Words To Give You Pause On Today’s Economy ( Can we both fix the economy and punish....)

Flopping Aces ^ | Sept 25, 2008 Sep | Curt

[Ernest_at_the_Beach]

Words that give me pause:

Now let me tell you something very simple and very important: You can try to prevent a financial meltdown or you can teach Wall Street a lesson, but you can’t do both at the same time.

So which will it be?

You say you want straight talk — no spin, no bull, no sugar-coating. Okay, here goes.

First, stop fixating on Wall Street executives — there will be time to deal with them later. Even if you clawed back every dime they made over the past decade, it would come to several billions of dollars. That’s a rounding error compared with the size of the financial problem we’re facing here.

Second, we need to act quickly. The financial situation is now downright scary. Don’t look at the stock market — that’s not where the problem is. The problem is in the credit markets, which are quickly freezing. I won’t bore you with technical indicators like Libor and Treasury swap spreads, but if you talk to people who work these markets every day, as I have, they report that the money markets are in worse shape than they were last August, or even during the currency crises of 1998.

[penowa]

False choice IMO. This bailout isn’t going to FIX anything. All it’s going to do and all it’s designed to do is hold things together until after the election.

[Sons of Union Vets]

Not to sound like a conspiracy theorist, but is it possible that this economic nightmare has been - at least in part - systematically orchestrated in such a way as to manipulate the rank and file middle-class citizens of the U.S. to embrace ever broadening socialist economic encroachments out of fear for their future financial security???

On the other hand, is there any difference between one economic system in which the means of production/capital are concentrated in the hands of a few “commissars” and another in which the means of production/capital are concentrated in the hands of a few laissez-faire capitalists/fascists?

It appears to me that in either case the means of production - as well as most of the profits - wind up being concentrated in the hands of an elite few while we rank and file middle class taxpayers continues to get screwed out of our hard-earned money.

We need to get back to a MODERATE (i.e. non-monopolistic) form of capitalism which allows for BOTH economic growth AND provisions for our less fortunate, needy citizens (i.e. elderly, disabled, etc.) while doing away with non-essential economy-crippling taxpayer-funded entitlements which morphed out of the socialist “politics of envy.”

[Ernest_at_the_Beach]

Hope the rest of your family have taken the smae intelligent steps as you have.....

See this:

J.P. Morgan says California home prices face further drop

***********************EXCERPT INTRO**********************

NEW YORK (MarketWatch) -- J.P. Morgan Chase , which late Thursday bought Washington Mutual said the peak-to-trough average home price in California could fall as much as 58% if the country enters a severe recession.

[Wolfie]

Doesn’t that go against the Capitalist System?

You're kidding, right?

[Ernest_at_the_Beach]

From this thread:

Buffett's "time bomb" goes off on Wall Street

******************************Graph from post # 25.

****************************************

I posted this graph on another thread - Cox recently stated that Credit Default Swaps are now at $62 Trillion.

We may be toast.

25 posted on Wed 24 Sep 2008 08:49:27 AM PDT by unique

[SE Mom]

So are we looking at CDS/derivatives as a major culprit?

[Moose Burger]

Even more: you *should* do both. Doing the first without the second means applying a short term paliative. The economy is not the problem, it’s a consequence. Not punishing those responsible means not fixing the root causes.

[Straight Vermonter]

Ouch.

[Toddsterpatriot]

I posted this graph on another thread - Cox recently stated that Credit Default Swaps are now at $62 Trillion.

They aren't worth $62 trillion and so what?

[singfreedom]

I noticed that, too. They're blaming McCain for “injecting Presidential politics” and being “in front of the camera all the time”. Well, guess what? The only one I saw discussing Presidential politics was Harry. And, the only one in front of the camera was? Yes, you guessed it! The “Dirty One”, himself!!

Thanks for the PING!, Ern!

[SunkenCiv]

Thanks Ernest.

And for the following, thanks LucyT:

Major “Earmark” in Democrat Bailout Agreement
(URGENT must read -ACORN and more)
Blogs 4 McCain | 25 September 2008 | Bill Smith
Posted on 09/26/2008 4:04:56 AM PDT by SE Mom
http://www.freerepublic.com/focus/f-news/2090926/posts

[LucyT]

You’re welcome, SunkenCiv.

From the same thread, #112 added to your post.

http://www.freerepublic.com/focus/news/2090926/posts?page=112#112

[Marine_Uncle]

Nice little presentation.

[BIGLOOK]

That graph would give me a worse headache than the one I already have.....except that not all hedges and derivatives are in default.

I find the fix of the credit market pegged at 800 billion suspect too. Buffet just bought 10% of Goldman Sachs and today JP Morgan Chase ate Washington Mutual. This is market adjustment....

Berkshire Hathaway and JP Morgan Chase are vultures and I suspect there'll be others.

[AdmSmith]

It is of utmost importance to fix this, so we should urge all politicians to hold their nose with one hand and vote for a bailout with the other. More here from John Mauldin, check the graphs http://marketoracle.co.uk/Article6489.html

[nuconvert]

“A properly constructed Stabilization Plan hopefully avoids the worst-case scenario. It should ultimately not cost the taxpayer much, and maybe even return a profit. The AIG rescue that Paulson arranged is an example of how to do it right. My bet is that the taxpayer is going to make a real profit on this deal. We got 80% of AIG, with what is now a loan paying the taxpayer over 12%, plus almost $2 billion in upfront fees for doing the loan. That is not a bailout. That is a business deal that sounds like it was done by Mack the Knife.”

Thanks for the ping