US can learn from Japan's crisis
 

After Bear Sterns tanks, other investment banks posts large profits. So no bail out. I, for one, am tired of giving taxpayer money to millionaires and billionaires. http://www.discussworldissues.com/fo...lies/angry.gif

Um... I thought we already were injecting public funds?

Originally posted by Aeson
Um... I thought we already were injecting public funds? Indeed we are, but indirectly. The Fed is accepting mortgage-backed securities as collateral for the low-interest short-term loans that it offers.

There is no more excess liquidity, it has already been vaporized by collapsing asset values. In fact, the situation has turned into a full-blown liquidity crisis: it's very very hard to borrow anything from the bank now.

Originally posted by Blake
Solution to excess liquidity = inject more money?

I'm very happy that I don't understand basic economics. If you note the article, the Japanese minister is saying the global excess liquidity is flowing OUT of the United States. So there is no more excess liquidity in the US. As One_more_turn has stated, it is gone in the opposite direction.

Thursday there were some bids for negative returns on 3 month treasuries. A lot of scared money out there right now.

Think of it like this:

When things are going well...

Your neighbor comes and asks you if he can borrow $50 to fill up his gas tank to get to work. You trust him to pay you back, give him the money, he gets to work, and you get your $50 back eventually (maybe with some extra for thanks).

Currently in the US...

Your neighbor comes and asks you if he can borrow $50 to fill up his gas tank to get to work. You pull a shotgun... and tell your neighbor to get off your lawn. Then late at night you take all your valuables, put them in a tin can, and bury them somewhere in the backyard so no one else could get at them. Your neighbor would lose his job, making him even less trustworthy to pay you back, and you'd count the money you didn't loan to him (and thus lose) as a profit in the books so your wife wouldn't know you blew $50 down at the casino last night.

Originally posted by DanS
And here's the lede on a sister article from the WSJ (chosen by your's truly)...

http://online.wsj.com/article_print/...238558267.html
That is certainly good news considering that growth in exports fell in 2007 compared to 2006.

Originally posted by DanS
And here's the lede on a sister article from the WSJ (chosen by your's truly)...

http://online.wsj.com/article_print/...238558267.html
Any sign it's diminishing protectionist sentiment?

Let's see:

1. American banks give loans to people who shouldn't be loaned large amounts of money.
2. American banks sell various financial instruments based on those mortgages to a variety of international banks and financial institutions, notably Japanese ones.
3. People who shouldn't be loaned large amounts of money have a difficult time making loan payments.
4. Investments held by Japanese banks tank.
5. Japanese government recommends bailouts.

What a surprise! http://www.discussworldissues.com/fo...milies/lol.gif

Bosh, you're a genius, but that's only half of it. He wants the US to intervene on the dollar such that Japan can continue to have a large trade surplus to the US.

Originally posted by snoopy369
Perhaps the Fed should just start lending money on its own right now http://www.discussworldissues.com/fo...milies/lol.gif That's actually something to think about. I wouldn't rule it out if things get too bad. The Japanese have done something like that.

I don't even know how we can compare the recession in 2001 to the one happening now. A bad presidential election and blowing up 3000 citizens is likely to cause a 'false recession' anywhere..

but the current recession is something different.

If the Swiss are so far into it, I wonder where the Japanese losses on this are...

It must be quite something to have the pace of deterioration increase in March, what with the torrid pace at the beginning of the year. I guess we haven't set a clearing price yet.

Here's FT's lede...

http://www.ft.com/cms/s/0/5bc18e5c-f...nclick_check=1

UBS set to reveal further writedowns

By Haig Simonian in Zurich and Chris Hughes in London

Published: March 31 2008 22:01 | Last updated: March 31 2008 22:01

UBS is poised to reveal further writedowns of up to $18bn and seek a capital increase of about SFr13bn ($13.1bn) just weeks after shareholders approved a similar-sized injection from outside investors.

Switzerland’s largest bank, which wrote off $18bn last year as it became the most serious European casualty of the US subprime mortgage crisis, has suffered from further falls in the value of mortgage and other credit securities during the first quarter, especially in March.

Aren't you intelligent enough to recognize a filler article when you see one? This speech is just a bit of empty rhetoric of the kind politicians sprinkle here and there to oil relations with the US and other nations. I mean for a bunch of people to get excited over this drivel is a sign of sheer boredom and lack of meaning in life.

*grabs a bag of popcorn and surfs to bloomberg.com*

The danders of deflation just contained to Japan has never been much of a problem even for Japan, but everyone should know, and the Japanese certainly do, that if it ever spread to the US there would be very bad consequences for the entire world.

Originally posted by Victor Galis
If we bail out the people that got us into this mess, we'll lurch from crisis to crisis until we run out of money to bail them out with. It doesn't work like that. Not bailing people out might mean less jobs (money).