Posted on 09/25/2008 11:33:23 AM PDT by Notary Sojac
...his name was Henry Paulson...
...his name was Henry Paulson...
...his name was Henry Paulson...
Interesting... BTTT
The problem is that Paulson is not an economist, but a dude who worked for Goldman-Sachs. Sure, he’s bright and knows how to wheel and deal to make money— but he’s not an objective guy—has to protect his buds on Wall Street, has to grease the wheel so after he gets finished with his washington stint he can cash in on the favor.
George Bush deftly inserted Paulson, and Bernacke into these jobs, putting the foxes in charge of the hen house!
There are no coincidences.
His name is about to become an adjective.
Example: Grease your cheeks and bend over, we’re about to get Paulsoned.
First: I want to know the party affiliation, and working background, of the entire list of “economists”, particularly since so many on the list hale from the most liberal and Marxist bastion in the world - U.S. colleges and universities.
Second: When they say “Investors who took risks to earn profits must also bear the losses”, the composers of this sentence are intentionally trying to get you to see, in your mind, “Wall Street executives” and rich people with money (investors).
But, in reality, the bulk of the virus, the bulk of the “investors” are in your local bank, the companies in your 401k, the companies in your mutual fund, your insurance company, you or your employers pension plans, etc. etc. etc. So, apparently, these “economists” don’t think that every form of your savings and investment should be helped out; just devalued.
Me thinks this group of “economists” have a non-economic agenda.
And those 401Ks that are denominated in dollars, they'll hold up great too??
Fight Club reference, BTW.
Woody Harrelson’s character in Kingpin gave us the act of being “Munsoned” when things go horribly wrong.
Great flick. Hell. Anything in life can be reduced to a movie moment, right?
“I guess that pumping a few trillion of additional unfunded debt onto Uncle Sam’s balance sheet will leave my cash savings looking jes’ fine, right??....”And those 401Ks that are denominated in dollars, they’ll hold up great too??”
Look, if it makes you feel better you can call $700 billion a few $trillion.
Second: your savings account and your 401K are yes valued in dollars and invested mostly in U.S. securities.
So what is it that world traders are saying today about the bailout so far. (1)dollar is up against Euro, (2)gold is down in U.S. and Europe, (3)Dow is up 225, and Oil is up because traders see economic recovery, and oil demand higher, following the “bail out”.
But, if you like to feel gloomy, go ahead.
Lots of people from Chicago school of Economics which is the most pro-market school there is from what I know. In general the list of names is very impressive. Some are business school finance guys, many general economists. I am not expert unfortunately my knowledge of the subject is limited to half undergraduate degree in Economics.
BTW it does not matter who made investment, you play the game you got pay the price.
This bail out is looking like a terrible mistake. I think Bush is scared about his “legacy” so he had this knee jerk reaction and with election coming up I am afraid the populist short term approach will prevail. This is something that our grand kids kids will be still paying for
Senator Bunning just mentioned this letter to Shep Smith. He’s strongly and vocally against the bailout. Could be a good sign they won’t do it. Also a Fox producer just posted that McCain and the House Republicans are presenting an alternate plan and obstructing the bailout. Really hope that’s true!
Me too, FRiend, I pray you are right.
Look, if “market economics” on its own created the mess, I would maybe agree with you, but this mess was not going to happen - the size and scale of the problem - except for the institutional size and clout of the government elephants interfering in the market - Freddie and Fannie; and with their government bosses asking them to and letting them run wild. GOVERNMENT created the crisis, so of course government should try to correct it.
It's become clear that the man who at the start of his first term dreamt of being the second Ronald Reagan now, at the close of his second term, is destined to be the second Jimmy Carter.
No matter the reason for it, such rush to basically nationalize a part of the financial system is just a really bad idea. Cure here might be more deadly then disease itself. This crises might just resolve itself in the next few years, this “solution” will have effect 50 years from now and not a good effect either.
“This crises might just resolve itself in the next few years, this “solution” will have effect 50 years from now and not a good effect either.”
Your first point is correct, and why, that point makes it also true that what Paulson is “buying” may not, in the end, leave an extra $1 trllion new debt on the Treasury’s books.
But, the institutions that are holding what Paulson will buy have two problems: (1)regulations require that some of what they are holding be valued at less than zero, today, at “market prices”, today, which increases the spread between their regulatory required asset and liability ratios; (2)which produces the demand that they raise capital FOR THEMSELVES, NOT TO LEND; which (3)is freezing up new capital investments and credit liquidity (the largest multi-location car dealer company in the southern states, with more than a $1 billion in revenue in 2006, closed their entire business this week - too many buyers cannot get loans.)
Some of us have offered (and Berneke has even suggested the possibility) that many institutions be allowed to, temporarily, use asset and debt valuation algorythims they used before “mark to market” was made mandatory. What the entire industry does not know is how far that will account for identifying the viral and non-viral components of securitized mortgage instruments and credit debt swaps, and how soon; AND NONE OF THEM BELIEVE KNOWING THOSE ANSWERS IS POSSIBLE - WITHOUT A HOLDING PLACE FOR THE VIRUS (the bailout) BEFORE ALL CREDIT LENDING AND NEW CAPITAL INVESTMENT FREEZES.
The “bailout” is really about your first point - time will correct allot of it - and clearing the obstruction the virus is creating, until time can provide some true settlement values for most of it.
As far as your “50 year” comment; I can only say that what seems to be suggested is no worse than the mere existence of Freddie and Fannie and they were created in the depression and legislatively allowed to grow ever since. I don’t see anything proposed as being worse than that, and therefore not MORE socialistic. But, when we already have the socialism that Freddie and Fannie represent and the problems they helped create, I don’t see the solutions as “greater” socialism, just more of the same.
Back again to your first point: about how much of the problem could be settled favorably, in time; and since many “economists” agree with that, then we could suggest that since we (taxpayers) will hold $700 billion of it at today’s price and it could, when it all settles, be worth more than a trillion, we could suggest that the $700bn investment we are buying be placed in the Social Security “trust fund” accounts and $700 billion of Treasury IOU’s sitting there be retired.
“Me thinks this group of ‘economists’ have a non-economic agenda.”
Think again. Surely, these economists may be socialists (most professors are), but the socialist solution to this problem would be to pump more money into the system. Opposing the bailout and letting bad investments liquidate themselves is the most “free market” thing you can do. This point, especially, underlines their point:
“Its long-term effects. If the plan is enacted, its effects will be with us for a generation. For all their recent troubles, America’s dynamic and innovative private capital markets have brought the nation unparalleled prosperity. Fundamentally weakening those markets in order to calm short-run disruptions is desperately short-sighted.”
Causing the currency to collapse through inaction would be disastrous. However, there is no guarantee that this particular bailout plan will save anything. What good would buying mortgages up above market value do when there is nothing to stop another false boom from revisiting us in a few years?
“Lots of people from Chicago school of Economics which is the most pro-market school there is from what I know”
Wrong. It’s the second-most pro-market school, after the Austrian School.
“GOVERNMENT created the crisis, so of course government should try to correct it.”
I’m not entirely sure how you can solve a problem by doing more of the same thing that caused the problem in the first place.
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