Remorse or No? For Lehman..

Heyman_2

Carol is right - the US government doesn't know where to turn at the moment in terms of bailing out these massive institutions and ultimately everyone's going to pay for it, even us here in the UK.

It's an unprecedented situation and to be frank it doesn't look good.

Mr_Mumble

An episode of the BBC's "The Truth About Property" told a good story regarding Lehman's utter incompetence. Tenants wishing to pay rent or purchase their home but were ignored as a Lehman subsidiary would only deal with the dodgy BTLer who had defaulted. The Telegraph has a report from the presenter:

http://www.telegraph.co.uk/money/main.jhtml?xml=/money/2007/10/22/cmbuy122.xml

Two sources have told the BBC some of the sub-prime lenders involved in the scheme have ignored offers by tenants to pay the mortgages themselves.

...

"I've tried. The administrators have tried. Most of the lenders just aren't interested."

Southern Pacific is owned by Lehman Brothers, a giant US investment bank which has written off millions of dollars in the US. It has closed down its sub-prime unit over there but kept open its British equivalent.

LisbonLaura wrote:

Privatise the profit - Socialise the debt.

While you could make that argument for Northern Rock or Bear Stearns its simply untrue for Lehman.

LisbonLaura

Mr_Mumble wrote: »

While you could make that argument for Northern Rock or Bear Stearns its simply untrue for Lehman.

NR was direct

Lehman will be indirect

carolt

harbinger13 wrote: »

If we want to live in a Capitalist economy then learn to live like 'them'. No remorse for those who falter on their own.

Seems a very defeatist attitude.

Actually, I have no desire to live in the kind of naked unfettered capitalism that allowed these guys to pocket 1 million dollars; but given we have done, nor do I want to stand back and sing a little song whilst our whole economy goes into meltdown either.

To try to be positive (difficult at the moment) I 'd hope this might give rise to some new regulation to prevent both the abuses of unfettered capitalism and these kind of failures caused by them.

harbinger13

LisbonLaura wrote: »

Lehman will be indirect

Indirect - probably in my opinion it will be 'catharsis'.
Certainly it will hit the right people who asked for it.
The sale of Porsche might come down - so will the sale of beer (priced 4 to 5 times base price) will come down. This will in-turn (hopefully) secure better health - which will cause the patient to not to go to NHS.

steadysaver

Can't say I feel any remorse for their failed business model.

However the wider implications could be far reaching and a lot more worrying.

Also you may joke about being able to pick up a cheap luxury sports car, but what about the lower paid workers, the ones who didnt make the reckless decisions???

I believe only now we are going to see the REAL effects of the credit crunch and it has only just begun. Once they unwind the fallout from Lehmans, I think a few others could find themselves in a sticky mess.

LisbonLaura

http://www.marketoracle.co.uk/Article6256.html

carolt

"Also you may joke about being able to pick up a cheap luxury sports car, but what about the lower paid workers, the ones who didnt make the reckless decisions???"

Not that worried about the 'lower paid workers.

People like cleaners were appallingly paid by the banks but have easily transferable skills. People in what were effectively low-skilled admin jobs were vastly overpaid compared to similar admin jobs in less big-money industries - why do you think they took jobs there?

They may have to take a paycut/reskill - but that's life. No more sympathy for them than any others who've lost jobs when their business went bust - at least they've been very well paid (overpaid) for years, along with their bosses. Not in the same league, clearly, but a secretary in a bank has not done too badly either.

harbinger13

carolt wrote: »

Seems a very defeatist attitude.

Actually, I have no desire to live in the kind of naked unfettered capitalism that allowed these guys to pocket 1 million dollars; but given we have done, nor do I want to stand back and sing a little song whilst our whole economy goes into meltdown either.

To try to be positive (difficult at the moment) I 'd hope this might give rise to some new regulation to prevent both the abuses of unfettered capitalism and these kind of failures caused by them.

About the defeatist attitude - seems to me you are ignoring the view of the common. It serves no purpose to support a big inflated balloon when it can not sustain itself. Unfortunately you have agreed to defeat as well - that 'our' economy is going to falter.

The most celebrated rule of Capitalism is 'Creative Destruction' - if you have the magnanimity to stand and watch Creationism and rejoice - be strong enough to watch its destruction as well. Being Capitalistic during Boom and being a Communist during Bust does not work.

Yes, I agree there will have to be cleansing - which is in the process - which will then lead to new law and regulation which will not create this kind of bust it will create a different kind of boom (and eventually another bust).

The true Capitalists have learned that there is no point in taking others along - that is what the Invst Banks did during the boom years. Now when they are doomed - certainly we should learn to not feel remorse for their ineptitude.

Yes we will face a recession and it will be hard - but certainly the cause was elsewhere while the common face the 'music'.

When you mention 'our whole economy' - please do remember when LB and their bro's were blowing air and inflating it - they never thought it was 'our economy', they were worried with 'our accounts'.

When it is falling - no point in hurriedly going and standing right under it, with the optimism that I am going to catch it.

No body is a pessimist now a days - every body is saying the market will turn around in a few days and the govt will do this in a another few days. Optimism and Pessimism are a part of cycle in Capitalism - to much of both blows in 'ones' face.

Conrad

If you gorge at the trough you may choke at the trough.