Russia's financial crisis_Sept 17 08

[Chechen07]

Dear friends from Western Civilisation, Russia is a Bloody regime of Putinist paranoid Idiots and crazy KGB anti-western fanatics. Russia have no economy, no market and no future. Russia will collapse. Please, don;t invest in Putins Pocket.

[2012nugget]

........Somthing wicked this way comes......

[countesscristo]

If this so called 'credit crunch' is global,why is anyone worried,the value will go down everywhere. We are warned more 'big name' banks will potentially go down,of course they will,that is the idea,how else can the 'hero' government then step in and save the banking 'crisis' with a more'centralised' system. It's part of the plan to a one governed centralised banking system. The media and politicians lie aboaut everything else,why should they be telling the truth on credit crunch?

[wekelandia]

are u ready?

2009 world financial crisis and total war.

good look

[countesscristo]

one governed centralised banking system is what this is all about. If they can afford wars in middle east and arming and creating terrorist groups like al-queada,I reckon they can manage to save a bank with a few million if they want to. But no,it will become a more 'centralised' system.

[saadasim]

THEY WANT MAMA TO MAKE IT ALL BETTER! Rep Kapture

watch?v=mbD62gNi9WE

[abide2008]

again soviet collapse

[commiecet]

yep Communism failed now its capitalisms turn to fail

[PauloGVieira]

Capitalism as a system of payment for a good or service is not going to fail, it will always stay with us. What will fail is national financial institutions that have ineffective means of self-governance.

[polygamous1]

asan interal cia memp said capitalism cannot survive without the power of the military in its grudest form is this i have the water u all need it u pay what i demand or get stuffef die u will rushme n take it get the us military in play hjey p[resto capitalism lives n rules the biggesr BULLSHIT ever invented by man juyst like the federal reserve it is NOT FEDERAL IS HAS FA RESERVES but its the international currency to buy oil with take that away saddam tried n died n its worthless F capitalism

[vasilisksand]

y sure it is today 19 september the trading went so fast up in 30 minutes that they suspended trading again... yes its a big time collapse

[moester101]

russians need to start having 2+ kids

[sirhikesalot692]

cant blame them for closing it down today...with what's going on here in the west, seems sorta likely.

[JigglesJingle]

What about America's Financial market? I'd rather see AIG, Freddie Mac and Fannie May fail, then seeing my taxes rise by 200/300$. Why spend with no limit, and bill the tax payers? "Russias economy remains strong" Well not ours!. John McCain says the US' economy is strong too, even if theirs record inflation, the worst housing market ever,record debt, giving the country of Georgia a 1billion aide package when the US can't afford it.. it's all corruption.

[jamesrmaclean]

You have two points, one good, the other not quite right.

The reason for a bailout of a big financial institution is that the alternative usually is more expensive: $85 billion for AIG is 2.4% of the US federal budget, and the USG will (probably) recover most of the money. in contrast, a failure of AIG could trigger failure of other institutions, leading to a loss of several hundreds of billions (mainly in lost economic output).

[jamesrmaclean]

You are right, however, in the sense that the financial institutions ought to be more accountable. This is one of the things about Western European finance that I think needs to be imitated in the USA/Canada: banks have powers that are similar to the government, e.g., they can create money (credit) and are limited mainly by capital requirements the banking industry writes for itself.

When the banks screw up, it makes sense to help but the management needs to be replaced and made accountable.

[JigglesJingle]

How would they recover the 85 billion if it's just added onto the trillion+ dollar debt? wouldn't that mean more taxes for people, and more inflation? What if, just what would happen if AIG continues to fail and ends up like this again in the next half year??? THEN what?

[jamesrmaclean]

The federal government could recover the $85 billion loan when AIG repays it. In other types of bailouts, the money is recovered when the company recapitalizes, or (as is fairly common in EU member states), over a prolonged period of state ownership (e.g., Renault in France).

The size of the federal debt is not germane to the question. If the US government were entirely debt free, a loan to AIG would have the same financial risk.

[jamesrmaclean]

A loan is not counted as a debt. Basic accounting 101: a loan is an asset to the lender. It becomes debt if the lender is obligated to write it off (assume payment will never happen). If that happens, you'll have bigger worries than a slight increase to your federal income tax bill.

[JigglesJingle]

But if the US does not have the money, how will they give them a loan? Raising Taxes?

[jamesrmaclean]

The Treasury can lend money limited by the "moral hazard" (probability of default x size of loan); this loan is backed by the future income of the USFG.

As with all major enterprises (nation-states & corporations), the USFG is a going concern whose solvency is based on projected income streams. The overall rate of taxation is linked to the overall cost of government--both terms, of course, in the long run. The object is to save money by shoring up the financial sector.

[jklasdfjdfksl]

reality 101: those assets are essentially useless paper based on speculative bubbles that burst. some of the wealthiest people on the face of the earth were able to profit greatly during their speculative bubbles while enjoying extremely low taxes, now they socialize the risk when the bubble bursts. this is providing an incentive for the same behavior in the future. private coffers of the capitalist class should pay the bailouts.

[PauloGVieira]

Do you think they just threw $85 billion at them and told them to do what they like? This deal involves their stake on future revenues and assets - they will certainly be making their money back.

[PauloGVieira]

Have you looked at the 1 billion aid package to Georgia? All aid will come directly from the USA and is a 1 billion dollar injection into the local economy. It is more of an investment that will see Georgia purchase goods and services from the USA well beyond this aid package. This is a modern version of the Marshall Plan.

[dvdman73]

buy gold peeps..

[PauloGVieira]

Even better buy the cheap stocks that are now on the market because I can guarantee that in 6 months from now you will sell at a profit.