The US President has been wrong about so much during his eight years in office that it is tempting to dismiss his warnings of the impending financial apocalypse as yet more hyperbole - the boy crying wolf.
Unfortunately, this time I suspect he's right. Treasury Secretary Hank Paulson's bail-out is far from perfect, but without it the American and British economies face a crunch the likes of which we can hardly imagine. But how much money would you put on the likelihood of the lamest of lame-duck presidents driving the plan into law?
Not much, if the chaotic negotiations in the White House on Thursday night are anything to go by. As the $700 billion plan to prevent the world's biggest economy slumping into the worst recession in living memory was thrown off the road by a cabal of conservative Republicans, the administration suffered an apparent nervous breakdown. Having survived the invasion of Iraq and Afghanistan and the terrorist attacks in September 2001, it took a financial crisis to bring true chaos to the heart of the free world.
Is this the way the modern economy ends? In a scene of Beckettian farce? If the bail-out does collapse, the consequences are hideous. We are in the early stages of one of the worst world slumps in living memory.
The financial system on which the economy depends has frozen. In the past few weeks, we have seen some of the world's most venerated names in finance collapse. The US government has in effect nationalised Fannie Mae, Freddie Mac and AIG. Lehman Brothers is no more; Merrill Lynch has been eaten by Bank of America, and even Goldman Sachs has had to go cap-in-hand to Warren Buffett.
Bush was half-right: one "sucker" did go down. In the late hours of Thursday, America suffered the biggest bank failure in history, as Washington Mutual was shut down by regulators and the remnants sold to JP Morgan.
History shows that whenever there is a banking crisis, an economic slump, with all that entails - mass redundancies, falling house prices, widespread bankruptcies - invariably follows. The scale of the recession depends on the size of the banking crisis; the past year has brought the biggest systemic financial collapse since the 1930s.
We know this because economists, including Federal Reserve Chairman Ben Bernanke, have spent decades studying the causes and potential solutions for episodes such as the Great Depression. They may not have discovered a vaccine for financial panics. We make the same mistakes over and over again: borrowing too much, convincing ourselves we have minimised our financial risk, forgetting that money must be paid back and that house prices go down as well as up. But the quality of the cure has improved.
The worst thing to do now would be to impose medieval remedies. Back in the 1930s, the depression was cemented not by the Wall Street Crash of 1929, but by the hard-nosed policies of the US politicians, who allowed so many banks to fail that they set off a domino effect that took almost a decade of thrift to recover from. It was the financial equivalent of leeches and blood-letting.
In Britain, we had a comparatively benign 1930s, with not one major bank collapsing and the economy faring far better than the US. This time is different. Two of our biggest mortgage lenders have already had to be rescued. We are as vulnerable as the US - if not more so. Indeed, most likely we are already in recession, and the economy will continue shrinking until at least the latter stages of next year.
Unemployment will rise by almost a million. House prices - already down by a tenth - will fall by the same margin again, probably more. The problem is that the recent lurches in financial markets could make this far worse. In short, unless the Government is prepared for some radical rescue plans, the next decade could quite easily be our very own 1930s.
Which makes it all the more shocking that, so far, the major initiatives announced by the Government and the Bank of England have been tantamount to handing a paracetamol to someone suffering a heart attack. The Bank has pumped billions of liquidity into the market and it injected more cash in yesterday.
However, the lesson from the US is that at some point the Government will probably have to spend a significant chunk of taxpayers' cash to keep the financial system - and hence the wider economy - afloat.
This may involve a similar plan to Paulson's - a toxic waste dump for poisonous investments - or merely an injection of public money into the financial sector. It will be expensive, and the consequence, in the long run, is higher taxes or spending cuts once the economy has recovered. The Government has at least the luxury of learning some snatched lessons from America, though there is no telling how soon our own lifeboat may need to be launched.
In the meantime, the authorities must get the cost of borrowing down, or watch the housing market tumble to new lows. The Bank of England ought to have cut interest rates some months ago, but, better late than never, it should do so at the next possible opportunity. It is time to stop lecturing the patient; it is time to start applying the cure.
Edmund, don't talk publicly about matters you know nothing about. You're embarrassing yourself.
easy for edmond to say he agrees with the greedos, but I certainly disagree with him. it's crossing the pond now, see if you change your tune !!!!!!!!
http://www.youtube.com/watch?v=razF08A-9Is
This latest "crisis" is one of the symptoms of a fractional reserve banking system being led astray by political influence. Who bloody well cares if home prices drop? They deliberatly formed a housing bubble and a derivitaves bubble and now threaten us with a recession if we don't come up with a bailout for the finacial sector. They are really playing with fire this time, revolutions have been started for less.
"Unemployment will rise by a million"
You're over-optimistic. I wouldn't be surprised if UK unemployment went up to ten million, and in the USA to Zimbabwean levels.
This latest "crisis" is one of the symptoms of a fractional reserve banking system being led astray by political influence. Who bloody well cares if home prices drop? They deliberatly formed a housing bubble and a derivitaves bubble and now threaten us with a recession if we don't come up with a bailout for the finacial sector. They are really playing with fire this time, revolutions have been started for less.
To bright spark Pete: not quite sure what Israel has to do with this?
The author, like most of our population, has an illness that is so deep he cant even imagine a world without CREDIT. A world wear people pay for goods and services. To him bartering is folly considered radical. To him, solvency at all cost is not reality, it is something to aspire to. To him, seeing everyone face their CONSEQUENCES so he/she can face recovery is as inconceivable as a drug addict facing rehab and a life without heroin. Pathetic.
I live in SoCal and have ben saying it for years. "How can you charge $500,000 for a property, of which the land and home itself together isnt worth more than $200,000? Its called a bubble. And it should be called FRAUD. Now the actual property values are settling in, and those sheister real estate agents and mortgage lenders are screaming like a two year old. I say, quit your whining, you did this, dont expect ME to bail you out. Nobody forced you to offer sub-prime adjustable rate loans you KNEW the beneficiaries wouldnt be able to pay back. You bought the ticket, and you take the ride...alone. Oh, and you have to pay extra for carry-ons and peanuts.(airline bailouts certainly helped huh!)
Sod off the lot of you!
Why for Gawd's sake have people nothing better to do than write screeds of drivel!
G at 405P states, " It's plausible that security fraud and/or violations of the RICO Act may have occurred on a very, very large scale. "
This is the truth and on a single day the US attorney should indict former cabinet members, agency heads, NGO execs, lobbyists, bankers, and lawyers an dthe politicans who contributed to the violation of their fidiciry responsibilities. actors like Dodd, whoo is head of senate banking, and took lower than market loans fall under RICO. Guys like Reuben who deregulated under Clinton and then went on to take massive amounts ($100M+ i Reuben's case) from those cos. they deregulated should also be tried under RiCO> If these guys had Italian last names and didn;t go to Harvard law, harvard business school then they'd all be considered Mafia. But since every actor - check my sts - went to Harvard or Yale for Law, Undergrad, or for an MBA - they are I guess just unfortuante billionaires who happened to be in charge when all the poor decided to go get a home loan and default. HAHAHA - DC is abunch of criminals and now the emperor has no cloths. Time for we the people to put them all in jail or lose our country forever.
Captain Coma
on September 27, 2008
at 10:59 AM
Sounds good! And in ancient Rome and Etruscan civilzation the killed the kind for managing the assets of state poorly - how does that sound?
This bailout is a complete sham. I say LET THIS HOUSE CORRUPT CARDS FALL! Let's see how many wars of aggression you can finance now.
Could we be spared the remorselesly unending observations of Igonikon Jack?
Maybe it's time for the US to sell some land, how about Alaska, that would be shocking, maybe just start with places most people don't care about, Georgia, Ukraine, Taiwan, Tibet, Iraq ........
Have to sell US bonds to someone
Maybe it's time for the US to sell some land, how about Alaska, that would be shocking, maybe just start with places most people don't care about, Georgia, Ukraine, Taiwan, Tibet, Iraq ........
Have to sell US bonds to someone
Maybe it's time for the US to sell some land, how about Alaska, that would be shocking, maybe just start with places most people don't care about, Georgia, Ukraine, Taiwan, Tibet, Iraq ........
Have to sell US bonds to someone
Forgive my naivity. If everyone owes money to everyone else, wouldn't it be simpler just to cancel the debts?
Both the 'Age of Irresponsibility' (lack of regulation from Brown) and the 'Nice Decade' (artificially low interest rates) to blame for this unnecessary crisis. Nothing was learnt from the last boom/bust which didn't happen that long ago.
We need a GOLD standard again. Paper money is worthless, and the reshuffling of more (or worse - the unbridled PRINTING of more), only devalues the mess that's already in circulation. Inflation is the fleecing of the poor by the rich in fiat currency economies. Gold & silver are friends of the common man - the great equalizer, and the foundation of stable currency. Look how far America has fallen, since abolishing them under Nixon, less than 40 years ago!
Welcome to the USSR of A.
Give us your money or the economy gets it in 45 minutes.
The bailout is
Rep. Michael Burgess (R-TX) says:
�I have been thrown out of more meetings in this capital in the last 24 hours than I ever thought possible, as a duly elected representative of 825,000 citizens of north Texas.�
Burgess asks the Speaker of the House to post the bailout bill on the Internet for at least 24 hours instead of passing the largest piece of legislation in US financial history in the �dark of night.�
Rep. Burgess� says, �Mr. Speaker I understand we are under MARTIAL LAW as declared by the speaker last night.�
All this as the 3rd Infantry�s 1st BCT trains for a new dwell-time mission. Helping �people at home� may become a PERMANENT part of the active Army.
They will be on-call federal response force for natural or manmade emergencies, including terrorist attacks and civil unrest.
Rep. Ron Paul of Texas speaking on the House floor predicted that Americans would lose their liberty as a result of this meltdown.
These measures show the gravity of the situation.
You have to ask where stock markets are going to end up, and if you still have shares this is definitely a chance to sell before things get really serious. We have not seen the bottom yet, see this analysis:
http://arabianmoney.net/2008/09/29/dow-to-fall-to-7000-ftse-to-3300/
Both the 'Age of Irresponsibility' (lack of regulation from Brown) and the 'Nice Decade' (artificially low interest rates) to blame for this unnecessary crisis. Nothing was learnt from the last boom/bust which didn't happen that long ago.
"I don't know what to do!" cried Paulson, laughing and crying in the same breath; and making a perfect Laocoon of himself with his stockings. "I am as light as a feather, I am as happy as an angel, I am as merry as a schoolboy. I am as giddy as a drunken man. A merry Christmas to everybody! A happy New Year to all the world! Hallo here! Whoop! Hallo!"
----Running to the window, he opened it, and put out his head. No fog, no mist; clear, bright, jovial, stirring, cold; cold, piping for the blood to dance to; Golden sunlight; Heavenly sky; sweet fresh air; merry bells. Oh, glorious. Glorious!
"What's to-day?" cried Paulson, calling downward to a formerly bankrupt banker in Sunday clothes, who perhaps had loitered in to look about him.
"Eh?" returned the banker, with all his might of wonder.
"What's to-day, my fine fellow?" said Paulson.
"To-day?" replied the banker. "Why, Christmas Day."
"It's Christmas Day!" said Paulson to himself. "I haven't missed it. The Spirits have done it all in one night. They can do anything they like. Of course they can. Of course they can.
with apologies to c. dickens
I dont fear big brother I fear anarchy and internicine strife,with great bitterness and gall.
"I don't know what to do!" cried Paulson, laughing and crying in the same breath; and making a perfect Laocoon of himself with his stockings. "I am as light as a feather, I am as happy as an angel, I am as merry as a schoolboy. I am as giddy as a drunken man. A merry Christmas to everybody! A happy New Year to all the world! Hallo here! Whoop! Hallo!"
----Running to the window, he opened it, and put out his head. No fog, no mist; clear, bright, jovial, stirring, cold; cold, piping for the blood to dance to; Golden sunlight; Heavenly sky; sweet fresh air; merry bells. Oh, glorious. Glorious!
"What's to-day?" cried Paulson, calling downward to a formerly bankrupt banker in Sunday clothes, who perhaps had loitered in to look about him.
"Eh?" returned the banker, with all his might of wonder.
"What's to-day, my fine fellow?" said Paulson.
"To-day?" replied the banker. "Why, Christmas Day."
"It's Christmas Day!" said Paulson to himself. "I haven't missed it. The Spirits have done it all in one night. They can do anything they like. Of course they can. Of course they can.
with apologies to c. dickens
Sorry for the double post, I did a refresh on the same page, to see if my entry had gone in and it posted the same comment again.
Looks like other people may of had the same problem.
Apologies again.
�Capitalism was dead: to begin with. There is no doubt whatever about that. The register of his burial was signed by the Congress, the Treasury Secretary, the Federal Reserve undertaker, and the chief mourners McCain and Obama . Bush signed it: and Bush�s name was good upon 'Change, for anything he chose to put his hand to. Old Capitalism was as dead as a door-nail.�
Bah Humbug!
We need the crash, yes some of you may think I'm mad but just before you condemn me let me explain.
The only reason that our western society has stayed semi upright this long is because we have consumed and thrown away. We have done this using credit.
We now realise to protect our planet, and future generations we have to consume less and recycle. This doesn't support as many traditional jobs as our consumptive lifestyle did.
In the long term a crash is good for our planet. There are people posting comments that house prices won't fall because people won't sell...... have these people never heard of repossession?, and what chance would our children have of buying a house if prices didn't come down to realistic values?.
All that these "bail outs" are doing is turning a train wreck into a slow motion train wreck.
Let's get there sooner, find a real value for everything, pick up the pieces and start creating real value for all humanity, not just for shareholders.
We need to get sensible about the way we live our lives not seek to continue the excesses of the past decade.
Let's invest in coastal defences, more effecient power generation systems, alternative transport systems. Most of our innovations in the last few years seem to be linked to communications or leisure. These are good enough lets focus our attention on doing something useful!.
We need to take stock on what has real value, that's only going to happen if it get's rubbed in our collective faces.
We need a crash.
I cant believe people get paid to write this alarmist claptrap. Surely anyone with a modicom of common sense coupled with early life experience of handling pocket money can see that running an economy on such impractical levels of debt and credit just wont work. A fall of one fifth in market indicies is a necessary correction, it would require falls of four fifths to justify the emotive language used here. Manufacturers must wait untill they have the cash to invest in new equipment. House builders must wait to buy bricks untill they can pay for them, and house prices must fall until people can pay cash for them. The resulting unloading of the intolerable burden of debt servicing from revenue streams will free up vast quantities of cash for building real investment in the economy, rather than keeping a bloated, parasitic financial services industy in buisness.
We need the crash, yes some of you may think I'm mad but just before you condemn me let me explain.
The only reason that our western society has stayed semi upright this long is because we have consumed and thrown away. We have done this using credit.
We now realise to protect our planet, and future generations we have to consume less and recycle. This doesn't support as many traditional jobs as our consumptive lifestyle did.
In the long term a crash is good for our planet. There are people posting comments that house prices won't fall because people won't sell...... have these people never heard of repossession?, and what chance would our children have of buying a house if prices didn't come down to realistic values?.
All that these "bail outs" are doing is turning a train wreck into a slow motion train wreck.
Let's get there sooner, find a real value for everything, pick up the pieces and start creating real value for all humanity, not just for shareholders.
We need to get sensible about the way we live our lives not seek to continue the excesses of the past decade.
Let's invest in coastal defences, more effecient power generation systems, alternative transport systems. Most of our innovations in the last few years seem to be linked to communications or leisure. These are good enough lets focus our attention on doing something useful!.
We need to take stock on what has real value, that's only going to happen if it get's rubbed in our collective faces.
We need a crash.
house prices are over valued - they need to drop - you can't buck the market - better they drop now and quickley
AT LAST I hope that the bitter fools in UK who rejoice in falling house prices (who invariably did not work hard enough or save enough for a deposit to buy one) can see that this is a very bad situation for EVERYONE.
Indeed, if they don't own a property now they may NEVER own their own home due to credit restrictions or just cos prices will NOT tumble because people just won't sell unless they have to. A crucial difference between UK and US mortgages is that UK mortgage holders can't walk away from their debt - the incentive to do all thy can to stick it out is therefore about a million times higher than in US....perhaps time for some humility this side of the pond?
AT LAST I hope that the bitter fools in UK who rejoice in falling house prices (who invariably did not work hard enough or save enough for a deposit to buy one) can see that this is a very bad situation for EVERYONE.
Indeed, if they don't own a property now they may NEVER own their own home due to credit restrictions or just cos prices will NOT tumble because people just won't sell unless they have to. A crucial difference between UK and US mortgages is that UK mortgage holders can't walk away from their debt - the incentive to do all thy can to stick it out is therefore about a million times higher than in US....perhaps time for some humility this side of the pond?
"The only fix is time and people learning to live within their means again. And that means the economy will be slow for years to come even if the bailout for bankers goes through in the US."
Well, consumption is the great opiate of the masses, so I suspect we will all stay addicted to whatever funds we can get our hands on, at ridiculous prices (our credit card interest just hit 19%) rather than give up the spending drug.
However, if the "little people" do decide to live within their means, I doubt if this will be such a good thing. People will focus on the basics, and even then, curtail their use of things like electricity for heating. Farmers will need subsidies, because people will buy very little meat, due to cost. The profits of the supermarkets, with the exceptions of Lidl and Aldi, will go down the drain very quickly, because they rely on purchases of high priced luxury items, like chocolate, fresh fruit and vegetables/meat/fish and the like for their profits. Unemployment will soar in the retail sector. Housing defaults will increase, as more and more people walk away from mortgages they can no longer afford. And those same people who are tightening their belts and trying to live within their means had better plan for a smaller belt, because they will end up on the dole. Current subsidy (funded by borrowing from China) for a family of four on the dole? Around �170 a week.
"The only fix is time and people learning to live within their means again. And that means the economy will be slow for years to come even if the bailout for bankers goes through in the US."
Well, consumption is the great opiate of the masses, so I suspect we will all stay addicted to whatever funds we can get our hands on, at ridiculous prices (our credit card interest just hit 19%) rather than give up the spending drug.
However, if the "little people" do decide to live within their means, I doubt if this will be such a good thing. People will focus on the basics, and even then, curtail their use of things like electricity for heating. Farmers will need subsidies, because people will buy very little meat, due to cost. The profits of the supermarkets, with the exceptions of Lidl and Aldi, will go down the drain very quickly, because they rely on purchases of high priced luxury items, like chocolate, fresh fruit and vegetables/meat/fish and the like for their profits. Unemployment will soar in the retail sector. Housing defaults will increase, as more and more people walk away from mortgages they can no longer afford. And those same people who are tightening their belts and trying to live within their means had better plan for a smaller belt, because they will end up on the dole. Current subsidy (funded by borrowing from China) for a family of four on the dole? Around �170 a week.
There is a simple solution. Stop allowing banks to create money out of nothing but debt foisted on the citizenry, and return to an archetypal gold-based currency system in which goverment performs its proper role of prosecuting fraud whenever a bank issues more banknotes than it has gold. Of course, this means governments cannot run deficits, buy votes with soical welfare programs, or prosecute unnecessary wars. Heaven forbid that we start living with integrity!
You stray from the constitution and this collapse is what you get. They should have all been hung for treason in 1913.
=============================================
In America the mortgage and banking crisis is just a "catalyst" and cost of the Fannie May & Freddie Mac fiasco is pocket change compared to what's about to happen. Twenty years hence Americans shall look back upon 08/09 as the good years, as were posed to enter a prolonged depression.
With the help of the Neoconservatives, Republicans, Bush administration and Federal Reserve the big banks such as Citi, Countrywide, Wash Mutual, BA, JP Morgan etc. were allowed to dump hundreds of billions of dollars of toxic mortgages on both Fannie May and/or Freddie Mac. Making the "6 trillion dollars" in home mortgages they hold a "giant cesspool" of subprime mortgages dumped on the America taxpayer.
The Stock Market has been seriously damaged over the last 9 years from changes implemented by Texas Senator Phil Gramm (now a McCain adviser) who's also responsible for the "Enron Loophole" which allowed unregulated Utility trading, brought down Enron and destroyed the employee pension fund.
In America we need to start looking at the Gramm-Leach-Bliley Act passed in 1999 that repealed the second Glass-Steagall Act which barred investment banks and retail banks from merging. The Gramm-Leach-Bliley, among other things, allowed a single institution to create debt-based investments and sell them. That�s what started the financial catastrophe in America and maybe the World. America needs to prosecute and imprison a few politicians, financiers, lobbyists and bankers whom for years changed laws to rig the game in favor of investment banks. Then investigate banking, investment banking and various Federal Agencies that policed and/or signed off on this mess. The basic premise behind the Gramm-Leach-Bliley Act could have been promoted and/or sold by USA and London Investment Bankers all over the World. How else could banks in every country be on the same page with the same exact problems? Citizens of the World should be very angry about the fact that starting shortly after the Gramm-Leach-Bliley Act was approved by Congress in 1999 the amount of CDO, CDS and CL0's issued in the World during the year 2000 went from 0 to 918 billion dollars then soared to "72 TRILLION DOLLARS" by the end of 2007. America and England are Mecca for World financial transactions. In America, both Federal and state Attorney Generals, FBI, SEC and law enforcement agencies all over the world, especially England, should be investigating these financial transactions.
What amazes me most about this financial crisis is the lack of newspaper stories and editorials asking for investigations Worldwide of the possibility that security fraud may have occurred on a very, very large scale.
================================================
The pending depression is a "manufactured crisis" that is out of control with infighting amongst the "Elitists" over our tax dollars.
CHANGE ANYONE????
Let's change the game plan and play on turf belonging to the Elitist Robber Barons of America and the World.
The only defense we Americans have against Corporatism is staged "protests" with citizens targeting key officials in Congress and "Board of Directors, CEO's, big stockholders of major corporations" that are inflicting pain upon society.
However, this time lets change the game plan ---- protest by picketing their "homes, churches, social clubs" and "children and/or grandchildren homes, grade and high schools" with bold signs and hundreds of peaceful protesters. Let the media, executive families and community know the dastardly deeds these Elitist heads of state, various corporations and/or industries have committed.
In time, the elitist officials "family, children and friends" should put heat on them to make these "embarrassing" public protests stop. Sooner or later the government will get involved to settle the dispute. Let Democracy rein and citizens again be in control of their government.
Follow local laws and keep the protests legal as you want them jailed not yourself.
That's Democracy folks� time to act.
===============================================
OK the conventional wisdom is that inflating the money supply could have prevented the great depression. Maybe, maybe not. I might be more persuaded if someone can explain to me how applying ink to paper in a special way can heal a sick distorted debt ridden world?
One poster thinks that the 'world' will be saved if Senator Obama is elected the next president of the USA. When the economic crisis broke last week in the USA, Senator Obama opted to stay out campaigning for his next desired job as US president. He told the lead Democrats in Washington DC that IF THEY thought he could contribute ANYTHING to the bail out process to let him know and he would return to Washington DC. These members of his own political party DID NOT think he could contribute to solving this crisis and did NOT invite nor urge him to return to Washington DC. Obama, himself, didn't even know what he could do to contribute to saving the USA and world economy so he stay out to campaign for president. Obama ONLY returned to Washington DC so that he could avail himself of a photo opportunity to be at the White House with President Bush and Senator McCain. It was Senator McCain who took it upon himself to suspend his presidential campaign and return to Washington DC to fulfill his duties as an elected US Senator. It was Senator McCain who requested a meeting at the White House with Pres. Bush to which Senator Obama was invited by the Republican president. Senator Obama was not needed in Washington DC even by his own party members. How can anyone rationally believe that Senator Obama would have the sound judgment, dedication, and ability to prioritize crisis events to become a 'world leader'? Senator Obama has shown the world that his first interest was to continue to run for the office of US President while ignoring his duties as an elected US Senator. Given a clear opportunity to show case any leadership skills in a crisis, Senator Obama stayed away from the US Senate. Again, his own party members did not demand, beg, nor urge him to return to Washington to help resolve this economic crisis. He clearly was not viewed as 'essential' in addressing this national crisis with a global impact.
What international reviews on this crisis are failing to incorporate into their analysis of these events and the demands of Sec. of Treasury Paulson, is the violation of the US Constitution in such a rescue package, including but not limited to Sec. Paulson's demand for absolute control, unlimited funding, and no judicial review.
Americans are aghast that this fundamental document of American freedom has been so tattered in this process. Protests have taken place across this USA this weekend but little media coverage on these historic events as American citizens are protesting the attack on the US Constitution and our sacred, fundamental rights.
POLITICIANS, mostly on the Democrat side, are DESTROYING this country with their idiotic legislation & regulations.
Then they stand on their soapbox & proclaim, "how could this happen"... find someone else to blame, then promise to pass more of the same legislation to fix "someone elses" problem.
It's criminal.. And the dumb taxpayers pay them to do it to their own country.
People need to wake up,
stop watching all the sports & movies & TV hours on end,
and pay attention to what's going on in their own government...
A.
Edmund Conway - Apparently when the "Economics Editor" vacancy developed it didn't exactly ignite a firestorm of quailfied candidates 'throwing their name in the hat'. Maybe just buddies with the boss. Please, don't let ..The Facts.. get in the way of your story.
1)you stated "..As the $700 billion plan...was thrown off the road by a cabal of conservative Republicans, the administration suffered an apparent nervous breakdown..."
TRUTH> The Democrats, led by Nancy Pelosi and Harry Reid..along with media spin machine, attempted to turn this event into something it's not. The Democrats are playing political 'hot potato' with this issue.
The Democrats have PLENTY of votes to get this $700 billion plan passed, WITHOUT any support of the "..cabal of conservative Republicans.."
With a president that already he will sign the $700 billion plan.
the Democrats have NO CONFIDENCE in this plan that they say the support SO MUCH.. They DO NOT want to put their butts on the line. SPINELESS as... It's the Democrats mess.. let them clean it up.
the "..cabal of Republicans.." in congress have been warning about this for the last 2-3 years.. with proposed legislation to head it off.
But Democrats have blocked them, since they control both houses of Congress.. Democrats know this is their mess.
The American public is e-mailing their legislators at a 300 to 1 rate AGAINST this bailout plan which is almost guaranteed not to work anyway.
If the Congress pushes this thru their will either be anarchy or a dictatorship. We're doomed.
Thanks for making some interesting comparisons to the Great Depression. I just want to point out to your readers that the topic of the Great Depression is quite complex and certainly controversial. There have been several books that expose or analyze different aspects (even though they disagree on several points). Read many of them before you crystallize your views. One viewpoint one seldom hears now is the one in "The Great Crash: 1929", by John Kenneth Galbraith, published in 1955. Here is a slightly abbreviated quote: �Here lies the threat to capitalism. It is what causes men who know that things are going quite wrong to say that things are fundamentally sound."
Of course, finding the right cure is a different matter and probably requires a bit more than a week....
Thanks for making some interesting comparisons to the Great Depression. I just want to point out to your readers that the topic of the Great Depression is quite complex and certainly controversial. There have been several books that expose or analyze different aspects (even though they disagree on several points). Read many of them before you crystallize your views. One viewpoint one seldom hears now is the one in "The Great Crash: 1929", by John Kenneth Galbraith, published in 1955. Here is a slightly abbreviated quote: �Here lies the threat to capitalism. It is what causes men who know that things are going quite wrong to say that things are fundamentally sound."
Of course, finding the right cure is a different matter and probably requires a bit more than a week....
This is the financial patriot act, a cover of panic, to loot the treasury and destroy the constitution.
The law cannot undo what liars have done, only the truth can undo liars, this law contains no truth.
It is merely a last feast for the hogs of Wall street and Washington a last supper on the taxpayers tab, before they close the restaurant and flee the country.
Oh so many voices no wonder Italy has so many governments.
Marks comment 27 9 10 54 very correct,Brown s totally at fault.
But this is a golden oppurtunity as long inflation is controlled and savers are protected.
Govertment can pick up assets a quarter or less of their value.
Then begin a huge energy building programme with the emphasis on green tech.Creating new jobs and weaning us off outside energy suppliers.Finally let capitalisum have its head again but be ready to step into control its excesses
There seems to be two possible outcomes at this point:
A) no bailout, a lack of available credit, and an ensuing contraction of the monetary supply which will cause deflation, which will cause a major recession.
B) a bailout, printing of money to pay for said bailout, which will cause inflation, which will a cause a hopefully-not-quite-as-major recession.
Either way it looks like recession is probably inevitable, unfortunately...
Economic policy should not be the work of political hacks on either side of the aisle, nor for that matter even a subject for government action.
We will suffer the ills of the fools with us to the degree we permit markets to be tied to any political bent of the moment.
Drive an enlightened nation by the good sense of the greatest many against their needs and wants, the general welfare will win out over the desires of those freaks who seek to run the lives of everyone else.
Norman: "
Which one of you decided that the old rule of 10% down, one third of salary to home and no more than 3 times earning as the price to pay for a house decided not to buy because the numbers did not work?"
I'm one. I put down 14%, and my mortgage is now less than $60,000 because I insisted on a clause that I could pay extra money at any time to pay down principal, not interest. My combined mortgage, taxes and insurance are now less than $700 a month in an excellent neighborhood.
I can sit back and puff on my cigar with a grin.
'blackmailedamericantaxpayer'.
Best wishes to you and yours at this difficult time. There is no way out. Banks bust. Nations bust. That's economics when credit expansion leads to credit contraction, as we will all now experience for years.
Fortunately, you live in a country where your words and actions must be heeded. Pity your homeland, the UK. There's no answer here for the world's woes. There's only thieving politicians forcing through their inflation beating pay rises, expenses and index linked pensions by way of doing the same for their coterie of supporters: civil servants and public sector workers...all of them paid for by the second class citizens of the UK: the taxpayers employed in the private sector; the wealth producing sector; the sector being robbed blind by bail-outs of the kind now inflicting the U.S., but such bail-outs are commonplace in the U.K.
George Orwell was a visionary; an Englishman; a humanist.
George Orwell was despised by the British political elite.
Good luck, and God bless to you and yours. It's a funny old world. Somehow, the masses do find ways to survive their 'masters'. We'll do it this time, as we've always done it.
Personal responsibility, and dogged determination will ensure it, in my opinion.
God bless our American cousins, wherever they are.
The Telegraph has assembled a coterie of youngish journalists, who seem to have a slim grasp of reality.
Mr Conway seems to think it remiss of our government not devising a plan to: "keep the financial system - and hence the wider economy - afloat."
Our economy is fine, except for the gross distortions in house prices and house purchase lending. Just as in the US.
In the real world, Mr Conway's view that house prices are down 10% and will fall by that figure again are simply laughable.
In 1997 house prices were 5 times average earnings. In 2007 they were 10 times average earnings. They need to halve over the next year or so.
At that point our "economy" can be re-floated. At the moment is levitating 100 feet above the water.
Apologies.The 1939 figure I previously mentioned should be 1.7m.
I am surprised at the comment that "Britain survived the slump that followed the Wall Street Crash quite easily.."
Edmund Conway must have had ancestors living somewhere else, or studied economics outside the mainstream. I refer to the "Abstract of British Historical Statistics" by Mitchell & Deane, published Cambridge 1962. The percentage of workers unemployed in the UK in 1929 was 11%. This rose by 1932 to 22.5%. In terms of total numbers this was an increase from 1.2m to 2.7m. I do not think those extra 1.5m unemployed thought they had survived "quite easily". Even by 1939, when the UK was virtually on a war footing, unemployment was still 11.7m. If Edmund Conway thinks the next decade could be worse, I would like to see the mechanism by which this would come about be explained. Is he talking about unemployment over 25%?
No matter what the fools in Washington DC or London do, the die is cast. The US is already in a recession and it will become a depression. If the bailout plan passes it will just prolong the agony and make any recovery that much slower to arrive. Please tell me, what is the logic that says sending $700 Billion Dollars to banks and financial institutions that have been incompetent and corrupt will solve the problem? You would have to be a world class fool to think that this bailout will do any good at resolving the crisis.
Here is a good one for those of you in the US that feel aggrieved with the proposed bail out T&C's.
http://online.wsj.com/article/SB122247015469280723.html
I always apply a "follow the money" technique as one of my methods of analysis. In this case an internal financial crisis in the US would merely mean a continual redistribution of wealth would occur as a function of time. Of course the economy would function at greater or lesser efficiency as a result, but would continue "as normal". Although this would cause terrible problems for some, the overall net effect would be zero. However, we live in a global economy now, so in this case it seems that a communist country has reaped the reward and created a 21st century giant which will now set the tone for the next 50 years of this century at least. The USA and other Western nations have effectively bankrolled the creation of China and all but bankrupted themselves for years to come. Didn't Lenin say that a Capitalist was one who would sell you the rope you hang him with? Not much profit in this type of transaction. All the USA can do now is inflate it's currency massively to dump the debt and follow the successful capitalist/authoritarian model of China. Let's watch and see it happen, as we pawns have no say in it.
It�s becoming clearer by the day that the whole world needs a brand new financial system, one aimed at the real economy and the common good, and not only at providing large profits and uncheched power to the fat cats and the "smartest guys in the block." As one FT columnist suggested the other day (of all places), finance is a thing too serious to be left to private hands. So, the exit door to this crisis is gathering the political will to convert all such a dysfunctional and vested interests-dominated system in a functional one aimed at supporting the real productive economy (specially infrastructure), which will be the only way to avert a worldwide-scale depression. As a starting point, French president Sarkozy's proposal for a soon international meeting to discuss a new world financial architecture should be taken seriously.
This is a whole civilizational crisis, and no amount of "business as usual" wishful thinking will suffice to reverse it.
Here is a good one for those of you in the US that feel aggrieved with the proposed bail out T&C's.
http://online.wsj.com/article/SB122247015469280723.html
Here is a good one for those of you in the US that feel aggrieved with the proposed bail out T&C's.
http://online.wsj.com/article/SB122247015469280723.html
Ludwig von Mises wrote, "there is no way to avoid the collapse of a boom brought on by credit expansion. The alternative is only whether the crisis should come sooner as a result of a voluntary abandonment of further credit expansion, or later as a total catastrophe of the currency involved."
Ludwig von Mises wrote, "there is no way to avoid the collapse of a boom brought on by credit expansion. The alternative is only whether the crisis should come sooner as a result of a voluntary abandonment of further credit expansion, or later as a total catastrophe of the currency involved."
The volume of self serving BS contained within the majority of these comments is pathetic.
Tell us, which one of you now in �angst� did not invest in property?
Which one of you decided that the old rule of 10% down, one third of salary to home and no more than 3 times earning as the price to pay for a house decided not to buy because the numbers did not work?
Every one of you that did not stick to these rules of thumb has directly contributed to this fiasco. Full stop, end of story and good night, get over it.
You are as individuals have much to answer for and stop blaming others for feeding your greed.
Can you believe there was some idiot harping on about the Marshal Plan and repaying the debt in the context of this discussion?
To all my friends in the UK, motherland of my country, the United States, do not be fooled.
At least 90 percent of the citizens of the USA are opposed to any bailout of the crooks of Wall Street who cooked the books at Lehman, Bear, Fannie and Freddie and AIG.
Our blind media is not telling the public that all five of those companies, and 22 other unnamed companies, are under investigation by the F.B.I. (Federal Bureau of Investigation).
Lehman Brothers reported a 2nd quarter 489 million dollar profit in March 2008. They then sold around 4 billion of new stock in April. Less than 6 months later they declare bankruptcy. If that isn't fraud my good friends, I don't know what is. Yet, the American public is never alarmed by our complicit, corrupt news organizations.
Large protests at the Obama/McCain debate against the bailout were not broadcast on any network.
Fortunately the last few Americans left who have honest jobs, the middle class, who pay all the taxes to support the rich and poor alike in this dishonest country, are flooding Capitol Hill with phone calls. We're sending emails and there have been many ugly things said in no uncertain terms to some very powerful people. Slowly we are losing our fear of our corrupt leadership as we see that the F.B.I. is weak and lazy and they simply can't arrest us all.
Please Brits, help us, the desperate middle class, help us stop the corrupt US Government from seizing even more power. Please demand that the UK put pressure on the USA to arrest more criminals on Wall Street immediately to restore US credibility in the markets. Act now, our national elections are only a month away and this is the only time Congress listens to the little guys just struggling to make ends meet in what the media claims is the richest country in the world.
You hear me United Kingdom? Please help us stop Wall Street Corruption ! Show us how to demonstrate against corrupt government. Give me some pointers on how to stop a corrupt government from growing even larger and more corrupt.
Thank you.
$700,000,000,000 in new debt is simply trying to put out a fire with gasoline (or petrol). What goes up (stock prices, housing prices) must -- and will -- come down. A $700bn bailout simply postpones the inevitable mandatory market correction, and saddles the American taxpayer with yet additional public debt. What's even more horrific is that everyone knows it. This is being rammed through without any input from taxpayers.
Those of us that have always lived within our means are especially angry. I obtained a regular mortgage with a sound bank, I have zero other debt (that's right, zero), don't even have a credit card, and have zero other debt. Why the hell should I pay for others' mistakes, lies, and greed?
A good question that no one seems to have addressed yet is "What happens if this bailout plan fails? What's Plan B?"
Maybe it's because everyone knows already yet is too afraid to say, eh? The parallels in the economies of the Hoover administration and the Bush administration are frighteningly similar.
A second Depression is coming. It's only a matter of when.
To all my friends in the UK, motherland of my country, the United States, do not be fooled.
At least 90 percent of the citizens of the USA are opposed to any bailout of the crooks of Wall Street who cooked the books at Lehman, Bear, Fannie and Freddie and AIG.
Our blind media is not telling the public that all five of those companies, and 22 other unnamed companies, are under investigation by the F.B.I. (Federal Bureau of Investigation).
Lehman Brothers reported a 2nd quarter 489 million dollar profit in March 2008. They then sold around 4 billion of new stock in April. Less than 6 months later they declare bankruptcy. If that isn't fraud my good friends, I don't know what is. Yet, the American public is never alarmed by our complicit, corrupt news organizations.
Large protests at the Obama/McCain debate against the bailout were not broadcast on any network.
Fortunately the last few Americans left who have honest jobs, the middle class, who pay all the taxes to support the rich and poor alike in this dishonest country, are flooding Capitol Hill with phone calls. We're sending emails and there have been many ugly things said in no uncertain terms to some very powerful people. Slowly we are losing our fear of our corrupt leadership as we see that the F.B.I. is weak and lazy and they simply can't arrest us all.
Please Brits, help us, the desperate middle class, help us stop the corrupt US Government from seizing even more power. Please demand that the UK put pressure on the USA to arrest more criminals on Wall Street immediately to restore US credibility in the markets. Act now, our national elections are only a month away and this is the only time Congress listens to the little guys just struggling to make ends meet in what the media claims is the richest country in the world.
You hear me United Kingdom? Please help us stop Wall Street Corruption ! Show us how to demonstrate against corrupt government. Give me some pointers on how to stop a corrupt government from growing even larger and more corrupt.
Thank you.
just think all the money the USA took from UK from two world wars lost through American bankers greed. .
It is clear indication of the collapse of the system and leaving the citizens in the hands of the vultures.All the wall st execs made a killing and made all the observers fools.There were clouds out there at the sea and winds but made us beleive that nothing is going to happen.all of them worked on absurd pay packages, flaunted wealth, advised buy and they sold,treated the funds raised by complicated methods from banks and squandered.
The savings of all the third world,arab world and reserves of all the countries vaporised inthe wall st with tacit understanding of the fed reserve.Now the rescue is an attempt to further mortagauge the future of the americans and make the third world toil .
They're telling us our home is on fire and, if we don't leave by nightfall, we will all be burned alive. Do you not see them waiting outside, laughing as we flee, then walking through our front door and settling onto the couch?
Induced panic has been a tool of tyranny since Rome. Fortunately, here in the US, for now, we retain the tools needed to, eventually, set things right.
They're telling us our home is on fire and, if we don't leave by nightfall, we will all be burned alive. Do you not see them waiting outside, laughing as we flee, then walking through our front door and settling onto the couch?
Induced panic has been a tool of tyranny since Rome. Fortunately, here in the US, for now, we retain the tools needed to, eventually, set things right.
Aah..the blame game. The blame lies with the majority of US voters who still insist on treating the elections as a Rah-Rah football game and when I hear the words "We are a Republican/Democrat family/State I hang my head in despair.
Dubya's pedigree and credentials were well aired prior the last elections. His slim grasp of the English language, his business incompetence, his spoiled rich boy attitude and arrogance, his lack of knowledge and even interest of what exists outside the borders of the Continental US was well known.....but what the hell "Grandad voted Republican all his life so will I" ...What price the one party State in land of the free.
I believe this financial crisis will not just be a financial crisis but an economic one which will surpass that of the great depression, and when is all said and done only a handful of banks will remain for each country. Once b&b give up on finding a mentally insane wealthy man to rescue them then they will fall with the sound of "self-certified mortgages" ringing firmly in there ears.
The only institutions left will be hsbc, rbs if they are lucky, barclays, jp morgan chase, bank of america, bnp paribas, goldman sachs, and the worlds most smartest and financially savvy bank of 'em all SANTANDER.
You know it makes me sick to see what is happening today in the world. Is this your idea of progress and so called civilisation that led my people to be slaughtered like the buffalo? I have part native american blood (Sioux Lakota) and moved to the UK because my family could not stand the agony of living in the United States after the genocide over many years.
When will you, pro unchecked capitalist vultures be satisfied? Until the people are begging for mercy and on their knees once again? The answer is definitely NOT MORE CREDIT! Western society is corrupt and rotten to the core and it's because of economists and so called experts such as yourself tyring to keep the people subdued with debt,debt and more debt. The world must know that debt = nothing more than control. I guess that's why the banks and governments are panicking so much. If people lived within their means and worked together in small communities looking out for each other, we wouldn't need central command & control. I am sick to the back teeth of people like you. All you care about is the pathetic consumerist society which is poisoning the environment mankind needs to thrive. The world led by the West and in particular the ideology of the USA has become one great big consumer market.
I leave those of you who should know better with a famous warning:-
When all the trees have been cut down,
when all the animals have been hunted,
when all the waters are polluted,
when all the air is unsafe to breathe,
only then will you discover you cannot eat money.�
You know it makes me sick to see what is happening today in the world. Is this your idea of progress and so called civilisation that led my people to be slaughtered like the buffalo? I have part native american blood (Sioux Lakota) and moved to the UK because my family could not stand the agony of living in the United States after the genocide over many years.
When will you, pro unchecked capitalist vultures be satisfied? Until the people are begging for mercy and on their knees once again? The answer is definitely NOT MORE CREDIT! Western society is corrupt and rotten to the core and it's because of economists and so called experts such as yourself tyring to keep the people subdued with debt,debt and more debt. The world must know that debt = nothing more than control. I guess that's why the banks and governments are panicking so much. If people lived within their means and worked together in small communities looking out for each other, we wouldn't need central command & control. I am sick to the back teeth of people like you. All you care about is the pathetic consumerist society which is poisoning the environment mankind needs to thrive. The world led by the West and in particular the ideology of the USA has become one great big consumer market.
I leave those of you who should know better with a famous warning:-
When all the trees have been cut down,
when all the animals have been hunted,
when all the waters are polluted,
when all the air is unsafe to breathe,
only then will you discover you cannot eat money.�
"In the meantime, the authorities must get the cost of borrowing down, or watch the housing market tumble to new lows."
No, you don't get it either, just as Bush doesn't. The problem is that easy credit was abused and there's too much debt in the system now at all levels. More credit is not going to fix this problem.
The only fix is time and people learning to live within their means again. And that means the economy will be slow for years to come even if the bailout for bankers goes through in the US.
Oh great, another toxic economist dumbing down us goyim for highway robbery!
Oh great, another toxic shyster economist! With economists like you, who needs enemies?
The rain it raineth on the just
And also on the unjust fella
But mostly on the just, because
The unjust steals the just's umbrella.
Lord Bowen
Fed chairman Bernake, is an expert on the 1929 Great Depression. Reading about the Great Depression many of the basics are identical - deregulation led to fraud, cheating, stealing. Heavy credit investments in stocks and real estate came crashing down. Buying on margin(credit) and many other things. IF BERNAKE IS AN EXPERT ON THE GREAT DEPRESSION WHY DID IT HAPPEN AGAIN. SHOULD HE HAVE USED HIS POWER AND KNOWLEDGE TO STOP WHAT CAUSED THE FRIST DEPRESSION? Why did this expert let this happen??? IS everyone sleeping- did't see 911 coming - ignored an impending depression until it may be too late-
Would all the 'bailout' money be fairly utilised or would Goldman and Morgan get more than their fair share to ensure they would be among the few still standing if/when this is over and thereby clean up? Would banks be in a position to pass on interest rate cuts anyway? Does the credit junkie need another fix, or is it time for some 'tough love' at long last? Should bank deposit saving rates reduce in the current very uncertain economic environment, the resultant poorer risk/reward ratio of investing a good proportion of my assets in UK bank sterling accounts would convince me to withdraw a substantial sum to invest elsewhere, thus denying that bank crucial capital. If wobbly banks have recently found the need to go cap in hand to sovereign wealth funds etc. who have demanded interest rates of 9%-10% to offset any risk potential, why should we prudent savers not be similarly compensated, particularly as deposit rates minus real inflation rates currently results in continued reduction in purchasing power. But these are just details, the real problem is that for several decades we have gone down the dead end of unbacked fiat money, allowing greed, corruption and political expediency to wreck the system. It is unlikely that the powers that be would ever allow us to return to 'real' money and sound monetary principles as they would no longer be able to harvest us and cream an easy living off our toil and their scam would finally be over.
Plan: bankrupt U.S., declare martial law, assume dictatorship
1) Mein Kampf/Project New American Century
2) 3rd Reich/43rd Administration
3) Reichstag fire/9-11
4) Austria (Anschluss)-Czechoslovakia (Munich Agreement)-
Poland/Afghanistan-Iraq-Iran
5) Enabling Act/Patriot Act
6) Gestapo/Blackwater
7) Weimar Republic depression/Federal Reserve bailout
Would all the 'bailout' money be fairly utilised or would Goldman and Morgan get more than their fair share to ensure they would be among the few still standing if/when this is over and thereby clean up? Would banks be in a position to pass on interest rate cuts anyway? Does the credit junkie need another fix, or is it time for some 'tough love' at long last? Should bank deposit saving rates reduce in the current very uncertain economic environment, the resultant poorer risk/reward ratio of investing a good proportion of my assets in UK bank sterling accounts would convince me to withdraw a substantial sum to invest elsewhere, thus denying that bank crucial capital. If wobbly banks have recently found the need to go cap in hand to sovereign wealth funds etc. who have demanded interest rates of 9%-10% to offset any risk potential, why should we prudent savers not be similarly compensated, particularly as deposit rates minus real inflation rates currently results in continued reduction in purchasing power. But these are just details, the real problem is that for several decades we have gone down the dead end of unbacked fiat money, allowing greed, corruption and political expediency to wreck the system. It is unlikely that the powers that be would ever allow us to return to 'real' money and sound monetary principles as they would no longer be able to harvest us and cream an easy living off our toil and their scam would finally be over.
They should reward the responsible Banks instead of saving the irresponsible. Paulson's plan is a short term solution.