People Power

Quote:

---

Originally Posted by BDunnell

Because the evidence shows that they don't seem to.

---

And what evidence is that?

The last time it was tried it worked so the ALL the Evidence points to let the free market correct itself is the right move.

Quote:

---

Originally Posted by chuck34

I did explain it, you just don't seem to like it. Let bankrupt companies go throght the bankruptcy procees where they will either restructure and/or their viable assets will be bought by other investors, corporations, or startups. This is exactly what happened in 1920 (yes the causes were different, but I'm talking about the consequences), the government allowed everything to go through its normal process, it was painful, but the recovery was quick.

---

You can't talk about the consequences without the causes.

I ask you again, where would the credit have been for all these acquisitions, startups and investors? I've asked you this several times now?

In 1920 the private sector was in good shape and adapted to the drop in government spending leading to a rapid recovery.

In 2008 the private sector was in awful state due to the drying up of credit thanks to the banking crisis. The state bailed parts of it out.

How can you possibly say that this wouldn't have made any difference to the consequences?

What you are saying doesn't make any sense, it sounds more as if you're reading from a propaganda book.

Quote:

---

Originally Posted by chuck34

I did explain it, you just don't seem to like it. Let bankrupt companies go throght the bankruptcy procees where they will either restructure and/or their viable assets will be bought by other investors, corporations, or startups. This is exactly what happened in 1920 (yes the causes were different, but I'm talking about the consequences), the government allowed everything to go through its normal process, it was painful, but the recovery was quick.

Just because you do not seem to want to accept any sort of painful process doesn't necessarily mean that that isn't what's needed.

---

Correct :up:

The likes of AIG, GM, banks etc were rewarded with bailouts for doing a poor job and running reckless businesses. It's like rewarding a criminal for breaking the law! The rest of the companies that had their houses in order were effectively penalised for their strong business models and disciplined trading.

What we have now is still weak bailed out organisations and false economies/markets. The current world problems will not go away until governments, companies and private citizens realise what the real problems are and stop trying to prop up weak structures. Until then, nothing is going to change.

And no, I am not interested in debating this post of mine, it's purely my opinion!

Quote:

---

Originally Posted by Malbec

You can't talk about the consequences without the causes.

I ask you again, where would the credit have been for all these acquisitions, startups and investors? I've asked you this several times now?

In 1920 the private sector was in good shape and adapted to the drop in government spending leading to a rapid recovery.

In 2008 the private sector was in awful state due to the drying up of credit thanks to the banking crisis. The state bailed parts of it out.

How can you possibly say that this wouldn't have made any difference to the consequences?

What you are saying doesn't make any sense, it sounds more as if you're reading from a propaganda book.

---

Sorry I'm not tuned into the financial markets as closely as I would like so i can't give you specific names. To know an unknowable past event that never happened, is a fairly hard task to accomplish. But to deny there would have been people stepping in is foolish.

The credit markets were freezing up because the government was wavering on what they were going to do. So no one wanted to do anything while the prospect of government intervention was hanging over everyone's heads. If they would have announced a policy of free markets, liquidity would have probably returned.

Quote:

---

Originally Posted by anthonyvop

The only thing that has altered are the things that are making things worse.

The Free Market is the Free Market. Whether it is 1920 or 2011 it works the same.

---

Despite all the changes it has itself undergone?

Big day today with the Occupy movement here in the USA.

The intention is peaceful but of course we will have all kinds of scenes developing throughout the day.

Occupy America | Common Dreams

An "Occupy" that hasn't been mentioned enough . . .

lest we not forget Japan:

Occupy Tokyo: Mass demonstrations go unreported by Japanese media -- Puppet Masters -- Sott.net

Quote:

---

Originally Posted by race aficionado

An "Occupy" that hasn't been mentioned enough . . .

lest we not forget Japan:

Occupy Tokyo: Mass demonstrations go unreported by Japanese media -- Puppet Masters -- Sott.net

---

Damn, where is a good sized Tsunami when you need one.

Quote:

---

Originally Posted by Bob Riebe

Damn, where is a good sized Tsunami when you need one.

---

Bob, are you seriously of the view that people whose opinions don't tally with yours deserve to be killed? Or is this another example of your well-known 'sense of humour'?

Even those of us who disagree vehemently with your opinions would never stoop so low as to advocate the death of you and your ilk.

Quote:

---

Originally Posted by chuck34

The credit markets were freezing up because the government was wavering on what they were going to do. So no one wanted to do anything while the prospect of government intervention was hanging over everyone's heads. If they would have announced a policy of free markets, liquidity would have probably returned.

---

Sorry but that doesn't tally with my understanding of events.

Correct me if I'm wrong but the whole problem kicked off when BNP announced that it had very serious reservations about the credit rating of CDS's and the rest of the world took note. When it was realised that BNP were indeed correct and that investors who had thought they were buying AAA packages were in fact buying a whole pile of home loans of variable ratings the system collapsed.

One of the problems with the banking sector is that while trades are performed almost instantaneously money isn't transferred until months later after the back office boys get through the paperwork. Financial institutions had no real way of determining what the liability of other organisations were to the CDS collapse. Given the size of the sums involved it was clear that some organisations would not survive, hence banks stopped lending money as they were unsure who owed what to whom and whether they'd still be around in a few months time.

This is why credit stopped flowing almost instantaneously, and those institutions that had increased their investment/asset ratios to stupendous levels to increase leverage and hence profit came to a shuddering halt and collapsed.

The government had nothing to do with the stop in credit, all they could do was react belatedly using central banks to release money in an attempt to get flowing again. Your version of events may be accurate for a later stage but it is not a description of the first days of the crisis.

Quote:

---

Originally Posted by BDunnell

Bob, are you seriously of the view that people whose opinions don't tally with yours deserve to be killed? Or is this another example of your well-known 'sense of humour'?

---

American conservatives don't have a sense of humor. It's all bitterness, anger, name calling and schadenfreude (handy word, by the way).

Quote:

---

Originally Posted by BDunnell

Bob, are you seriously of the view that people whose opinions don't tally with yours deserve to be killed? Or is this another example of your well-known 'sense of humour'?

Even those of us who disagree vehemently with your opinions would never stoop so low as to advocate the death of you and your ilk.

---

I guess I have been listening to too many "occupy" broadcasts snd have taken up their mode of thought.

Quote:

---

Originally Posted by BDunnell

Despite all the changes it has itself undergone?

---

Every one of those changes moved it further and further from a true free market. Remove most of the impediments and Voila!!! Problem solved.
The only regulation in the financial markets should be protection against Fraud.

Quote:

---

Originally Posted by Gregor-y

American conservatives don't have a sense of humor. It's all bitterness, anger, name calling and schadenfreude (handy word, by the way).

---

OH Lordy, Lordy ROFLMAO!
All one has to do is listen to sound clips how persons speaking for the stance of the Democratic Party speak of the Republicans, or their legislature and one will think conservatives are gutless wimps whilst the Democratic talking heads sound like hate filled raving lunatics.
Oh Lordy that one made my day.

Quote:

---

Originally Posted by Bob Riebe

I guess I have been listening to too many "occupy" broadcasts snd have taken up their mode of thought.

---

So, no apology for what you wrote, then? You don't think it went a little far, when no-one on here has ever said anything of the sort about you and your fellow free-marketeers?

Quote:

---

Originally Posted by Bob Riebe

OH Lordy, Lordy ROFLMAO!
All one has to do is listen to sound clips how persons speaking for the stance of the Democratic Party speak of the Republicans, or their legislature and one will think conservatives are gutless wimps whilst the Democratic talking heads sound like hate filled raving lunatics.
Oh Lordy that one made my day.

---

In what sense was that a response to the point made?

Quote:

---

Originally Posted by Malbec

Sorry but that doesn't tally with my understanding of events.

Correct me if I'm wrong but the whole problem kicked off when BNP announced that it had very serious reservations about the credit rating of CDS's and the rest of the world took note. When it was realised that BNP were indeed correct and that investors who had thought they were buying AAA packages were in fact buying a whole pile of home loans of variable ratings the system collapsed.

One of the problems with the banking sector is that while trades are performed almost instantaneously money isn't transferred until months later after the back office boys get through the paperwork. Financial institutions had no real way of determining what the liability of other organisations were to the CDS collapse. Given the size of the sums involved it was clear that some organisations would not survive, hence banks stopped lending money as they were unsure who owed what to whom and whether they'd still be around in a few months time.

This is why credit stopped flowing almost instantaneously, and those institutions that had increased their investment/asset ratios to stupendous levels to increase leverage and hence profit came to a shuddering halt and collapsed.

The government had nothing to do with the stop in credit, all they could do was react belatedly using central banks to release money in an attempt to get flowing again. Your version of events may be accurate for a later stage but it is not a description of the first days of the crisis.

---

What you say here is correct. However, just as the banks were starting to sort everything out, the govenment got wind of things, said "something" must be done, give us a bit to figure it out. So the credit market remained frozen while the government sorted out what "must be done". Then they came back with the cockamamie scheme of forcing the top nine banks to take billions in federal loans even if they didn't need them want them and said no to them. Then things got really interesting because you had banks which were forced to add money to their books they didn't want or need, so they ended up buying up more banks, making them not just too big to fail but too enormous to fail now. That really seemed to work out just swell. And to top it all off, employment went in the tank and hasn't even made an attempt at recovery. Credit is extremely had to get even if you have well established credit. The housing market hasn't recovered, and is still sliding in many areas. And inflation is starting to kick in.

How exactly has government intervention made things better here?

Quote:

---

Originally Posted by BDunnell

In what sense was that a response to the point made?

---

Even though his statement is absolute bs, IF-IF it were true, no matter how bad, conservative Rep. may be, liberal Dem. have proven themselves in recorded bytes to be far, far, far worse.

Quote:

---

Originally Posted by BDunnell

So, no apology for what you wrote, then? You don't think it went a little far, when no-one on here has ever said anything of the sort about you and your fellow free-marketeers?

---

Nope, I did not even bat an eyelash.

Quote:

---

Originally Posted by Bob Riebe

Even though his statement is absolute bs, IF-IF it were true, no matter how bad, conservative Rep. may be, liberal Dem. have proven themselves in recorded bytes to be far, far, far worse.

---

No, they have been proven to be worse in your eyes and those of people like you. This is a very different thing to factual proof.

Quote:

---

Originally Posted by Bob Riebe

Nope, I did not even bat an eyelash.

---

In that case, would you complain if someone here were to wish, say, a terrorist attack against a major corporation or financial institution? I think we know full well that you would consider it in bad taste and go on a rant about 'vacuous rhetoric' or some such familiar thing.

By the way, so would I consider such a thing in bad taste.

Quote:

---

Originally Posted by chuck34

What you say here is correct. However, just as the banks were starting to sort everything out, the govenment got wind of things, said "something" must be done, give us a bit to figure it out. So the credit market remained frozen while the government sorted out what "must be done". Then they came back with the cockamamie scheme of forcing the top nine banks to take billions in federal loans even if they didn't need them want them and said no to them. Then things got really interesting because you had banks which were forced to add money to their books they didn't want or need, so they ended up buying up more banks, making them not just too big to fail but too enormous to fail now. That really seemed to work out just swell. And to top it all off, employment went in the tank and hasn't even made an attempt at recovery. Credit is extremely had to get even if you have well established credit. The housing market hasn't recovered, and is still sliding in many areas. And inflation is starting to kick in.

How exactly has government intervention made things better here?

---

Are you kidding?

You realise that the CEO of Goldman Sachs along with other financial institutions actually cried as they begged for bailout money?

None of them were forced to take a penny. Do not rewrite history for your convenience.

It is the desperation that these financial institutions showed when they were on their knees contrasting with their arrogance now as they claim they didn't need the bailout money that is so distasteful.

Now you say that credit is still hard to get, how much easier would out have been if the government hadn't underwritten those banks three years ago?

Sure things are not easy with government intervention, i'm arguing things would have been worse without.

Quote:

---

Originally Posted by BDunnell

In that case, would you complain if someone here were to wish, say, a terrorist attack against a major corporation or financial institution? I think we know full well that you would consider it in bad taste and go on a rant about 'vacuous rhetoric' or some such familiar thing.

---

No a terrorist attack is people killing people; a tsunami is an act of nature.

You could say a hurricane so strong, it sucked out all the windows in a building and leeches inside with them.

Quote:

---

Originally Posted by Malbec

Sure things are not easy with government intervention, i'm arguing things would have been worse without.

---

Yep and these boys just asked for another 13 billion of our tax money.

Fannie Mae CEO Michael Williams and Freddie Mac CEO Charles Haldeman have received, along with eight other executives, a combined $13 million in bonuses for their work at the failing companies. In the hearing before the House Oversight Committee, they argued that their compensation levels are necessary to attract the talented workers needed to see the companies through difficult times.

“We need to compensate our executives and employees to ensure that we have and keep the leadership we need to continue our progress,” Williams said.

Quote:

---

Originally Posted by Malbec

Are you kidding?

You realise that the CEO of Goldman Sachs along with other financial institutions actually cried as they begged for bailout money?

None of them were forced to take a penny. Do not rewrite history for your convenience.

It is the desperation that these financial institutions showed when they were on their knees contrasting with their arrogance now as they claim they didn't need the bailout money that is so distasteful.

Now you say that credit is still hard to get, how much easier would out have been if the government hadn't underwritten those banks three years ago?

Sure things are not easy with government intervention, i'm arguing things would have been worse without.

---

On GS you are right they "needed" the money. But reports at the time, and some private conversations I have heard about, say that the government made the top 9 banks take money so that no one could know for sure which banks were ok and which were not.

You are arguing things would have been worse. Perhaps you are right, at least in the short term. But this has been dragging on for basically three years now with no end in sight. I'm not sure that once you figure in the length of this, that you can claim a short painful crash would have been "worse".

Quote:

---

Originally Posted by chuck34

On GS you are right they "needed" the money. But reports at the time, and some private conversations I have heard about, say that the government made the top 9 banks take money so that no one could know for sure which banks were ok and which were not.

---

Is there not some degree of good sense behind that, in that it stopped people panicking about their money (a la the absurd scenes at Northern Rock branches in the UK)?

Quote:

---

Originally Posted by chuck34

On GS you are right they "needed" the money. But reports at the time, and some private conversations I have heard about, say that the government made the top 9 banks take money so that no one could know for sure which banks were ok and which were not.

You are arguing things would have been worse. Perhaps you are right, at least in the short term. But this has been dragging on for basically three years now with no end in sight. I'm not sure that once you figure in the length of this, that you can claim a short painful crash would have been "worse".

---

chuck, GS didn't "need" money as you put it, they NEEDED money with full capital bold underlined letters. As for your claim that the Fed forced banks to take their money I see no evidence for that although it would have added liquidity to the system. If the Fed did what the British did and charged exorbitant levels of interest (10-12% with added penalties for failure to repay) to the banks then I think those banks 'forced' to take that money would have kicked up a hell of a stink.

In the UK the government did not force anyone to take money, in fact HSBC who had run a very tight ship throughout were offended at the talk of bailouts. Barclays thought about it but turned to Arab investors instead as they were not in so much trouble. Money was lent to the banks that needed it at exorbitant rates and I'm pretty certain the government made a small profit out of that initial bailout, although it has subsequently had to take shares in two British banks.

Quote:

---

Originally Posted by Malbec

chuck, GS didn't "need" money as you put it, they NEEDED money with full capital bold underlined letters. As for your claim that the Fed forced banks to take their money I see no evidence for that although it would have added liquidity to the system. If the Fed did what the British did and charged exorbitant levels of interest (10-12% with added penalties for failure to repay) to the banks then I think those banks 'forced' to take that money would have kicked up a hell of a stink.

In the UK the government did not force anyone to take money, in fact HSBC who had run a very tight ship throughout were offended at the talk of bailouts. Barclays thought about it but turned to Arab investors instead as they were not in so much trouble. Money was lent to the banks that needed it at exorbitant rates and I'm pretty certain the government made a small profit out of that initial bailout, although it has subsequently had to take shares in two British banks.

---

I am posting from a phone so it is extremely hard to post links. However if you simply google "banks forced to take tarp" you will get a quick education on the subject. I am not simply making it up as you suggest.

Quote:

---

Originally Posted by Malbec

Are you kidding?

You realise that the CEO of Goldman Sachs along with other financial institutions actually cried as they begged for bailout money?

None of them were forced to take a penny. Do not rewrite history for your convenience.

It is the desperation that these financial institutions showed when they were on their knees contrasting with their arrogance now as they claim they didn't need the bailout money that is so distasteful.

Now you say that credit is still hard to get, how much easier would out have been if the government hadn't underwritten those banks three years ago?

Sure things are not easy with government intervention, i'm arguing things would have been worse without.

---

:up: Agree.
Funny how some people have such short memories.

Quote:

---

Originally Posted by Bob Riebe

Yep and these boys just asked for another 13 billion of our tax money.

Fannie Mae CEO Michael Williams and Freddie Mac CEO Charles Haldeman have received, along with eight other executives, a combined $13 million in bonuses for their work at the failing companies. In the hearing before the House Oversight Committee, they argued that their compensation levels are necessary to attract the talented workers needed to see the companies through difficult times.

“We need to compensate our executives and employees to ensure that we have and keep the leadership we need to continue our progress,” Williams said.

---

Looks like they were reading Dilbert, oh wait...

Quote:

---

Originally Posted by ioan

:up: Agree.
Funny how some people have such short memories.

---

Not all financial institutions needed, wanted, or desired tarp funds.

Funny how some that are ignorant chastise others' memories.

Quote:

---

Originally Posted by chuck34

Not all financial institutions needed, wanted, or desired tarp funds.

Funny how some that are ignorant chastise others' memories.

---

OK, only 90% needed it.

BTW in the US you can force a bank to take money they don't need?

Quote:

---

Originally Posted by ioan

OK, only 90% needed it.

BTW in the US you can force a bank to take money they don't need?

---

It was less than 90%

And yes the federal government has been allowed to grow so powerful in this country that they can force people to do pretty much whatever they want. In this particular case it was "take this money or we will saddle you with so many investigations and plug up your offices with so many investigators that you will literally not be able to conduct business".

Glad to see them move the smelly rentamobs out.

in the UK most of these protesters go home to the home counties, hypocrites with their iphones and the like. Batter them.

Quote:

---

Originally Posted by chuck34

I am posting from a phone so it is extremely hard to post links. However if you simply google "banks forced to take tarp" you will get a quick education on the subject. I am not simply making it up as you suggest.

---

OK fair enough I was wrong.

Interesting to hear quotes from the BoA CEO claiming that the TARPs were much needed at the time and things would have been much worse without them.

Before you deride others though chuck perhaps you ought to wonder if your claim that the credit crunch was government caused is correct. Was the government responsible for packaging home loans of different credit ratings as AAA?

The problem with this 'debate' is that you've already predecided that government is at fault. The banks misbehave, its the governments fault for mishandling the aftermath. If the government tries to preempt problems, its their fault for misbehaving. Try taking a step back.

Quote:

---

Originally Posted by Malbec

OK fair enough I was wrong.

Interesting to hear quotes from the BoA CEO claiming that the TARPs were much needed at the time and things would have been much worse without them.

Before you deride others though chuck perhaps you ought to wonder if your claim that the credit crunch was government caused is correct. Was the government responsible for packaging home loans of different credit ratings as AAA?

The problem with this 'debate' is that you've already predecided that government is at fault. The banks misbehave, its the governments fault for mishandling the aftermath. If the government tries to preempt problems, its their fault for misbehaving. Try taking a step back.

---

Have I once said the banks were not at fault? Have I once defended the banks? No quite the opposite in fact, I have said all along that they were in the wrong and that they should have suffered the consequences.

It is the government's fault for mishandling the aftermath of this bubble. It is also the government's fault for not properly investigating the GSEs (Fannie and Freddy). Bush requested that investigation numerous times, only to be stopped by Rep Frank ans Senator Dodd. And no Bush is not blameless either, he could have done more.

The whole situation is and was a mess. My whole argument is that the banks made a bunch of shady deals, and should have paid rhe price for them. But there were many points where the government stepped in "to make thimgs better for the greater good" only to make things worse. Their policies continued to inflate a housing bubble that should have never been inflated, or at the very least popped early on before much damage would have been done. Or failing that, they should have gotten out if the way and let the free market and well established bankruptcy proceedings take their natural course so that we could have moved through a very painful (yet natural and necessary) period of market correction.

Quote:

---

Originally Posted by chuck34

It was less than 90%

And yes the federal government has been allowed to grow so powerful in this country that they can force people to do pretty much whatever they want. In this particular case it was "take this money or we will saddle you with so many investigations and plug up your offices with so many investigators that you will literally not be able to conduct business".

---

There goes the land of freedom tag down the drain. ;)
Not that it's anything new.

Well well, look what happens in the land of freedom:

Officers in pepper spray incident placed on leave - Yahoo! News

Quote:

---

Originally Posted by ioan

Well well, look what happens in the land of freedom:

Officers in pepper spray incident placed on leave - Yahoo! News

---

We can do better than that. Here's the video:
UC Davis Protestors Pepper Sprayed - YouTube

Aren't people in the United States supposed to have some kind of right to peaceful assembly or something?