Stock markets and dollar plunge again on fears over bank crisis(facing a financial black hole)

You completely misunderstand my position. If you think I am advocating breaking the machinery of finance you are wrong. I just want folks to state in plain English who is doing what to whom for what purpose and what is the detriment.

I get just a tad irritated by the oblique obfuscations about what is really going on. I am not claiming there is a secret conspiracy. The "conspiracy" is open in public for all to see. But don't expect folks to stand up and applaud the fine upstanding men and women just doing their patriotic duty to lose a whole bunch of money. They need to go away, quietly and with due contrition for what they have done.

There are no free lunches in the universe. A default on a loan that contributed to broker x buying a ferrari means that the cost of the ferrari just got transferred from the income stream of the mortgagees to the economy as a whole. One ferrari does not matter, but ferrari after ferrari, hooker after hooker, condo after condo, private jet after private jet and pretty soon you are talking about real money. You don't have to follow all the peas under all the CDO swaps to see what happened. We see what pocket it ended up in and we know where it started and that is enough.

Nonsense, your pretending that Americans know nothing of financial matters is simply condescending, and precisely treating them as ignorant peasants. Which they aren't. They've been around the block a few times, lived through the 1970s and the 1980s and can tell the difference, etc.
It isn't rocket science that owning a home carried by money borrowed in nominal dollars (at a fixed rate) is a better long term bet than paying rent and stuffing bank notes under the mattress. Something most Americans have long since figured out - indeed, some of them speculated on it rather too aggressively of late.
What is "disingenuous as hell" is pretending American wage earners and businesses would earn the same as they do now without any increase in the money supply or any easy financing, and then pretend they are being robbed because prices rise as a result of those same things. Obviously everyone's wages are higher and their ability to consume higher because of those things, as well as prices being higher (eventually). Whether any given person comes out ahead on both combined, or behind, is more than you know about any of them.
Your pretending otherwise is "one entry accounting". As though all the same jobs would be there at the same wages, and all the same products would be available, along with fixed prices forever. Um, no. If money were so tight that prices never changed, your nominal wages would be lower, too. You'd pay three times as much in real terms to finance a car purchase, and you'd rent, because only 20% of the population could afford to own a house.

I despise this relentless unthinking attack on finacial capitalism, it is beneath the dignity of this site and modern conservatism. You want to urge tighter monetary policy in the interest of price stability, do it in a boom. Right now it is the last thing anybody needs, and the calls here for it are sheer destructive luddism."

Jason, I'm not pretending Americans know nothing about financial matters. I'm saying that even if they can somehow manage to keep and grow what they've earned that the government with a stroke of a pen and the switch of a printing press can take it away from them. And they have been doing exactly that.

Interesting you think it's so easy to find some help and protection in these financial matters. We have any number of large investment banks teetering on the brink. If it's so cheap and easy for the common man to find people who can do well in the system as it's currently set, maybe the folks they find should be working for Bears Sterns or Lehman. I'll bet either of those companies would pay $250 for good good advice right now.

I'm well aware that easy financing as you call it can grow the economy and bring a higher standard of living. But there seems to be a limit that I'm afraid we're well past. How much of the last few years of easy credit has actually created wealth or a higher standard of living? Wealth isn't a higher credit line, greater debt, two guys selling the same commodity to each other and adding a percentage each time, or the false appreciation of an asset in a bubble. It's not wildly inflated dollars either.

Yet your answer seems to be, lets do more of the same. As if we'll be able to somehow borrow our way out of debt.

As far as attacks on capitalism or conservative thought, I see none of those things in my posts. Those policies that built an economy based on massive debt and one bubble after another are not conservative in any way.

That you think those things are the product of conservative thought says more about you that it does about me. I am a real conservative and capitalist that doesn't need confirmation from you. Feel free to continue to call yourself a conservative though many of us are quite sick of the label applied where it doesn't belong. You're in good company in any case, GWB probably still thinks he's a conservative too...

No, the government can't take anything from you that way, not unless you voluntarily stand in line for it - though wait until you see what Obama can do with the old fangled IRS.

My objection to the nonsense pretending that inflation takes only is the one entry accounting bit, where people pretend their wealth should increase from all they boom period activity, and then that the evil government or the evil capitalists are scheming to take it away from them, when some of it goes kerflue afterward, because they didn't get out of the way when the boom ends. That is one entry accounting and it is whining and it is a blame game.

Presently it is also being peddled as a reason to deflate - as though people aren't getting as much of that as they will ever stomach. The smash isn't the time to worry about too much debt issuance.

And no, it isn't the nefarious government or nefarious uncapitalists that give us a business cycle, booms and busts. That is mere reality, never going to change. Do what you will, capital is at hazard.

As for Bear needing my advice, they bet 33 to 1 on their own preferred calls, made billions when they worked, lost billions when they didn't. The failure was pure discredit, a run that choose to focus on them and could have picked anyone. Their level of leverage exposed them to that. Said exposure was utterly voluntary. Free men are free to make mistakes, and they will.

The answer in a smash is emphatically not, "ok let's tighten drastically and do away with all debt. Why, debt it evil, obviously, so let's just not have any".

Is there anyone today after seeing what actually happens that thinks Bear and company are getting off easy? What would being eviscerated look like?

"Well golly, I wanted a $400 billion bank failure, not just the stockholders wiped out, I want a general financial domino smash that wipes out the entire street". You may well get one even if the Fed pulls out every stop it has. Do you understand that?

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