OT "a leap of faith"

I agree with what you say. I don't agree that money should go to the people that screwed up to solve the problem - find a better way.

The economy runs on credit and to an extent that is exactly wrong.

Nothing in economics is presented simply - they deliberately obfuscate the facts since they are interested in keeping people ignorant.

When the government announces a new program to help people it will sound laudable like "affordable housing." What do they do to make housing affordable? Lower interest rates (print more money).

So people apply for loans to buy houses, more houses are sold driving up the price of materials to make houses, the cost of the house just went up so the people buying, have to borrow more for the same house, they pay a mortgage that will end up costing 3X the price they settled on in interest to compensate for inflation and profit to the banks. Neat and simple - the banks reap the largest benefit and the system rolls along.

It seems like the politicians are looking out for people by "making housing affordable." They get votes, the banks make money, the people are in debt more so than if the government hadn't "helped" them.

I really do understand the role credit plays in this economy - but it is something of a syndrome and seems to carry an awful lot of overhead

- in the sense that people who are not directly productive reap and retain the highest rewards.

Without credit "the economy would expand slower." Yes it might seem so, but instead of a large corporation buying 30 locomotives or airplanes, there might be 10 corporations buying three similar vehicles - and "money men" might get real productive jobs.

Not saying that's what would happen - god knows humans can screw up anything with greed, but it does bear thinking about. At least the "conventional wisdom" hasn't exactly produced stellar results.

The people who screwed up are mostly in Congress. Several people predicted the current dynamic.

The money is mostly gone. The thing to do now is whatever does less damage to the country.

John

. . .

No argument there.

I once read "The Wealth of Nations" I haven't been the same since.

The money is gone - but it didn't evaporate, it is still there in the form of over-priced houses here. The actual money itself is still there too - it just changed hands and went from M2 to M3, and most of that is probably in inflation and offshore now.

The rescue plan is to just dump more M zero. That is akin to putting gasoline on a fire to put it out. It may work like gangbusters for a few months but markets have a way of trying to be free. Have you read the text of the plan, and what do you think of it?

I agree. You mention the word "conspiracy" and folks have visions of tin-foil hats, BUT. There does seem to be a strong element of conspiracy here and it is a beautiful setup for another massive transfer of wealth. Georgie himself is probably not smart enough to have thought of it, but he certainly hangs out with the wrong people and they are that smart and greedy.

Realistically speaking, you get a bunch of greedy unscrupulous people in power and acting independently, they can all just support what amounts to a conspiracy without a formal conspiracy meeting.

But here we are in the last days of a very lame duck's presidency, with all the indicators pointing to a massive shift in power in Washington - the people on the way out might just figure this is there last chance to rape the country and are going for it. It fits. It makes sense.

Beware of that guy behind the curtain... you know, that one pulling the strings.

And we call this a "design" group :-(

...Jim Thompson

How about if the responsible businesses were required to pay us back, quarterly?

We could, essentially, "loan them" back their own bad loans; they could pay them off over time, from profits.

That would keep them afloat, solve their capital crunch, but they'd pay the price for their own misdeeds.

OTOH it's not clear to me how much was really from misdeeds, and how much was from Congressionally-mandated lending standards under the CRA.

that.

Agreed. But I'm torn.

On the one hand a depression would be inconvenient. OTOH, bailing out these guys is like paying hijackers: it just produces more hijackings. A bailout leaves the byzantine system and players intact.

We're running Windows. It's garbage collection is...garbage. Maybe it's time for a re-boot. It sure would clean things up.

Cheers, James Arthur

Jim has money and thinks that he has enough to survive a depression in comfort with enough left over to buy up some good stuff at bankrupt sales.

Most Republicans think the same way - is it any wonder that we have boom-and-bust economic cycles?

Keynes long ago worked out how to stabilise the economy, but monetarist economists didn't like his theory. Naomi Klein's "The Shock Doctrine" spells out why.

-- Bill Sloman, Nijmegen

and arms ;-)

...Jim Thompson

On Sep 25, 11:38=EF=BF=BDpm, Jim Thompson

Wasn't she on Bill Mahar's show the other night? This one's on my reading list. Thanks for the reminder...

-mpm

Darwin selection for single story banks.

Damn guy, you just ruined a beautiful dream.

One has to look no further than congress or candidates for sick minds.

The last thing stock brokers want is a stable economy - they make their fortunes over "churn" in the market, like real estate or other commodities where the same thing is sold over and over.

Stable is stagnant to their thinking. Good for the working stiff, but bad for the instant wealth crowd.

Someone further down the thread mentions this book

THE SHOCK DOCTRINE: The Rise of Disaster Capitalism. By Naomi Klein.

Description: Hardcover. The author explains "the shock doctrine," the use of public disorientation following massive collective shocks (wars, terrorist attacks, natural disasters) to push through highly unpopular economic shock therapy. May have a small remainder mark on the edge. 558 pages. Published at $28.00. ISBN 0805079831. Bookseller Inventory # 7229526

hey

the

dends

than

absolutely no way $400 billion in dividends for 5 companies, impossible, the entire market value of the those companies isn't worth that, for instance goldman sacks dividend is 150million, I think he meant $400 million, oh well, another financial idiot, off by 1000x and goes on TV and nobody corrects him

No, it's in the hands of people who sold their California costal cardboard shack for 1.3 million and moved inland.

Don Bowey wrote in news:C5011144.C50E5% snipped-for-privacy@comcast.net:

The only dicy thing for me re: the dividends are retirement accounts and small investors. The only way to provide for retirement is to invest, because savings alone don't keep up with inflation, and Social Security is going down the tubes and not reliable as supplemental retirement income.

Re: the "bailout", I agree with Jim Cramer re: the need to renegotiate with homeowners to slwo forclosures, slowly reverse teh housing glut, and thereby stabilize home prices, and eventualyl allow banks toclaim real assets and use those to borrow and lend money to individuals and small businesses.

Another poster looked into the prospects of dividends having the magnitude stated on CNBC, and found no support for it. I followed-up by looking at the CITI financials and, while our numbers don't agree, the dividends, when combined with four other companies couldn't hit $400B, so the desired impact just isn't there.

A lot of buyers helped get themselves into the financial trouble they are in, so they can't expect to do too well. OTOH, the mortgage companies were irresponsible and enabled the lousy innovative financing so I agree they should attempt to renegotiate loans to avoid foreclosure. IMO, they would be money ahead of carrying the non-earning property on their backs.