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Is The Global Financial Crisis A Hoax?

I am beginning to think it is

I think some smart people out there are trying to scare everybody.

Methinks some rich cats have withdrawn some huge money from the system,

create the pre-determined situation and make so much money out of the chaos and restore the status quo

Knowing that the present American, British and Japenese governments are almost lameducks

Coming back home, the senate is negotiating a N300bn bail-out!

Bail-out from what?

Who benefit from this bail-out?

Same set of people

And what happens to the average Nigerian?

What do you think?

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20 answers

Great post Gekko

That was what I was alluding to!

People at the financial pyramid are colluding to manipulate the global financial system!

I think they have one/two objectives

One, to change the fat cows at the helm of the pyramid and replace them with themselves or others

Two, change the global financial power base (US)!

It is getting obvious from all these that US, has seized to become the apex of the financial world

There are other emerging power houses - China and Russia and to some lesser extent, Germany, India and Brazil

The sooner we realised this, the better for all

I am not a financial expert o!

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The problem in the automotive industry is not GM's alone.

Even the rampaging Toyota has suffered steep losses in market shares

and its stock price as well as those of the other big auto makers in Japan

are at the vanguard of the freefalling Nikkei

Oil coming down should be seen as a good thing cause it was largely responsible

for the higher headline inflation numbers that particularly held the unbelievably hawkish

and irrational ECB president in check.

You do have a point, the excesses of the recent credit bubble need to be extinguished from

the system, that said, not at the alarming irrational rate at which the process is going at the moment.

All it would take is for some contrarians to take bullish bets on select equities and we might be going up

almost as fast as we have come down.

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The crisis is now spilling over to other sectors.

Dow's 600+ point fall yesterday was largely due to a downgrade by standard and poors on GM (General Motors owner of ford, hummer, land rover). Just imagine that their shares is currently at the same level it was @ in the 1950's meaning if you bought their shares in the 50's the value will be zero @ that moment.

You really need to pay close attention to the world economies as the governments have actually started forward planning in terms of mass unemployment. In the Uk, they are training job centre staffs on how to handle the influx of unemployed people. They are even willing to pay for unemployed people's mortgage of up to £175k after being on the dole for 13 or so weeks.

I really do feel though that the market does need this massive correction as the era of massive bonuses and wage inflation ought to be eradicated.

Look @ petrol prices, they have suddenly dropped from the highs seen not to long ago to barely the lowest levels seen over a year ago (brent crude is currently trading below $80 per barrel)

The major currencies are currently free falling and you still think it's an hoax. The relationship with major currencies and the market is for example;

if the value of dollar v yen is "98.01" meaning the yen has risen considerably higher to levels not seen in ages. It will affect the japanese economy because a high currency will make export fees considerably higher to america as most of their manufacturing companies export their goods to the number 1 consumer (USA)

Another big implication of this crisis is banks unwilling to lower the "LIBOR" rate (interest rate at which banks lend each other money) cause of lack in trust (no bank would want to lend its competitor money when the bank seeking for loan might actually be exposed to the sub-prime mortgage crises which could eventually lead to collapse of the bank cos of dried up funds)

Banks need to borrow each oothermoney so the economy can function properly in terms of people getting mortgages, being able to get deserved credits, small business being able to function properly. All these are the main component of growth in employment which in turns feeds into the annual growth of any economy)

All is not lost though. My advice for people in america is to buy GM shares as i strongly believe the FED/government will not let it go bankrupt as they employ quite a lot of people and if its ever allowed to happen will send shiver down through the already tense market.

As per Nigeria, all markets are related one way or the other. Nigerian banks might not be exposed to the financial crises but slow down in other key factors like (crude oil, some soft commodities will definitely affect the emerging markest like Nigeria)

I hope you can understand my rambles. Please do feel free to come back with any other questions if still unclear

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Well if one looked at the equity markets alone, one would think the roof is about to cave in.

But it has become obvious no bank will be allowed to fail anymore so the falls in stock prices

are largely irrational.

Even more irrational is the reticence of the banks to lend to each other despite the assurances by

the Fed and other central banks in the world that it would do everything in its power to ensure liquidity

in the system as well as  the rescue plan which would buy all the toxic assets on the banks books that has given

them the jitters.

I maintain, the worse case scenario isn't even close. Sovereign wealth funds all over the world

have trillions of dollars and there is no bed in the world under which that amount of dough will be kept. These monies

have to be invested and very soon, people will start to look at equities again when they realise the yields on Fed Treasuries

are piss poor relative to other securities.

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And who do banks lend money to?

Who do banks give money to?

Whose money do banks store?

Ans: Everyone out there. Other companies in other sectors. It's a domino effect.

One bank goes down, thousands of small businesses are threatened. Market declines sharply, stock portfolio drops like a rock.

Shares of companies like Toyota and Nintendo are down in Japan. Not because these companies are threatened, but for fear that since this financial woes started, consumers will hold off buying new cars. As banks become unwilling or unable to hand out loans, sales of cars, plasma TVs and other luxury good will be threatened.

It doesn't stop at the banks alone. You have to consider what the effect is on the financial market in it's entirety. Why do u think the US government could not let AIG fail?

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The only institutions that are collapsing are banks. . . . .companies from other sectors of the economy aren't

The point I have been trying to make is. . . . . .the world is no more leveraged than it was two to three years ago

when banks and even hedge funds were lending at close to zero percent.

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Your initial post was more about insinuating that the crisis is a hoax, despite the overwhelming evidence the contrary.

Hopefully someone more well versed in financial matters explains this to you so you see the gravity of the situation.

If no one else steps up, i'll try and dig up a good answer. it'll benefit me too.

No one is saying France will collapse, or the US will collapse. What is happening is that banks in the US, UK and many EU countries are going under. The Markets are taking big hits and many companies are going bust. Along with the demise of the banks, many depositors lose money, many shares portfolios and pension funds lose lots of value. Panic sets in and people are selling and divesting as quick as they can. That is where the crisis comes from. Jobs are being lost like wildfire.

No one is talking about calling in loans made to countries. People are talking about the Global markets taking hit after hit, about people losing life savings, about reduced demand for goods and a spreading fear of the banking sector collapse.

Had i not been informed that you reserve this line for close family members, i might have been offended.

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Thats what I just did

Can you explain the "global" financial crisis is all about?

In a layman's language

And when you are at it, answer my previous questions

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@oldie

if you don't understand the current tumoil in the financial sector then I'd advice you to ask so u can be enlightened.

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The recent events have shown that the people managing the economy are not that very bright!

Or they are bloody crooks

Nobody saw this coming?

It is strange.

B T W, you don't have to be too bright to make money from the system

Crooks make quick and more money from the system than the bright ones!

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what I don't get with the Nigerian 'bail-out' is what/who exactly do they want to bail out?

hope they are not doing it for the sake of doing it

I had the misfortune of watching the senate/house of assembly yesterday

and all the could do was refer to the American bail-out with no real explanations

or understanding of what is happening exactly!

The companies are declaring profit, there is liquidity in the market

Apart from their foreign credit line I don't know what more they need

help with at the moment, tehse companies dont have bad loans tied to mortgages

their loans are tied to stock trading and i'm sure they can restructure without a bail-out!

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I still think this is a global 419

How come only the banks and mortgage houses are hit

Some people are manipulating the system and hitting the vulnerables

to have the desired effect

How come the blue chips are not tumbling?

Can someone educate me more?

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No wonder we are in a mess in Nigeria, If this are the future of Nigeria.

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It is no hoax - things are MUCH worse than when times were 'good' - millions of people have spent more than they can repay, thousands of bankers/lenders have made loans which are not repayable, sold them off to unknowing buyers halfway around the world, and governments have continually relied on more spending to grow economies, not increased productivity per se.

Couple all that with an natural cyclical slowdown in world economies, inflated commodity and energy prices, greedy traders/bankers and a generous dose of fear/paranoia and you have the current mess.

Its not going to be pretty and a heck of a lot of people are still going to be badly affected before this storm dies down - things might never be the same again in the world financial systems.

Note: The senate/government has denied any involvement in a 'bailout' - there is essentially nothing to bail out anyways, Nigerian stocks are simply observing a natural correction cycle after years of bumper growth in share prices not backed by commensurate economic/earnings growth. Speculation and bank loans caused this mess and things have to return to order.

Interestingly enough, there is little/no connection between Nigeria's mini-slump in the stock market and the wider financial crisis rocking the world.

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Brilliant!

In a few short words you have managed to defuse and decipher the global financial crisis, something hundreds of experienced analysts and economists have failed to resolve.

Kindly proceed to Geneva to collect your Nobel Prize.

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Its a hoax insofar as things are not worse than there were when the times were good

All of a sudden, the world seems to realise it is overleveraged and everyone is worried counterparties

will not be able to service their debts regardless of what credit rating they have.

Hogwash.

Anyways nobody panic. . . . .Until one of the lenders to the most indebted entity in the world(namely the United States)

starts to wonder if it will get paid.

Then people, be afraid, be very afraid.  . . . . . .Buhahahahahahahahahahahahahah

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Yep, it is all a hoax!!! Now we can all sleep soundly.

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Markets are going down, economies are crashing. Banks are going bankrupt, hundreds of thousands of jobs are being cut. Oil prices are crashing, heads of State are frantically calling meetings, Wall Street in turmoil. . .in short the whole financial world is going up in flames.

And you think it's all a 'hoax'

I think you aren't bright enough to think for yourself.

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True especially the Nigerian one!! some share certificates are still in their office after 12months!!!

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I dont think it is.

The world is going through some kinda of sickness in the economy, and needs some medication from the govts, the G& leader i blv are meeting this week to find a way out.

However, the stimulus packages wont even affect the economy for another months to come.

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