Financial bombs,DERIVATIVES, where will the next one explode

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time traveler

Midlothian, TX

#1 Jun 24, 2010
We have done had the Wall Street Derivatives Bomb explode on WALL STREET. It was a monster of a disaster to the mom and pop investers who bought those derivatives from the markets on wall street where they were created. the derivatatives market failures brought a disaster to the jobs market, causing high unemployeement to millons who lost their jobs, as well as the wealth they held in their homes which were forclsed on. Yet the derivatives marketers continues on doing business as if nothing happend that brought our economy to the GREATEST RECESSION IF NOT A DEPRESSION SINCE THE GREAT RECESSION OF OF THE 1929 MARKET CRASH. As the people on wall street continue in the DERIVATIVES MARKET TODAY, I wonder just when and where the nest DERICATIVES MARKETING BOMB WILL EXPLODE AND CAUSE EVEN MORE DAMAGE TO OUR already weakend,non jobs creating economy. When that next BOMB explodes will you once agin be one of the victims of an even greater recession???

erivatives Bomb explode onerivatives
time traveler

Midlothian, TX

#2 Jun 24, 2010
Another type BOMB has alreaady exploded inthe Gulg of Mexico. I call it the OIL BOMB. It has already started destroying the Gulf econmy and we do not at this moment know the complete effects it will have on the nations economy. How many people will this disaster efffect? Will the effects be felt by millions of people or in the tens of millions of people on the Gulf or will it be felt nation wide. The big question is; how long will the effects of the BP diaster be felt among the people who have lost their jobs, and how long will the Gulf waters be effected by the oil that sucked the life out of the gulf. Will the effects linger for 10, 20, or 30 years or longer.
time traveler

Midlothian, TX

#3 Jun 24, 2010
You put both the disasters togather, the Derivatives market and the BP GULF OIL disaster and you could end up with the biggest recession of all times, and maybe as THE GREATEST DEPRESSION of all times. Will it happen? maybe as it has already started.
Sunrise

United States

#4 Jun 25, 2010
time traveler wrote:
We have done had the Wall Street Derivatives Bomb explode on WALL STREET. It was a monster of a disaster to the mom and pop investers who bought those derivatives from the markets on wall street where they were created. the derivatatives market failures brought a disaster to the jobs market, causing high unemployeement to millons who lost their jobs, as well as the wealth they held in their homes which were forclsed on. Yet the derivatives marketers continues on doing business as if nothing happend that brought our economy to the GREATEST RECESSION IF NOT A DEPRESSION SINCE THE GREAT RECESSION OF OF THE 1929 MARKET CRASH. As the people on wall street continue in the DERIVATIVES MARKET TODAY, I wonder just when and where the nest DERICATIVES MARKETING BOMB WILL EXPLODE AND CAUSE EVEN MORE DAMAGE TO OUR already weakend,non jobs creating economy. When that next BOMB explodes will you once agin be one of the victims of an even greater recession???
erivatives Bomb explode onerivatives
I think you are confused again. I can't see that derivatives had anything to do with jobs being lost, homes being foreclosed on or the recession. As far as moms and pops having a disaster because they invested in derivatives, it is a sad situation but the government was never meant to protect a person from themselves. Mom and pop should never have invested in derivatives if they did not understand how they worked. A person should never invest their money in anything that they do not fully understand. But if they do, it is not the government's responsibility to be their protector.

Are you wanting the government to shut down the derivatives market? Just how would they do that? Should they stop all derivatives trading? How do you think that would impact the economy. What would it do to anyone that had money invested? Derivatives have filtered into even common investments. I can't imagine how that could be done.
Sunrise

United States

#5 Jun 25, 2010
time traveler wrote:
You put both the disasters togather, the Derivatives market and the BP GULF OIL disaster and you could end up with the biggest recession of all times, and maybe as THE GREATEST DEPRESSION of all times. Will it happen? maybe as it has already started.
What do you think a solution would be for the derivatives market and the BP gulf oil disaster?
pappy

Dallas, TX

#6 Jun 29, 2010
According to you Sun Shine there was nothing that happened on wall street that caused a collapse of the financiall institutions. How then if derivatives did not lose their value as well as the securities that had no actual value that was sold on wall street And what caused the value on the peoples retirement plans to lose value. I suppose it was only the people that bought homes with no down payment that caused the disaster.? well what cause the financial collapse or was there even a collapse.??? expain it to me if derivatives had nothing too do with it
Sunrise

United States

#7 Jun 30, 2010
pappy wrote:
According to you Sun Shine there was nothing that happened on wall street that caused a collapse of the financiall institutions. How then if derivatives did not lose their value as well as the securities that had no actual value that was sold on wall street And what caused the value on the peoples retirement plans to lose value. I suppose it was only the people that bought homes with no down payment that caused the disaster.? well what cause the financial collapse or was there even a collapse.??? expain it to me if derivatives had nothing too do with it
I am not sure what you mean by wall street. To me it means the stock market. The stock market has nothing to do with financial institutions.

I did NOT say that derivatives did not lose some of their value. You had said that derivatives caused the collapse which is not true.

I did NOT say that nothing happened on wall street to cause the collapse.

You are actually talking about three different things. The stock market is buying and selling stock of companies. Their value is based on their profits less expenses. If the company begins to show a loss or begins to have problems, people tend to start selling their stock holdings in that company.

You see, that is why putting high taxes, strict regulations and fees on companies affects the economy. Those taxes, regulations and fees cut into their profits and the value of the company falls.

Derivatives are found mostly in mutual funds.

The housing market has nothing to do with wall street. Freddie and Fannie are the home lending institutions. They are operated by the government, ie. Barney Frank. You also have the option to go to a local institution but they must abide by the federal rules.

Do some reading on the Glass-Stegall act. A bill was passed during the Carter administration that lowered the requirements for receiving a home loan. I remember one requirement was the required down payment of 20% was lowered to 10%. Then during the Clinton administration that bill was watered down even more. Senator Chris Dodd made the statement "We have to be sure that people who cannot afford a home can buy a home."

All of these things had a way of impacting the collapse.
pappy

United States

#8 Jun 30, 2010
Sun Rise, are you shining brightly today? Well Sunrise I do not make millions but I am in a hogher tax bracket than those who wheel and deal in stocks. And do not have the write offfs they have, nore the lobbyist to represent me in a congressman's office in DC. And if those derivivatives were not a cause of the financial collpse then tell why not. And the people that bought the homes were not the cause either, but the ones making the arrangement s aand using false info on the mortagages and what about those people that could afford the house and pmake the payments? But in the end they lost their jobs. Were they at fault because they bought a house. If Bush had been using some oversight and watching the financial institutions most of this would not have occurred. He was not keeping those institutions honest. Especially the mortgage lenders, the morgage writers, Some one had to giver their approval on the crooked dealings going on in the mortgage business, but Bush and his cronies just turned a blind eye to what was hppening. The interest rates were lowered for the financial houses down to where they were giving momey away, at zero percent interest to try and keep the economy from collapsing. they say it started in 2007, but you can not find a financial genius that was in the bush administration that will say a wood about the collapse or when it started or its cause. they all claimed ignorance.They ignorance is blessed. Even I and my kin folks knew the economy was going to collapse, and it did just as we knew it would, just later than we predicted.
pappy

United States

#9 Jun 30, 2010
ARe those Dodds exact words Sun rise? And Bush was also talking up the housing sales also and gave no oversight. That is the samee reason the oil rig blew up in the gulf, no oversight. No rules and regulations. Once more letting the Big Oil do the self regulating.
pappy

United States

#10 Jun 30, 2010
Did you see Sun Sire where BP was caught lying about the amount of oil they were pumping on an indian reservation. The firat time thewee caught they said they would correct the error. they were than caught agin cheating and lying about the total amounto f oil they were pumping and was fines this time , over 5 million dollars. Just goes to show what big business will cheat and lie even after being caught at cheating. Can not keep their hand out of the cookie jar. I bet they came out ahead on the oil and the profits even after paying the fine.
Sunrise

United States

#11 Jul 1, 2010
pappy wrote:
Sun Rise, are you shining brightly today? Well Sunrise I do not make millions but I am in a hogher tax bracket than those who wheel and deal in stocks. And do not have the write offfs they have, nore the lobbyist to represent me in a congressman's office in DC. And if those derivivatives were not a cause of the financial collpse then tell why not. And the people that bought the homes were not the cause either, but the ones making the arrangement s aand using false info on the mortagages and what about those people that could afford the house and pmake the payments? But in the end they lost their jobs. Were they at fault because they bought a house. If Bush had been using some oversight and watching the financial institutions most of this would not have occurred. He was not keeping those institutions honest. Especially the mortgage lenders, the morgage writers, Some one had to giver their approval on the crooked dealings going on in the mortgage business, but Bush and his cronies just turned a blind eye to what was hppening. The interest rates were lowered for the financial houses down to where they were giving momey away, at zero percent interest to try and keep the economy from collapsing. they say it started in 2007, but you can not find a financial genius that was in the bush administration that will say a wood about the collapse or when it started or its cause. they all claimed ignorance.They ignorance is blessed. Even I and my kin folks knew the economy was going to collapse, and it did just as we knew it would, just later than we predicted.
Pappy, I have got to get ready to go out of town. I will answer this tomorrow. In the meantime would you please explain to me what is a derivative?
Sunrise

United States

#12 Jul 1, 2010
pappy wrote:
Did you see Sun Sire where BP was caught lying about the amount of oil they were pumping on an indian reservation. The firat time thewee caught they said they would correct the error. they were than caught agin cheating and lying about the total amounto f oil they were pumping and was fines this time , over 5 million dollars. Just goes to show what big business will cheat and lie even after being caught at cheating. Can not keep their hand out of the cookie jar. I bet they came out ahead on the oil and the profits even after paying the fine.
No, I did not see that but I am not surprised. Your consternation is showing again.
pappy

Midlothian, TX

#13 Jul 1, 2010
Such big words Sun shine, But the real problem that we had on wall street and its selling of securities that had very little value in the mortgage markets were what I would call a ponzi scheme. The same thing took pance at Enron where the accounting and auditoring firms got away with what I call fraudulent book keeping practices that let a product be sold at an inflated price. And as of yet the accounting and auditing firms has not be held accountable for their book keeping practices. I wonder how deep this rececsssion would have gone if AIG insurance, would it have been a dpression even greater than the 1929 depression. Had not been bailed out to pass that money around like candy. I think so. Even Goldman- Sachs would have gone down , busted, broke. they would have been jumping outo f those Wall STreet windows. But a bailout by the tax payers saved their butt.
Sunrise

Fort Worth, TX

#14 Jul 5, 2010
pappy wrote:
Well Sunrise I do not make millions but I am in a hogher tax bracket than those who wheel and deal in stocks. And do not have the write offfs they have, nore the lobbyist to represent me in a congressman's office in DC.
How can you make such a statement and know it to be true? My neighbor on each side appears to have wealth by looking at their automobiles, house, clothes, etc. but I don't know that to be a fact. They might be very deep in debt and not really own any of what I am seeing. Nor can I tell by looking at them whether or not they invest in the stock market. I have holdings in the stock market and buy and sell shares of stock often. I am also in a high tax bracket. I do not have any tax write offs nor lobbyists.
pappy wrote:
And if those derivivatives were not a cause of the financial collpse then tell why not.
I did not say that derivatives was not A cause in the financial collapse. Your first statement on this subject was that derivatives was THE cause which is not the case. I am still waiting for you to give your definition of derivatives.
pappy wrote:
And the people that bought the homes were not the cause either, but the ones making the arrangement s aand using false info on the mortagages and what about those people that could afford the house and pmake the payments? But in the end they lost their jobs. Were they at fault because they bought a house.
Yes, the people that bought houses that they could not afford are at fault. No one forced them to buy a house when they did not have the funds to pay for it. Just because the government required lending institutions to loan money to those people does not mean the people should disregard their financial status. So yes, they are at fault. For those that lost their job - they could have made a valid attempt to sell the house or refinance the mortgage. There are ways to deal with these situations but instead most just stopped making payments and lived in the house until they were forced out.
pappy wrote:
If Bush had been using some oversight and watching the financial institutions most of this would not have occurred. He was not keeping those institutions honest. Especially the mortgage lenders, the morgage writers, Some one had to giver their approval on the crooked dealings going on in the mortgage business, but Bush and his cronies just turned a blind eye to what was hppening. The interest rates were lowered for the financial houses down to where they were giving momey away, at zero percent interest to try and keep the economy from collapsing. they say it started in 2007, but you can not find a financial genius that was in the bush administration that will say a wood about the collapse or when it started or its cause. they all claimed ignorance.They ignorance is blessed. Even I and my kin folks knew the economy was going to collapse, and it did just as we knew it would, just later than we predicted.
The financial institutions were using the financial laws that were first passed during the Carter administration and watered down during the Clinton administration. Do some research on those laws. What you are saying about this is not true.
Sunrise

Fort Worth, TX

#15 Jul 5, 2010
pappy wrote:
Such big words Sun shine, But the real problem that we had on wall street and its selling of securities that had very little value in the mortgage markets were what I would call a ponzi scheme. The same thing took pance at Enron where the accounting and auditoring firms got away with what I call fraudulent book keeping practices that let a product be sold at an inflated price. And as of yet the accounting and auditing firms has not be held accountable for their book keeping practices. I wonder how deep this rececsssion would have gone if AIG insurance, would it have been a dpression even greater than the 1929 depression. Had not been bailed out to pass that money around like candy. I think so. Even Goldman- Sachs would have gone down , busted, broke. they would have been jumping outo f those Wall STreet windows. But a bailout by the tax payers saved their butt.
Name me some of the mortgage markets that was/is selling shares in the stock market. There are many securities on wall street that have little value. As I have said before, a person should not be buying and selling shares of stock if they do not understand what they are doing. As for Enron, the best I remember the managers of that company and the accounting firms that they were using were punished which is the way it should be. What is it that Enron got away with that you speak of? If a company and accounting firm are using fraudelent data there are few ways to discover this until a collapse happens. I have known other companies to do this. They should be heavily punished especially the accounting firms. The accountants and the accounting firm should have their license revoked for life.
pappy

Dallas, TX

#16 Jul 11, 2010
Sun Shine, if a security is marked tripple aaa for its value on the buyingers market to show it has a future value that wont degrade, but has just been bundled and not checked by those doing the grading of those bundled securities then you have problems just as they had in the mortage securities market. Seems the wall streetcompanies just did not take the time to check thise securities before they were graded and sold as a secure product to some very knowledgeable people. And it finally collapsed the market. Did it not. all because of one thing, no rules, no oversight, and no regulations as the the laws were done away with when they done away with Glass Stegall bill. And where and who is going to be punished. It has been a vry profitable game of chance for a few and a disaster for the nation. Just ask your doctor how much they lost in thier retirement plan.
pappy

Dallas, TX

#17 Jul 11, 2010
I may not know all about wall street and its operations, but a thieve is a thieve. Whether on main strreet or wall street.
Sunrise

United States

#18 Jul 11, 2010
pappy wrote:
Sun Shine, if a security is marked tripple aaa for its value on the buyingers market to show it has a future value that wont degrade, but has just been bundled and not checked by those doing the grading of those bundled securities then you have problems just as they had in the mortage securities market. Seems the wall streetcompanies just did not take the time to check thise securities before they were graded and sold as a secure product to some very knowledgeable people. And it finally collapsed the market. Did it not. all because of one thing, no rules, no oversight, and no regulations as the the laws were done away with when they done away with Glass Stegall bill. And where and who is going to be punished. It has been a vry profitable game of chance for a few and a disaster for the nation. Just ask your doctor how much they lost in thier retirement plan.
That would not be a description that I would put on a derivative. Here is an example but understand that this does not completely cover what a derivative is. Are you familiar with financial institutions selling bad loans as a group to other financial institutions for a fraction of their value? Of course if you cannot collect on a loan it has zero value to you. Institutions buy these bad loans by the lot for a fraction of their cost that then try to collect on them. They only have to collect on a few to recover their money and make a profit. The loans that they did not collect on are then sold to some other institution. This scheme takes place several times. By the time these loans have been sold 2-3 time nobody knows where they came from or what they contain but they continue to be bought and sold even though the buyer doesn't know what he is buying. A derivative is derived from many things, so many things that it is impossible to trace what they contain or their value or soundness.
Sunrise

Grand Prairie, TX

#19 Jul 13, 2010
pappy wrote:
Sun Shine, if a security is marked tripple aaa for its value on the buyingers market to show it has a future value that wont degrade, but has just been bundled and not checked by those doing the grading of those bundled securities then you have problems just as they had in the mortage securities market. Seems the wall streetcompanies just did not take the time to check thise securities before they were graded and sold as a secure product to some very knowledgeable people. And it finally collapsed the market. Did it not. all because of one thing, no rules, no oversight, and no regulations as the the laws were done away with when they done away with Glass Stegall bill. And where and who is going to be punished. It has been a vry profitable game of chance for a few and a disaster for the nation. Just ask your doctor how much they lost in thier retirement plan.
A rating (ie AAA) is how bonds and other securities are rated on any given day. Buyers look at that rating to judge the soundness of the security. In addition a buyer should study other information about the security. This rating in no way represents the FUTURE value or degrading of the security. Once you buy a security it is up to you to keep up with the soundness of it. Securities are downgraded or upgraded all the time. I'm not sure what you mean by "bundled." It is incorrect to say there are no rules, oversight nor regulation. You can go to this link and read about the Glass-Stegall act.
http://en.wikipedia.org/wiki/Glass%E2%80%93St...
pappy

Fort Worth, TX

#20 Jul 22, 2010
Sun Rise, I just got thrugh watching McCain of Arizona making a speech on the cost of goverment and the deficit. Over the years McCain in the bush years has never and I mean never seen a deficit he didnot like and vote for while bush and the republicans controled both the senate and house and all of a sudden he is against deficit spending where in the world was he at during his vote in the senate when bush ran the goveremtn into the ditch and the ditch of deficit was so dip he could not get out of that deficit ditch, why he just loved that deficit spending just as the other republicans did. And how soon they forget it was their viote that caused out deficit spending of the bush years to increase the deficit spending 89 percent. I guess he is still in that ditch. Why when Carter left office the deficit was 884 billion dollars and when Reagon left office he added another 187 percent to the cost of the deficit, nearly thrippling the deficit. The deficit was in the trillions when Reagan left office. He done something no other President before him had done trippling the deficit. Boy was he a big spender. Daddy bush added even more to the deficit. Now when Clinton came into office he added about 32 percent to the deficit and had 238 million left over to be used to lower the deficit when the nest President came into office. Now what diod the next President do but give a tax brake to his froend the millionaires. So agin the Repulicans used the chance to lower the deficit by giving it away to the wealthy. And what did that tax break do but add to the deficit. then He gave another tax break, agin addding to the deficit. Now the Republican party sceams about the cost of the extension for the unemployeed people to draw their checks. I has always been done when unemployeement is running in the high percentage points as it is now. And the Republicans are now against SMALL BUSINESS LOANS. i ALSO AM WAT HING THIS ON C SPAN AS IT HAPPENS. sO ARE THE SMALL BUSINESS PEOPLE GOING TO BE ABLE TO GET small business loans, not if the republicans have their way because they are against it. And I guess and assume that Mc Cain is also against the loans to small business. So agin the REPUBLICANS are against this billl also. So thesmall business sector ends up unable to raise money because of tight money . And the republicanns has said before that small business are the jobs creators in our country. I believe that is just talk as the republicans are against loans to small business as they are talking against the passage of thie bill. So as it has bee said before: Republicans are the party of NO.

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