Can world leaders end the financial crisis?

[RSS News]

George Bush has asked Americans to trust his plans to reverse the economic downturn. Are you convinced?

(Feed provided by BBC News | Have your Say (http://news.bbc.co.uk/go/rss/-/2/hi/talking_point/default.stm))

[A New Era]

I think they can ease it, but the crisis must end itself and have its run before it dies out.

[BraneMatter]

Boom and bust cycles are part of capitalism, but the global nature of the current crisis is a more recent thing.

As for Bush, I would not believe him if he told me the earth revolves around the sun! :laugh:

The European leaders are somewhat more rational in their approach than Bush. At least they talk about new global "rules" and a restructuring of the 'free market' system, and also about "social inclusion." Granted, it's not full blown socialism, but it's a step in the right direction. And people in Europe are calling capitalism itself into question far more than in the U.S.

[Followthewhiterabbit]

To understand if the markets can be saved you must first understand why the crash has happened in the first place.
You can compare traders to Parents, parents on the run up to Christmas all look for the next big thing toy/fad. They know that there won't be enough to go around and they are all watching each other to see what the thing is. So, one or two may buy something then the 3 or 4 who are watching them buy the same as they think that this is the next big thing, the thing there spoiled child will scream for if they don't get it for Christmas. This continues and spreads exponentially and because of the basic concept of supply and demand (as I mentioned earlier, the parents already know that these will run out), the companies selling these can sell way over what they are worth. It does not even matter if a couple of the smarter parents have a closer look at the toy and see that its build quality is shit and that it will fall to pieces or that it has no intellectual or educational value whatsoever because they are blinded by the fact that the masses are buying these and they will run out if they don't buy NOW, leaving little Joe and Jill all teary eyed on Christmas day.

Now, when we look at the trading sector we can compare the next big thing presents to these packages containing toxic debt. The companies who originally took on this debt repackaged it with good debt and sold them on as something different entirely. Sad thing is that the first couple of banks and financial institutes who bought these never questioned there quality. So, the rest of the banks see these banks buying packages of debts for what looks like a good deal, they trade them amongst themselves and for a few years things are good, the people who cannot afford the mortgages (Toxic Debt) are doing OK because the economy is doing ok. Then suddenly, its Christmas day (LOL) and the economy has had a little stutter (as capitalist economies do) now the people cannot afford those mortgages so the debt becomes noncollectable. Ahh, but the banks can just repossess the homes on the mortgages. But at times like this during the economic downturn house prices fall because people are not buying houses. So basically the banks are left with lots of repossessed houses which they can't sell and if they did they would make a loss. After this the banks all look at each other as the person who started it so inter-bank lending is frozen and leads to the freefall we are in now.


So after reading my ideas on the reasons, Do you think that a simple injection of cash will solve the problem?
Ask yourself a similar question-
If you copied me, by say, buying a car I recommended or owned. Then the car broke down the next week and it turned out there was no warranty on the car. Would money make you to copy me again?

[Charles Xavier]

This is bigger than their claim to a boom bust cycle. However the Rich will find their way out of this crisis and it will be on the backs of the working class, they will make us who are already suffering from this crisis to pay for it. And the Left in the Imperialist countries is quite weak currently to defend our interests.

[piet11111]

no i do not believe that the political leadership is able to turn this around the bubble has burst and nothing will be able to re-inflate it.

but with their attempts to re-inflate the bubble they are throwing away billions in dollars and euro's and in the end this will cause inflation that will make everything more expensive for the working people while wages will only rise enough for the bosses to pretend they give a fuck about their employees.

the banks are just taking the money and sitting on it for when the time has come for them to pay their debts it will not be used for inter-bank lending.

[Labor Shall Rule]

No, he'll fail.

He can pay for all of the troubled mortgage-backed securities he wants but he can't expect an 'end' to the crisis without interfering in the credit markets.

*edited*

[Tower of Bebel]

Global credit money is in crisis, not just some banks that bought junk. So nationalisation does not solve this crisis. It's because of this: the crisis is born out of the contradictions within the capitalist system, and these contradictions are normally fought out between capitalists themselves. When the state nationalizes banks these contradictions become contradictions between capitalist states. It results in clashes between capitalist states!

So world leaders cannot overcome this problem through state intervention!

[DesertShark]

Followthewhiterabbit thank you for breaking down the crisis in America. Why do the people in power think that giving money to the banks will solve the problem? Won't the increase in money circulating just cause more problems by decreasing the value of the dollar?

What exactly is happening in the EU? Is their economic crisis due to the same greediness of banks and citizens trying to live past their means?

Is it a coincedence or not surprising that the US and the EU are having economic problems at the same time?

-DesertShark

[Psy]

Followthewhiterabbit thank you for breaking down the crisis in America. Why do the people in power think that giving money to the banks will solve the problem? Won't the increase in money circulating just cause more problems by decreasing the value of the dollar?

The bourgeois governments are trying to displace the current crisis in time like how they did with the crisis in the 1970's (to come back now), as if they can postpone the crisis then in their eyes it won't be their problem.



What exactly is happening in the EU? Is their economic crisis due to the same greediness of banks and citizens trying to live past their means?

Is it a coincedence or not surprising that the US and the EU are having economic problems at the same time?

-DesertShark
It is happening in the EU as it is a global crisis of capitalism. Stagnation of the 70's was "solved" by pushing the crisis into the (then) future yet that future is now. The problem is not that fictional capital is turning worthless, the problem is that the economy can't realize the value of that fictional capital as stagnation returned some years ago that was papered over with fancy accounting and now the fact we have stagnation is exposed.

[BraneMatter]

Perhaps the real question should be: What does the global economy look like without the U.S. being a major player anymore? A nation based on reckless and out-of-control borrowing will sooner or later get its credit card yanked, or the working class taxpayers getting stuck with the bill will rebel!!! Fascism and war? Hey, this is REAGAN'S own man saying it!


Real Video Stream (http://play.rbn.com/?url=demnow/demnow/demand/2008/oct/video/dnB20081017a.rm&proto=rtsp&start=17:19)
Real Audio Stream (http://play.rbn.com/?url=demnow/demnow/demand/2008/oct/audio/dn20081017.ra&proto=rtsp&start=17:19)




Ex-Asst. Treasury Sec. Paul Craig Roberts on Wall St. Bailout: “Has Deregulation Sired Fascism?”

As the Bush administration announces a $250 billion plan to partially nationalize the nation’s banking system, we speak to Paul Craig Roberts, former Assistant Secretary of the Treasury Department in the Reagan administration and a former associate editor of the Wall Street Journal. Roberts says the latest bank measure suggests the bailout is “either incompetence or fraud.” -- MORE (http://www.democracynow.org/2008/10/17/ex_asst_treasury_sec_paul_craig)

[Followthewhiterabbit]

Basically my comment was trying to surmise that because of the bad practices of banks, they do not trust each other. Capitalism as we know it requires inter-bank lending in order to keep the market growing and in good health. As the banks do not trust each other they are no longer lending each other money. The market cannot now be sustained.


What exactly is happening in the EU?It's basically all interconnected , the American market is deeply connected with the EU markets and Asian markets.

My belief is that the banks are happily going to take all of the tax bailout money but it will not restore confidence in the system. We can expect things to get worse, typically of this kind of situation there is a turning point. I think that it will come too late and this article from the BBC realizes my fears (although BBC stats are not always the most reliable).

newsvote.bbc.co.uk/1/hi/business/7680863.stm

as always its the workers which are the real sufferers, while the middle class just need to buy cheaper wine the workers are reduced to repossessions and record levels of debt.

[Psy]

Basically my comment was trying to surmise that because of the bad practices of banks, they do not trust each other. Capitalism as we know it requires inter-bank lending in order to keep the market growing and in good health. As the banks do not trust each other they are no longer lending each other money. The market cannot now be sustained.

If the market could realize a large chunk of this fictitious capital then it would only be a slump in the market. The problem is a large chunk of this fictitious capital can't be realized meaning the market has the shock of a sudden collapse of the rate of profit.

[DesertShark]

Stagnation of the 70's was "solved" by pushing the crisis into the (then) future yet that future is now. The problem is not that fictional capital is turning worthless, the problem is that the economy can't realize the value of that fictional capital as stagnation returned some years ago that was papered over with fancy accounting and now the fact we have stagnation is exposed.
Why is stagnation a problem? Other then pushing the problem away into the future, what are solutions for solving it? Is stagnation a common problem of a monetary economic system? Or is it a problem that could arise in a gift or barter economy?

-DesertShark

[Psy]

Why is stagnation a problem? Other then pushing the problem away into the future, what are solutions for solving it? Is stagnation a common problem of a monetary economic system? Or is it a problem that could arise in a gift or barter economy?

-DesertShark
Stagnation is a problem of Money->Commodities->More Money mode of production for two reasons. The first reason is with stagnation it makes making more money then you started with harder, the other reason is that the manufacturing and consumption of means of production solves the consumption gap in this mode of production (expansion of the means of production mops up surplus value in the system). Basically capitalism requires perpetual growth to stay healthy.

As for solving stagnation, the solutions to solve stagnation within world capitalism all carry long term countervailing forces that would eventually bring the market back into crisis.

[Pogue]

Will the financial leaders end the financial crisis? You mean capitalism? I doubt it! :lol:
Come on guys lets hurry up with our revolution already :D