Comments on: Banking bailout or economic bailout? Guest post by Joe Cambria

By: DeusExMacintosh

DeusExMacintosh — Wed, 01 Oct 2008 14:09:18 +0000

Sustainability isn’t just an environmental concept… **headdesk**. [Gets out her well thumbed copies of "The Richest Man in Babylon" and "Think and Grow Rich"]

By: John Hasenkam

John Hasenkam — Wed, 01 Oct 2008 03:09:51 +0000

The problem there Deus is that the Aus and US economies have been kept bubbling along by consumer spending, which has been driven by easy credit, which has been made possible by relaxed lending practices, which has been allowed to go on for so long by selling loans here, there, and everywhere, and so the vicious cycle is complete. What we have had over the last 10 years is a debt driven growth. Governments are now terrified, as are directors, because now they can no longer report increased growth and share value. They want the bail out to sustain what has been debt driven growth. Can’t continue, we need to reappraise our growth and dividend prospects. Probably more like European countries, which typically have much lower expectations than the US, Aus, or Britain.

You are absolutely right, we need to adjust to a new financial environment. Economies should grow through productivity, not debt. We may end up in a situation similiar to Japan, where no amount of priming the economy gets its moving again.

By: DeusExMacintosh

DeusExMacintosh — Wed, 01 Oct 2008 02:31:16 +0000

Oh well, if THAT’s all that’s stopping them let the suckers drown. Those of us on ‘main street’ will just have to re-learn to live within our means in a low-credit environment.

By: John Hasenkam

John Hasenkam — Tue, 30 Sep 2008 09:27:13 +0000

I’m a bit confused JC. The US seems to be persisting with this major cash injection but if the problem is the inability to price these dodgy derivatives, why don’t they just dissolve the derivative instruments and have the mortgages they contain revert to the original institution of origin? That way everybody knows what their exposure is, it can be properly accounted for on balance sheets and governments can tailor their assistance more accurately to domestic institutions.

Yes but Deus that takes all the fun out of the game. Nothing to speculate on, nothing to justify all those jobs serving the speculators. No point in that, be doing themselves out of a job. Self interest rules, Adam Smith believed that said that can work for the common good, he never said it would always work for the common good.

By: Adrien

Adrien — Tue, 30 Sep 2008 08:48:07 +0000

I’ll keep my purple pin-stripes dry
And offer no apology
I go to church’t ain’t a lie
My Book of Ideology
It tells me true, my greed’s no cause of all these horror farces
God is great and so are we – the conspiracy of horses’ arses.

Well you may say that this today
Was vict’ry for democracy
I’m sure you’re right but now I play
Before they take my yacht from me
.
We bankers are the best y’see
Pluckin’ feathers off the ducks
Sprite ‘way with rainday cash in SUV
And the rest of you: Get fucked!!

The choice is hard, must needs thoughts deep
This week it ain’t no lark
Should we save these shonky lying creeps
Or get used to eatin’ bark?

By: DeusExMacintosh

DeusExMacintosh — Mon, 29 Sep 2008 19:43:32 +0000

Yes, but these aren’t ‘naked’ options Nanu. They are financial instruments that contain concrete assets (ie. mortgages) but in a mixed bundle of risk exposures that makes them impossible to value.

By: Nanu

Nanu — Mon, 29 Sep 2008 06:17:41 +0000

“They booked all these derivatives assuming bad things would never happen. It was like writing fire insurance, assuming no one is ever going to have a fire….”

By: DeusExMacintosh

DeusExMacintosh — Thu, 25 Sep 2008 18:28:00 +0000

By: Adrien

Adrien — Tue, 23 Sep 2008 10:25:24 +0000

Obama has got ‘Jimmy Carter MK II’ written all over him

You reckon? He’s much more impressive than Carter. Carter beat Ford. Big deal! I have dishcloths that could beat Ford.

Obama’s a much more impressive individual. I thought the only way you could do worse than Carter was resurrect Dan Quayle.

But he could be total smoke indeed. I don’t know. I’ve been purposely not paying attention for months. I want to feel good in late January.

For the five minutes it’ll take for the bitter and inevitable truth to sear my reeling brain.

By: Nanu

Nanu — Tue, 23 Sep 2008 04:16:24 +0000

“And the silly left argue that the transfer of this toxic waste is socializing losses, what hypocrisy.”

Good point Dallas, the hypocrisy hadn’t even occurred to me.
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[Nice piece JC]