US Financial crisis: is it recession or depression?

[LivePsy]

In previous posts I've been cruel but fair about imported synth pricing rising in the US because of the US Dollar vs. Euro. But actually I'd always thought the financial crisis was far worse than most commentators predicted. Cash handouts to taxpayers, now cash handouts to major major financial instutions, and some of the biggest names in corporate history worthless or destroyed. This really is serious, is this recession or depression? Whatever it is, the difference this time around is that much of the world is not affected so badly. But I do feel sympathy for the US, its gonna hurt for some time.

Cheers,
B

[psy604]

currently american companies like MS, HP, ... buying back their shares at very low prices (i've read in financial newspaper recently).

"This is what happened: Some "financial engineers" with PhD.s from Harvard etc. outsmarted everyone else, when they came up with a scheme to make a lot of money for themselves. They sold a lot of bad morgages to people, like illegal aliens with no work permit, who could never pay their mortgages off, and they packaged the bad mortgages in with the good mortgages, and paid the only 3 lame U.S. rating agencies to put a "Triple A rating" on these bad loans. They then sold these bad "Triple A loans" to other banks and financial institutions, where these bad loans exploded over the last 2 yrs. These banks and financial institutions lost so much money on these bad loans, which they had purchased as good triple A loans, that they went bankrupt. They were insured by AIG, which consequently also went bankrupt. Sounds like a Terrorist Plot? It was only the plot of homegrown greed! And Cox was asleep and instrumental. Well, the U.S. Government had no choice than to bail out AIG, by lending them about 84 billion dollars for 11.75% interest for 2 yrs to let them sell off their many companies in an orderly fashion, to prevent a global crisis. Friedberg, the founder of AIG, lost 6 Billion Dollars in one day."

[LivePsy]

Short selling might have been the plan from the outset, but the opportunistic sharks are certainly profitting from it now. I'm no expert, but I don't remember a previous time that the US Government threw money at failing companies and the economy. Its almost unamerican.

No matter what financial experts say, shares and investments is gambling. And we are all expected to gamble money instead of leaving it in the bank. Some even borrow the money to invest it, and its all 'reasonable' financial advice.

[psy604]

still think that it's not within the responsibility of the tax payers,
if their financial system got hacked up by fake rated worthless loans.

if someone else goes bankrupt (no matter how) - almost none cares.

[LivePsy]

Australia: a 100 staff company closes and the union demands that the staff's jobs stay or get good payouts. An overseas car manufacturer closes and the government can't scrabble fast enough to give them money to stay operating.

Actual reality: You have no right to a job. Every job loss is an opportunity to reinvent yourself or better yet, do something so useful that people will pay you for it. And I'm talking about personal experience, not motivational paperback.

The US gov shouldn't bail out anyone. It has to hurt until it gets better. And put some laws in so that companies trade on product and services, not multiconglomerate buying and selling to make money. Its gambling, get some laws!

B