What the HECK just happened in America?!? Two major investment banks have been dismantled in a little over a weekend. Lehman Brothers is about to enter bankruptcy and Merrill Lynch is to be taken over by Bank of America. Has this EVER happened before?
10 comments:
This is bad stuff. There is going to be a serious knock on effect. I think that with all these bail outs, the US government is going to start putting themselves at risk. What's the US account deficit at these days?
there will be a world global recession with the price of properties collapsing. People would be mad to buy anything now. The worse is to come
To Anon,
Actually I would disagree and say that in a recession , property would hold value more than equities for example. sure maybe physical gold/silver bars may be more valuable but you cant stock those at home. Look at Zim , country in a recession ( if there was ever a country in one!) and prop prices maintained their values in hard currency.....just a thought
This is getting very serious.
Suddenly all the "The worst is over" and "Property only goes up" economists seem to be in hiding.
Even though this might be a good thing in terms of getting property prices back to reasonable levels, I fear the fallout might be big enough to make it irrelevant. No one will have any money to buy property, no matter how cheap.
Look at what happened in the USA. Price of houses in some parts of the country has fallen by 75% and the worse is still to come. Look at what is happening in the UK, same thing. If you want to be safe with your investment invest in gold. Switzerland is buying a lot of gold at the moment and they are talking about a shortage of gold soon. This will make the price rise very fast. You have to be "suicidal" to invest in properties now
whats the best way to buy Gold?
Best way to buy gold: Krugerrands
I actually think that what happened to LB is a good thing. First is the fact that the US Fed didn't bail them out means that the life will take its course and the sick will die and the strong will survive. While the bailout might have made the situation less dramatic in the short term, in the long term it would spell a lot more trouble.
Second, you must understand what an investment bank like LB is up to. It is essentially a dealer for market speculators. One can argue that while they do not produce anything directly,they indirectly help redistribute capital where it is needed the most. This is in theory. For a look at what those banks do in practice read a book like "Traders Guns & Money". My personal view is that banks like LB are cancers of the financial system and when they get too greedy and reckless and die, it is a good thing.
i certainly do not feel sorry for LB employees who have lost their jobs. Very often they got the job when they have never studied finances. They get jobs because of "connection, contact"! The same happens in all big institutions
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