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The Rajon Blog » Blog Archive » Bailout good or bad

Bailout good or bad

Well I have to say this is not going to go the way a lot expect.

To cover bad debt with taxpayers money to those who mismanage funds is not the way to go but future events and they are closer than many think will show what happens next.

Retraction of funds be they american or otherwise affects what the markets do and if funds deplete stock market values from say Asian points or even middle east points or within the USA itsef can affect what takes place. Companies depend on the flow of money in and out and in many cases borrow or offer stock for sale to raise capital to expand etc.

If for any reason banks or other large companies get greedy then the market has to go down eventually due to an over structuring on shallow ground thus it collapses.

We have only seen the start of this and $700 bn is a drop as to what is coming.

3 Responses to “Bailout good or bad”

  1. moryah4 Says:

    In financial markets, Black Monday is the name given to Monday, October 19, 1987, when stock markets around the world crashed, shedding a huge value in a very short period. The crash began in Hong Kong, spread west through international time zones to Europe, hitting the United States after other markets had already declined by a significant margin. The Dow Jones Industrial Average (DJIA) dropped by 508 points to 1739 (22.6%).[1] By the end of October, stock markets in Hong Kong had fallen 45.8%, Australia 41.8%, Spain 31%, the United Kingdom 26.4%, the United States 22.68%, and Canada 22.5%. New Zealand’s market was hit especially hard, falling about 60% from its 1987 peak, and taking several years to recover.
    The Black Monday decline was the second largest one-day percentage decline in stock market history.
    Interestingly, the DJIA was positive for the 1987 calendar year. It opened on January 2, 1987, at 1,897 points and would close on December 31st, 1987, at 1,939 points. The DJIA would not regain its August 25, 1987 closing high of 2,722 points until almost two years later.
    A degree of mystery is associated with the 1987 crash, and it has been labeled as a black swan event.[4] Important assumptions concerning human rationality, the efficient market hypothesis, and economic equilibrium were brought into question by the event. Debate as to the cause of the crash still continues many years after the event, with no firm conclusions reached.
    http://en.wikipedia.org/wiki/Black_Monday_(1987)
    What most don’t know was that Dr Jon Sherwood’s guide Zarlen predicted this stock market crash in 1986 ,even down to the relative amount of point loss as well as the escalation of the Iraq-US war etc.
    The reason why this crash occurred ,said Dr Jon at that time, so inexplicably, is that the Muslim nations who had large amount money invested in the American markets withdrew a massive amount of cash to build up their armaments. This was due to the current escalating previous Iraq war they faced. The US was the obvious place for the oil rich Muslim nations to invest when they started striking it rich.
    Other countries, like Japan, historically have always held a lot of money in investments the US, particularly in real estate. The latter view this form of investment as a nest egg (insurance)which could be extracted to rebuild Japan if they ever get hit by another devastating earthquake again.
    So these types of things are ‘curve balls’. This does not include an ‘inside job induced by corporate greed.
    So now you have a ‘house of cards’- type scenario with no back-up funds in the US treasury.
    And remember another thing the Arabs are big on revenge it is part of their creed(speaking of the incursions on their territories in recent years by we western nations) and for them ‘ revenge is a dish is best served cold’.
    Dr Jon (Zarlen) has stated since 2002 and I have detailed the various predictions he has made since 1986 which amount to thousand of separate statements, that terrorism would be one of the key issues for USA,UK and Australia because these three countries used false pretexts to invade another country. So more terrorist attacks for UK,USA and Australia has not had any yet. So where do you think the greatest psychological impact will be felt?
    Doc Sherwood says a terrorist attack in Australia would hit this nation( my home) like a ‘ton of bricks’ financially because Australia’s bounce–back, (‘buffer-zone’ if you like), has always been tourism. IAustralia was able to absorb the 1987 crash better than most countries because tourism was surging then.
    So what happens when you take way Australia’s back-up system too?
    The reason we tell you these things is not to put you in a state of fear but because we have many friends, contacts and associates in all three of these countries. Your lives are equal to ours as are all of those who suffer though the calamities that ensue .
    Zarlen always says ‘that a person is exactly where they are supposed to be at a particular point in time.’
    So it would appear these scenarios present a testing time where belief in self and leadership need to come to the fore.
    The first thing to remember said Zarlen to me once is that “No matter how bad things get in your life ,in your particular sphere of the world,concentrate on the slightest positive thing that goes right. That is your fist step. Your thoughts are the building blocks of your life. And remember what Dr Emoto says about the power of ‘gratitude’.
    Lately when something in my life causes me stress,pain,upset I have taken to turning the ‘higher forces’ and saying ‘Thank-you’ because as you may know if something does not kill you it makes you stronger.
    As Doc said once you don’t have to like me as a person but listen to my words I can help you and this extends to all of you who read website. We are your friends stay close and if not remember if you are sincere in your intent ther will always be others who will be near watching waiting to help you.You are never alone.
    Regards
    Moryah

  2. moryah4 Says:

    …One other thing when Black Monday(1987) occured the Arabs only took out a portion of their investments at the time.

    US TURMOIL HITS GULF OIL REVENUES,OVERSEAS INVESTMENTS

    by Omar Hasan

    NICOSIA, Sept 18, 2008 (AFP) - Gulf states are bracing for the shakeout in the value of their massive foreign investments and the impact of lower oil revenues as the US financial crisis jolts the global economy, analysts say.

    But the banking sector in the oil and gas-rich six-nation Gulf Cooperation Council appears safe, they have told AFP.

    GCC states have earned well over one trillion dollars from high oil prices in the past six years and are estimated to be holding global investments worth 1.5 trillion dollars run by their sovereign wealth funds (SWFs).

    “The US banking crisis will further slow global economic growth, dampening demand for oil. This will cause oil prices and revenues to drop sharply,” said Saeed al-Shaikh, chief economist of Saudi Arabia’s National Commercial Bank.

    GCC member states Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and the United Arab Emirates together pump 16 million barrels a day, or about 20 percent of world supplies, and hold 45 percent of proven global oil reserves.

    “After this crisis, Gulf states should be prepared for cheaper oil prices and a drop in their oil revenues,” which account for more than 90 percent of public income, Kuwaiti economist Hajjaj Bukhdur said.

    “I think demand for oil will decline even from China because its exports to the United States are expected to take a dive as a result of the banking crisis,” Bukhdur told AFP.

    Global markets were shocked when Lehman Brothers, the fourth largest US investment bank, filed for bankruptcy and Bank of America bought troubled Merrill Lynch for 50 billion dollars.

    Markets were further rattled by the near bankruptcy of insurance and financial services group AIG, one of the largest companies in the world, which was staved off by a US government rescue.

    The price of crude oil has now plunged by almost 40 percent since striking record highs above 147 dollars per barrel in July.

    On Tuesday, OPEC cut its world oil demand growth forecast for 2008 to 1.02 percent from 1.17 percent in the face of falling demand already occurring in the United States, the world’s biggest consumer of energy.

    The Gulf banking system is not expected to be affected but Gulf nations are fretting about their huge foreign investments, estimated by some reports at more than 1.5 trillion dollars.

    (As you can see this is big bikkies and how much of this 1.5 triilion is invested in the US ?)

  3. moryah4 Says:

    (Meanwhile..)

    US SANCTIONS FIREWALL FOR IRAN,SYRIA ?

    By Alistair Lyon, Special Correspondent
    Reuters, Sunday October 5 2008

    BEIRUT, Oct 5 (Reuters) - Syria and Iran, both targeted by U.S. sanctions, proclaim that their “independent” economies will suffer less than others from global financial turmoil.
    But economists in the region say neither Tehran nor Damascus will be immune from the credit crunch spreading from the United States, or from any ensuing world economic downturn.
    Some argue that the cost of sanctions greatly outweighs any unforeseen benefits Syria or Iran might gain by being denied access — and direct exposure — to U.S. financial markets.
    The United States has long enforced unilateral measures against Iran, and has toughened them while seeking to tighten U.N. sanctions over Tehran’s nuclear programme. It imposed sanctions on Syria in 2004, accusing it of sponsoring terrorism. “Sanctions are very damaging to their economies,” said Louis Hobeika, an economics professor at Lebanon’s Notre Dame University, saying they further isolated both countries from the potential gains of globalisation, as well as its occasional shocks.
    It’s true that Syrian investors have experienced no wild swings on the local stock market — they don’t have one.
    And the head of Tehran’s bourse told Reuters its lack of links with the outside world was a “strong point” when asked why Iranian shares had so far escaped the panic in markets elsewere.
    Iran’s all-share index has gained some 20 percent this year — although inflation has run even faster. Total capitalisation climbed to $70 billion in August from $40 billion in January 2007, said Ali Rahmani, the stock exchange’s managing director.
    OIL PRICE THREAT TO IRAN
    President Mahmoud Ahmadinejad said Iran would survive better than others because its economy had grown more independent since the 1979 Islamic revolution that toppled the U.S.-backed Shah.
    He said falling oil prices, which have tumbled partly due to the weakening U.S. economy, the world’s biggest consumer, would have an impact, but would not derail Iran’s economic plans.
    Yet Iran, the world’s fourth-largest crude exporter, relies heavily on oil revenue to fund its budget and is showing concern at volatility that has seen U.S. crude plunge to around $93 a barrel on Friday, more than $50 below its $147 record in July.
    “$100 or below is not suitable for oil producers or oil consumers,” Oil Minister Gholamhossein Nozari said on Saturday.
    An Iranian economist, who declined to be named, said no country could emerge unscathed from global financial chaos.
    “This credit crunch is everywhere in the world. The Iranian banks are also exposed to refinancing lines of credit,” he said.
    Iranian banks are not invested directly in the U.S. market, but are vulnerable indirectly via business in Europe and Asia, he added. “They are subject to the systemic risk. It is multiplied in the case of Iran because of the sanctions.”
    Traders say the cost of financing trade, such as via letters of credit, has climbed as Western banks in particular have increasingly reduced or even severed links to Iran and perceived risks have risen as a result of U.S. and U.N. sanctions.
    Syrian officials, echoing a line they took during world market turmoil in 1998, say Syria’s curbs on foreign investment and capital flows have sheltered it from the latest crisis.
    Finance Minister Mohammad Hussein, making a virtue of Syria’s primitive financial system, strong state role and cautious economic reform, says the upheaval will have limited impact on a country with few links to global financial markets.
    “The Syrian stock market is not born yet. Banks and financial institutions have just started,” he noted recently.
    SYRIAN ECONOMY UNDER STRAIN
    Syria’s main problem is its financial sector, handicapped less by U.S. sanctions than by its own inefficiency and lack of liquidity, argued Hobeika, the Lebanese economist.
    The World Bank ranks Syria last of 178 nations in access to credit, although in a report last month it also said the Syrian business environment had improved slightly in the past year.
    Foreign direct investment rose 47 percent to $885 million last year, mainly due to Gulf capital going into real estate in Syria, as well as neighbouring Lebanon and Jordan….

    http://www.guardian.co.uk/business/feedarticle/7844238

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