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Strategies & Market Trends : 2026 TeoTwawKi ... 2032 Darkest Interregnum -- Ignore unavailable to you. Want to Upgrade?

To: TobagoJack who wrote (40882)	10/8/2008 11:11:31 AM
From: prosperous	Read Replies (2) \| Respond to of 218620

Its interesting to see the propensity of other central banks to stick to US Fed which seems clueless about solutions to the problem, in fact some of these nations can try and decouple from US and may help their citizens by taking a smaller blow if they went a different way, the lemming mentality for Central banks still exists and makes problem more difficult since they will sink the world economy with coordination instead of decoupling. One thing that could potentially work and that will absolutely not be done is to let the markets act out and correct to levels where it becomes attractive for investors to jump in even with the credit issue hanging and may provide some stimulus toward recovery. Its not clear to me how the actions banks and govt is taking is going to be any better when in fact it seems to be not working and creating additional problems that are attached with the solutions themselves. Also, with this rapid fire solutions its not clear if there is enough thought being put here...

To: TobagoJack who wrote (40882)	10/8/2008 1:20:17 PM
From: elmatador	3 Recommendations Read Replies (2) \| Respond to of 218620

Beyond the Bailout --Notes On the Coming Sharecropper Society By Steve Cummings Member Ventura County Democratic Central Committee As the financial economy merrily vomits into the abyss, people have been transfixed by the two week soap opera that was the debate over Treasury Secretary Hank Paulson’s $700 billion bailout plan. The details are well known by now. Paulson would create an agency, similar to the Resolution Trust Corporation that was created after the S&L bust, in order to buy dud assets from banks and repay them with real money raised through issuing Treasury securities to those prospective suckers who either still believe that U.S. is still worth the money or who use the securities as political bargaining chips (i.e., China). Much hue and cry was heard from the so-called Main Street, hard-up ordinary people who resent the fact that the people who created the mess in the first place were getting bailed out (It doesn’t do much for one’s confidence that the big shots at Lehman Brothers were discussing $20 million in bonus packages just days before they went belly-up). But the far greater concern is the fact that (1) dozens of leading economists have stated that the bailout won’t work for a variety of reasons (more on that later) and (2) the Democrats in Congress were once again stampeded by the Bush Administration, this time from the threat of supposed financial terrorism haunting Wall Street. Of course from the Democrats standpoint, it probably was a good deal. More a mere $700 billion, nobody is going to blame them for not doing enough during the crisis, and if they take control of the White House in January, they can redo the whole package anyway. But as the days subsequent events have shown since the bill was passed on October 3, the bailout is simply road kill on the highway to the financial apocalypse. First, the plain truth is $700 billion ain’t enough. Analysts have but the pile of zombie assets at anywhere 2 to $5 trillion. It may very well be beyond the governments ability to buy it all up, given the other responsibilities it has to other agencies, such as the FDIC and the Federal Home Loan Banks.. That is why some economists have come out for recapitalizing the banks rather than replacing their assets. But again the question is how much capital is it REALLY going to take to do the job and are there investors out there who are willing to take the risk. Still, there are people like the Credit Bubble Bulletin’s Doug Noland, who say that the real problem isn’t bad assets or lack of capital, but the fact that the whole system was part of a giant Ponzi scheme floating on a mountain of reckless extension of credit. Noland estimates that it would take some $2 trillion of this stuff just to keep the markets afloat. No way are banks going to do that now. So the bottom line is that the rot is so extensive in the financial system, not just in the US, but the UK and Europe, that there quite simply may be nothing left to save. The markets since October 3 have been acting that way. The Japanese facing a similar problem nearly 20 years ago acted as if there was wasn’t a problem, propped up their zombie banks, and stagnated for 15 years. For the American tax payer, throwing good money after a bad $700 billion is not a pleasing prospect. The only other feasible option is to let the whole system fall in a “controlled “ crash through nationalization, seizing the banking system, wiping out the shareholders (who are wiped out already, but don’t know it yet), then carving out the viable parts of the system, recombine them, and sell them to the private sector. A variation of this would be an FDR-styled “bank holiday” in which all the banks are closed simultaneously, the banks audited, the healthy ones opened up immediately, and the rest either opened up later or not at all. This broke the banking panic in 1933, and even among FDR’s critics is recognized as a successful method in bringing confidence back to the banking system. What is clear is that the current panic probably won’t be solved by the bailout, and will need something stronger such as nationalization or national closure to stabilize the situation for good. Regardless of how the financial crisis ends, it is now clear that we will be faced with a vastly different country than the one we experienced a year ago, and a notably indebted and poorer one as well. The Sharecropper Society is coming into view. Steve Cummings is a member of the Ventura County Democratic Central Committee, Controller for CDC, and the Southern VP for the California Federation of Democratic Central Committee Members. His book, Red States, Blue States, and the Coming Sharecropper Society, was published by Algora Publishing, NY in April.

To: TobagoJack who wrote (40882)	10/8/2008 1:48:58 PM
From: THE ANT	Read Replies (1) \| Respond to of 218620

I agree ,but think that for at least today,if they have any tools to goose the market and prevent another down day and punish those who are piling into shorts,they will use them

To: TobagoJack who wrote (40882)	10/9/2008 9:12:25 AM
From: elmatador	Read Replies (1) \| Respond to of 218620

Iceland a lab of how a rich country is made. The non-real time lab experiment in a controlled manner displays how a rich country is made and how it ends. No natural resources, tiny population but got all the money to build infrastructure with surplus to spend investing overseas. I am watching if this was not the way those minnow power houses came up as rich countries. Now the Icelandic experiment has run its courses. Let's see how the real cases develop.