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Politics : Ask Michael Burke -- Ignore unavailable to you. Want to Upgrade?

To: GuinnessGuy who wrote (117716)	2/9/2009 10:58:55 PM
From: Skeeter Bug	Read Replies (1) \| Respond to of 132070

GG, i'm not Knighty, but... >>"By focusing scarce fiscal resources on supporting flows of new lending and new funding to support new lending, rather than on supporting stocks of existing bad assets and/or toxic assets assets and on guaranteeing or insuring stocks of existing liabilities, the state meets its three key objectives.<< that's not what they are doing. instead, they are shoring up massively insolvent banks - they are so broke, they keep their heads in the sand and keep repeating "we don't know how much they are worth." some folks are saying another $1.5 trillion is required to support them. given that i think socal real estate has another 30-50% fall in it and commercial is about to implode, i don't think that number comes close to the problems these banks face. they won't lend to each other because they all know the other is massively insolvent. >>First, its short-run economic stabilisation and crisis-fighting objective; second, its medium and long-term banking sector incentive-enhancing, moral-hazard-minimising objective; and third, its fairness objectives: the polluter pays or, you break it, you own it.<< their objective is not to make their campaign contributors pay for their actions. these folks basically own government. >>"Establishing legal and institutional clear water between the legacy bad banks and the new good banks is a necessary condition for fulfilling the economic imperative to support flows of new lending and borrowing rather than to protect existing stocks of toxic assets and their owners."<< the owners of this nation own the old banks - or at least the ones still standing and being propped up. they aren't going anywhere except right up on the back of the american taxpayer.