# Crisis may make 1929 look a 'walk in the park' (from 2007)



## Stormy_NY (Dec 8, 2007)

As central banks continue to splash their cash over the system, so far to little effect, Ambrose Evans-Pritchard argues things are rapidly spiralling out of their control

Twenty billion dollars here, $20bn there, and a lush half-trillion from the European Central Bank at give-away rates for Christmas. Buckets of liquidity are being splashed over the North Atlantic banking system, so far with meagre or fleeting effects.

As the credit paralysis stretches through its fifth month, a chorus of economists has begun to warn that the world's central banks are fighting the wrong war, and perhaps risk a policy error of epochal proportions.

"Liquidity doesn't do anything in this situation," says Anna Schwartz, the doyenne of US monetarism and life-time student (with Milton Friedman) of the Great Depression.

"It cannot deal with the underlying fear that lots of firms are going bankrupt. The banks and the hedge funds have not fully acknowledged who is in trouble. That is the critical issue," she adds.

Lenders are hoarding the cash, shunning peers as if all were sub-prime lepers. Spreads on three-month Euribor and Libor - the interbank rates used to price contracts and Club Med mortgages - are stuck at 80 basis points even after the latest blitz. The monetary screw has tightened by default.

York professor Peter Spencer, chief economist for the ITEM Club, says the global authorities have just weeks to get this right, or trigger disaster.

http://www.telegraph.co.uk/money/main.jhtml?xml=/money/2007/12/23/cccrisis123.xml


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## tomstractormag (Feb 23, 2007)

After the money's gone.
Paul Krugman 
New York Times
12/14/07

http://www.truthout.org/docs_2006printer_121407D.shtml

Tom


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## TonyE (Aug 1, 2007)

*Money represents Freedom! A nice subtitle to that book should read: After our Freedom is gone!*


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## booklover (Jan 22, 2007)

Tom - link doesn't work.


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## TexasArtist (May 4, 2003)

it didn't work for me either but when I erased half of it and just left the www.truthout.org it went right to quite a few headlines to choose from


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## Stormy_NY (Dec 8, 2007)

I was talking to my cousin last night ...He works for the Federal Reserve. I ran both of these stories past him. 

He did not discount them and said this could get ugly real fast.


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## TexasArtist (May 4, 2003)

Did yor cousin give ya any tips on surviving or atleast riding through this thing? :shrug:


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## Stormy_NY (Dec 8, 2007)

TexasArtist said:


> Did yor cousin give ya any tips on surviving or at least riding through this thing? :shrug:


I live from pay check to paycheck now ....... When tax return money comes I will be buying a 1000 worth of Silver Coins. 

Most of my extended family has no clue of what is to come ....I am a tin foil wearing .....end of the world wacko. 

But I have the play book of what is to come ..... It is all layed out for us in the Blue Book to Fr Gobbi.


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## TexasArtist (May 4, 2003)

Stormy_NY said:


> the Blue Book to Fr Gobbi.


The what? Please explain this. I'm a bit lost.


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## JGex (Dec 27, 2005)

TexasArtist said:


> The what? Please explain this. I'm a bit lost.


Me, too.... Book of what?


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## seedspreader (Oct 18, 2004)

I think it is a catholic thing something to do with Fatima.


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## AngieM2 (May 10, 2002)

amazing what you can google...

http://www.mmp-usa.net/main.html
The Marian Movement of Priests......
Fr. Gobbi is the start of it... according to some googling and the site.

Angie


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## JGex (Dec 27, 2005)

Yeah, I googled it..... I'll refrain from saying what I think about it.


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## Bonnie L (May 11, 2002)

Fr. Gobbi's "messages" from Mary have not been approved by the Church. I doubt if they will be. I read the first part of his book & was pretty upset by the words he puts in Mary's mouth. Not exactly orthodox! :nono:


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## brierpatch1974 (Sep 28, 2005)

The best way to fix the credit problems is to stop giving people credit who cant afford to pay it back. I know some kids who are freshman in college and the credit card companies give them 10k credit cards. They don't even have jobs. These companies are just as irresponsible as many of the people who have them. If you want somthing pay cash or don't buy. I would make exceptions for car loans and housing loans but then you would only be allowed to borrow what you can afford to pay back. To may people try to live above their means and then they want the goverment and everyone else to bail them out of trouble. I say let them sink.

BP


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## seedspreader (Oct 18, 2004)

brierpatch1974 said:


> The best way to fix the credit problems is to stop giving people credit who cant afford to pay it back. I know some kids who are freshman in college and the credit card companies give them 10k credit cards. They don't even have jobs. These companies are just as irresponsible as many of the people who have them. If you want somthing pay cash or don't buy. I would make exceptions for car loans and housing loans but then you would only be allowed to borrow what you can afford to pay back. To may people try to live above their means and then they want the goverment and everyone else to bail them out of trouble. I say let them sink.
> 
> BP


I don't think anyone is against them sinking... it's just if they take the rest of us down with them that's the problem.


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## Stormy_NY (Dec 8, 2007)

Bonnie L said:


> Fr. Gobbi's "messages" from Mary have not been approved by the Church. I doubt if they will be. I read the first part of his book & was pretty upset by the words he puts in Mary's mouth. Not exactly orthodox! :nono:


This is Bonnie from Days of Noah Forum right ? 

Pope JP ll con celebrated Mass every year with Fr Gobbi and had a yearly Cenacle with him also. Sr Lucia also had the Blue Book in her Cell. Guess you are more "Orthodox" then them .......


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## tomstractormag (Feb 23, 2007)

booklover said:


> Tom - link doesn't work.


 Try going to truthout.org. It should still be posted.
Tom


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## Bonnie L (May 11, 2002)

> This is Bonnie from Days of Noah Forum right?


Yep! Who are you on the Ark? I don't recognize your name. I don't consider myself holier than any Pope - not even some the the bad ones! However, they judge by other standards than I do. Can't say if it's good or bad, but staying on the "strait & narrow" keeps me from straying off to one side or the other of the "via media"


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## Stormy_NY (Dec 8, 2007)

brierpatch1974 said:


> The best way to fix the credit problems is to stop giving people credit who cant afford to pay it back. I know some kids who are freshman in college and the credit card companies give them 10k credit cards. They don't even have jobs. These companies are just as irresponsible as many of the people who have them. If you want somthing pay cash or don't buy. I would make exceptions for car loans and housing loans but then you would only be allowed to borrow what you can afford to pay back. To may people try to live above their means and then they want the goverment and everyone else to bail them out of trouble. I say let them sink.
> 
> BP


Basically from my understanding of this event .....it is the housing market that is going to bring this upon us. The sub prime mortgages that were sold during the peak of the housing boom are now resulting in negative equity. So in reality .....A lot of banks are not worth anything any more.


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## uyk7 (Dec 1, 2002)

[I don't consider myself holier than any Pope - not even some the the bad ones! However, they judge by other standards than I do.]


The Bible says "judge not lest ye be judged" or doesn't the Bible apply to Popes?


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## Stormy_NY (Dec 8, 2007)

uyk7 said:


> [I don't consider myself holier than any Pope - not even some the the bad ones! However, they judge by other standards than I do.]
> 
> 
> The Bible says "judge not lest ye be judged" or doesn't the Bible apply to Popes?


Listen uyk ...I am not going to get into this here with you. If you would like to debate the Catholic Church ....click on my sig line.


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## AngieM2 (May 10, 2002)

And if the Catholic or religious fencing goes further, the thread will either be pruned back or closed, moved or something other than continue here.

Angie

And Stormy I'd greatly appreciate you editing your post to delete the name calling. - Thank you.


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## Bonnie L (May 11, 2002)

Perhaps the word I should have used was "discern".


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## uyk7 (Dec 1, 2002)

Sorry.


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## edcopp (Oct 9, 2004)

Stormy_NY said:


> Basically from my understanding of this event .....it is the housing market that is going to bring this upon us. The sub prime mortgages that were sold during the peak of the housing boom are now resulting in negative equity. So in reality .....A lot of banks are not worth anything any more.


So let the banks sink too. They after all caused the problem. There is no sensible reason that the government should be involved in this business transaction.


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## Stormy_NY (Dec 8, 2007)

First of three parts

This year's housing bust is shaping up to be one of historic proportions. Sales and construction have sunk to levels not seen since the 1990 savings and loan crisis, while foreclosures and price drops are the largest since the Great Depression â and expected to get worse next year.

Many parallels can be seen with earlier housing debacles. Each episode had some combination of easy money, loose lending, greed and fraud that turned a housing boom into a speculative bubble. But few housing bubbles have ended so badly as the one today, when the nation is confronting the prospect of mass foreclosures and family dislocations.

John Stumpf, president of Wells Fargo & Co., the second-largest U.S. mortgage lender and a survivor of the housing busts of the 20th century, blames today's crisis on unscrupulous lending practices, which joined in a toxic mix with outright greed and extraordinarily low interest rates to send house prices soaring 90 percent between 2000 and 2006. When the bubble burst, house prices collapsed by 5 percent to 20 percent in cities nationwide. 


http://www.washingtontimes.com/apps/pbcs.dll/article?AID=/20071226/BUSINESS/572777982/1001


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## billy (Nov 21, 2005)

Don`t mix me up with the Socialist Democrats because I mention this, but wasn`t there a Bush family member who was greatly involved in the Savings and Loan scandal of the 1990`s?

SOUND MONEY
RIGHTS RESTORED 
RON PAUL 2008


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## woodsy_gardener (May 27, 2007)

billy said:


> Don`t mix me up with the Socialist Democrats because I mention this, but wasn`t there a Bush family member who was greatly involved in the Savings and Loan scandal of the 1990`s?


George Bush's younger brother Neil was chairman of the board at Silverado Savings and Loan. He made millions before Silverado became the biggest failure in the S&L crisis. 

Neil's new company has currently made more than 2 billion dollars providing material for No Child Left Behind.

He has also travelled extensively with his friend the Reverend Sun Yung Moon.


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## Hip_Shot_Hanna (Apr 2, 2005)

the ONLY reason the bottom has not fallen out yet is the annual Christmas bonus payments , i read 3 dealers got 1 BILLION dollar bonuses , and i bet they made certain that nothing stuffed that ,they and their like will be siting heavily on any bad news . just wait until the new year when those cheques clear , then the SHTF


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## seedspreader (Oct 18, 2004)

HSH,

You're predicting the CHTF in January?

What level?


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## Stormy_NY (Dec 8, 2007)

Hip_Shot_Hanna said:


> the ONLY reason the bottom has not fallen out yet is the annual Christmas bonus payments , i read 3 dealers got 1 BILLION dollar bonuses , and i bet they made certain that nothing stuffed that ,they and their like will be siting heavily on any bad news . just wait until the new year when those cheques clear , then the SHTF


A Billion Dollars ?


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## Hip_Shot_Hanna (Apr 2, 2005)

Yup Billion


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## Stormy_NY (Dec 8, 2007)

seedspreader said:


> HSH,
> 
> You're predicting the CHTF in January?
> 
> What level?



????????


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## edcopp (Oct 9, 2004)

A billion here and a billion there, soon it will add up.


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## Junkman (Dec 17, 2005)

Stormy_NY said:


> I live from pay check to paycheck now ....... When tax return money comes I will be buying a 1000 worth of Silver Coins.
> 
> Most of my extended family has no clue of what is to come ....I am a tin foil wearing .....end of the world wacko.
> 
> But I have the play book of what is to come ..... It is all layed out for us in the Blue Book to Fr Gobbi.


Yep, we are considered crazy. But, we don't care. No one pays our bills. My question to you is, what do you intend to purchase with your silver coins? And, being personal, but you brough it up, did you ever check to see why you are living "paycheck to paycheck now?"
Are you and your loved ones prepared for the SHTF senario food and comfort wise? Jklady


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## Bonnie L (May 11, 2002)

I'm curious about something. I've been thru a recession or 2, but somehow they didn't affect me. I know that if banks crash, you lose most, if not all, of your savings, but what happens to loans? They get taken over by other companies, don't they? 

I'm wondering because, tho we're usually debt free, we owe the credit union about $1500 for our car. Would the banks that take over loans jack up the interest, or demand repayment right away?


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## Stormy_NY (Dec 8, 2007)

Junkman said:


> Yep, we are considered crazy. But, we don't care. No one pays our bills. My question to you is, what do you intend to purchase with your silver coins? And, being personal, but you brough it up, did you ever check to see why you are living "paycheck to paycheck now?"
> Are you and your loved ones prepared for the SHTF senario food and comfort wise? Jklady


Well with history .... Silver and or Gold Coins have all ways served anyone who had them well in shtf situations. 

I choose to live pay check to pay check, my wife could work but we think it is right that a parent raises there children not someone they dont even know. ....I could move to an area with more work opportunities but then that would change our way of life, mind you ...I am not complaining about the way we live ...I was just stating a fact. ....plus what are savings going to do for you when it does happen? 

We are prepared body and soul ......


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## BillHoo (Mar 16, 2005)

Stormy_NY said:


> I live from pay check to paycheck now ....... When tax return money comes I will be buying a 1000 worth of Silver Coins. ...QUOTE]
> 
> That may not be much.
> 
> ...


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## Stormy_NY (Dec 8, 2007)

BillHoo said:


> Stormy_NY said:
> 
> 
> > I live from pay check to paycheck now ....... When tax return money comes I will be buying a 1000 worth of Silver Coins. ...QUOTE]
> ...


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## Stormy_NY (Dec 8, 2007)

During this hoiliday break and thanks to this site....I have read Lights Out and We Interrupt this Program. These 2 have made me rethink the whole prep theology.

Depending on how bad and the degree of the situation .... I am thinking we are going to need 2 places to be well prepared. One more secluded then the other. 

For if or when the Federal Government takes over ....they will take everything you have for the "Greater Good". Then again I also believe that we will also be under the control of a world wide power (anti-christ).


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## seedspreader (Oct 18, 2004)

Just a note, please send me all your worthless notes.


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## Jim-mi (May 15, 2002)

You gave me a bad case of indegestion just reading and thinking about that "Three big Fat Mac happy meals".
Oh what a quick way to shorten your life...........

When it gets really nasty . . .How much of that hard earned 'silver' are you going to have to part with inorder to put something into your belly . .??


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## Stormy_NY (Dec 8, 2007)

Jim-mi said:


> You gave me a bad case of indegestion just reading and thinking about that "Three big Fat Mac happy meals".
> Oh what a quick way to shorten your life...........
> 
> When it gets really nasty . . .How much of that hard earned 'silver' are you going to have to part with inorder to put something into your belly . .??


Hopefully none .....Food and water I will be set with if I can stay at the homestead. It is the unknowables that the currency will be for. Who really knows ....but I think it behooves us to have some of each.


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## Jim-mi (May 15, 2002)

Granted,
But my point is that **a piece of silver** for a dozen cans of pork&beans would be kind of a Big ouch.
And the desperate person trying to sell\barter\trade such as a car for his hungry belly . . . . .what value would (such as that *car*) that item be worth in nasty times . .??

I guess its all a very BIG crap shoot.

hope and pray that it doesn't get *nasty*


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## BillHoo (Mar 16, 2005)

Jim-mi said:


> Granted,
> But my point is that **a piece of silver** for a dozen cans of pork&beans would be kind of a Big ouch.
> And the desperate person trying to sell\barter\trade such as a car for his hungry belly . . . . .what value would (such as that *car*) that item be worth in nasty times . .??
> 
> ...


Well, if you have an American Silver Eagle 1 oz proof, the denomination minted on the face of it is One Dollar, no matter what you paid for it.

SHTF, you will likely get a can of pork and beans for your ASE, that's about a buck today.


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## Jim-mi (May 15, 2002)

And what will it cost me to go out tommorrow and buy a dozen ASE's . . . ??


One of those for a can of beans................thats a big OUCH


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## Stormy_NY (Dec 8, 2007)

I have no doubt that a can of pork and beans will be worth a lot more then a dollar when there isn't anyone canning them anymore.


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## mightybooboo (Feb 10, 2004)

BillHoo said:


> Stormy_NY said:
> 
> 
> > Kinda like the depression in '29 made things much more expensive!
> ...


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## pancho (Oct 23, 2006)

mightybooboo said:


> BillHoo said:
> 
> 
> > Guess I read different history books and my folks were stupid as they actually lived it.
> ...


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## mightybooboo (Feb 10, 2004)

BillHoo said:


> Stormy_NY said:
> 
> 
> > QUOTE]
> ...


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## AngieM2 (May 10, 2002)

This is thread from 3.5 years ago.... speculating on the housing bust, and such things.

The church part, could be left out, but the overall posts about the housing causing worse that 1929... rather interesting considering the times we are living in.

What do you think about the talk of the future back on the posts before this one, and what is our present - the future they talked of?


Angie


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## Plainswalker (Sep 24, 2009)

I was just starting to get the idea that tougher times were ahead when this thread was written. I wish I had put more money into silver back then.


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## shanzone2001 (Dec 3, 2009)

The housing bubble crisis prediction was right on. I wonder if and when it will ever recover.

Here in CA, there are foreclosed homes everywhere. A majority of the homes for sale are bank owned or short sales.

Vacant homes have become a safety issue because they attract squatters. Many vacant homes we look at have trash left from people living there. I never go look at a vacant home alone because the homes we check out are remote and you never know who could be inside. Many of them have been broken into and are open. When our realtor sends us to look at a house my DH always brings a gun.


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## Spinner (Jul 19, 2003)

The predictions about the housing crisis was spot on, so was the advice to buy silver. 

I didn't notice the thread was so old until I read the price of silver. Wish I could have bought a bunch back then. It's now over $42. and yesterday was almost $44.


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## tab (Aug 20, 2002)

What Plainswalker said. Also agree wholeheartedly about wishing we had bought silver. What I do believe is that we may be still saying that down the road even at the current prices.


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## Guest (Apr 18, 2011)

2007 was just the prelude.


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## Darren (May 10, 2002)

Stormy_NY said:


> Basically from my understanding of this event .....it is the housing market that is going to bring this upon us. The sub prime mortgages that were sold during the peak of the housing boom are now resulting in negative equity. So in reality .....A lot of banks are not worth anything any more.


That's a dirty little not so secret that hasn't gone away. Remember the 600 trillion dollars in toxic assets, derivatives, that were going to be bought up by the government? They were supposed to figure out the value of the derivatives but the whole system of figuring out who owns which mortages and the value of the mortgages is beyond broken. There's no way the feds can buy $600 trillion of anything when the entire GDP is about 17 trillion per year. 

Add to that, the organization that was formed to track ownership as a substitute for filing a lien at courthouses across the nation and we have a mess that appears to be insolvable. Some courts have ruled in individual cases that mortgages held by some banks cannot be foreclosed because of that.

The icing on the cake is that it is somewhat well known that the federal reserve is responsible for the Great Depression. That's why the fed is keeping interest rates where they are. The federal government really doesn't know how to get us out of this mess. WW II solved it for us last time. This time we don't have the manufacturing base to provide the jobs.

The fed's policy of printing money to buy back treasuries is destroying the real value of paper money. Anyone can see inflation is taking off. If the price of something at the supermarket doesn't go up, the package size gets smaller.

The current administration is clueless. Obama never had a real plan. All he can do is read speeches. And the people he picked are so far out of their depth, it's pathetic.


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## Guest (Apr 18, 2011)

A derivative is a mathematical function, a notion, if you will. It cannot be bought up, it has no real value. its value lies in the underlying asset and the exact function of said derivative. All the stuff you ever read about 600 trillion in derivatives was written by people with absolutely no idea of what they were discussing. 
It's like if I were to give you the option to buy all my apples at a dollar a pound. You pay me 25 cents a pound to lock in that price. you didn't buy the apples, you bought the option to buy those apples. If when apple season comes around, and apples are 2.00 a pound, you still get mine for a dollar a pound. You paid 25 cents for that option, but the option itself is worthless, you still have to buy the apples. On the other hand, if its a bountiful season for apples, and they are selling for 70 cents a pound, you don't have to buy mine for a dollar. Thats why it's an option. You don't get your 25 cents back though, you paid 25 cents for that option. you never get it back, no matter what. In the end, you either exercise your option by buying the apples at the agreed upon price of $1.00 per pound, or it expires worthless. There is no buying it up, its a notional contract between you and me.


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## fordy (Sep 13, 2003)

Darren said:


> That's a dirty little not so secret that hasn't gone away. Remember the 600 trillion dollars in toxic assets, derivatives, that were going to be bought up by the government? They were supposed to figure out the value of the derivatives but the whole system of figuring out who owns which mortages and the value of the mortgages is beyond broken. There's no way the feds can buy $600 trillion of anything when the entire GDP is about 17 trillion per year.
> 
> Add to that, the organization that was formed to track ownership as a substitute for filing a lien at courthouses across the nation and we have a mess that appears to be insolvable. Some courts have ruled in individual cases that mortgages held by some banks cannot be foreclosed because of that.
> 
> ...


.................Darren , it's NOT 600 Trillion , it's 600 Billion , or , 60% of ONE Trillion ! , fordy


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## fordy (Sep 13, 2003)

................Some observations , we had , and , still have a crisis in the mortgage lending sector of our economy ! Society didn't fall apart , there wasn't widespread murder and mayhem , lots of folks lost their jobs , lots lost their homes and became displaced and broke and had too suffer greatly until they could could start too rebuild their lives .
.................This financial Tsunami has forced Lenders too forclose on millions of homes that were financed with loans that should have never been made . The Positive aspect of this situation is that both federal and State courts have forced the lenders too actually produce the legal paperwork that Proves that , THEY , have the Legal right , too forclose ! This , then , leads back too the process and procedure that large investment banks used too sell Deratives and casts Aspersions Upon the value that the Banks placed upon their groupings of loans that were sold too large investors . Large Investors are now filing lawsuits against the Banks too force them to compensate the Investors for selling loan packages whose value and rate of return is less than Junk bonds or just , Junk , period ! , fordy


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## Txsteader (Aug 22, 2005)

Darren said:


> T
> 
> The icing on the cake is that it is somewhat well known that the federal reserve is responsible for the Great Depression.


And the irony there is that the federal reserve was created to _prevent_ instability and panics in the market. :hysterical:


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## mightybooboo (Feb 10, 2004)

I think the financial call here was spot on.All along financial failure has been my biggest concern,where it will play down to I just dont know,but that it would happen I never doubted for one minute.Things were too bubble-ish,too much Middle class job loss to China and house of cards financing to NOT happen.

Also someone waaaaay smarter than me financially explained the metal story to me,and what a dollar REALLY was and I was so astounded and amazed that I shut my mouth and took the excellent free advice of a self taught expert who had made money study his hobby.

Thats the biggest thing I probably learned thru this situation,when someone without an agenda will share a lifetime of knowledge for no other reason than they like you,LISTEN!


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## Aintlifegrand (Jun 3, 2005)

zong said:


> A derivative is a mathematical function, a notion, if you will. It cannot be bought up, it has no real value. its value lies in the underlying asset and the exact function of said derivative. All the stuff you ever read about 600 trillion in derivatives was written by people with absolutely no idea of what they were discussing.
> It's like if I were to give you the option to buy all my apples at a dollar a pound. You pay me 25 cents a pound to lock in that price. you didn't buy the apples, you bought the option to buy those apples. If when apple season comes around, and apples are 2.00 a pound, you still get mine for a dollar a pound. You paid 25 cents for that option, but the option itself is worthless, you still have to buy the apples. On the other hand, if its a bountiful season for apples, and they are selling for 70 cents a pound, you don't have to buy mine for a dollar. Thats why it's an option. You don't get your 25 cents back though, you paid 25 cents for that option. you never get it back, no matter what. In the end, you either exercise your option by buying the apples at the agreed upon price of $1.00 per pound, or it expires worthless. There is no buying it up, its a notional contract between you and me.


Best explanation of a derivative that I have seen.. I have been trying to explain this to my DS..this helps a lot thanks


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## whiskeylivewire (May 27, 2009)

I just wish I had been paying attention when this thread was current. I just got done reading One Second After and I'm feeling more....urgency, I guess is the word, than ever.


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## GoldenCityMuse (Apr 15, 2009)

Ah yes, silver at $16/oz. Waht a buy at the time.

And the housing market was good at that time compared to now.


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## Darren (May 10, 2002)

No Fordy it's 600 trillion and possibly as much as 1.5 quadrillion. FWIW, derivatives or credit default swaps are not options. They are more like insurance contracts. 

"Now that some highly leveraged banks and hedge funds have had to lay their cards on the table and expose their worthless hands, these avid free marketers are crying out for government intervention to save them from monumental losses, while preserving the monumental gains raked in when their bluff was still good. In response to their pleas, the men behind the curtain have scrambled to devise various bailout schemes; but the schemes have been bandaids at best. To bail out a $681 trillion derivative scheme with taxpayer money is obviously impossible. As Michael Panzer observed on SeekingAlpha.com:"


http://www.globalresearch.ca/index.php?context=va&aid=8634


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## Guest (Apr 20, 2011)

Surely you realize that any and all derivatives are notional in nature. Do you possibly think that there is 681 trillion dollars laying around in cash and real estate in this country? Or on the whole earth??
ETA: If I go long a futures contract of oil, that contract is for 1000 barrels of oil at current price of $108.15 a barrel or a notional value of $108,150. However, if the price moves against me, I may cash out with a hundred dollar loss. There never was an intent to take delivery of a thousand barrels of oil. There never was $108,150 at stake. There was only a trade with the notional value of $108,150 and the reality is that I took a trade and lost 100 bucks. Thats what notional means. That's why they are "derivatives" not real money.


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## Shine (Feb 19, 2011)

As soon as Glass-Stegall act was repealed, the banks were allowed to start dealing in securities. Those securities were home loans. When the AAA rated loans sold like hotcakes, it is my opinion that the banks closed their eyes and opened the gates. Anyone could have a loan, just so that loan could be bundled. The banks were raking in money hand over fist until there was a hint that something was wrong with the bundles. Once it was determined that the bundles were not actually AAA rated, heads should have rolled. Congress stepped in and covered the whole shebang and started bailing them out with our money. The banks should have collapsed, now they're held up with baling wire and twine. Sure, they present a set of books that shows liquidity but they don't show the worthless stuff still in their possession. Much fraud was committed. Someone spoke of MERS, Mortgage Electronic Registration System, this invalidates almost every state law and also takes away the filing fees from the municipalities, this is against the law too. Low and behold, the banks are still selling the same vehicles that originally caused the blowout. No, this whole event is rigged. If America is ever going to surrender it's sovereignty then they will have to be brought to the same level as the third world countries. I gave up keeping track but at the 3rd quarter of 2010 there were 130 Trillion in unfunded liabilities. That alone cannot be met unless the GDP goes up at least 50% - won't happen. Those that see danger ahead are spot on. This will not be pretty. None of this is about following the law, the law, for them, is no longer of consequence... I'm imaging an EMP burst [false flag] in NYC that will allow them to evacuate the city, totally. Once that is accomplished, we'll see a reverse "Escape from NY" scheme, no one in but the chosen and extravagance that makes Dubai look like Dennys.


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## Darren (May 10, 2002)

Zong, we're not just talking about real estate. The point is when there is a loss, someone expects to be paid real money in return for the premiums they paid. This article puts the figure at 1.4 quadrillion dollars.

http://seekingalpha.com/article/198197-why-derivatives-caused-financial-crisis


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