700 billion dollars bailout
- FlameBlade
- SMITE!™ Master
- Posts: 8644
- Joined: Fri Mar 15, 2002 3:54 am
- Contact:
700 billion dollars bailout
Any thoughts?
I really don't get 700 billion dollars. I just don't get it.
I really don't get 700 billion dollars. I just don't get it.
_I'm a nightmare of every man's fantasy.
- paladin2019
- Bulldrek Pimp
- Posts: 824
- Joined: Fri Mar 29, 2002 10:24 am
- Location: Undisclosed locations in Southwest Asia
- Serious Paul
- Devil
- Posts: 6644
- Joined: Mon Mar 18, 2002 12:38 pm
Re: 700 billion dollars bailout
Nothing polite or worth repeating.FlameBlade wrote:Any thoughts?
Seriously though, my thoughts are varied on this subject matter.
I'm not sure we're supposed to! Sad to say.I really don't get 700 billion dollars. I just don't get it.
I feel this "Bail Out" is pretty poorly thought out, poorly defined (From what little I've had the luxury time to see), certainly reeks of "favoritism" and other "ism's" I'm not sure I'm ready to trot out just yet.
My problem, and I think a lot of peoples problem is that we don't really know what this is. I mean it's what the single largest non wartime budget item ever? (Is that true)
On the one hand I'd like to see the "rich fat cats" "sink"-but on the other hand I have to question just what it really means. I'd say like a lot of American's I am confused, and frustrated.
I don't think it's a very good idea. I think, rather than give US$2000 for every man, woman, and child in the nation - probably closer to US$4000 when all is said and done - to an industry which has failed, we should allow the market to play itself out, even if that means a temporary recession, which has been shown in the past to be more effective in the long term than the temporary measure of forced citizen investment. Companies - and not just these - need to see that there is a strong and vigorous effect of their irresponsibility, and that ultimately the only organization who is responsible for their actions is they themselves. A bailout at this point sends the wrong message to Wall Street, and won't permanently fix the problem.
- Serious Paul
- Devil
- Posts: 6644
- Joined: Mon Mar 18, 2002 12:38 pm
http://www.cnn.com/2008/POLITICS/09/29/ ... pstoryviewI don't think it's a very good idea. I think, rather than give US$2000 for every man, woman, and child in the nation - probably closer to US$4000 when all is said and done - to an industry which has failed, we should allow the market to play itself out, even if that means a temporary recession, which has been shown in the past to be more effective in the long term than the temporary measure of forced citizen investment.
There is then a need to guard against a temptation to overstate the economic evils of our own age, and to ignore the existence of similar, or worse, evils in earlier ages. Even though some exaggeration may, for the time, stimulate others, as well as ourselves, to a more intense resolve that the present evils should no longer exist, but it is not less wrong and generally it is much more foolish to palter with truth for good than for a selfish cause. The pessimistic descriptions of our own age, combined with the romantic exaggeration of the happiness of past ages must tend to setting aside the methods of progress, the work of which, if slow, is yet solid, and lead to the hasty adoption of others of greater promise, but which resemble the potent medicines of a charlatan, and while quickly effecting a little good sow the seeds of widespread and lasting decay. This impatient insincerity is an evil only less great than the moral torpor which can endure, that we with our modern resources and knowledge should look contentedly at the continued destruction of all that is worth having. There is an evil and an extreme impatience as well as an extreme patience with social ills.
Totally agree. They're just stringing it out longer, betting on inflation against a crash. It's incredibly dumb. Just let these people fail (both the lenders and probably most of the homeowners who should have been aware that they couldn't afford the debt they were assuming). The market will sort itself out if the promise of free money isn't on the horizon.3278 wrote:I don't think it's a very good idea. I think, rather than give US$2000 for every man, woman, and child in the nation - probably closer to US$4000 when all is said and done - to an industry which has failed, we should allow the market to play itself out, even if that means a temporary recession, which has been shown in the past to be more effective in the long term than the temporary measure of forced citizen investment. Companies - and not just these - need to see that there is a strong and vigorous effect of their irresponsibility, and that ultimately the only organization who is responsible for their actions is they themselves. A bailout at this point sends the wrong message to Wall Street, and won't permanently fix the problem.
It's this sickening level of greed that's turned this country to shit over the last 50 years. Further subsidizing (publicly!) a market that's been developed to support that mindset (spurred on by the happy pill of every-can-own-a-home) doesn't help anyone but the people whose assets are already tied up in these bad mortgages. They need to pay for their own mistakes. Everyone else is going to take a hit regardless.
It's all about crystal meth and Gwar. - Hauze
- UncleJoseph
- Wuffle Initiate
- Posts: 1087
- Joined: Tue Jun 11, 2002 8:32 am
- Location: Central Michigan
- Contact:
Some people are comparing the mortgage/banking industry crash to that of the tech-stock crash of just a few years ago. People are arguing that this is not like the tech-stock crash, since that market crash only affected that specific market. The mortgage/banking crash affects every other market by its very nature. This is why so many people are proposing the bailout. If we don't keep the banking sector from crashing, every other market will crash.
I personally don't want to pay for someone else's mistakes. However, we do that all the time with out taxes...this is no different, except for the fact that they're talking about 700+ billion dollars. I also think this bailout has the potential to simply delay the inevitable. The market will recover on its own. I don't think the bailout will make it recover or keep it from crashing. I also don't believe that the market will necessarily crash. It surely might, but it might not.
The "Everyone can own a house" doctrine has failed as miserably as the "No child left behind" educational program.
I personally don't want to pay for someone else's mistakes. However, we do that all the time with out taxes...this is no different, except for the fact that they're talking about 700+ billion dollars. I also think this bailout has the potential to simply delay the inevitable. The market will recover on its own. I don't think the bailout will make it recover or keep it from crashing. I also don't believe that the market will necessarily crash. It surely might, but it might not.
The "Everyone can own a house" doctrine has failed as miserably as the "No child left behind" educational program.
If you take away their comforts, people are just like any other animal.
I think the U.S. government might also feel the pressure from abroad to bail out the financial institutions, particularly the far- and middle-east, as they have massive quantities of dollars in their reserves. If you don't bail out the financial institutions and let them go bust and it does come down to a recession it's going to weaken the dollar even further, forcing nations to either dump their dollars at a lower price before the recession or risk losing it all. Is that plausible?
You mean like how Lehman Brothers just got bought up by Barclays? How Merill Lynch sold off to BofA? So long as the government isn't thinking about bailing these institutions out for 80 cents on the dollar, they'll get bought up by the market (for less, of course). This is bad for the people who invested in these companies, but tough shit. Losing is part of the fucking game. The main problem we're having right now is that greedy people are waiting for free money.Uncle Joseph wrote:If we don't keep the banking sector from crashing, every other market will crash.
If it doesn't happen, the world isn't going to end, but some people will lose and things will be tight for a while.
Yeah. The $700b+ doesn't exist. It'll be printed out of thin air. This equals inflation, which means a devalued dollar. There's no way out of this now. The only bet we have left to continue to stave off a recession is that the government won't fuck this up. Which is fucking hysterical because they're the assholes who got us into this in the first place (along with the Fed, who continued to drop interest rates in order to keep the bubble from bursting)! We shouldn't be making this bet. We should stop fucking around and just deal with the damn recession. We do, were in and out of it in a year or two. We don't, we're likely in deep shit for a decade or more.I personally don't want to pay for someone else's mistakes. However, we do that all the time with out taxes...this is no different, except for the fact that they're talking about 700+ billion dollars.
Incidentally, does anyone know if the other $620b in swap lines the Fed has injected into other markets in the last two weeks (without congressional approval) is inflationary? I can't seem to find anything about it and it's not clicking with me right now (but it is very late)...
Yup. Which is exactly what should happen. It sucks for the people that are invested in them now, but if they stay on board, they'll see returns again over time (of course, a lot of them are old white guys who have invested their retirement in these companies... Hmm...). It also creates investment opportunities for other people (buy low, sell high).DV8 wrote:After having read Marius' article my question doesn't seem to hold much water as it states that bankruptcy doesn't lead to an economic breakdown of the markets. It claims that in a situation of bankruptcy it would only lead to a shift of ownership of the financial institutions.
Speaking of mismanagement (straight-up corruption actually), has anyone even looked at the fucking horseshit that got amended to the senate bill that got passed for this? Incredible. Shit that has absolutely nothing to do with it. They're bribing house members that are on the fence about this. Not that that's anything new...
It's all about crystal meth and Gwar. - Hauze
It increases the money supply, I think, unless dollars owned by foreign reserves are counted in the money supply, and I rather think they're not.Incidentally, does anyone know if the other $620b in swap lines the Fed has injected into other markets in the last two weeks (without congressional approval) is inflationary?
There is then a need to guard against a temptation to overstate the economic evils of our own age, and to ignore the existence of similar, or worse, evils in earlier ages. Even though some exaggeration may, for the time, stimulate others, as well as ourselves, to a more intense resolve that the present evils should no longer exist, but it is not less wrong and generally it is much more foolish to palter with truth for good than for a selfish cause. The pessimistic descriptions of our own age, combined with the romantic exaggeration of the happiness of past ages must tend to setting aside the methods of progress, the work of which, if slow, is yet solid, and lead to the hasty adoption of others of greater promise, but which resemble the potent medicines of a charlatan, and while quickly effecting a little good sow the seeds of widespread and lasting decay. This impatient insincerity is an evil only less great than the moral torpor which can endure, that we with our modern resources and knowledge should look contentedly at the continued destruction of all that is worth having. There is an evil and an extreme impatience as well as an extreme patience with social ills.
Despite being the victim of one long statewide recession since the dot-com bubble burst - or perhaps because of it - I think the solution described here has merit.
- UncleJoseph
- Wuffle Initiate
- Posts: 1087
- Joined: Tue Jun 11, 2002 8:32 am
- Location: Central Michigan
- Contact:
Yeah, one would think that the failing institutions would get bought out by other successful institutions. I just wonder if there are enough successful institutions to go around, considering the size of the problem.Raygun wrote:You mean like how Lehman Brothers just got bought up by Barclays? How Merill Lynch sold off to BofA? So long as the government isn't thinking about bailing these institutions out for 80 cents on the dollar, they'll get bought up by the market (for less, of course). This is bad for the people who invested in these companies, but tough shit. Losing is part of the fucking game. The main problem we're having right now is that greedy people are waiting for free money.Uncle Joseph wrote:If we don't keep the banking sector from crashing, every other market will crash.
But to me, the bailout isn't the solution either. I'm more in support of the economic collapse and subsequent rebuild, rather than a continued downward spiral for many years to come. Of course, my job most likely won't be subject to any cutbacks, decreased tax revenue, etc. Perhaps people with a lot more to lose are in support. I would hate for a collapse to cause tons of people to lose their jobs...my employer is laying off people (code enforcement) right now, and dumping their responsibilities on us (the police). They're already complaining that our productivity is down and that we aren't "earning our keep." So now they want to add more on our shoulders. It's really funny. We don't have the staffing needed to do our responsibilities now...adding more responsibilities will decrease our productivity.
I imagine the same concept is being applied to many workforces in the country. An economic collapse will only further this problem.
If you take away their comforts, people are just like any other animal.
Well, fuck it. I hope you guys are prepared for a full-on crash.
http://news.bbc.co.uk/2/hi/business/7651060.stm
This country is fucking stupid. They'll be back for more after they blow through this $700b. I'm glad I'm in little ol' economically-isolated Montana.
http://news.bbc.co.uk/2/hi/business/7651060.stm
This country is fucking stupid. They'll be back for more after they blow through this $700b. I'm glad I'm in little ol' economically-isolated Montana.
It's all about crystal meth and Gwar. - Hauze
- UncleJoseph
- Wuffle Initiate
- Posts: 1087
- Joined: Tue Jun 11, 2002 8:32 am
- Location: Central Michigan
- Contact:
Yeah, those of us here in the U.S. are pretty much fucked. The more I think about this bailout plan, the less I support it. "Let's throw a shit-ton of money at people who have consistently shown they can't manage money." That's a lot like a bank loaning more money to a borrower when the borrower can't repay his current loans. I think our markets and economy would be stronger in the long run if we let the system crash and then rebuild.
That's it. I'm invading a small island an renaming it the Republic of Bulldrek. Anyone want to join me?
That's it. I'm invading a small island an renaming it the Republic of Bulldrek. Anyone want to join me?
If you take away their comforts, people are just like any other animal.
The system doesn't have to crash, we just need to let it recede for a little while. And for some reason I can't seem to grasp, that's become unacceptable. It's stupid. But the higher we build the dive and the more water we let out of the pool, the harder the fall is going to be.
It's all about crystal meth and Gwar. - Hauze
- Salvation122
- Grand Marshall of the Imperium
- Posts: 3776
- Joined: Wed Mar 20, 2002 7:20 pm
- Location: Memphis, TN
A credit freeze would basically be the end of the modern economy. It'd be another Great Depression. If it makes you feel any better, the government /bought/ those securities, and will almost certianly be able to turn around and resell them later for either a slight loss or a profit.Raygun wrote:The system doesn't have to crash, we just need to let it recede for a little while. And for some reason I can't seem to grasp, that's become unacceptable. It's stupid. But the higher we build the dive and the more water we let out of the pool, the harder the fall is going to be.
- Salvation122
- Grand Marshall of the Imperium
- Posts: 3776
- Joined: Wed Mar 20, 2002 7:20 pm
- Location: Memphis, TN
Just so people understand (and most don't) we're pretty much raping the investment banks in the ass on these securities we're buying, and the odds of this plan actually costing $700b are pretty low.3278 wrote:I don't think it's a very good idea. I think, rather than give US$2000 for every man, woman, and child in the nation - probably closer to US$4000 when all is said and done - to an industry which has failed, we should allow the market to play itself out, even if that means a temporary recession, which has been shown in the past to be more effective in the long term than the temporary measure of forced citizen investment. Companies - and not just these - need to see that there is a strong and vigorous effect of their irresponsibility, and that ultimately the only organization who is responsible for their actions is they themselves. A bailout at this point sends the wrong message to Wall Street, and won't permanently fix the problem.
No, it will not. We're running with the bailout specifically because it doesn't print money. We're taking on debt. This is not, not the same thing, regardless of what Ron Paul says.Raygun wrote:Yeah. The $700b+ doesn't exist. It'll be printed out of thin air.
The likely outcome of this if we had done nothing was a complete credit freeze, whereupon the global economy would have basically come down around everyone's ears. The last time that happened, communism and fascism ate Europe. That was before we had thermonuclear weapons.We shouldn't be making this bet. We should stop fucking around and just deal with the damn recession. We do, were in and out of it in a year or two. We don't, we're likely in deep shit for a decade or more.
Yes, because monopolies in the investment market are totally sweet!Yup. Which is exactly what should happen. It sucks for the people that are invested in them now, but if they stay on board, they'll see returns again over time (of course, a lot of them are old white guys who have invested their retirement in these companies... Hmm...). It also creates investment opportunities for other people (buy low, sell high).DV8 wrote:After having read Marius' article my question doesn't seem to hold much water as it states that bankruptcy doesn't lead to an economic breakdown of the markets. It claims that in a situation of bankruptcy it would only lead to a shift of ownership of the financial institutions.
It's also worth noting that Marius's article was written by a Libertarian and that his economic ideology is therefore somewhat suspect.
This isn't really recession avoidance. A recession is roughly equivalent in overall shitiness to the Iraq War. A hardcore credit freeze is global thermonuclear war. We're still destined to go through a recession in the immediate future, it just won't be Grapes of Wrath.3278 wrote:Despite being the victim of one long statewide recession since the dot-com bubble burst - or perhaps because of it - I think the solution described here has merit.
Last edited by Salvation122 on Sun Oct 05, 2008 12:02 am, edited 1 time in total.
- Salvation122
- Grand Marshall of the Imperium
- Posts: 3776
- Joined: Wed Mar 20, 2002 7:20 pm
- Location: Memphis, TN
-
- Footman of the Imperium
- Posts: 3036
- Joined: Mon Mar 18, 2002 4:44 am
- Location: Oz
- Contact:
The thing about a recession is that those that will be most heavily hit by it will be the rich. Those that are middle class or below are going to get through pretty much okay, while the rich will lose millions upon millions. The other positive aspect of a recession is that housing prices are going to plummet, because currently people are paying way way too much for houses due to the massively inflated housing market, which was exacerbated by poor lending practices and no government regulation.
Recession does not mean that the world spirals into chaos, Sal. There were plenty of recessions throughout history that haven't led to thermonuclear war. Black Monday didn't do it, and the Asian credit crisis didn't do it. This won't do it, either. Investments will have to change, and a lot of rich will get poor, but fuck them. It's their own damn fault.
Recession does not mean that the world spirals into chaos, Sal. There were plenty of recessions throughout history that haven't led to thermonuclear war. Black Monday didn't do it, and the Asian credit crisis didn't do it. This won't do it, either. Investments will have to change, and a lot of rich will get poor, but fuck them. It's their own damn fault.
- Salvation122
- Grand Marshall of the Imperium
- Posts: 3776
- Joined: Wed Mar 20, 2002 7:20 pm
- Location: Memphis, TN
Recession doesn't. A credit freeze pretty much does. The two are not the same. We are still going to go through a recession (imminently); the credit freeze has probably been avoided.
The thermonuclear war this was more for a sense of scale then an actual fear that people'd start nuking each other (although I do believe that if we had decided to do nothing, another major global war would have been the inevitable outcome.)
The thermonuclear war this was more for a sense of scale then an actual fear that people'd start nuking each other (although I do believe that if we had decided to do nothing, another major global war would have been the inevitable outcome.)
- Serious Paul
- Devil
- Posts: 6644
- Joined: Mon Mar 18, 2002 12:38 pm
Sal you seem so assured of your opinion, but I can't share your confidence. I listen to NPR, the news and read the papers-and what I seem to notice is an awful lot of confusion on their part. Now if the so called experts are confused how can you be so certain?
I'm don't know who's right, and I get we have to make a decision at some point-but I guess I wonder how we know who's right. And I guess we don't until well after we've made it.
I'm don't know who's right, and I get we have to make a decision at some point-but I guess I wonder how we know who's right. And I guess we don't until well after we've made it.
-
- Footman of the Imperium
- Posts: 3036
- Joined: Mon Mar 18, 2002 4:44 am
- Location: Oz
- Contact:
A credit freeze led to the last great depression, yes. However, it also led to the New Deal. Your country's more socially progressive policies have been riding on that for a long time, which is a very good thing. It also means an end to business as usual, as everything is forced to reform. For example, free market capitalism is now dead.Salvation122 wrote:Recession doesn't. A credit freeze pretty much does. The two are not the same. We are still going to go through a recession (imminently); the credit freeze has probably been avoided.
[url]The thermonuclear war this was more for a sense of scale then an actual fear that people'd start nuking each other (although I do believe that if we had decided to do nothing, another major global war would have been the inevitable outcome.)[/quote]
Unlikely. People would need to consolidate their own positions before they went out and tried to kill more people. Russia may gain more turf, sure, but it was theirs not so long ago anyway. They wouldn't go too far as China is right there, and the EU will still have more than enough clout to be a threat. Major global war would be unlikely.
- Salvation122
- Grand Marshall of the Imperium
- Posts: 3776
- Joined: Wed Mar 20, 2002 7:20 pm
- Location: Memphis, TN
1): Reform of the US financial industry is utterly certain under a combined Democratic Congress and President anyway, so there's no point in triggering a global depression to get there..Crazy Elf wrote:A credit freeze led to the last great depression, yes. However, it also led to the New Deal. Your country's more socially progressive policies have been riding on that for a long time, which is a very good thing. It also means an end to business as usual, as everything is forced to reform. For example, free market capitalism is now dead.Salvation122 wrote:Recession doesn't. A credit freeze pretty much does. The two are not the same. We are still going to go through a recession (imminently); the credit freeze has probably been avoided.
2): Schadenfreude is stupid.
At the absolute least you'd see nasty shit go down in and around China, and I suspect you'd see a war between NATO and Russia. Revolutions all over the place at the very least. But at this point we're spitballing pointlessly.Unlikely. People would need to consolidate their own positions before they went out and tried to kill more people. Russia may gain more turf, sure, but it was theirs not so long ago anyway. They wouldn't go too far as China is right there, and the EU will still have more than enough clout to be a threat. Major global war would be unlikely.The thermonuclear war this was more for a sense of scale then an actual fear that people'd start nuking each other (although I do believe that if we had decided to do nothing, another major global war would have been the inevitable outcome.)
-
- Footman of the Imperium
- Posts: 3036
- Joined: Mon Mar 18, 2002 4:44 am
- Location: Oz
- Contact:
Obama has to win it first. As much as I'd like to look at things optimistically Bush did get in for 8 years and that guy should have been nowhere near the presidency. Dirty pool will be tried again.Salvation122 wrote:1): Reform of the US financial industry is utterly certain under a combined Democratic Congress and President anyway, so there's no point in triggering a global depression to get there..
Against over rich fuck heads that brought it on themselves? If you really believe that then I don't suggest visiting Australia unless you limit your travels to Sydney. The rest of the country <i>loves</i> that sort of thing.2): Schadenfreude is stupid.
But all that is going to happen anyway, global credit freeze or no.At the absolute least you'd see nasty shit go down in and around China, and I suspect you'd see a war between NATO and Russia. Revolutions all over the place at the very least. But at this point we're spitballing pointlessly.
- Jeff Hauze
- Wuffle Trainer
- Posts: 1415
- Joined: Mon Mar 18, 2002 10:31 pm
It's not so much that I'm agreeing with Ray (or disagreeing with him here, I'm just pretty ambivalent). But his last statement may apply a bit. I live in a small town in Pennsylvania. I don't know a single person who has had any real major immediately noticeable effects from the "economic crisis" other than gas being more. My parents don't know anyone, my neighbors don't know anyone, and my friends don't know anyone (even the majority of the close online ones). So it's really difficult for me to wrap my head around the need for any kind of bailout. I don't know a single person who lost their home, their job, their life savings, or anything of the sort. 401ks are down for a few known folks, but not by huge amounts (if they weren't completely aggressive on them) and gas is rather expensive. That's about it. So it does leave me and mine scratching our heads quite a bit.Raygun wrote:This country is fucking stupid. They'll be back for more after they blow through this $700b. I'm glad I'm in little ol' economically-isolated Montana.
The only major thing this crisis has me wondering is whether I should have actually started contributing to my 401k at this time after not having done so for a number of years.
Screw liquid diamond. I want to be able to fling apartment building sized ingots of extracted metal into space.
- Salvation122
- Grand Marshall of the Imperium
- Posts: 3776
- Joined: Wed Mar 20, 2002 7:20 pm
- Location: Memphis, TN
- UncleJoseph
- Wuffle Initiate
- Posts: 1087
- Joined: Tue Jun 11, 2002 8:32 am
- Location: Central Michigan
- Contact:
The New Deal was basically a massive bailout, similar to the one we have now, but targeted at labor. This is all Keynesian economics, instead of the classic model; it postulates that you can prevent the worst effects of recessions by spending money at the right place at the right time. Part of the reason why recessions don't hurt normal people as much is because of Keynesian and socialistic reforms placed on banking and the market.A credit freeze led to the last great depression, yes. However, it also led to the New Deal. Your country's more socially progressive policies have been riding on that for a long time, which is a very good thing. It also means an end to business as usual, as everything is forced to reform. For example, free market capitalism is now dead.
It's tempting to think: "The market will fix itself in the long run, in the long run we'll all be stronger for it." Keynes was the one who said: "In the long run, we are all dead." Right about now, I'm thinking that Keynes might be right. We cannot afford another Depression. I don't like the thought that fat-cat CEO's will get away scot-free, but what other choice is there?
[edit]Gods Damn it, the fat cats got away with it.
-
- Wuffle Trainer
- Posts: 1537
- Joined: Thu Apr 25, 2002 5:33 pm
- Location: Hawai'i
- Contact:
Fuck it, just save the hassle and get an aluminium heliocopter.DV8 wrote:Aeroplane! *petpeev*UncleJoseph wrote:Or an airplane.
*By the way, it's pet peeve.
I may be somewhat cranky this morning.
Those who can't, teach. Those who can't teach, become critics. They also misapply overly niggling inerpretations of Logical Fallacies in place of arguing anything at all.
- Jeff Hauze
- Wuffle Trainer
- Posts: 1415
- Joined: Mon Mar 18, 2002 10:31 pm
*shrugs* Five people at work have purchased cars in the last three months (two used, two new, one paid in cash). It's not meant to be argumentative. I just honestly don't know anybody who has claimed any kind of major impact from it.Salvation122 wrote:Find someone who's tried to buy a car in the past two months.
Screw liquid diamond. I want to be able to fling apartment building sized ingots of extracted metal into space.
It'll mostly affect people who are trying to buy a home, or are dependent on investments for an income source. For example, the average retiree. There's even ads talking about how glad people are that we didn't let Bush privatize Social Security; otherwise, we'd be even more in the hole now.Jeff Hauze wrote:*shrugs* Five people at work have purchased cars in the last three months (two used, two new, one paid in cash). It's not meant to be argumentative. I just honestly don't know anybody who has claimed any kind of major impact from it.Salvation122 wrote:Find someone who's tried to buy a car in the past two months.
Go on. I keep hearing this and it keeps on making no sense. Unless you mean "It'll only cost us like $450b."Salvation122 wrote:Just so people understand (and most don't) we're pretty much raping the investment banks in the ass on these securities we're buying, and the odds of this plan actually costing $700b are pretty low.
As of today it doesn't appear that the $700b plan has chilled everyone out very much. I expect they'll be asking for more soon.
True. The $700b is apparently being borrowed from the bond market so that they don't need to print more cash to cover it (however, that other $620b in swaps...). But where does the liquidity from the bond market come from? More foreign investment. So, drag it out. Default or pay it off. And you know we're not gonna pay it off. Neither party thinks that's much fun. How to bleed a nation dry 101.No, it will not. We're running with the bailout specifically because it doesn't print money. We're taking on debt. This is not, not the same thing, regardless of what Ron Paul says.
That's certainly possible, whether or not the bailout was passed. It's pretty hysterical if you ask me, but it certainly isn't impossible.The likely outcome of this if we had done nothing was a complete credit freeze, whereupon the global economy would have basically come down around everyone's ears. The last time that happened, communism and fascism ate Europe. That was before we had thermonuclear weapons.
In that case the government would actually be doing its job by proceeding with anti-trust lawsuits and breaking up the monopolies. But then that would have to mean that politicians weren't for sale which is of course asking a bit much, especially at this point.Yes, because monopolies in the investment market are totally sweet!
Heh. That's pretty amusing coming from a guy taking the positions you are.It's also worth noting that Marius's article was written by a Libertarian and that his economic ideology is therefore somewhat suspect.
Right. This is the result of all the recession avoidance.This isn't really recession avoidance.
That's the bet, anyway. Pretty much all we can do now is hope that you're right. How much credit do we have left, you think?A recession is roughly equivalent in overall shitiness to the Iraq War. A hardcore credit freeze is global thermonuclear war. We're still destined to go through a recession in the immediate future, it just won't be Grapes of Wrath.
Except that they won't fix the problem either. Sure they're less greedy, but unfortunately they're just as stupid. See initial cause of current crisis.1): Reform of the US financial industry is utterly certain under a combined Democratic Congress and President anyway, so there's no point in triggering a global depression to get there.
California (Economic problems? Califonia? No!), Florida, and Nevada (Las Vegas) were the states with the housing markets that were built up and inflated to utterly ridiculous levels and are now crashing. That's mainly what we're paying for, but there are others (Detroit and Phoenix being a couple more majors).Jeff Hauze wrote:It's not so much that I'm agreeing with Ray (or disagreeing with him here, I'm just pretty ambivalent). But his last statement may apply a bit. I live in a small town in Pennsylvania. I don't know a single person who has had any real major immediately noticeable effects from the "economic crisis" other than gas being more. My parents don't know anyone, my neighbors don't know anyone, and my friends don't know anyone (even the majority of the close online ones). So it's really difficult for me to wrap my head around the need for any kind of bailout.
Even here in little Great Falls, Montana we had a couple of new subdivisions built up that are currently about two-thirds full and will likely remain that way until prices drop to a level that isn't completely fucking stupid. $300k for a three bedroom 1,700 square foot house in Great Falls? ARE YOU HIGH? And they built a bunch of them. Not nearly as many as these other places, but certainly more than a place like Great Falls ever needed.
Me either. I guess we live in places where people weren't credit-extended beyond all reason. All I see here are quite a few brand new empty houses that never had anyone in them, which means (surprise) there's a bank somewhere that just got paid to build a house that they couldn't sell.*shrugs* Five people at work have purchased cars in the last three months (two used, two new, one paid in cash). It's not meant to be argumentative. I just honestly don't know anybody who has claimed any kind of major impact from it.
Nothing that would equal less pain or more injustice.Cain wrote:I don't like the thought that fat-cat CEO's will get away scot-free, but what other choice is there?
It's all about crystal meth and Gwar. - Hauze
What a strange pet peeve. After all, he's correct, in the language he speaks. If he were British or Canadian, the correction would be logical, but it's like being put off by Americans saying "soccer:" our language is not English, and should not be expected to be.DV8 wrote:Aeroplane! *petpeev*UncleJoseph wrote:Or an airplane.
Have another depression, which we indeed can afford. The short-term effects will be bracing - which is a polite word for how fucked we'd be - but the long-term effects would be to lower inflation, normalize the economy, and encourage a revisitation of the things that put us here.Cain wrote:We cannot afford another Depression. I don't like the thought that fat-cat CEO's will get away scot-free, but what other choice is there?
It won't happen. In a representative democracy, you can't ignore the short-term in favor of the long, or you won't be in office for the long-term, and will lose your ability to influence anything. Originally it was said about diplomacy under democracies, but it's no less true of other sorts of policies: "In its desire to conciliate popular feeling it is apt to subordinate the principle to expediency, to substitute the indefinite for the precise, to prefer in place of the central problem (which is often momentarily insoluble) subsidiary issues upon which immediate agreement, and therefore immediate popular approval, can be attained." Sir Harold Nicolson, naturally.
edit: Or, to put it another way, in the words of Yves Smith:
Yves Smith wrote:The bailout bill is a classic example of expediency over effectiveness. It will purchase dud assets at above-market prices. It does serve to recapitalize banks, but it rewards the worst offenders and does nothing to restore trust. Even though Japan is the poster child of how not to manage a banking system crisis, this is a page straight out of its playbook.
By contrast, the most successful approach is to let asset prices fall to discover the extent of the damage, take over failed banks, recapitalize them, and later sell them back to investors. That's according to a new International Monetary Fund report that examined 124 banking crises in the past 27 years.
This approach is harder on the economy in the short term, usually leading to a two- to-three-year deep recession, but with a strong growth rebound after that. Too bad the US doesn't do recessions; the idea of a painful purge is deemed to be beyond the pale. And getting religion later doesn't work: the Japanese later recanted, forced banks to write down bad loans, and injected public funds, but today, 18 years after the country's asset bubble started popping, they remain stuck in a deflationary trap.
American attachment to instant gratification is strong. So is the pressure to pass the bailout. But left unchecked by self-restraint and honest reckoning, both forces may lead America to repeat, on a grander scale, the same sort of error that got us in this financial mess in the first place.
Sorry, but in this case, I'm sticking with Keynes. We don't know how long the "long term" is really going to be. Our social services network is already stretched thin enough as is; a major recession would result in even more job losses and unemployment claims than we have right now. Short term, the damage would be severe, even you agree with that. And the people who are going to be best able to ride it out are the extremely wealthy; the average American will suffer from huge inflation and probably home loss.Have another depression, which we indeed can afford. The short-term effects will be bracing - which is a polite word for how fucked we'd be - but the long-term effects would be to lower inflation, normalize the economy, and encourage a revisitation of the things that put us here.
It won't happen. In a representative democracy, you can't ignore the short-term in favor of the long, or you won't be in office for the long-term, and will lose your ability to influence anything. Originally it was said about diplomacy under democracies, but it's no less true of other sorts of policies: "In its desire to conciliate popular feeling it is apt to subordinate the principle to expediency, to substitute the indefinite for the precise, to prefer in place of the central problem (which is often momentarily insoluble) subsidiary issues upon which immediate agreement, and therefore immediate popular approval, can be attained." Sir Harold Nicolson, naturally.
I'll repeat it once again: "In the long term, we are all dead." Keynes put it best. Back during the Depression, Hoover did pretty much nothing; he was convinced that the economy would straighten itself out, eventually. And it did, but not until after about ten years. It probably would have been longer without Keyensian spending.
-
- Footman of the Imperium
- Posts: 3036
- Joined: Mon Mar 18, 2002 4:44 am
- Location: Oz
- Contact:
No, you're right. Pretty soon you'll all be speaking Chinese anyway.3278 wrote:What a strange pet peeve. After all, he's correct, in the language he speaks. If he were British or Canadian, the correction would be logical, but it's like being put off by Americans saying "soccer:" our language is not English, and should not be expected to be.
They're both correct you know...DV8 wrote:Aeroplane! *petpeev*UncleJoseph wrote:Or an airplane.
Last edited by Tiny Deev on Thu Oct 09, 2008 6:56 am, edited 1 time in total.
Quelle surprise!3278 wrote:What a strange pet peeve. After all, he's correct, in the language he speaks. If he were British or Canadian, the correction would be logical, but it's like being put off by Americans saying "soccer:" our language is not English, and should not be expected to be.DV8 wrote:Aeroplane! *petpeev*UncleJoseph wrote:Or an airplane.
Well, feel free: he re-assures me no less than any of the other thousand economists with conflicting views on what's going on and how to stop it. Myself, I'll probably base my views on things like the IMF report of 124 banking crises in 27 years; others will listen to their own investment firms; some will base their opinions on dead economic theorists from various periods. Most will listen to whomever agrees with them the most. There's certainly no shortage of opinions in a situation like this, and Keynes' is always one of them, if not more; Winston Churchill: "If you put two economists in a room, you get two opinions, unless one of them is Lord Keynes, in which case you get three opinions."Cain wrote:Sorry, but in this case, I'm sticking with Keynes.
- paladin2019
- Bulldrek Pimp
- Posts: 824
- Joined: Fri Mar 29, 2002 10:24 am
- Location: Undisclosed locations in Southwest Asia
What, you plan on offing yourself to avoid it?Crazy Elf wrote:No, you're right. Pretty soon you'll all be speaking Chinese anyway.3278 wrote:What a strange pet peeve. After all, he's correct, in the language he speaks. If he were British or Canadian, the correction would be logical, but it's like being put off by Americans saying "soccer:" our language is not English, and should not be expected to be.
-call me Andy, dammit
Thank you. Here's one selection that I read:
Another quote:Using the dataset
presented in this paper, Laeven and Valencia (2008) examine the effectiveness of blanket
guarantees in restoring depositors confidence and find that they are often successful in the
sense that they restore depositor confidence.
So, we don't see that "letting it happen" will help the economy. In fact, waiting too long can make the situation worse. We can't just sit around and wait for the markets to recover on their own. Intervention is required. I don't know enough to say if this intervention is the right one, but it could be worse.However, in crisis characterized by liquidity and solvency problems, the central bank should stand ready to provide liquidity support to illiquid banks. In the event of systemic bank runs, liquidity support may need to be complemented with depositor protection (including through a blanket government guarantee) to restore depositor confidence, although such accommodative policies tend to be very costly and need not necessarily speed up economic recovery. All too often, intervention is delayed because regulatory capital forbearance and liquidity support are used for too long to deal with insolvent financial institutions in the hope that they will recover, ultimately increasing the stress on the financial system and the real economy.
Oh, and 32? The quote from my Econ professor was: "Ask 10 Economists a question, and you'll get thirteen different answers." I think you get the gist?