On Thu, 25 Sep 2008 15:19:36 -0500, cavelamb himself
wrote:
snip
If we don't bail out the financial houses, there won't be any credit
for anybody - a depression happens, and everybody suffers.
snip
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It is exactly at this point that the non sequitur starts.
Indeed, it can be argued [and I tend to agree] than many of our
current socio-economic problems are the result of the financial
"great houses" and their "high rollers," and the sooner we are
rid of them the better.
There was credit long before there were the great houses of
finance, and there will be credit long after they are gone. What
there won't be [for a while] if the great houses disappear are
the huge piles of [other peoples] money controlled by the "high
rollers" and "generous sports."
There will of course be huge paper losses, but these will be born
mainly by the "high rollers," their stock and bond holders, and
the hedge and private capital funds. The depositors in FDIC
institutions will be compensated up to 100k$ per account. [Which
IMNSHO is a *MUCH* better use of the tax payers $s]
If this were allowed to happen there would be little risk of
inflation as the total supply of money would probably go down
slightly, not increase drastically as under "Bazooka" Paulson's
plan, and there will be ample number of banks and credit unions
to provide the required credit for "normal" human activities.
{Now if you want to buy the entire country of Bolivia on E-Z
credit, that might be a different story.}
This would also concentrate the losses on those who caused and
profited by the asset bubble creation, although there would be
some collateral damage [in the military sense] to the average
person who had a pension plan, 401k, mutual funds, etc. invested
in these so-called "assets."
Note that many of the people screaming the loudest for a
governmental bail out are the same people that ground entire
American communities into the ground in the name of profit, free
enterprise and the free market such as [Neutron] Jack Welch of
GE.
--------
Jack Welch says U.S. faces "deep downturn"
Wed Sep 24, 2008 2:44pm EDT
By Nick Zieminski
NEW YORK (Reuters) - Former General Electric Co (GE.N: Quote,
Profile, Research, Stock Buzz) Chairman and Chief Executive
Officer Jack Welch said the U.S. economy faces a deep downturn in
coming quarters, and he supports a proposed $700 billion
government rescue package for the financial sector.
"I now believe we are in for one hell of a deep downturn," Welch
told the World Business Forum in New York on Wednesday, adding
that the first quarter of 2009 will likely be "brutal."
Until recently, Welch said, he had believed the U.S. economy
could avoid recession, but he has changed his mind.
"I am now caving," he said. "Get ready for real tough times.
They're coming. There is no credit available."
Welch said mortgage lenders, legislators, investment bankers and
others are all to blame for the crisis, which stemmed from easy
credit and investors' appetite for yield.
"The problem was money didn't cost anything," Welch said. "People
took swings."
snip
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for complete article see
http://www.reuters.com/article/newsO...48N74H20080924
[Chainsaw Al Dunlop seemed to be missing.]
http://www.businessweek.com/1998/27/b3585090.htm
Also be reminded that the FED has/is pumping in even more than
700 billion to keep the big banks afloat. {Until after the
election?}
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Federal Reserve Doubles Lending as Crisis Worsens (Update1)
By Scott Lanman
Sept. 25 (Bloomberg) -- Commercial banks and bond dealers
borrowed $217.7 billion from the Federal Reserve as of yesterday,
more than double the prior week, as the financial crisis worsened
and private funding dried up.
snip
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for entire article see
http://www.bloomberg.com/apps/news?p...nA0&refer=home
At that rate in a little more than 3 weeks they will have pumped
in 700 billion *MORE* conjured up fiat dollars. Thus the 300
point bounce in the Dow. It should be obvious that a lack of
liquidity is *NOT* the major problem, but when the only tool you
have is a hammer, everything looks like a nail...
Does anyone know where these huge sums are going? I did notice
the Maybach and Masaratti ads are back in the Wall Street
Journal.
http://www.maserati.com/
http://www.maybachusa.com/
Unka' George [George McDuffee]
-------------------------------------------
He that will not apply new remedies,
must expect new evils:
for Time is the greatest innovator: and
if Time, of course, alter things to the worse,
and wisdom and counsel shall not alter them to the better,
what shall be the end?
Francis Bacon (1561-1626), English philosopher, essayist, statesman.
Essays, "Of Innovations" (1597-1625).