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Posted on 03/05/2009 11:39:51 PM PST by dennisw
There is plenty of blame to go around. Greedy Wall Street speculators took mega-bonuses even when they knew their leveraged companies were tottering — and someone else would pick up the tab. Crooked or stupid politicians allowed Fannie Mae and Freddie Mac to squander billions, as they raked in campaign donations and crowed about their politically correct support for millions of shaky — and now mostly defaulting — buyers.
But amid the gloom, there are some valuable lessons that we can take away from the Wall-Street panic.
First, cash really is king. For all the talk of a trillion here or billions there, when the crunch came many of these investment houses and their once-strutting managers found themselves with a minus net worth. They were desperate to find liquidity — any money anywhere they could find it. Pedestrian passbook savings accounts proved wiser investments than all the clever hedge funds, derivatives and subprime schemes put together.
Second, wisdom and blue-chip college educations are not quite the same thing. The fools in Washington and New York who blew up Wall Street had degrees from our finest professional schools.
If these guys are our best and brightest, then it is about time we rethink what constitutes wisdom, since an Ivy League law degree certainly seemed no proof of either intelligence or ethics.
Third, we as a nation need to relearn the old notion of shame — as in, "Shame on you!" Firms like Lehman Brothers and Bear Stearns were once responsible Wall Street institutions, built up over decades by sober men. But their far-lesser successors in just a few months have bankrupted these venerable brokerage houses — with seemingly no shame at what they have done to the image of Wall Street.
(Excerpt) Read more at victorhanson.com ...
Excellent piece.
No doom and gloom. My 87 year old mother had it right all along. Stuff it in your mattress, dear. You will sleep better knowing your money is STILL there in the morning. My 401K, my variable universal life (savings) policy have done nothing but tank. Why put money there when it is gone in the morning but my mattress is getting very stuffed and supportive these days!!!! And I don’t think Obama’s team has thought of taking over mattresses yet.
Perhaps all this lack of ethical behavior and the ensuing collapse of these companies points to something even greater in society. There seems to be less and less in life that one can depend on. Society itself seems to be in more of an amorphous, ever-changing state, a situation caused by liberals. There seems to be nothing to believe in anymore as everything has been marginalized and deviant behavior is constantly being celebrated and accepted. Who is going to stand up for principles and ethical behavior that is not enforced and constantly under revision?
Mattress money did just fine in the Great Depression and it out performing all other investments in 2008 and 2009.
----- During this deflation your mattress money is gaining value every moment. Go sleep on that! :)
----- So far food prices are sort of up. I predict supermarket prices will also start a modest deflation in 2009
------ Don't buy a new mattress. Just stuff your old one with green Federal Reserve Notes. Your bank may fail but your mattress never will
Church attendance is up-— I wonder why
You can’t print endless money and not devalue it.
Inflation is coming long term.
It's obvious that the fashionable Keynesianism and Marxism taught at the Ivy League and Oxford and Cambridge is creating leaders incapable of sound economic decision making.
Give me a Ronald Reagan or a Sarah Palin, who hasn't been trained to treat the average American with contempt, and to treat his money as a plaything in a sophomoric social engineering scheme.
I’ve been saying for some time now that fall of U.S. capitalism started when we began mass producing MBA’s in our schools. They are scourge. Mathematical formulas took the place of good old common business sense and ethics. Number crunching fools is all they are.
I have repeatedly argued our universities are nothing but Marxist propaganda mills that are making our country worse. American parents diligently save their money to hand it, and their children, over to these idiots to brainwash those children of the values with which they were raised.
What good are colleges when our country is on the fast track to tyranny and communism as a result of its college graduates' lunatic ideologies carried with religious fervor despite the universal, historical failure of the hogwash they espouse?
I have repeatedly argued our universities are nothing but Marxist propaganda mills that are making our country worse. American parents diligently save their money to hand it, and their children, over to these idiots to brainwash those children of the values with which they were raised.
I don’t have children but i agree...i’m 43 and couldn’t imagine going back and listening to their idiocy.
Indeed!
We are now at the point of "every man for himself."
We can have no longer have any confidence in leadership in this country. They are idiots, crooks and egomaniac-tyrants.
In these times, well-made, reliable, accurate firearms and plenty of ammunition are the prudent investments.
A friend of mine wants me to go to the gun range today, something I’ve never done. I think I’ll take him up on his offer.
Truer words were never spoken...
Why don’t you expect INflation?
BO is printing money to cover all this stupid spending, isn’t he? I would think we are set to see inflation soar, since the extra dollars he is putting into the system will now be worth less than they were two years ago.
BO is printing money to cover all this stupid spending, isn’t he? I would think we are set to see inflation soar, since the extra dollars he is putting into the system will now be worth less than they were two years ago.
Look up the writings of Mish Shedlock, Nouriel Roubini, Martin Weiss
They are all deflationists
Meaning this economic crisis will manifest in wealth destruction and deflation. An implosion
Not an explosion like inflation. Hyper inflations are very rare in the historical record
We just got into this deflationary period after 6 years of wild asset inflation in housing, real estate, commodities, the stock market. This deflationary era has at least 3 years left to go, maybe more. So much wealth destruction is going on in housing, real estate, commodities, the stock market. that it counteracts all the stimulus, bailouts etc that are going on
I think I see what you’re saying...let me see if I can restate it, let me know if this is right:
You’re saying the “fake” buildup in asset values (esp. real estate) has set us on a downward trend for values—the prices for these assets are now seeking a “bottom”.
So much so that the inflationary actions of stimulus package will be “evened out” by this search for the bottom.
Is that about right?
If so, like I said, it is an interesting argument, and I guess we’ll see. My opinion remains that the actions of BHO—the spending, the raising taxes, the new restrictions on oil and gas energy production, will choke the private sector and the costs for doing business will rise.
I may try and look up some of those people you mentioned.
Thanks for the info.
SFF
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