Posted on 09/27/2008 11:32:07 AM PDT by Petronski
I've received phone calls in the last hour from two economists I respect, one of them Larry Lindsey, the other in a position where he'd prefer not to be named. Both have government experience, neither is alarmist by nature, and they say this:
The huge European bank Fortis is apparently about to fail. The ripple effect on the American banking system could be disastrous, with bank runs, liquidity crises, and stock sell offs possible Monday. Wachovia may well fail next week. As Larry put it, this really will be 1933 soon if we don't move rapidly to stabilize the banking system.
And here's the bad news: the current bailout bill, whatever its merits and likelihood of passage, does nothing to address this.
Congress should pass by Monday simple legislation doing two things:
1. Giving the FDIC authority to provide unlimited deposit insurance through the FDIC for transaction accounts in banks.
2. Authorizing the Secretary of the Treasury to provide unlimited protection of principal in money market funds through the Treasury's exchange stabilization fund.
Maybe my acquaintances (and I) are too worried; maybe this legislation wouldn't quite be the right solution. But I wanted to sound what may be, unfortunately, a needed alarm.
William Kristol is editor of THE WEEKLY STANDARD.
It was chilling how emotionless the former guards were. It destroyed their souls.
One of them described how they would execute prisoners. Make them kneel at the edge of the pit, and bash them in the head with a heavy metal pipe. He said he did thousands that way.
Sad, but I fear too true. And the worst part is that those of us who pursued “prudence” will be taxed to bail out fools who sold themselves into slavery to “debt.”
This is not the kind of scholarly analysis that I respect.
I figured that "anyone who is leveraged 30 to 1 can bite me" wasn't respectful enough, so I decided to sugar coat it a bit..
I have three unopened WWII rations downstairs (as part of a collection). I would have to be really hungry though...they are worth over $500 each as collectibles; bet you wished you would have saved yours up...LOL.
Your “analysis” reveals a hell of a lot more about you than anything else.
Oh, and it’s very creepy.
America's economic model during those years basically consisted of borrowing money from foreign countries, and spending that money buying assets (first tech stocks, then houses) back and forth from each other at ever-ratcheting prices.
No way we come down off that bender without the mother of all hangovers.
The Paulson plan is not going to avert this. Adding more debt is not the cure to a hyper-leveraged economy.
I'm not pretending that the economy is great, or that life will magically become sweet once all the investment bankers are strung up.
I'm saying that the Paulson plan as currently presented will have the effect of giving the status quo a life support extension and ensure an even harder crash when its effects wear off.
>>Wow. Name-calling.
Nope just making an observation. Comrade Collectivist Petronski. Now run along and worship your hive.
>>Deutche Bank invested heavily in U.S. mortgages.
Correct. IIRC, they were the principal warehouse lender working with Ameriquest/Argent.
http://www.google.com/search?hl=en&q=deutsche+bank+Argent&btnG=Search
That’s the extent of your argument: personal abuse.
>>Thats the extent of your argument: personal abuse.
Yes I’m just an Ideological Luddite. A bigot.
You’ve learned well from the Rainbow Collective, comrade Petronski.
Thats the extent of your argument: personal abuse.
The Paulson plan is the difference between a recession and a severe recession or depression.
The Paulson plan is the difference between a recession and a severe recession or depression.
Ridiculous.
People like Robert Shiller. Or Ivy Zelman. Or Nouriel Roubini.
Specifically NOT people like Ben Bernanke or Henry Paulson.
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