Tuesday, September 16, 2008

“It looks as if the prophets of doom may have been right after all. “

Hank Paulson has turned a drama into a crisis

"we are now unquestionably in the worst financial crisis since the Great Depression" Let's not all jump for joy...

Posted by jonathan @ 12:31 AM (556 views)
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4 thoughts on ““It looks as if the prophets of doom may have been right after all. “

  • planning4acrash says:

    Great Depression, Gosh, back in the good old days!

    “The upheaval we are in today could well be as bad if not worse than those of the collapse of the Lombard System in 1348 and the fall of the Hanseatic League in the 1600s. The current debt-based, fiat-money global economy is in the process of collapse and accompanying manipulation will soon come to an end. No fiat currency has ever survived and when it does it will be catastrophic.” Oh boy! From Bob Chapman’s International Forecaster

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  • Interesting how this journalist is changing his tune, although still repeating the old chestnut about economic fundamentals. The most fundamental feature of the economy is the level of debt, hardly an underlying strength.

    The comment below the article asking how speculators can make money by forcing a bank into liquidation is highly apposite now. If shares in a bank are borrowed to sell, and the bank subsequently goes bust, how does the borrower pay back the shares? I don’t know what position legally that would leave the borrower in, but they surely would lose money in that situation.

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  • letthemfall – if the company goes bust the shares are worth nothing so what has been borrowed to sell dont have to be given back as there is nothing to give back. So i short at £1 the company goes bankrupt, the shares are worthless [although in fact they would probably be bought back for a very small amount because as Lehman’s would have shown the values can go down to very small levels] – now although the shares are in theory worthless they could be worth something after liquidation of the assets and the payment of higher ranking creditors (eg HM Customs and excise, Inland Revenue, and employees). So i might do a deal with the company i borrowed the stock from to give them back much less cash, if any. Personally i would just short the stock on the futures exchange then you dont have to deal with all that nonsense. 🙂

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