the 80's , it did and it may do so in this year. Homes are being foreclosed on, and banks are becoming stricter and stricter. The banks are NOT running out of money in US. We can thank the FDIC for that. The FDIC is also being stricter and stricter. IRS, stricter and stricter. Farms are being lost, but no dust bowl. No reports of suicides. Etc Etc Etc.

As you can see, there aren't that many big similarities to the Great Depression because now, we know what to expect. I bid you good luck in your own countries and may a crash of the stock market, never come.

[Proxan]

ALERT: The US Federal Government has just granted AIG, the largest Insurance company in the United States, an emergency loan of 85 Billion Dollars in light of the worries that it may also go bankrupt.

This is a great depression, only this time, we have a plan and security measures to keep our economies afloat. This happened in the 80's and we got out of it then and we will now too.

There is one difference though. When the great depression hit, in the years before, the stock market kept climbing and climbing and climbing. You could literally put money in, and expect to gain money out of it within a month. It was a great way to make cash. Then, suddenly, it fell instantly. People rushed to sell their stocks which ruined things even more. Then, people ran to withdraw all of their money from the bank. The banks soon ran out of money. The government could do nothing. Unemployment rate = EXTREMELY HIGH. People committed suicide because they felt like failures. Kids left home. Failure to do crop rotation soon caused a massive dust storm to wipe out a large supply of crops. Farms were lost. Homes were lost. The current president was blamed. A new one comes in and creates a plan to get us out. Supreme court rules it unconstitutional. He appoints several more of his own judges. Things begin to semi-stabilize but the great depression rolls on. WORLD WAR TWO HITS. Hundreds of Thousands of jobs are created for everyone in America and the world alike. By the end of world war two, the depression was over.

You can probably tell several differences. For one, the stock market hasn't crashed though, in the 80's , it did and it may do so in this year. Homes are being foreclosed on, and banks are becoming stricter and stricter. The banks are NOT running out of money in US. We can thank the FDIC for that. The FDIC is also being stricter and stricter. IRS, stricter and stricter. Farms are being lost, but no dust bowl. No reports of suicides. Etc Etc Etc.

As you can see, there aren't that many big similarities to the Great Depression because now, we know what to expect. I bid you good luck in your own countries and may a crash of the stock market, never come.

Interesting reading... I remember we worked with this in school about a couple of years ago...

Anyway I really hope it wont crash again... Even if you know how to deal with it there will be consequences..

[Hess]

Yeah, top headlines here... :roll:

[polopolo]

Hmmm... where did I heard that before..

The dutch knew this already for damnit 5 years!!!!

[yt=425,350][/yt]

[schfifty]

Every government knew about it. In our case, bad loans were being handed out left and right.

[Gandalf]

Most of the Western society lives on credit. If there is real estate, it is mortgaged. If you have a problem in paying, the answer is take a loan and invest in the stock market.
There is a problem. Banks earn money by investing it, they give out loans on savings and stocks. There are laws that every bank must keep a reserve (60% to 90% depending on which country), but they give out more money as they have in deposit.
Some money is given as private loans, other invested in stocks. However apart from private loans, banks also get capital from the stock market.
When many people can not repay their debt, the bank is left with a deficit and needs capital. But if the stock market goes down, the bank is left with less capital as needed.
Some banks have taken too high risks, and as a result they go below their reserve margin. This can cause them to go bankrupt.

As long as there are just a few banks going down, the State and other banks will take the blow and blame it on 'risky loans'. But when the money will be unavailable, many banks might get in trouble. As banks invest in each other worldwide, it can be like a domino effect that goes further than one country.

For those who want to trade stocks, invest only if you want to do it for the long term, minimal 10 years.

[schfifty]

As banks invest in each other worldwide, it can be like a domino effect that goes further than one country.

Exactly Right. Because of international enterprise, this effects every country pretty much.