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Politics : President Barack Obama -- Ignore unavailable to you. Want to Upgrade?

To: tejek who wrote (40869)	10/28/2008 4:09:31 PM
From: RetiredNow	Read Replies (5) \| Respond to of 149317

LOL. OK tejek, I have to summarize things from my own perspective to highlight how silly this is: 1) banks and financial institution throw risk management out the window in a ponzi scheme to enrich themselves, through repackaging high risk mortgages and flipping them for a quick commission profit 2) mortgage holders begin to default in great numbers, because they've been sold on a mortgage they couldn't afford 3) the ponzi scheme comes apart as debt instruments and derivatives value comes crashing down on the increase in defaults 4) banks start to breach their reserve requirements as they mark their assets to market, all of them trying to catch the falling knife value of their assets 5) banks start to hoard cash to stay above their minimum reserve requirements 6) liquidity suffers massively and the economy seizes up as businesses are unable to borrow to continue operating 7) the Fed and Treasury decide to bailout these financial institutions to avert more damage to the broader economy; Congress gives Paulson a mandate with almost no controls to make sure the money is spent wisely 8) executives at these financial institutions are already using some of that money to acquire other companies, pay dividends, and set aside billions of dollars in bonuses for themselves; in addition, they are continuing to hoard cash, which means we still have a spreading liquidity problem that is destroying the lifeblood of our economy 9) Now that the market dynamics of our economy have failed and we bailed them out, the White House turns despotic and orders banks to lend Now that we know the whole story, let me ask you this. If you are a bank exec and you were just rewarded for your previous folly and you are being told to lend more, what course of action would you take? If I put myself in their shoes, I'd say, "Screw you. I'll just take my huge bonus and sit pat and take no risks. This is way too good of a deal to pass up." You see, it's no longer that the economy is broken, it's MARKET DYNAMICS that have been disrupted. The very essence or animal spirits that make our markets work have been thrown off the rails. That's why we are headed to another Great Depression. Very ugly.