Mortgage bail-out rallies markets, Light at the end of the credit crunch tunnel.

moanymoany

justpurchased wrote: »

Abuse!!!!!!!

Come on DD - we all know it's you..... :kisses:

Since you 'came out' the spelling and grammar has had a miraculous conversion.

No, stop messing about... :rotfl:

geoffky

Dan: wrote: »

It just shows how desperate some people are for a crash.

How can people be desperate for a crash when they have one ?:j

Dan:_4

geoffky wrote: »

How can people be desperate for a crash when they have one ?:j

Do they? Depends on your defination of 'Crash' I suppose

Cannon_Fodder

as at 19:33 GMT the Dow Jones is down 1.7%...

http://newsvote.bbc.co.uk/1/shared/fds/hi/business/market_data/overview/default.stm

so the recovery is holding nicely...

mewbie_2

Took me a while, apologies for that. The 'light at the end of the tunnel' is the white hot light of total meltdown. Although actually the more usual comment is it's a train rushing towards you. Either will do.

Armageddon outahere. Thanks Spike.

Dithering_Dad

moanymoany wrote: »

Come on DD - we all know it's you..... :kisses:

Since you 'came out' the spelling and grammar has had a miraculous conversion.

No, stop messing about... :rotfl:

Hang on, I thought I was you. Confused now!

ruggedtoast

Lets be clear about one thing. The bail out of the supposedly impervious Freddie and Fannie is a crisis reaction to a total systemic financial failure. A failure of planning and a failure of policy that has once again left the top echelons of the financial elite even more powerful than they were before while pouring effluent over the rest of us.

This bail out is not good news, in any sense, it is a catastrophe that will end up inflicting a world of pain on everyone who has to work for a living.

A bit of light relief

http://www.counterpunch.org/whitney08292008.html


http://www.counterpunch.org/whitney09082008.html



Excerpt:


MW: The housing market is freefalling, setting new records every day for foreclosures, inventory, and declining prices. The banking system is in even worse shape; undercapitalized and buried under a mountain of downgraded assets. There seems to be growing consensus that these problems are not just part of a normal economic downturn, but the direct result of the Fed's monetary policies. Are we seeing the collapse of the Central banking model as a way of regulating the markets? Do you think the present crisis will strengthen the existing system or make it easier for the American people to assert greater control over monetary policy?
Michael Hudson: What do you mean “failure”? Your perspective is from the bottom looking up. But the financial model has been a great success from the vantage point of the top of the economic pyramid looking down. The economy has polarized to the point where the wealthiest 10% now own 85% of the nation’s wealth. Never before have the bottom 90% been so highly indebted, so dependent on the wealthy. From their point of view, their power has exceeded that of any time in which economic statistics have been kept.
You have to realize that what they’re trying to do is to roll back the Enlightenment, roll back the moral philosophy and social values of classical political economy and its culmination in Progressive Era legislation, as well as the New Deal institutions. They’re not trying to make the economy more equal, and they’re not trying to share power. Their greed is (as Aristotle noted) infinite. So what you find to be a violation of traditional values is a re-assertion of pre-industrial, feudal values. The economy is being set back on the road to debt peonage. The Road to Serfdom is not government sponsorship of economic progress and rising living standards; it’s the dismantling of government, the dissolution of regulatory agencies, to create a new feudal-type elite.
The former Soviet Union provides a model of what the neoliberals would like to create. Not only in Russia but also in the Baltic States and other former Soviet republics, they created local kleptocracies, Pinochet-style. In Russia, the kleptocrats founded an explicitly Pinochetista party, the Party of Right Forces (“Right” as in right-wing).
In order for the American people or any other people to assert greater control over monetary policy, they need to have a doctrine of just what a good monetary policy would be. Early in the 19th century the followers of St. Simon in France began to develop such a policy. By the end of that century, Central Europe implemented this policy, mobilizing the banking and financial system to promote industrialization, in consultation with the government (and catalyzed by military and naval spending, to be sure). But all this has disappeared from the history of economic thought, which no longer is even taught to economics students. The Chicago Boys have succeeded in censoring any alternative to their free-market rationalization of asset stripping and economic polarization.
My own model would be to make central banks part of the Treasury, not simply the board of directors of the rapacious commercial banking system. You mentioned Henry Liu’s writings earlier, and I think he has come to the same conclusion in his Asia Times articles.

sarkin

The light at the end of the tunnel for this bail out is just some idiot with a torch

MrMalkin

sarkin wrote: »

The light at the end of the tunnel for this bail out is just some idiot with a torch

I don't think daft catchphrases really add much to the discussion.

Ultimately a lot of commentators in the States think that the bail-out will be a good thing. Sure, it's a big hit in the short term, but when all's said and done the US taxpayer is getting a nice big chunk of two massive and industry-leading companies for a pittance. The US government is perfectly able to weather this storm and when the credit crunch blows over they will stand to make a lot of money on this investment.

Remember, the huge liabilities they are assuming will in the most part be repaid with a decent profit to be had. No matter what the doomsayers may think, the vast majority of mortgages issued by Freddie and Fannie are viable and will be paid off as expected, only a small percentage are sub-prime and not all of those will default.

mewbie_2

Do you want to buy some magic beans? Pound each and they will grow all the way to heaven.