What do you think of the recent financial upheavals in the U.S. that have seen Lehman Brothers file for bankruptcy, Bank of America buy Merrill Lynch, the collapse of Bear Stearns and the U.S. government take over Fannie Mae and Freddie Mac?

Tuesday 16th September, 04:24 AM JST

Latest 15 of 44 Total Comments Show All

buttamimi at 07:43 AM JST - 17th September

Best summed-up by the phrase 'selfish capitalism.' I think it's about time they made a follow-up to the movie Wall Street, in which Michael Douglas made that memorable one-liner at a meeting of share holders in the movie: 'Greed is Good.' Perhaps that can now be changed to 'Greed is Bad.'
bamboohat at 07:58 AM JST - 17th September

Stock up on old, silver dimes. You can spend them to buy bread, AND silver has a history of holding it's value during apocalypic economic crisis. And keep a jar of peanut butter around, just in case. You never know.
Alinsky4prez at 10:47 AM JST - 17th September

Us Liberals know that trained economists like Keith Olbermann and Katie Couric are right:the economic misery we face at this moment is as bad or WORSE than the Depression.
Ah_so at 04:50 PM JST - 17th September

If the blame lies anywhere, with one individual, it is with Alan Greenspan. He had interest rates down at 1% during what were quite clearly still boom years in 2003 and 2004 and brought them up so slowly over the next few years that the whole complexion of the money markets changed.

The returns on cash were negligible that investors needed to chase higher returns. At the same time, people who could never have afforded loans suddenly could - after all, 1% on $1m is only $10,000 and affordable to the poor.

This created the perfect conditions for the storm that followed.
Blue_Tiger at 07:20 PM JST - 17th September

I believe it stems from personal irresponsibility, which is why the housing maret has gone into a free-fall. The fact that people tried to buy houses when they didn't have the money to do so, and that financial groups like these allowed it to happen is the r eason for the economic problems...
buttamimi at 02:23 AM JST - 18th September

No. It stems from the illogigal view that most Americans have, that the impossibe is possible. I, for one, am sick and tired of the American perfect view, that you can have anything that you want if you have the right spirit. The present economic crisis is a classic example of American hubris. Anything and everything is possible. Obama and McCain are just peddling the same old same old. The arrogance of their positions in relation to the outside world is staggering.
Farmboy at 06:10 AM JST - 18th September

Now we just need China to withdraw its funds that it has invested worldwide and the party is over. Why would they stay invested, when their assets are tumbling?

The AIG bailout was probably unavoidable, but paying for it will be on the backs of the U.S. taxpayers. It will be a drag on the economy as a whole. The housing market worldwide will continue to dive. In the US, the Fed will try cutting the borrowing rates, which will give a one or two day boost, but then that's it.

Worldwide, Russia is already in trouble, and this will spread to other countries. Japan will follow the U.S. today with the stock market dropping, I'm almost sure.

Just a cheery thought to start your day... I think I'll go have a cappuccino.
Molenir at 06:22 AM JST - 18th September

A lot of people seem to be misunderstanding both the problems as well as thinking the best solution to the crisis is government intervention. People think that more regulation is the solution. To put it simply, the managers and CEOs at these huge companies didn't see what was coming. At least not until it was too late to shift their positions. Do you really think some bureaucrat would be smarter, and more visionary then these people are? You really want to give a bunch of power to those kinds of people? I certainly don't.

China can't pull what its invested worldwide. When you say that, you make it obvious you don't understand what Global economy means. As well as showing you don't know where the Chinese and other countries are invested. Banks all over the world, including those in China, are looking to help shore up these firms, for the simple reason that if they collapse, the the entire world economy could very well slip into a depression. And if that happens... You think its bad now, you ain't seen nothin yet!
Farmboy at 08:14 AM JST - 18th September

Molenir,

I think it's important to mention which of the "huge companies" you are talking about. In the case of AIG, which is the one I was referring to, the choice was between a collapse of AIG, which would have had ripple effects worldwide, and an 85 billion dollar bailout, funded by US taxpayers. Since the money belongs to the taxpayers, the government is going to want some control over what is done with it. I don't necessarily disagree with you in regard to some of the other companies, but I think in this case, government intervention to prevent a collapse may have been the best of bad choices.

As to what China can and can't do, that's really hard to say. China has been pouring money into the USA for years. It doesn't have to continue, and certainly the money can start flowing a different direction. And yes, "the entire world economy could very well slip into a depression." For a nice article about what China has been doing and why, I recommend an Altantic Monthly article, located here: http://www.theatlantic.com/doc/200801/fallows-chinese-dollars

As to understanding what is happening in the global economy, I wouldn't pretend to really understand it, and if I did, I probably would be attending to business, not typing this response. We all do the best we can, though.
Nessie at 05:02 PM JST - 18th September

What do you think of the recent financial upheavals. . .

Con.
helloklitty at 05:44 PM JST - 18th September

How many times have we seen stories on Japan Today: Consumer Confidence Down, and then some "expert" saying we consumers need to consume more? That has been the problem for the U.S., a nation of consumers who produce very little of what the rest of the world wants. American GDP growth from the Clinton era onwards has been an illusion created by the FED. Stop investing in the U.S. and life will be just fine. And if you want to buy a house, make sure the payments are 30% or less of your income.
helloklitty at 06:29 PM JST - 18th September

How does the U.S. take over a private enterprise (AIG) without approval of the shareholders? Why do they only take over sick companies? Can't they take over healthy ones? Comrade Bernanke seems to have finally drawn a line in the sand over Lehman. Why?
tclh at 09:29 PM JST - 18th September

When you (America) moves manufacturing jobs,real wealth creation jobs to foreign countries and relies only on service jobs to make money;this is the reward! And this is not the worst yet, more will come.
ichinensei at 09:37 PM JST - 18th September

there is too much greed in the US market - which caused this. I think some companies who are lucky enough to scoop up their rivals in this turbulent times..will one day become a very strong financial powerhouse..It's too bad that during the good times, all the bankers make a lot of money and live a lavish lifestyle, but when the you know what hits the fan, the taxpayers have to bail them out
Molenir at 04:42 AM JST - 19th September

Farmboy,

I agree, that saving AIG was necessary. Its collapse, with the ties it has to banks worldwide, could have triggered a global recession. Ok, I don't see that necessarily happening, but its one of the possibilities, and stepping in to prevent its collapse was the best of a bunch of bad choices.

there is too much greed in the US market - which caused this.

Its not greed, but rather a lack of foresight. Many of us saw the housing downturn, and acted, shifting portfolios away from companies that had fueled the housing boom via their lending practices. I for one however didn't anticipate the ripple effect it would cause. I expected Fannie Mae and Freddie Mac. I expected Bear Stearns. However the lack of movement by Lehman Bro's CEO, when he had many opportunities to save the company, that surprised me.

Again, more regulation is not the answer. The people who would be regulating the economy would be just as bad and probably worse then the people who created the mess we're in.