I hate these bailouts too, but we have a Depression to avoid.
We are not losing the game today. The game was lost long ago. There is a momentum to these things. When Greenscam decided to leave rates at 1% so all the players could gorge fat on the easy money until they were regurgitating at the vomit troughs for the next feast of easy money, these bailouts were baked into the cake. All we are seeing now is the end result of the idiotic decisions made almost a decade ago.
I heard the talking heads on CNBC whining that “AIG is not insolvent, it is just illiquid.”
HELLO????? We are in a LIQUIDITY CRISIS.
They said, “AIG has assets to sell”. Right. Tell that to the judge when your mortgage is foreclosed on your $10 million house that is worth $9 million today. OK, sure. Your house is worth $9 million, and if you sold it, you could afford to pay your mortgage. But unfortunately, you can’t sell it and pay off your mortgage in time to stave off foreclosure. That is AIG.”
And Freepers like Travis McGee have been absolutely screaming that this was coming after the collapse of the long-running overextended credit bubble.
Nothing to do now but throw more money in the fire and hope we can dump so much money on the fire that we suffocated it under the stack. The alternative now is a nice toasty Depression. I hope and pray it doesn’t end that way.
But... The financial sector is rapidly melting down before our eyes. How many major private companies have to be bailed out from their horrific derivatives losses before the Fed says, “sorry, we’re broke too, you are on your own, good luck.”
Helloooooooo hobos. Welcome to the Depression.
“I hate these bailouts too, but we have a Depression to avoid.”
Why do you want to avoid a depression? Everyone knows that all the bad stuff happens during the boom; depressions fix the economy.
This is bad.
I’ll tell you one of the stranger things I saw: Walked by Lehman headquarters in Times Square and tourists were taking pictures of folks walking out with cardboard boxes of personal possessions.