Posted on 09/26/2008 5:42:27 PM PDT by supercat
The next President will be a one term President.
I think you’re right on the money supercat. The OTC derivatives are the problem. Here’s Karl Denninger’s solution.
DENIER!
I bet you don’t believe in Global Warmism either, do you.
This debate is settled! Just shut up and hand over your dough to your betters NOW, dammit.
Good post and humor!
Everything is just fine unless you need to borrow money to start a business, buy a car for your son or daughter, buy a house, borrow money to pay for college or replace a refrigerator, the heating/cooling system in your home.
Other than those ‘little’ things we ought to let the system go down the tubes.
>> Other than those ‘little’ things we ought to let the system go down the tubes.
Credit will tighten (and in my opinion, that’s a GOOD thing).
I don’t think credit will disappear altogether, despite the doomsayers.
Households and businesses have (literally) trillions of dollars in cash on hand. They all need to do something with it. Some of it will go into Treasuries, but with Treasuries yielding next to nothing, how long before cash holders are forced to find something more productive to do with it?
I’ll be fine.
Oh, that's nice to hear. I'm so relieved.
Now what about those of us who are going to have to be looking for a job in the next year? We're not going to be so fine. In face, we may add to the millions who are losing their homes and their equity, and hitting bottom.
I don’t think there will be much of a crash. we will come out of it stronger in the end and I would hope a few crooks go to jail in spite of the Democrat protection.
Yep, if you lose your job then you’ll stop spending money which results in further job losses.
Enemies are hoping our govt does exactly what you propose.
Right now credit is paralyzed because of the toxic paper that's flooding the market. If a prospective lender is holding toxic paper, it can't know how much money it can afford to lend. If a prospective borrower is holding toxic paper, lenders can't tell whether the borrower is solvent. Given that any toxic paper held by a borrower is in effect also held in some measure by the lender, almost everyone in the market is exposed to toxic paper.
The more quickly the toxic paper is cleared from the marketplace, the more quickly the market resume functioning.
Humor? What's so funny?
Are you suggesting that it's better to spend trillions of dollars so we can pretend for another year or two that the credit default swaps are worth more than they are (during which time their value will probably continue to decrease)?
“Are you suggesting that it’s better to spend trillions of dollars”
Despite your creative writing in the initial post and this most recent ‘trillion’ creativity you make no sense.
I’m saying its time to restore confidence in the markets. Socialism caused this mess and unfortunately it will take govt action to get us out. Waiting for a pure market driven solution at this point will only result in the destruction of the United States.
We’d be better off letting these banks fall to the level they’ve made for themselves. Add some serious tax cuts and we’ll get over the rough patch pretty quickly. Maybe even a limited morotorium on forclosures for a the duration. (Family homes)
Maybe things will be good for you, maybe they won't. But throwing trillions dollars of good money after bad will leave us in the same situation, except trillions of dollars poorer.
Some government action is needed, certainly. A billion dollars toward prosecuting fraudsters would be a good start, as would passing rules to ensure an orderly fall of the CDS market (e.g. ensuring that assets get allocated among all claimants, rather than simply going to the earliest ones). I see no reason to believe that any action which does not clear the toxic paper will have any lasting effect, beyond the impoverishment of the American taxpayer.
Sure prosecution should happen, but it won’t.
This isn’t 1915, if our economy fails so will we. China, Russia, and the Muslims will all step into the power vacuum. We will truly become a 3rd world country.
Yup.
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