Watch 'em fall...

[newGuy12]

Who gets to take the risk in the buyout of Bear Stearns? YOU DO!!! Congratulations, and many suits on Wall Street wish to Thank You for helping them stay in the black!

link

JPMorgan (JPM, Fortune 500) executives initially decided to pass on a purchase of Bear Stearns this past weekend, Bear execs said, largely because of the risks tied to Bear's mortgage portfolios. They changed their minds after the Fed agreed to pony up $30 billion in so-called nonrecourse loans - agreements that transfer the risk of Bear's bad mortgage bets to U.S. taxpayers.

Its going to get more interesting as we see others fall, and the Fed run to put out the fires. Watch them go!

Yes, let banking institutions do whatever they wish -- do not regulate them, forcing them to only loan to people with good credit. No. We can always turn to the tax payer to take on the risk.

Besides, President Bush says that the economy is going to be just fine!

HAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHA!!!!!!!!!!!!!!!!!




w0000!!!

 

[terryl965]

President Bust is a joke with that type of comment, the economy and housing market suck and will continue until we as a whole put a stop to it.

 

[Ninjamom]

Any time there is a financial crisis, you can expect SOMEONE to yell, "The Government ought to do something."

In this case, the Government should do NOTHING, and allow capitalism to take it's course - companies with irresponsible lending polocies will go out of business, and people who are living outside their means will be forced to move into smaller houses or rent something they can afford. Life is tough. get used to it.

 

[Makalakumu]

Amen, Ninjamom. These fat-cat banks have gotten so used to the government removing all moral hazard that there are no limits to what they would risk. Let them reap the harvest they sowed.

 

[Archangel M]

Any time there is a financial crisis, you can expect SOMEONE to yell, "The Government ought to do something."

In this case, the Government should do NOTHING, and allow capitalism to take it's course - companies with irresponsible lending polocies will go out of business, and people who are living outside their means will be forced to move into smaller houses or rent something they can afford. Life is tough. get used to it.

Listen to the voice of True Liberalism. Great post.

 

[BrandiJo]

from what i understand (limited as that is) if they fold, or don't get bailed out ... we are gonna hit what would be the next great depression... so why is it bad that the government is helping them out? Granted i am new to actually paying attention to stuff like this so i may be wrong.

 

[navyvetcv60]

Any time there is a financial crisis, you can expect SOMEONE to yell, "The Government ought to do something."

In this case, the Government should do NOTHING, and allow capitalism to take it's course - companies with irresponsible lending policies will go out of business, and people who are living outside their means will be forced to move into smaller houses or rent something they can afford. Life is tough. get used to it.

Ninjamom & Upnorthkyosa, Y'all got the right idea!!

 

[arnisador]

I couldn't believe that...it closes at $30 and is bout at $2. Maybe stockowners still make out compared to bankruptcy, but...

 

[Ninjamom]

from what i understand (limited as that is) if they fold, or don't get bailed out ... we are gonna hit what would be the next great depression...

Not at all. They go out of business. A better, stronger company takes their place.

so why is it bad that the government is helping them out?

Because once again, we end up paying for someone else's irresponsibility.

 

[BrandiJo]

ah thanks ninja mom, like i said still working on figuring this stuff out

 

[newGuy12]

from what i understand (limited as that is) if they fold, or don't get bailed out ... we are gonna hit what would be the next great depression... so why is it bad that the government is helping them out? Granted i am new to actually paying attention to stuff like this so i may be wrong.

Well, I am not an economics student, and know little. I *do* know that we hear all this talk about the "free market", OVER AND OVER, free market this, free market that -- the free market will save us all and make us all rich!

But when something like this happens -- OH -- we cannot let this go on, we must bail this company out! Don't worry, J.P. Morgan, you can buy this and be guaranteed to make money! The tax payers will have your back if you tank!!!

And more, too... the depression or at least a pronounced recession is coming -- what you see here (in my opinion) -- is the Fed running around starting to put out brush fires.

Has anyone here ever been on a vessel that is taking on water? Well, guess what -- YOU ARE NOW!






Robert

 

[shesulsa]

Anyone remember The 80's S&L scandal? And Charles Keating?

Here's a good one for Bush Family lovers: "Neil Bush, George Bush's son, never servered time in jail for his part in running an S&L into the ground."

Wiki on the matter.

We're still paying for THAT crisis ... and now ... another one?

Pay off your credit cards and your loans, folks - it's gonna be a bumpy ride.

 

[newGuy12]

Pay off your credit cards and your loans, folks - it's gonna be a bumpy ride.

YES! Get out of debt NOW no matter what you have to do!

 

[shesulsa]

YES! Get out of debt NOW no matter what you have to do!

Yeah, we're cutting our spending and the job I'm getting that was going to pay for vacation money will likely go toward paying down mortgages.

 

[crushing]

Anyone remember The 80's S&L scandal? And Charles Keating?

Here's a good one for Bush Family lovers: "Neil Bush, George Bush's son, never servered time in jail for his part in running an S&L into the ground."

Wiki on the matter.

We're still paying for THAT crisis ... and now ... another one?

Pay off your credit cards and your loans, folks - it's gonna be a bumpy ride.

Thanks for the links. I didn't realize the the foundation of the S&L problems really started in the late 70s.

 

[Ninjamom]

Pay off your credit cards and your loans, folks - it's gonna be a bumpy ride.

Why? If I default, won't The Government just bail me out?

 

[newGuy12]

I was going to try to save all of the money, but I am instead going to a seminar! Oh, well, so much for my resolve! But no joke, the government will NOT be bailing us out of anything!!!

 

[Empty Hands]

Why? If I default, won't The Government just bail me out?

That's only for the poor, beleaguered, needy mega-corporations. Fat cat private citizens like yourself will just have to suck it up.

 

[tellner]

"The harsh Discipline of the Market" has always been for little people. In fact, if you study economics you'll find it built into the assumptions. Labor is greedy, lazy and stupid. It must be kept at or near the "natural wage" for "efficiency". The Natural Wage according to classical theory is the amount of money that barely keeps body and soul together enough to work. Anything else just causes inflation. And it causes workers to slack off. Left to itself labor is also immoral. It must be corrected with laws and other moral improvementsso that we don't enter into Hobbesian damnation.

Capital, on the other hand is good, wise, and imbued with The Ju-Ju which makes its decisions rational and Efficient. Capital must be rewarded with tax breaks and largess and freed from the cruel hand of Collectivism so that it can be bribed to shower its blessings on the world. By the bye, it's also a matter of Faith that no firm ever makes a profit above the bare minimum it would make buying T-bills.

So you start off with an assumption that Labor is foolish and corrupt while Capital is wise and good.

Add to it the fact that we have the best government that money can buy.

Toss on several decades of the regulations being written by those who are regulated.

Recall that the people who run the system tend to come from the Boardroom, Wall Street or Econ departments that preach the neo-Liberal synthesis. If you don't know what that means in technical terms please look it up so that we can avoid misunderstanding. Or they may actually be out of the Austrian or Chicago schools which take away the sugar coating of "sometimes the Invisible Hand might possibly fumble, you know once in a great while". All these sorts have a natural sympathy for the big players.

That's where you get "too big to fail" and "natural monopoly" and the rest of the words that excuse the big players and drop the weight onto the proles. That's why corporate bankruptcy protection is still strong while the new US bankruptcy laws for individuals more closely resembles a FEMA trailer than the storm cellar that it formerly represented.

You and I ride the pipe. The Big Boys are taken care of in true Gilded Age style.

Old-style small-c conservatives and most Progressives have been watching the wheels come off since the mid 1980s. The Cassandras started a decade earlier. Back in the 1960s the URPE - Union or Radical Political Economists - did a comprehensive and exceedingly rigorous critique of the mathematical foundations of the neo-Liberal Synthesis that underlies conventional economics. Not one of them ever got a job in academia again. The community of economists said "Yep. Their math is correct. They're probably right" and kept right on using the same corrupt models because that's what gave the people with the money and power warm fuzzies.

To put it in somewhat less technical terms, it looks like the bill for thirty years of untrammeled greed and rapaciousness is coming due. We are screwed. And it looks like we won't even get the common courtesy of a reach-around.

The last time this happened we had the good fortune of one of the best Presidents and the flexibility to do things like massive public works, changes in tariffs, regulation where needed, and a strong if unemployed industrial base. The out-and-out literal fascists like Prescott Bush played their hand and lost when they chose Smedley Butler to lead the coup; Roosevelt was able to do what needed to be done with a relatively free hand.

None of that applies today. McCain is running for Bush's third term and swears to continue the disastrous policies that got us here. The rest of the GOP thinks he's too far to the Left. Clinton is running as the moderate Republican she has always been. The DLC's position is to copy the Republicans in all things but with their own people in power. Obama is hard to read on the serious structural issues, but his talk about reaching out to the Republican Party and meeting them halfway seems to show that he doesn't have the cojones to do what is needful. Kucinich had some excellent plans but was railroaded and not even allowed to appear in the debates. Edwards was sandbagged. When Lyndon LaRouche's industrial policies start to look rational you know we're in deep trouble.

We need FDR, Henry Cabot Lodge Jr. or William Jennings Bryan. We could get by with fer Crissake Huey Long. If we get Taft or Hoover we're dead, and I would start taking odds against the survival of the United States of America as an entity.

 

[newGuy12]

Yep. There you have it.

I can say that I'm glad that I was able to live out my best years in the hey-dey of the US. It was fun. But I fear the worst. At least I probably won't have TOO long to live (and eek out an existance under increasingly more stressful times), or have children.