Words that give me pause:
Now let me tell you something very simple and very important: You can try to prevent a financial meltdown or you can teach Wall Street a lesson, but you can’t do both at the same time.
So which will it be?
You say you want straight talk — no spin, no bull, no sugar-coating. Okay, here goes.
First, stop fixating on Wall Street executives — there will be time to deal with them later. Even if you clawed back every dime they made over the past decade, it would come to several billions of dollars. That’s a rounding error compared with the size of the financial problem we’re facing here.
Second, we need to act quickly. The financial situation is now downright scary. Don’t look at the stock market — that’s not where the problem is. The problem is in the credit markets, which are quickly freezing. I won’t bore you with technical indicators like Libor and Treasury swap spreads, but if you talk to people who work these markets every day, as I have, they report that the money markets are in worse shape than they were last August, or even during the currency crises of 1998.
Banks and big corporations and even money-market funds are hoarding cash, refusing to lend it out for a day or a week or a month. Even the best companies are having trouble floating bonds at reasonable rates. And the shadow banking system — the market in asset-backed securities that ultimately supplies the capital for most home loans, car loans, college loans — is almost completely shut down.
People are so nervous, and there is so much distrust, that all it would take is one more hit to trigger the modern-day equivalent of a nationwide bank run. Financial institutions would fail, part of your savings would be wiped out, jobs would be lost and a lot of economic activity would grind to a halt. Such a debacle would cost us a lot more than $700 billion.
Not saying I’m buying the sky is falling analogy….but something to think about. Is the fix worse then the cure or not?
See author page
You actually can do both.
It’s called the Cantor-Hensarling-Ryan plan (with a few additions to appease the Dems).
It’s going to work out, and I’m not worrying at all. And neither should any of you.
ONE POST?! We are looking down the abyss and there is only one post about this? Wow.
This is pure capitalism. Sometimes it goes up and sometimes it goes down. Nothing goes up forever. For as fast as it went up, no one should be surprised that it is going down this hard. The reason no one wants to loan money out is becasue every a-hole already got a loan.
Back in August I sold my motorcycle and car and went to buy a cheaper used car. I had 40% to put down and 750+ credit scores. I entertained a loan from a major lender who I have had a credit card with for 10 years. They offered me 12% APY!! hahahah My take on that was they we telling to to f- off. Oh well. My credit union gave me 3.5%.
Joe,
This is just the most recent thread on this issue.
That is why you were only seeing one post.
The other threads have been worn down to the bones.
Good posting.When the USSR clamped down on the Czechs, in 1957(my memory is not what it was so I may miss some details here) his explanation was (to Jean Kirkpatrick) ” the czechs are living too well and making the Russians next door look like poor relations. We could have put up with the free speech but not their success. In socialism the important thing is to share misery.Many of the comments on the T plan are of that ilk.Why should I help the guys who made too much money , too big a house etc.Answer Because in free societies individual choice will always result in great inequalities but in the long run we are all in this boat and refusal to bail when it is leaking is just plain dumb.
@joe from chi: Next time check out all the posts on the sidebar on the subject, or click the categories and check out the economy cat….much more on this subject then this one post.
Btw peeps, you see that arrow beside the number comment? That’s new and will put that response link into the comment like the one up above.
Even w/o the pork, any ‘bailout’ plan from here on out is like putting a band-aid on a sucking chest wound…while giving the patient blood thinners.
Peter Schiff, Jim Rogers, even Ron Paul have tried to warn us about this for years. (Ron Paul isn’t crazy, but some of his fans most definitely are.)
Also see:
‘THE RISE AND FALL OF CIVILIZATIONS’ by Miller, Joubert, and Butler.
‘Wealth and Democracy’ by Kevin Phillips.
See: selected works by Alvin Toffler.
Cycles come and cycles go, and this is one of them.
Stock up on the beans, bullets and bandaids and get to know your local survivalist.