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Strategies & Market Trends : The coming US dollar crisis -- Ignore unavailable to you. Want to Upgrade?

To: Real Man who wrote (19021)	3/25/2009 4:19:53 AM
From: Real Man	Respond to of 71475

I understand that folks want to see Moral Hazard go away, receivership for players at the craps table and such. The problem is, such actions will result in immediate systemic meltdown, something we are trying hard to avoid. It will not be constructive to the manufacturing sector. In fact, it will destroy whatever is left of it. I understand that the bears got tired of the PPT and want to see Spoos at 100, but, perhaps, the economic picture would not be all that pretty. Unfortunately, systemic meltdown may STILL be unavoidable. That is now the risk, as the policies of "no other choice" keep shifting the derivative and credit bubble risk onto the government, which ultimately results in printing. We will just see as we go, and hope for the best. Trying to implement policies that distribute risk from failed players to all players at the craps table is the right way to go, for now.

To: Real Man who wrote (19021)	3/25/2009 5:13:10 AM
From: axial	Read Replies (2) \| Respond to of 71475

Agree very much. Re: "Naturally, as pessimists would say, the same people are running the show, so ... are they all bought? My answer to this is yes, the same people are there. However, this does not mean necessary reforms won't be implemented as the administration and the public anger keep pushing for it. Simply put, they have no choice." Yes. Should the fireman douse the flames, or rescue the baby? One thing at a time. The riddle of who should be used to start making things right reminds me of what many firms do when they find their security has been compromised by a hacker: they hire the hacker. They hire someone who knows how to game the rules, because that's the shortest route to solving the problem. Yes, it's right to say they're captives of the Wall Street mindset: they see things a certain way. But where in heaven will a new administration find qualified people, knowledgeable people except from the best talent pool in the country? About the solutions... Volker said, "... I don't know." "So I think we have a problem which is not an ordinary business cycle problem. It is much more difficult to get out of and it has shaken the foundations of our financial institutions. The system is broken. I'm not going to linger over what to do about it. It is very difficult. It is going to take a lot of money and a lot of losses in the banking system. It is not unique to the United States. It is probably worse in the UK and it is just about as bad in Europe and it has infected other economies as well... " shockedinvestor.blogspot.com The new administration must be the moral compass for Wall Street expatriates, and over the coming years, begin making the system right again. --- From the sixties: "...There's battle lines being drawn Nobody's right if everybody's wrong..." Right now, everybody's wrong: everybody else says so. There's anger, finger-pointing, moral hazard and evasion of responsibility by all concerned. So nobody's right. --- And I agree with you: there was no "plot". It was a series of cumulative sins and errors, by politicians, by the financial community, by bad actors, good actors, regulators and gatekeepers, mixed with prevailing psychology: that created this disaster. --- Looking forward to the next BIS report. That's another ticking bomb: derivatives. Jim

To: Real Man who wrote (19021)	3/25/2009 12:58:06 PM
From: benwood	3 Recommendations Read Replies (2) \| Respond to of 71475

After freaking for a while at fascism running amok, I finally understood that the objective, ostensibly, is to have FDIC-type power to seize quasi-banks and render them harmless, ala WaMu. I agree this is necessary. Let the owners and bondholders and other stakeholders take their lumps and losses. However, the idea that this is "required" in order to avoid bailouts is simply a complete lie. The bailouts were a choice -- they could have let it fail. If letting it fail without a bailout was too scary, then a takeover will not help unless a similar injection of capital occurs. The one difference is that if it is known all along that this firm is going to fail, then stopping them sooner is certainly better. But not getting rid of crap like permitting a thousand firms to bet the same way on a failure (CDS) is simply economic insanity. Stop the Insanity!