fonseca33
Posts: 2
Joined: Sun Mar 30, 2008 3:08 pm

Dollar Rallies As Safe Haven Status Reigns

Wed Oct 22, 2008 4:37 am

Seen the currency market?

I just woke up to see the Euro at $1.28, the Pound at $1.63, and many other currencies at multiyear lows. The Yen is the only currency that is stronger as a whole at this point.

Who knew. Shows how interesting the currency market is.

Of course, the main reason for $ appreciation is due to expectations that the ECB and others will slash interest rates, the fact that the European currencies were vastly overvalued to start with (just like in the mid 90's), and the huge demand in dollars brought upon by its safe haven/reserve status, mostly into US Debt (AAA).

Europe is still expensive to travel to, though it is now 25% cheaper than just a few months ago!
 
Doona
Posts: 3382
Joined: Fri Feb 18, 2005 9:43 am

RE: Dollar Rallies As Safe Haven Status Reigns

Wed Oct 22, 2008 5:43 am

Yup, the dollar has indeed rallied, back to pre-"clusterf@ck to the poorhouse" levels...  silly 

Cheers
Mats
Sure, we're concerned for our lives. Just not as concerned as saving 9 bucks on a roundtrip to Ft. Myers.
 
andz
Posts: 7626
Joined: Mon Feb 16, 2004 7:49 pm

RE: Dollar Rallies As Safe Haven Status Reigns

Wed Oct 22, 2008 5:55 am

There is always a downside. Our currency has slid badly against all currencies but mostly against the dollar. 3 months ago it was at R7.50 to the dollar, today it is almost R10.50. Economists reckon the Rand is undervalued by about 40% at the moment.
After Monday and Tuesday even the calendar says WTF...
 
kiwiinoz
Posts: 1999
Joined: Mon Oct 10, 2005 3:07 pm

RE: Dollar Rallies As Safe Haven Status Reigns

Wed Oct 22, 2008 6:06 am

We have been looking at buying a house in Australia this year. Have had our eye on one in particular.

Being in HK, our interest has been how much the house would cost us in HK$, which is pegged to the US.

4-5 months ago, this house would have cost us HK$4.56 million. Today, $3.12 million. Nearly 1.5 mill saving just as a result of the swing in currency!!!
 
kappel
Posts: 1836
Joined: Thu Jul 14, 2005 6:48 pm

RE: Dollar Rallies As Safe Haven Status Reigns

Wed Oct 22, 2008 7:53 am

Well, good news for Airbus at least. Bad news for me as a tourist in the US  Wink
L1011,733,734,73G,738,743,744,752,763,772,77W,DC855,DC863,DC930,DC950,MD11,MD88,306,319,320,321,343,346,ARJ85,CR7,E195
 
planesarecool
Posts: 3208
Joined: Sun Nov 11, 2001 12:37 am

RE: Dollar Rallies As Safe Haven Status Reigns

Wed Oct 22, 2008 9:34 am

Good news for me. I bought £500 worth of US$ in June, which got me $960. As my flights were cancelled when Zoom went bust, I still have that money, which I can trade in today for a healthy £80 profit.

Looks like us Europeans will have to find somewhere else to go to stock up on cheap goods.
 
davehammer
Posts: 266
Joined: Mon Nov 26, 2007 8:20 pm

RE: Dollar Rallies As Safe Haven Status Reigns

Wed Oct 22, 2008 9:52 am



Quoting Planesarecool (Reply 5):
Looks like us Europeans will have to find somewhere else to go to stock up on cheap goods.

Eastern Europe here we come!
 
fonseca33
Posts: 2
Joined: Sun Mar 30, 2008 3:08 pm

RE: Dollar Rallies As Safe Haven Status Reigns

Wed Oct 22, 2008 3:58 pm

Norwegian currency is also much weaker now.
 
Dougloid
Posts: 7248
Joined: Tue Jul 05, 2005 2:44 am

RE: Dollar Rallies As Safe Haven Status Reigns

Wed Oct 22, 2008 4:09 pm

Interesting stuff, this currency watching.

A long time ago here a fellow from Canada opined that the US dollar was in a "turd filled toilet" that it was never going to get out of, and that it was something of a mark of moral superiority-despite the fact that historically speaking currency exchange rates vary a lot over time and according to factors that have not much to do with being morally superior.

Right now the loonie is back about where it was before the runup started. Wherever will Canada go shopping?

As my mother always said, "time wounds all heels."
If you believe in coincidence, you haven't looked close enough-Joe Leaphorn
 
AM744
Posts: 1435
Joined: Thu Jun 07, 2001 11:05 pm

RE: Dollar Rallies As Safe Haven Status Reigns

Wed Oct 22, 2008 9:11 pm



Quoting Andz (Reply 2):
Our currency has slid badly against all currencies but mostly against the dollar. 3 months ago it was at R7.50 to the dollar, today it is almost R10.50

Here, here. We are on the same boat.
 
Kent350787
Posts: 844
Joined: Wed May 28, 2008 12:06 am

RE: Dollar Rallies As Safe Haven Status Reigns

Wed Oct 22, 2008 10:15 pm

I don't get the currency markets! Last month the AUD almost hit parity with the greenback, and was the best it had been for years with nearly every currency.

Now, even though the Australian economy seems to be the least like a clusterf**k (I assume that's the technical term in common use these days) of the G20 economies, it is seen a "risky" currency and has been sold down by almost 25% against the greenback, although it's coming back a little against other currencies.

What gives?

Kent
 
Arrow
Posts: 2325
Joined: Wed Jun 19, 2002 7:44 am

RE: Dollar Rallies As Safe Haven Status Reigns

Wed Oct 22, 2008 11:53 pm



Quoting Dougloid (Reply 8):
A long time ago here a fellow from Canada opined that the US dollar was in a "turd filled toilet" that it was never going to get out of, and that it was something of a mark of moral superiority-despite the fact that historically speaking currency exchange rates vary a lot over time and according to factors that have not much to do with being morally superior.

Probably me, although I don't recognize the metaphor. But if you go back far enough I'm sure I've said lots of even more outrageous things that turned out to be BS. Fortunately, I rarely put my money where my mouth is.

But be careful. I'll keep your note on file and trot it out when the US dollar tanks again -- which it surely will if I live long enough.

On the bright side: I just got back from two weeks in Hawaii that was 90% paid for last July when the loonie was at par. And I've got a bunch of accounts receivable in US dollars and UK pounds. O frabjous day!
Never let the facts get in the way of a good story.
 
Alessandro
Posts: 4962
Joined: Wed Sep 12, 2001 3:13 am

RE: Dollar Rallies As Safe Haven Status Reigns

Thu Oct 23, 2008 8:02 am

Perhaps people are convinced whom the next US president going to be?
From New Yorqatar to Califarbia...
 
AverageUser
Posts: 1824
Joined: Tue Oct 23, 2007 6:21 pm

RE: Dollar Rallies As Safe Haven Status Reigns

Thu Oct 23, 2008 7:30 pm

Don't know why I keep posting these -- everything's out of touch anyhow lately...



http://upload.wikimedia.org/wikipedia/commons/thumb/8/8c/Current_Account_Balance_per_capita_2006.PNG/800px-Current_Account_Balance_per_capita_2006.PNG
 
Dougloid
Posts: 7248
Joined: Tue Jul 05, 2005 2:44 am

RE: Dollar Rallies As Safe Haven Status Reigns

Thu Oct 23, 2008 10:20 pm



Quoting Arrow (Reply 11):
Probably me, although I don't recognize the metaphor. But if you go back far enough I'm sure I've said lots of even more outrageous things that turned out to be BS. Fortunately, I rarely put my money where my mouth is.

Nahhhh. It wasn't you. I've sold the occasional wolf cookie myself.

What happened was when I trotted out the chart that more or less said about what you've said , that it depends on what day it is and all that he suddenly lost interest in the argument-er, discussion.

I mean, you understand about moral superiority and all that, doncha?

Currency exchange rate discussions reminds me of a song we used to sing in Boy Scouts about a bajillion years ago:

The grand old Duke of York,
He had ten thousand men,
He marched them up the hill,
And marched them down again.

For when you're up, you're up,
And when you're down you're down.
And when you're only halfway up.
You're neither up or down.
If you believe in coincidence, you haven't looked close enough-Joe Leaphorn
 
Arrow
Posts: 2325
Joined: Wed Jun 19, 2002 7:44 am

RE: Dollar Rallies As Safe Haven Status Reigns

Thu Oct 23, 2008 11:18 pm



Quoting Dougloid (Reply 14):
I mean, you understand about moral superiority and all that, doncha?

Yup -- there's lots to spare up here, although the economic chapter is looking a little tattered these days. At least our banks are sound.

Just got back from the bank where my 750 pound cheque netted me $1495. I shoulda waited a couple of says to get it past 1500, Oh well. Next one will be in US dollars, so keep that loonie tumbling ...

Great song. Wonder if the Duke of Lancaster wrote it.
Never let the facts get in the way of a good story.
 
Dougloid
Posts: 7248
Joined: Tue Jul 05, 2005 2:44 am

RE: Dollar Rallies As Safe Haven Status Reigns

Fri Oct 24, 2008 12:57 am



Quoting Arrow (Reply 15):
At least our banks are sound.

Yes, there's that to be said for the Maple Leaf Republic. Sound conservative banking is a good idea, and I'm pleased that me and the wife use credit unions exclusively. The bank that ended up with our mortgage did not go in for a lot of the razzle dazzle the last few years, and they're starting to look like smart people.
If you believe in coincidence, you haven't looked close enough-Joe Leaphorn
 
AverageUser
Posts: 1824
Joined: Tue Oct 23, 2007 6:21 pm

RE: Dollar Rallies As Safe Haven Status Reigns

Fri Oct 24, 2008 5:41 am



Quoting Dougloid (Reply 14):
Currency exchange rate discussions reminds me of a song we used to sing in Boy Scouts about a bajillion years ago:

The grand old Duke of York,
He had ten thousand men,
He marched them up the hill,
And marched them down again

It should not remind you of anything of recent times, really. The outward appearance is the same as in the past dollar rallies, but this time it's a reflection of a "once-in-a-century event" (Greenspan). This is not a "return to business as usual" by no means. It's extraorndinary times now we're living in.

http://www.financialarmageddon.com/2...ll-seek-to-unload-the-largest.html
 
Arrow
Posts: 2325
Joined: Wed Jun 19, 2002 7:44 am

RE: Dollar Rallies As Safe Haven Status Reigns

Fri Oct 24, 2008 7:55 pm



Quoting AverageUser (Reply 17):
This is not a "return to business as usual" by no means. It's extraorndinary times now we're living in.

And here's an analyst suggesting that the precipitous drop in the value of the loonie might move in the other direction just as fast. He has an interesting take on the cause

from the Globe & Mail:

The Canadian dollar could quickly recover more than half the massive losses it has sustained this month once banks, hedge funds and other big investors no longer have to buy vast quantities of greenbacks and yen to cover short positions in those currencies, CIBC World Markets said Friday.

“It's not interest differentials that are driving the foreign exchange move,” CIBC senior economist Avery Shenfeld said in a note to clients, as the loonie was hovering at between about 78.50 cents (U.S.) and 78.70 cents in midday trading, down more than 15 cents from the beginning of October. “Instead, it's a wave of ‘forced' U.S. dollar and yen buying to cover short positions created by other asset price developments.”

But this wrenching process could be over “quite soon” and bring a “significant snap-back” for some of the many currencies that have plunged against their U.S. and Japanese counterparts.

“For the C$, the last five or ten cents of decline might be reversed as fast as they came, with further gains in the latter half of next year as the global economy and commodities rebound,” Mr. Shenfeld said.


Wouldn't it be nice if you could accurately predict all this -- you'd be very rich.
Never let the facts get in the way of a good story.
 
Arrow
Posts: 2325
Joined: Wed Jun 19, 2002 7:44 am

RE: Dollar Rallies As Safe Haven Status Reigns

Fri Oct 31, 2008 7:23 pm

From today's Globe & Mail. As predicted:

The dollar overcame morning turbulence and took off again Friday, gaining 1.25 cents to 83.75 (U.S) in afternoon trading, capping a wild week.

The loonie had started the day on a low note, dropping three-quarters of a cent – to 81.23 – in early trading Friday on the heels of weak economic reports from the United States and Canada and falling crude oil prices.

By noon, however, the dollar had recovered and resumed its upward trajectory, building on gains from Monday's close of 77.59 cents.
Never let the facts get in the way of a good story.
 
Dougloid
Posts: 7248
Joined: Tue Jul 05, 2005 2:44 am

RE: Dollar Rallies As Safe Haven Status Reigns

Fri Oct 31, 2008 11:11 pm



Quoting AverageUser (Reply 17):
http://www.financialarmageddon.com/2...ll-seek-to-unload-the-largest.html

You seem to be attracted to that website but you must realize that its primary purpose is to sell the guy's books, don't you?

I mean, think about it. If a guy thinks that everything's just peachy keen, he's not going to name his domain weareallfucked.com, is he?
If you believe in coincidence, you haven't looked close enough-Joe Leaphorn
 
AverageUser
Posts: 1824
Joined: Tue Oct 23, 2007 6:21 pm

RE: Dollar Rallies As Safe Haven Status Reigns

Sat Nov 01, 2008 6:45 pm



Quoting Dougloid (Reply 20):
must realize that its primary purpose is to sell the guy's books

Well he just might have struck gold -- but if selling books on an impending Armageddon is the best option for a banking professional we better run for the hills...
 
Dougloid
Posts: 7248
Joined: Tue Jul 05, 2005 2:44 am

RE: Dollar Rallies As Safe Haven Status Reigns

Sun Nov 02, 2008 3:57 am



Quoting AverageUser (Reply 21):
Well he just might have struck gold -- but if selling books on an impending Armageddon is the best option for a banking professional we better run for the hills...

I do not put a whole lot of stock in the musings of people who are that desperate to sell their own books. On that subject whatever happened to the guy who wrote "Dow 36,000" a couple years ago?
If you believe in coincidence, you haven't looked close enough-Joe Leaphorn
 
MadameConcorde
Posts: 9201
Joined: Fri Feb 23, 2007 5:08 pm

RE: Dollar Rallies As Safe Haven Status Reigns

Sun Nov 02, 2008 9:12 am

The US Dollar will probably take a hyke after the US Presidential elections are done with, whoever wins does not matter, the currency will go up. Just wait.
There was a better way to fly it was called Concorde
 
AverageUser
Posts: 1824
Joined: Tue Oct 23, 2007 6:21 pm

RE: Dollar Rallies As Safe Haven Status Reigns

Sun Nov 02, 2008 7:18 pm



Quoting Dougloid (Reply 22):
I do not put a whole lot of stock in the musings of people who are that desperate to sell their own books.

First of all, I thought it was very American to sell, even better to sell your own book, and in the recent years extend marketing to the net. Americans are seldom desperate, are they not?

He actually has a publishing house: http://store.kaptest.com/kappub_home.jhtml
And mind you, he was on-line with the correct prediction well in advance.
It seems the book is going to be translated into Japanese and Korean now.

Here's Ch. 1 of the updated edition as a sample. Readable? Factually correct? The reviews all classified Dougloid-junk AA+ or what?

And most importantly was he / is he likely wrong?
 
Dougloid
Posts: 7248
Joined: Tue Jul 05, 2005 2:44 am

RE: Dollar Rallies As Safe Haven Status Reigns

Mon Nov 03, 2008 2:57 am



Quoting AverageUser (Reply 24):
Here's Ch. 1 of the updated edition as a sample. Readable? Factually correct? The reviews all classified Dougloid-junk AA+ or what?

And most importantly was he / is he likely wrong?

I'm nor really up on what he's saying there and I do not have the time to sort it out just yet.

what I was remarking on is the connection between what you call things and who you are.

If you feel sick, and you pick up the yellow pages and see an ad for a doctor who says he's nutritionally oriented, chances are he'll find something wrong with your diet.

Same with this guy, The name of his website tells me a lot about how his mind works. Doom and gloom is always a good seller but it's an overvalued commodity.

If I were to start a website to tell the world what I think, it might well be theuniversewillfixitselfifweleaveitalone.com
If you believe in coincidence, you haven't looked close enough-Joe Leaphorn
 
AverageUser
Posts: 1824
Joined: Tue Oct 23, 2007 6:21 pm

RE: Dollar Rallies As Safe Haven Status Reigns

Mon Nov 03, 2008 4:10 am



Quoting Dougloid (Reply 25):
I'm nor really up on what he's saying there and I do not have the time to sort it out just yet

So you did not follow the link I gave to Ch. 1 "the debt"? I think you should, it's an excellent intoduction to the mortgage crisis. Would you find any factual errors? I should think the present crisis will have a lasting impact on all Americans for years to come so burying your head in sand now is a bad move.
 
Dougloid
Posts: 7248
Joined: Tue Jul 05, 2005 2:44 am

RE: Dollar Rallies As Safe Haven Status Reigns

Mon Nov 03, 2008 4:57 am



Quoting AverageUser (Reply 26):
So you did not follow the link I gave to Ch. 1 "the debt"? I think you should, it's an excellent intoduction to the mortgage crisis. Would you find any factual errors? I should think the present crisis will have a lasting impact on all Americans for years to come so burying your head in sand now is a bad move.

Yes. I did, after I had attended to other matters that are more pressing-like getting something to eat and seeing what was on the tube tonight. Time difference, y'know.

Frankly, it doesn't tell me anything I did not know, because everything this supposed savant talks about has been common knowledge for quite a while, and the signs have been plainly visible for at least 2-1/2 years.

You seem to forget and maybe I didn't tell you that I spent five years working in the legal end of the debt settlement industry so telling me that people are overextended and in over their heads and in trouble with their creditors is akin to sagely pointing to the east and telling me-mirabile dictu!-that the sun's going to rise over there directly.

Of course there is an impact-particularly on improvident lenders and all too greedy borrowers, who've operated on the assumption that the rising tide that floated all boats would just go on rising forever. And all those people who did so will be living in shitty apartments in the not so great part of town with lousy neighbors and an unsympathetic landlord and they'll have themselves to blame for the most part.

So if you think this fellow's some sort of Amazing Kreskin/wunderkind/super savant, you're misinformed. He's repackaging common knowledge and passing it off as 'armageddon'-now, there's a value laden word, don't you think? it sounds ever so much spicier than "trouble in the credit business" for a book title.

I'd been through one such boom-bust cycle already in California during the early nineties so I'm well aware of how that works-

That hardly qualifies as hiding my head in the sand.

And even if I was, perchance, hiding my head in the sand, what earthly difference could it make in the greater scheme of things?

Fact is, theres' a significant up side to this whole mess because it is encouraging the thrifty to invest money in their primary residence, and getting prices back down to where they should have been all along before everyone thought they could make a million without working for it.
If you believe in coincidence, you haven't looked close enough-Joe Leaphorn
 
AverageUser
Posts: 1824
Joined: Tue Oct 23, 2007 6:21 pm

RE: Dollar Rallies As Safe Haven Status Reigns

Mon Nov 03, 2008 12:06 pm



Quoting Dougloid (Reply 27):
Yes. I did, after I had attended to other matters that are more pressing-like getting something to eat and seeing what was on the tube tonight.

Glad you could find the time, and that since you're in the business, you did not find anything badly missing in the 1st chapter of the book factwise. I was just wondering -- if that book was in fact timely, should we say even slightly too timely, and by the looks of it, a non-specialist book targeting the general audience, I can't really see where I went wrong. Seems a pity more people did not actually order his book, would you agree? You seem to come from the laizzer-faire school of economics -- but then you must support every effort to raise the financial awareness of the consumers as otherwise they'll be making bad decisions, some very bad decisions indeed.

I am not the author and can't say why he chose the title that he chose, but we can agree that this is a soundbite world, and the title has to sell as well. Whether we like the fact or not is another thing.
 
Dougloid
Posts: 7248
Joined: Tue Jul 05, 2005 2:44 am

RE: Dollar Rallies As Safe Haven Status Reigns

Mon Nov 03, 2008 2:48 pm



Quoting AverageUser (Reply 28):
You seem to come from the laizzer-faire school of economics -- but then you must support every effort to raise the financial awareness of the consumers as otherwise they'll be making bad decisions, some very bad decisions indeed.

I'm from the common sense school of economics. My guess-hell, my opinion, is, that the knowledge was out there but people were too busy playing financial roulette that they probably would not have listened-plungers never do.

Ultimately at some level people have to end up being responsible for their bad decisions. It's in the nature of being a stand up guy and honoring your commitments no matter how distasteful or improvident they may seem to be.

Check this out, I heard it this morning on the radio. It explains the mentality of plungers far better than I could.

http://www.npr.org/templates/story/story.php?storyId=96487190

We had a similar bubble in farmland prices here during the late seventies and early eighties when too much easy money led people to mortgage their farms up and buy land they could ill afford. The real flaw in the entire notion was that the productive capacity of farmland is ultimately what determines its market value, and that is a finite number. You can't make the payments on $5,000 an acre corn ground if corn's getting $1.35 a bushel as it was back in those days.

It's similar to the present contretemps. The upper limit of housing, for people in the business, is the ability of people to make the payments. Get too far away from that there's bound to be trouble.

During the farm crisis, here's what we did.

A statute was enacted (still on the books and still being used) that required the debtor and the creditor to sit down together with a trained mediator to see if there is a way to save the farm operation, taking into account the ability and willingness of the debtor to pay and the fundamental financials of the farm operation-in other words, could the operation cash flow? For their part, the creditor was required to send someone to the mediation with the authority to rewrite the loan-no secretaries or janitors.

If the mediation failed, then and only then could the bank proceed to foreclose the loan.

It stemmed from the notion that people really wanted to save their farm operations, and the one thing that the creditors did not need was more inventory that was not making payments.

Only after mediation failed could the creditor get certified to go forward with foreclosure.

It was a good idea then and now. What is needed is that kind of process, because the banks do not need more foreclosed inventory and nonperforming loans and people need to be able to stay in their homes if they can pay on a rewritten loan.

We need to sort out the people who are willing to meet their obligations from those who are not. And the ones who are not, ought to get what's coming to them.
If you believe in coincidence, you haven't looked close enough-Joe Leaphorn
 
Arrow
Posts: 2325
Joined: Wed Jun 19, 2002 7:44 am

RE: Dollar Rallies As Safe Haven Status Reigns

Mon Nov 03, 2008 4:01 pm



Quoting Dougloid (Reply 29):
We need to sort out the people who are willing to meet their obligations from those who are not. And the ones who are not, ought to get what's coming to them.

That looks like someone with common sense was at the controls -- a rarity these days. I remember back in the early 80s when the last housing bubble burst, people ended up owning property worth substantially less than the mortgage principle, and at interest rates in the teens. A lot of people walked, never mind what that did to their credit rating, because initially the banks took a hard-line on the terms of the mortgage. They softened it somewhat when they realized how many declining and non-productive assets they were going to own.

Fortunately that one didn't last very long. I'm not so sure about this one.
Never let the facts get in the way of a good story.
 
Dougloid
Posts: 7248
Joined: Tue Jul 05, 2005 2:44 am

RE: Dollar Rallies As Safe Haven Status Reigns

Mon Nov 03, 2008 5:21 pm



Quoting Arrow (Reply 30):
They softened it somewhat when they realized how many declining and non-productive assets they were going to own.

What that points to, of course, is that if you're in debt you do have a lot of power over the people who lent you the money.

As it happened one of the things that came out of that era and that statute was the Iowa Mediation Service. I know the director-he's a prince of a fellow named Micheal Thompson (and yes, that's how he spells it) and I had the privilege of going through their mediator training.

He's very busy these days. I expect that there may yet be a credit card meltdown.
If you believe in coincidence, you haven't looked close enough-Joe Leaphorn
 
AverageUser
Posts: 1824
Joined: Tue Oct 23, 2007 6:21 pm

RE: Dollar Rallies As Safe Haven Status Reigns

Tue Nov 04, 2008 1:15 pm



Quoting Dougloid (Reply 29):
My guess-hell, my opinion, is, that the knowledge was out there but people were too busy playing financial roulette that they probably would not have listened-plungers never do.

Did you btw warn people around you loudly about that state of affairs?

Quoting Dougloid (Reply 29):
Ultimately at some level people have to end up being responsible for their bad decisions. It's in the nature of being a stand up guy and honoring your commitments no matter how distasteful or improvident they may seem to be

It's not a great secret that much of the subprime business rested on financing those that were not adequately informed of the risks, or perhaps not even in principle capable of taking in such crucial information. Are those who exploited this and took home their fees this really "standing up for their commitments"? I don't think so.

If there's someone who's "ultimately" responsible for this it's the central bank management that ordered the dollar bills to be printed for those subprime loans!

Quoting Dougloid (Reply 29):
And the ones who are not, ought to get what's coming to them.

That's a one great principle, and taking into account the map in #13, who should those folks be in your opinion?
 
Dougloid
Posts: 7248
Joined: Tue Jul 05, 2005 2:44 am

RE: Dollar Rallies As Safe Haven Status Reigns

Tue Nov 04, 2008 3:16 pm



Quoting AverageUser (Reply 32):
If there's someone who's "ultimately" responsible for this it's the central bank management that ordered the dollar bills to be printed for those subprime loans!

Quoting Dougloid (Reply 29):
And the ones who are not, ought to get what's coming to them.

That's a one great principle, and taking into account the map in #13, who should those folks be in your opinion?

First of all, let's study that map. It's a map of current account balance, which is defined as:

"...the sum of the balance of trade (exports minus imports of goods and services), net factor income (such as interest and dividends) and net transfer payments (such as foreign aid)"

Whatever that map says does not at all support what I conceive to be your argument. Maybe you meant something else and that just happened along?

You're also wrong about the banks, and I'm not a banker.

They were irresponsible and now, the ones who flew too close to the sun (to use a snappy metaphor) are paying the price-them and their shareholders.

But they're not nearly as culpable as the borrowers themselves.

No amount of less than diligent lending and creditworthiness analysis on the part of financial institutions relieves people of their personal responsibility to understand what they're getting into and the risks therefrom, or take the hit. Stupidity is not a defense-an explanation perhaps but not, as you suggest, a way of reallocating fault.

When you go to church do you take money out of the collection plate because it seems easy and it's there? Do you go to the grocery store and take a bite out of the lettuce and apples in the produce section because they're out on display? Do you borrow money from your mother to go to the track and play the ponies because you got a sure fire hot tip from a shoeshine boy about the likely winner in the 8th at Aqueduct?

No, you don't. And the reason you don't is because of personal responsibility. You can't fault the banks any more than you can fault the store owner who sells a bottle of liquor to someone who gets stinking drunk, beats his wife and loses his job because he didn't show up for work on Monday.

You're expected to be a responsible person and take ownership of your misdeeds. That is individual.

The banks do have some culpability, but nobody was there holding a gun to people's heads to sign on the line for loans that they knew deep down were gambles they couldn't afford.

I also do not think that this is a uniquely American happening that brought down the house on your heads in Europe. If the stray tile hits you upside the head, look to your own bankers-they all feed from the same ideological trough and it has little to do with nationailty.
If you believe in coincidence, you haven't looked close enough-Joe Leaphorn
 
Arrow
Posts: 2325
Joined: Wed Jun 19, 2002 7:44 am

RE: Dollar Rallies As Safe Haven Status Reigns

Tue Nov 04, 2008 3:49 pm



Quoting Dougloid (Reply 33):
But they're not nearly as culpable as the borrowers themselves.

I agree with you on that. For most of my working life, banks have been prepared to lend me far more money than I would be comfortable borrowing, but I don't bear them any grudge because I'm solely responsible for my financial health -- not them.

My favourite little anecdote: Many years ago my wife and I quit our jobs, sold the house, and ran away to northern Alberta to build a cabin and live on 160 acres we'd just bought (for $100/acre I might add). About six months into our sojourn, and still unemployed, we both got letters from our bank telling us how pleased they were to raise the limit on our credit cards.
Never let the facts get in the way of a good story.
 
baroque
Posts: 12302
Joined: Thu Apr 27, 2006 2:15 pm

RE: Dollar Rallies As Safe Haven Status Reigns

Tue Nov 04, 2008 3:54 pm



Quoting Dougloid (Reply 33):
They were irresponsible and now, the ones who flew too close to the sun (to use a snappy metaphor) are paying the price-them and their shareholders.

Not a correction more an a.net modification.

They just booked on Air Icarus.  wink 
 
AverageUser
Posts: 1824
Joined: Tue Oct 23, 2007 6:21 pm

RE: Dollar Rallies As Safe Haven Status Reigns

Fri Nov 07, 2008 2:17 pm



Quoting Dougloid (Reply 33):
First of all, let's study that map. It's a map of current account balance, which is defined as:

"...the sum of the balance of trade (exports minus imports of goods and services), net factor income (such as interest and dividends) and net transfer payments (such as foreign aid)"

I found another:

Definition: The current account balance is the difference between a country's savings and its investment. "[If the current account balance is] positive, it measures the portion of a country's saving invested abroad; if negative, the portion of domestic investment financed by foreigners' savings."


Normally, an economy heavily in debt would not be doing well, unless the debt is a sign in investing for the future. I encourage my American friends to look around their respective environments for any signs of such investments.

Quoting Dougloid (Reply 33):
They were irresponsible and now, the ones who flew too close to the sun (to use a snappy metaphor) are paying the price-them and their shareholders.

So you did actually mean that there were other "irresponsible" parties than the "irresponsible" people who took loans? Ok, we now have the individuals, the banks, and who else? The Central Bank? Of course, as you quite right said, the symptoms were obvious for anyone to see (and the author of a certain book was really stating the obvious years ago). Who is then this person who is actually quoted as having said:

"Those of us who have looked to the self-interest of lending institutions to protect shareholder's equity -- myself especially -- are in a state of shocked disbelief,"

"The consequent surge in global demand for U.S. subprime securities by banks, hedge and pension funds supported by unrealistically positive rating designations by credit agencies was, in my judgment, the core of the problem,"
?

Was this person "irresponsible" in his time as well -- or just plain incompetent?

Quoting Dougloid (Reply 31):
What that points to, of course, is that if you're in debt you do have a lot of power over the people who lent you the money.

That must come from some latter-day school of economics. But if it's true, I can see quite a few Americans, and the whole nation in fact, have been anxious to find themselves in this enviable upper-hand situation!

Quoting Dougloid (Reply 33):
If the stray tile hits you upside the head, look to your own bankers-they all feed from the same ideological trough and it has little to do with nationailty.

Fortunately not everyone was fooled this time. I've been told some Finnish fension funds had lately been often visited by some American gentlemen who made repeated offers on some papers with an ample and reliable return, but did not find anyone to sign them under.
Perhaps their moral fibre was stonger?

Therefore, I too'd like to see only those who were to blame actually pay for it, not those that had followed "the economics of common sense".

And btw, the U.S. Dollar rallies no longer at this time.

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