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Obama Owns This Economy - Page 2

post #41 of 152
Thread Starter 
Quote:
Originally Posted by FloorJack View Post

You're still not understanding how the CDS work and what the warrants on them are for. From your position of ignorance you can't hypothesize what might have happened.

OK, how about you explain it, professor?
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post #42 of 152
Sorry, haven't read the thread yet, but came across this devastating report on Mitt Romney's performance on job growth in his own state-

"“While 14 straight months of private sector job growth, the creation of over two million private sector jobs and a rejuvenated American auto industry belie Mr. Romney’s assessment of the administration’s accomplishments on the ‘Today’ show this morning, what can’t be disputed is that under Mitt Romney, Massachusetts ranked 47th out of 50 states in job growth,” said DNC spokesman Hari Sevugan.
*
In addition, in 2005 Romney received a C+ grade on the Pew Center on the States Government Management Report Card and a C on fiscal policy from the Cato Institute in 2004 and 2005."
~ http://www.bet.com/news/politics/201...effective.html
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"Islam is as dangerous in a man as rabies in a dog"~ Sir Winston Churchill. We are nurturing a nightmare that will haunt our children, and kill theirs.
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post #43 of 152
Quote:
Originally Posted by SDW2001 View Post

OK, how about you explain it, professor?

As the value of the MBS or CDO go down the insurer needs to put up warrants (aka millions or billions of dollars) on the CDS to insure that the insurance will pay off if a loss is realized. If it's not then the money could come back the insurer.

It was paying the warrants that took down AIG.


Everyone forgets that it was the freeze of the money market fund that really scared the crap out of everyone. That was solved when the FDIC backed all money market fund transactions. It wasn't really caused by the loss in value or MBS or CDO.

Everyone remembers all this right?

How much of the panic was caused by uncertainty in the governments response to backstop some banks and not others. Why scramble to save your bank when if you ride it to oblivion the government may just rescue you?
post #44 of 152
Thread Starter 
Quote:
Originally Posted by FloorJack View Post

As the value of the MBS or CDO go down the insurer needs to put up warrants (aka millions or billions of dollars) on the CDS to insure that the insurance will pay off if a loss is realized. If it's not then the money could come back the insurer.

It was paying the warrants that took down AIG.

Different terminology, same basic principle. I was simplifying and attempting to avoid too much inside baseball, so to speak.

Quote:


Everyone forgets that it was the freeze of the money market fund that really scared the crap out of everyone. That was solved when the FDIC backed all money market fund transactions. It wasn't really caused by the loss in value or MBS or CDO.


Everyone remembers all this right? [/quote]

Yes, that definitely caused panic until FDIC backed the money. But this was not the only element to the crisis to say the least.

Quote:

How much of the panic was caused by uncertainty in the governments response to backstop some banks and not others. Why scramble to save your bank when if you ride it to oblivion the government may just rescue you?

According to what I've seen, quite a bit. Are you arguing for an "all or nothing" approach?
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post #45 of 152
Why do you think that the money market fund broke the buck? Because it had money in Lehmann debt.

Raising the leverage limit
caused Lehmann to over leverage
caused a panic in Lehmann debt when their MBS started to go south
caused the Reserve Primary fund to break the buck
caused a run on money market funds
caused the treasury to guarentee money market funds
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post #46 of 152
Quote:
Originally Posted by e1618978 View Post

Why do you think that the money market fund broke the buck? Because it had money in Lehmann debt.

Raising the leverage limit
caused Lehmann to over leverage
caused a panic in Lehmann debt when their MBS started to go south
caused the Reserve Primary fund to break the buck
caused a run on money market funds
caused the treasury to guarentee money market funds

The money market froze because people got scared that money wouldn't get paid back. Lehmann was a small player in the money market.


You guys know what the money market is .... right? So often here complete ignorance of people posting here makes discussion impossible.
post #47 of 152
Quote:
Originally Posted by FloorJack View Post

The money market froze because people got scared that money wouldn't get paid back. Lehmann was a small player in the money market.

You guys know what the money market is .... right? So often here complete ignorance of people posting here makes discussion impossible.

Funny - go ahead, tell us what "the money market" is genius.
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post #48 of 152
Quote:
Originally Posted by e1618978 View Post

Funny - go ahead, tell us what "the money market" is genius.

Well...that took only about 30 seconds.

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post #49 of 152
Thread Starter 
Quote:
Originally Posted by MJ1970 View Post

Well...that took only about 30 seconds.

---though I think he includes me in the "ignorant."
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post #50 of 152
Quote:
Originally Posted by MJ1970 View Post

Well...that took only about 30 seconds.

I know what it is, I was being sarcastic. The run on the money market funds was caused by a single money market fund breaking the buck. Lehmann wasn't a "player in the money market" - it had issued $500 billion of debt that was bought by money market funds - hence the breaking of the buck.

I was being sarcastic because mr Floorjack was calling a non-existent kettle black.
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post #51 of 152
Quote:
Originally Posted by e1618978 View Post

I know what it is, I was being sarcastic.

Oh. okay. Sorry. I thought you were being caustic.

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post #52 of 152
Quote:
Originally Posted by SDW2001 View Post

There is no way to tell for sure what would have happened. I, for one, do believe that if we didn't bailout AIG, the entire financial system may have failed.

No, we don't know what would have happened, however, we've established you favor government intervention in private commerce "when it's for our own good." OK!

Following that logic inevitably leads to ObamaCare and illegal wars to end all wars. The elite know what's best for the rest of the lumpenproletariat. Got it.

Cite the Constitutional authority that justified the Treasury's actions in this case, and for "bailout USA" in general.

The deep-rooted problems that led to AIG still exist. Instead of addressing them now, our Clueless Leaders have left them to our children and grandchildren ad infinitum. And of the several Republican would-be challengers to this miserable status quo, only a couple "get it". Vote for Obamney and you'll get more of the same misery. Ditto T-Paw. Don't say I didn't warn you.
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post #53 of 152
Quote:
Originally Posted by e1618978 View Post

Funny - go ahead, tell us what "the money market" is genius.

If you don't know already stop posting.
post #54 of 152
Quote:
Originally Posted by FloorJack View Post

If you don't know already stop posting.

You have successfully drug me down to your level, and won with experience.
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post #55 of 152
Thread Starter 
Quote:
Originally Posted by john galt View Post

No, we don't know what would have happened, however, we've established you favor government intervention in private commerce "when it's for our own good." OK!

No, I'm saying certain action was necessary to avoid the collapse of the entire financial system. I am a conservative. As such, I tend to oppose government intervention. That does not mean I oppose ALL intervention, however.

Quote:

Following that logic inevitably leads to ObamaCare and illegal wars to end all wars. The elite know what's best for the rest of the lumpenproletariat. Got it.

Maybe in your mind, but nowhere else I've seen.

Quote:

Cite the Constitutional authority that justified the Treasury's actions in this case, and for "bailout USA" in general.

Congress has the right to regulate commerce, levy taxes, etc. Had the financial system failed, such commerce would have been severely impacted.

Quote:

The deep-rooted problems that led to AIG still exist. Instead of addressing them now, our Clueless Leaders have left them to our children and grandchildren ad infinitum. And of the several Republican would-be challengers to this miserable status quo, only a couple "get it". Vote for Obamney and you'll get more of the same misery. Ditto T-Paw. Don't say I didn't warn you.

I disagree. Many of the problems have been addressed. For example, try getting a sub-prime loan right about now. Try bundling bad loans and calling them the "Triple A Mortgage Fund." Try explaining to the government how you want to over-leverage your investment bank.

Speaking of which, what are the deeply-rooted problems of which you speak..specifically?
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post #56 of 152
Quote:
Originally Posted by SDW2001 View Post

Had the financial system failed, such commerce would have been severely impacted.

Sure! As I wrote the immediate consequences would have been devastating. And, temporary. I just hope you can appreciate that there need to be limits with invoking the Commerce Clause for every single collectivist aspiration. I can only ask that you consider the banking "crisis" in light of previous, real crises in American history.

I provided one example of a response that would not have indebted us for generations to come. The AIG bailout was a knee-jerk response in classic big government fashion: throw money at the problem - money we don't have and for which future generations are ill-prepared to provide.

Quote:
Many of the problems have been addressed. For example, try getting a sub-prime loan right about now. Try bundling bad loans and calling them the "Triple A Mortgage Fund."

Agreed. However, I question the value of much of the Dodd-Frank banking "reform" legislation. Classic case of shutting the barn door after the horses are long gone. And to extend the bucolic analogy, the same old foxes are guarding the henhouse.

The problem is that government and private enterprise are horribly intertwined, and have been for years. Its inevitable consequences have now become unworkable. We created the beast, and we can kill it. I expect it will take as many years, but if we don't, who will?
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post #57 of 152
Quote:
Originally Posted by SDW2001 View Post

Speaking of which, what are the deeply-rooted problems of which you speak..specifically?

The fact that the Obama administration is more in bed with big banks than any other President in history is one.

Here's another:

Quote:
By far the most interesting bit in the draft (cease and desist) order is the bit requiring the banks to engage independent foreclosure review consultants to review "certain" foreclosures that took place in 2009-2010. There is no specification as to which foreclosures are to be reviewed or precisely what the standards for review are.

Speaking of snuggling:

Quote:
... The bank regulators are going to provide cover for the banks by pretending to discipline them very hard, but not really doing anything. The public will see a stern C&D order, but there won't be any action beyond that. It's as if the regulators are saying so all the neighbors can hear, "Banky, you've been a bad boy! Come inside the house right now because I'm going to give you a spanking!" And then once the door to the house closes, the instead of a spanking, there's a snuggle.

Not to mention - creation of the Consumer Financial Protection Bureau... good idea. Making it a puppet of the Fed... bad idea

http://www.nakedcapitalism.com/2011/...ault-line.html
http://www.thenation.com/article/161...es-wall-street
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post #58 of 152
Thread Starter 
Quote:
Originally Posted by john galt View Post

Sure! As I wrote the immediate consequences would have been devastating. And, temporary.

I don't know that they would have been temporary. They may have lasted years, or longer.

Quote:
I just hope you can appreciate that there need to be limits with invoking the Commerce Clause

I agree. But you asked. I don't know that their justification was. This is academic anyway. The government has been overly involved in our currency and financial system for a 100 years. I don't like it...but it is what it is.

Quote:

for every single collectivist aspiration. I can only ask that you consider the banking "crisis" in light of previous, real crises in American history.

Just because the government has abused the Commerce Clause in the past doesn't mean it's not valid in any industry. And I consider this crisis to be a "real" crisis. My hunch is the millions who have lost their jobs and homes might agree with me.

Quote:

I provided one example of a response that would not have indebted us for generations to come. The AIG bailout was a knee-jerk response in classic big government fashion: throw money at the problem - money we don't have and for which future generations are ill-prepared to provide.

Letting AIG fail would have been a disaster. It would have taken down the whole system.

Quote:

Agreed. However, I question the value of much of the Dodd-Frank banking "reform" legislation. Classic case of shutting the barn door after the horses are long gone. And to extend the bucolic analogy, the same old foxes are guarding the henhouse.

I can't disagree with that.

Quote:

The problem is that government and private enterprise are horribly intertwined, and have been for years. Its inevitable consequences have now become unworkable. We created the beast, and we can kill it. I expect it will take as many years, but if we don't, who will?

They can't be detached completely. In fact, it seems to me that you're arguing for more regulation. And intertwinement is not always bad. Take Medicare (Part D) for example. It gives qualified people money to use in the private market place. This is much better than the government just providing the payment.
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post #59 of 152
Quote:
Originally Posted by SDW2001 View Post

And I consider this crisis to be a "real" crisis. My hunch is the millions who have lost their jobs and homes might agree with me.

No doubt, but their Government has helped them... how?

Quote:
Letting AIG fail would have been a disaster. It would have taken down the whole system.

I keep hearing that... "taken down the whole system". What does that mean to you? Could you elaborate? You mean the system of corrupt, broken, concentrations of wealth known as large commercial banks run by inept managers in bed with Washington? How would such failure manifest itself? Another Great Depression? Well, we lived through that and we would again. Tell me why a more robust, equally effective private banking "system" would not arise from the ruins of a collapsed, corrupt banking "system". I can't conceive of this not happening.

I sincerely respect your opinions SDW but to hear "taking down the whole system" repeated again and again simply sounds like a scare tactic to me. Scare tactics are the predictable refuge of the desperate collectivist. Just because Congress and our President fell for it doesn't mean you have to.
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post #60 of 152
Quote:
Originally Posted by john galt View Post

I keep hearing that... "taken down the whole system". What does that mean to you? Could you elaborate? You mean the system of corrupt, broken, concentrations of wealth known as large commercial banks run by inept managers in bed with Washington? How would such failure manifest itself? Another Great Depression? Well, we lived through that and we would again. Tell me why a more robust, equally effective private banking "system" would not arise from the ruins of a collapsed, corrupt banking "system". I can't conceive of this not happening.

I sincerely respect your opinions SDW but to hear "taking down the whole system" repeated again and again simply sounds like a scare tactic to me. Scare tactics are the predictable refuge of the desperate collectivist. Just because Congress and our President fell for it doesn't mean you have to.

*sits back* *grabs popcorn and soda*

The state is nothing more than a criminal gang writ large.

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post #61 of 152
Thread Starter 
Quote:
Originally Posted by john galt View Post

No doubt, but their Government has helped them... how?



I keep hearing that... "taken down the whole system". What does that mean to you? Could you elaborate? You mean the system of corrupt, broken, concentrations of wealth known as large commercial banks run by inept managers in bed with Washington? How would such failure manifest itself? Another Great Depression? Well, we lived through that and we would again. Tell me why a more robust, equally effective private banking "system" would not arise from the ruins of a collapsed, corrupt banking "system". I can't conceive of this not happening.

I sincerely respect your opinions SDW but to hear "taking down the whole system" repeated again and again simply sounds like a scare tactic to me. Scare tactics are the predictable refuge of the desperate collectivist. Just because Congress and our President fell for it doesn't mean you have to.

Quote:
Originally Posted by MJ1970 View Post

*sits back* *grabs popcorn and soda*

What does taken down the whole system mean? It means basically the end of the world. Let me restate: Let's say AIG and all 5 of the major investment banks failed. Next:

1. The commercial paper market dries up completely.
2. In a week, big business cannot function. The stock market plummets.
3. Manufacturers and transportation of goods are hit next. They cannot get the food, clothing and consumer goods to the stores.
4. In three weeks, retail has no stock and cannot pay its employees anyway. Wal-Mart, Target, Sears, Boscov's, Costco, Sam's Club (etc), grocery stores all close.
5. People panic. There is a run on savings banks. The banks fail.
6. In four weeks: Civl unrest, followed by martial law (<---edited...I was a fool and wrote "marshal!"--doh!) People loot, smash ATMs, and generally go nuts.

That's what we were facing. No, I can't prove it. But I do know for a fact that business that had nothing to do with investment banking started to have problems. Those that had some exposure saw their finance arms infect their entire business. Some were already talking about not being able to fund their operations within a week.

It's not hard to see how this could have happened. But I guess you guys think it's all just a scare tactic.
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post #62 of 152
Quote:
Originally Posted by SDW2001 View Post

What does taken down the whole system mean? It means basically the end of the world. Let me restate: Let's say AIG and all 5 of the major investment banks failed. Next:

1. The commercial paper market dries up completely.
2. In a week, big business cannot function. The stock market plummets.
3. Manufacturers and transportation of goods are hit next. They cannot get the food, clothing and consumer goods to the stores.
4. In three weeks, retail has no stock and cannot pay its employees anyway. Wal-Mart, Target, Sears, Boscov's, Costco, Sam's Club (etc), grocery stores all close.
5. People panic. There is a run on savings banks. The banks fail.
6. In four weeks: Civl unrest, followed by marshal law. People loot, smash ATMs, and generally go nuts.

That's what we were facing.

That's what we were told we were facing.

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post #63 of 152
Quote:
Originally Posted by SDW2001 View Post

What does taken down the whole system mean? It means basically the end of the world.

Well, now you've lost me SDW. Go join Harold Camping's cult.

Quote:
Civl unrest, followed by marshal law.

Marshal Law... let me guess, some character on Bonanza, right?

Martial Law

Quote:
But I guess you guys think it's all just a scare tactic.

Yes, I do. Absolutely.

Look, suffice it to say we'll never know what would have happened, and to speculate is a fruitless endeavor. But as far as "the end of the world..." I'm not only unconvinced, I'm unimpressed with your logic.

Doesn't mean we can't be friends.
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post #64 of 152
Quote:
Originally Posted by MJ1970 View Post

That's what we were told we were facing.

Actually, we were never told a thing. Perhaps because no one who understood the problem could have said it with a straight face.
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post #65 of 152
Quote:
Originally Posted by john galt View Post

Actually, we were never told a thing. Perhaps because no one who understood the problem could have said it with a straight face.

I agree. We weren't really told anything specific...just that the sky was falling and we need a ton of loot RIGHT NOW or we're all gonna die!!!!

The airlines did the same thing the day after 9/11.

GM and Chrysler (really the UAW) did it.

It's getting old.

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post #66 of 152
Quote:
Originally Posted by MJ1970 View Post

The airlines did the same thing the day after 9/11.

That's a little different, in that every single US airline was specifically prevented from doing business as a direct result of a government directive. They'd argue it was a "taking" under the Fifth Amendment, and they'd be right.

As I recall they were compensated for lost revenue for that period of time, and no more.

Had they done the same when facing insolvency (as almost all have at one time or another) then yes, it would have been the same thing. Instead they did it the old fashioned, legal way: reorganization under the bankruptcy code. Very much unlike UAW and the car companies, for which the scare tactics prevailed.
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post #67 of 152
SDW I gave you one alternative to the mess that has become. It's too late for that now, but it's not too late for this:

Quote:
This is certainly a better idea than forcing banks to spend tens of billions of dollars to comply with the 2,300 pages of inefficiency and misallocated credit known as Dodd-Frank. That law gave the regulators wide discretion to write at least 243 new required rules, and the authority to invent countless others.

Their toll on bank income and balance sheets keeps rolling out: the Consumer Financial Protection Bureau's demand for $20 billion in a foreclosure settlement; a $12 billion annual transfer from the banks to retailers in new debit card price controls; derivatives rules that may drive that lucrative business to less regulated markets overseas; and that's even before we learn what new intrusiveness will be required if you qualify as a "systemically important" institution. ...

You get the idea.

Quote:
When JPMorgan CEO Jamie Dimon recently asked Fed Chairman Ben Bernanke at a public event if anyone is tracking the cost of all this regulation on lending and the economy, Mr. Bernanke admitted that the regulators don't have a clue. It's "just too complicated," he said, in a remark for the history books.

Oh, yeah. We've fixed everything!



Tarullo's Capital Idea: A better way to build safer banks than Dodd-Frank's regulations
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post #68 of 152
Quote:
Originally Posted by MJ1970 View Post

That's what we were told we were facing.

Well, we will get another chance to find out, it is all about to start back up again imho.
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post #69 of 152
Quote:
Originally Posted by e1618978 View Post

Well, we will get another chance to find out, it is all about to start back up again imho.

I agree that something is starting up again, but it won't quite be the same. I think we're in a period of stagnation. There hasn't been any real growth despite what the numbers claim. This is going to be like the 1970's in the US or the 1990's in Japan.

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post #70 of 152
Quote:
Originally Posted by MJ1970 View Post

There hasn't been any real growth despite what the numbers claim.

Has there been any positive news? Somehow I've missed it. I mean, 9.1% unemployment is worse than had been predicted were there no attempts to fix it, and that's before it gets revised upward (which it will... unexpectedly)

Quote:
Did the “Stimulus” Work?

Proposed under the faulty assumption that the government can spend its way out of a recession, Congress passed the $666.4 billion spending bill in February of 2009. Claiming this massive spending package would “save or create” millions of American jobs while keeping the unemployment rate down, the quivering economy fails to illustrate the success of this policy.

The massive spending package passed under the guise of economic “stimulus” fails to acknowledge that the government does not exist in a vacuum - each dollar spent is extracted from the economy in the form of taxes, and then redistributed vis-Ã*-vis spending policy. It is hardly surprising, then, that the “stimulus” succeeded in none of its intended goals.

Some of us have been saying that for over two years now.

Quote:
The White House economists promised a bleak future if Congress didn't pass the “stimulus” package immediately, predicting that unemployment would rise as high as 8 percent. After almost a year and half of “stimulus” efforts, unemployment still teeters far above that, around 10 percent.

Estimates including those more or less permanently out of work bring that to 18 to 20%.

Follow Up: The Troubled Asset Relief Program (TARP) and The "Stimulus"
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post #71 of 152
Thread Starter 
Quote:
Originally Posted by MJ1970 View Post

That's what we were told we were facing.

Is there proof we were lied to? Of any kind? I mean, how do we know anything is true?

Quote:
Originally Posted by john galt View Post

Well, now you've lost me SDW. Go join Harold Camping's cult.



Marshal Law... let me guess, some character on Bonanza, right?

Martial Law

Crap. I knew I had completely the wrong spelling there. My bad. You didn't have to be an ass about it.

Quote:



Yes, I do. Absolutely.

Look, suffice it to say we'll never know what would have happened, and to speculate is a fruitless endeavor. But as far as "the end of the world..." I'm not only unconvinced, I'm unimpressed with your logic.

Doesn't mean we can't be friends.

My logic?. You mean to tell the above is not logical? I really don't know what to tell you on that one. I agree it could all be lies, but to say my scenario above is not logical? That doesn't make a lot of sense. That in itself is illogical.

Quote:
Originally Posted by john galt View Post

Actually, we were never told a thing. Perhaps because no one who understood the problem could have said it with a straight face.

Again, this is what's illogical. You're saying "It's crap! Everything would have been fine!" You're calling every player involved a liar. That's fine, but it would be nice if you had some backing whatsoever for your position.

Quote:
Originally Posted by MJ1970 View Post

I agree. We weren't really told anything specific...just that the sky was falling and we need a ton of loot RIGHT NOW or we're all gonna die!!!!

Let me ask: What if we didn't have TARP and didn't bail out anyone. What would have happened in your estimation?

Quote:

The airlines did the same thing the day after 9/11.

GM and Chrysler (really the UAW) did it.

It's getting old.

Yes, but those companies failing wouldn't have taken down the entire economy. That is the difference, and why we should have let them go Chapter 11. Having 5 investment banks and the largest reinsurer on the planet go Chapter 11 would have had catastrophic consequences. I find it odd that you make no distinction here. Size matters. If run a business and it goes Chapter 11, that's fine. If Chrysler goes Chapter 11, fine. But when banks that are involved in literally every sector of the economy (and hold billions if not trillions in personal assets) go under, it's like a cancer.

What you're saying is that any body part that gets the cancer should be cut off. If it's a 1 inch diameter section of skin on your thigh, fine. If it's your finger or your hand, fine. And if it's all your internal organs, fine. There is a limit to what the body (financial system) can handle, and this was it.
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post #72 of 152
Thread Starter 
Quote:
Originally Posted by john galt View Post

That's a little different, in that every single US airline was specifically prevented from doing business as a direct result of a government directive. They'd argue it was a "taking" under the Fifth Amendment, and they'd be right.

As I recall they were compensated for lost revenue for that period of time, and no more.

Perhaps for that event, yes. But the government has propped them up for years. It's one reason they have no idea how to run their businesses. Other, smaller airlines (well...they used to be small) have figured it out. But the legacy players were (and are to some extent) a disaster.

Quote:

Had they done the same when facing insolvency (as almost all have at one time or another) then yes, it would have been the same thing. Instead they did it the old fashioned, legal way: reorganization under the bankruptcy code. Very much unlike UAW and the car companies, for which the scare tactics prevailed.

That I agree with. However, I'm OK with the initial loan guarantees at least, given the impact the attack had on them.


Quote:
Originally Posted by john galt View Post

SDW I gave you one alternative to the mess that has become. It's too late for that now, but it's not too late for this:



You get the idea.



Oh, yeah. We've fixed everything!



Tarullo's Capital Idea: A better way to build safer banks than Dodd-Frank's regulations

When in the hell did I claim "everything is fixed?" I said I supported TARP and the AIG bailout. That doesn't mean I agree with all parts of it, nor does my support extend to all measures taken..especially those sponsored by people who helped create the problem to begin with.

Quote:
Originally Posted by MJ1970 View Post

I agree that something is starting up again, but it won't quite be the same. I think we're in a period of stagnation. There hasn't been any real growth despite what the numbers claim. This is going to be like the 1970's in the US or the 1990's in Japan.

Very possible, unless we make some real changes...and fast.

Quote:
Originally Posted by john galt View Post

Has there been any positive news? Somehow I've missed it. I mean, 9.1% unemployment is worse than had been predicted were there no attempts to fix it, and that's before it gets revised upward (which it will... unexpectedly)

To be fair there has been some. Growth, though anemic, is marginally positive. That's about all. Employment is a mess, and The Uncertainty Game is killing business investment/expansion.


Quote:

Some of us have been saying that for over two years now.



Estimates including those more or less permanently out of work bring that to 18 to 20%.

Follow Up: The Troubled Asset Relief Program (TARP) and The "Stimulus"

I have some issues with that article. First, it's biased (in a way I happen to agree with, but nevertheless). Secondly, it makes some pretty outrageous claims, like the one that TARP may end up costing "23.7 trillion." WTF?

The most egregious one in my opinion is that it paints TARP and the Porkulous bill as being one in the same..."slush fund" so to speak. TARP definitely grew in scope (in ways I do not support), but the "stimulus" is another matter. The stimulus was an unmitigated waste of a trillion dollars. It really WAS a slush fund. Sold as a Keynesian approach (which I don't support anyway), it was nothing of the kind. It contained billions for programs that weren't going to stimulate growth--even in the short term. And speaking of timing, a lot of it was backloaded. It was a mess. Fortunately, most people have figured that out.

http://www.politico.com/news/stories/0410/36544.html
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post #73 of 152
Quote:
Originally Posted by SDW2001 View Post

My logic?. You mean to tell the above is not logical? I really don't know what to tell you on that one. I agree it could all be lies, but to say my scenario above is not logical?

Yes, absolutely. You made the classic error of performing a static analysis, concluding the failure of AIG would result in specific results assuming no other entities could possibly arise to address the investment needs and obligations of an otherwise perfectly intact and functional economy. AIG and the investment banks would fail, and then complete and utter anarchy? No. I don't buy it.

I'm not calling members of Congress liars, though most of them are experts at it. They're simply inept. The only tool they know how to use is Treasury's (empty) checkbook. Using it has not, and will not, fix anything.

Furthermore, I never wrote "everything would have been fine." Far from it. Go back and read again.

I apologize for being an ass SDW, but really... "The end of the world" will not be seriously entertained here.
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post #74 of 152
Quote:
Originally Posted by SDW2001 View Post

Perhaps for that event, yes. But the government has propped them up for years. It's one reason they have no idea how to run their businesses. Other, smaller airlines (well...they used to be small) have figured it out. But the legacy players were (and are to some extent) a disaster.

Airlines haven't been "propped up" since deregulation. Their business model is fundamentally flawed in many ways, not the least of which is that airlines must constantly grow to meet ever-expanding labor costs. Small airlines can't remain small - they must either grow, or die. Stagnation is death. Given a market as hyper-competitive and saturated as much of it is, growth can only occur through mergers and acquisitions. Otherwise, it's the reset button of Chapter 11, and they're not done with either one of those strategies yet. As I say... fundamentally flawed.

Quote:
When in the hell did I claim "everything is fixed?"

That wasn't directed at you SDW.

Got to go fix the rest of the world. More later.
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post #75 of 152

Malo periculosam, libertatem quam quietam servitutem.

(I prefer the tumult of liberty to the quiet of servitude.)

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Malo periculosam, libertatem quam quietam servitutem.

(I prefer the tumult of liberty to the quiet of servitude.)

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post #76 of 152
45 2a3 300b 211 845 833
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post #77 of 152
Quote:
Originally Posted by e1618978 View Post

http://finance.yahoo.com/blogs/daily...142140899.html

there you have it folks...

Quite astonishing.

The state is nothing more than a criminal gang writ large.

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The state is nothing more than a criminal gang writ large.

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post #78 of 152
Quote:
Originally Posted by e1618978 View Post

http://finance.yahoo.com/blogs/daily...142140899.html

there you have it folks...

Quote:
As Henry and I discuss in the accompanying video, there's some justification for that view and, clearly, the White House strategy of continually repeating "we inherited a mess" has been effective. But if the economy is still sluggish a year from now, Obama will have a harder time selling that idea to the American people.

The last words of that phrase should be " should have a harder time selling that idea " as the american people should be clear on who has the reigns at this time. If they cannot see the responsibility now, they truly should by then. \
NoahJ
"It is unwise to be too sure of one's own wisdom. It is healthy to be reminded that the strongest might weaken and the wisest might err." - Mahatma Gandhi
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NoahJ
"It is unwise to be too sure of one's own wisdom. It is healthy to be reminded that the strongest might weaken and the wisest might err." - Mahatma Gandhi
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post #79 of 152
Thread Starter 
Quote:
Originally Posted by john galt View Post

Yes, absolutely. You made the classic error of performing a static analysis, concluding the failure of AIG would result in specific results assuming no other entities could possibly arise to address the investment needs and obligations of an otherwise perfectly intact and functional economy. AIG and the investment banks would fail, and then complete and utter anarchy? No. I don't buy it.

I'm not calling members of Congress liars, though most of them are experts at it. They're simply inept. The only tool they know how to use is Treasury's (empty) checkbook. Using it has not, and will not, fix anything.

Furthermore, I never wrote "everything would have been fine." Far from it. Go back and read again.

I apologize for being an ass SDW, but really... "The end of the world" will not be seriously entertained here.


Other entities? Like whom? You say my logic doesn't hold up, yet you just grab your ankles and hope "some other entity" would step up. You're forgetting something important: There is no other entity with the resources needed. That's why the government had to get involved in the first place.



Quote:
Originally Posted by john galt View Post

Airlines haven't been "propped up" since deregulation. Their business model is fundamentally flawed in many ways, not the least of which is that airlines must constantly grow to meet ever-expanding labor costs. Small airlines can't remain small - they must either grow, or die. Stagnation is death. Given a market as hyper-competitive and saturated as much of it is, growth can only occur through mergers and acquisitions. Otherwise, it's the reset button of Chapter 11, and they're not done with either one of those strategies yet. As I say... fundamentally flawed.



That wasn't directed at you SDW.

Got to go fix the rest of the world. More later.

Got it. I agree with most of that. Of course, they have been propped up, but other than that...agreed.
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post #80 of 152
Quote:
Originally Posted by SDW2001 View Post

You're forgetting something important: There is no other entity with the resources needed. That's why the government had to get involved in the first place.

Understood. Only government has the resources to thwart the Apocalypse. As I wrote earlier, OK!

Look SDW, you're either an advocate for free market capitalism or you're not. You're either a rugged individualist or you're not. I don't have to ask which you are since you've already removed any uncertainty I may have had.

Quote:
These United States are confronted with an economic affliction of great proportions. ... It threatens to shatter the lives of millions of our people.

Though they were written over twenty years ago, I submit the above would be an apt description of AIG's collapse. May I assume you agree?

Here's more. It's from the same speech.

Quote:
... Idle industries have cast workers into unemployment, causing human misery and personal indignity. Those who do work are denied a fair return for their labor by a tax system which penalizes successful achievement and keeps us from maintaining full productivity.

But great as our tax burden is, it has not kept pace with public spending. For decades, we have piled deficit upon deficit, mortgaging our future and our children's future for the temporary convenience of the present. To continue this long trend is to guarantee tremendous social, cultural, political, and economic upheavals.

You and I, as individuals, can, by borrowing, live beyond our means, but for only a limited period of time. Why, then, should we think that collectively, as a nation, we are not bound by that same limitation?

We must act today in order to preserve tomorrow. And let there be no misunderstanding. We are going to begin to act, beginning today.

The economic ills we suffer have come upon us over several decades. They will not go away in days, weeks, or months, but they will go away. They will go away because we, as Americans, have the capacity now, as we have had in the past, to do whatever needs to be done to preserve this last and greatest bastion of freedom.

In this present crisis, government is not the solution to our problem, government is the problem.

From time to time, we have been tempted to believe that society has become too complex to be managed by self-rule, that government by an elite group is superior to government for, by, and of the people. But if no one among us is capable of governing himself, then who among us has the capacity to govern someone else?

We hear much of special interest groups. Our concern must be for a special interest group that has been too long neglected. It knows no sectional boundaries or ethnic and racial divisions, and it crosses political party lines. It is made up of men and women who raise our food, patrol our streets, man our mines and our factories, teach our children, keep our homes, and heal us when we are sick - professionals, industrialists, shopkeepers, clerks, cabbies, and truckdrivers. They are, in short, "We the people," this breed called Americans.

Well, this administration's objective will be a healthy, vigorous, growing economy that provides equal opportunity for all Americans, with no barriers born of bigotry or discrimination. Putting America back to work means putting all Americans back to work. Ending inflation means freeing all Americans from the terror of runaway living costs. All must share in the productive work of this "new beginning" and all must share in the bounty of a revived economy. With the idealism and fair play which are the core of our system and our strength, we can have a strong and prosperous America at peace with itself and the world.

So, as we begin, let us take inventory. We are a nation that has a government, not the other way around. And this makes us special among the nations of the Earth. Our Government has no power except that granted it by the people. It is time to check and reverse the growth of government which shows signs of having grown beyond the consent of the governed.

It is my intention to curb the size and influence of the Federal establishment and to demand recognition of the distinction between the powers granted to the Federal Government and those reserved to the States or to the people. All of us need to be reminded that the Federal Government did not create the States; the States created the Federal Government.

Now, so there will be no misunderstanding, it is not my intention to do away with government. It is, rather, to make it work-work with us, not over us; to stand by our side, not ride on our back. Government can and must provide opportunity, not smother it; foster productivity, not stifle it.

If we look to the answer as to why, for so many years, we achieved so much, prospered as no other people on Earth, it was because here, in this land, we unleashed the energy and individual genius of man to a greater extent than has ever been done before. Freedom and the dignity of the individual have been more available and assured here than in any other place on Earth. The price for this freedom at times has been high, but we have never been unwilling to pay that price.

It is no coincidence that our present troubles parallel and are proportionate to the intervention and intrusion in our lives that result from unnecessary and excessive growth of government. It is time for us to realize that we are too great a nation to limit ourselves to small dreams. We are not, as some would have us believe, doomed to an inevitable decline. I do not believe in a fate that will fall on us no matter what we do. I do believe in a fate that will fall on us if we do nothing. So, with all the creative energy at our command, let us begin an era of national renewal. Let us renew our determination, our courage, and our strength.

We have every right to dream heroic dreams. Those who say that we are in a time when there are no heroes just don't know where to look. You can see heroes every day going in and out of factory gates. Others, a handful in number, produce enough food to feed all of us and then the world beyond. You meet heroes across a counter... and they are on both sides of that counter. There are entrepreneurs with faith in themselves and faith in an idea who create new jobs, new wealth and opportunity. They are individuals and families whose taxes support the Government and whose voluntary gifts support church, charity, culture, art, and education. Their patriotism is quiet but deep. Their values sustain our national life.

I have used the words "they" and "their" in speaking of these heroes. I could say "you" and "your" because I am addressing the heroes of whom I speak: you, the citizens of this blessed land. Your dreams, your hopes, your goals are going to be the dreams, the hopes, and the goals of this administration, so help me God.

We shall reflect the compassion that is so much a part of your makeup. How can we love our country and not love our countrymen, and loving them, reach out a hand when they fall, heal them when they are sick, and provide opportunities to make them self-sufficient so they will be equal in fact and not just in theory?

Can we solve the problems confronting us? Well, the answer is an unequivocal and emphatic "yes." To paraphrase Winston Churchill, I did not take the oath I have just taken with the intention of presiding over the dissolution of the world's strongest economy.

In the days ahead I will propose removing the roadblocks that have slowed our economy and reduced productivity. Steps will be taken aimed at restoring the balance between the various levels of government. Progress may be slow - measured in inches and feet, not miles - but we will progress. It is time to reawaken this industrial giant, to get government back within its means, and to lighten our punitive tax burden. And these will be our first priorities, and on these principles, there will be no compromise.

---

The above was written a long time ago. It is still relevant today. Given recent events it's only likely to become more relevant in the future.

You either agree with it you don't SDW. If not, you ought to turn in your Conservative card because you're not worthy of it.

To be clear: the current debacle was born way before AIG and the circumstances that led to its collapse. It was the predictable, inevitable, and direct result of government intervention in free markets. The path to prosperity is less intervention, not more. To (almost literally) paper over the systemic problems that still exist is no solution at all.

Enjoy your vacation from reality in Disneyland. Sounds like it began some time ago though.

...or am I just being an ass again?
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