Re: OT - How to think like a righty

On Aug 31, 11:10 am, "David Goldberg" <daagoldb...@xxxxxxxxx> wrote:
"kenzaburo" <James.B.Reyno...@xxxxxxxxx> wrote in message

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On Aug 30, 9:34 pm, "David Goldberg" <daagoldb...@xxxxxxxxx> wrote:
"kenzaburo" <James.B.Reyno...@xxxxxxxxx> wrote in message

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On Aug 30, 3:08 pm, "David Goldberg" <daagoldb...@xxxxxxxxx> wrote:
"theBZA" <dewe...@xxxxxxxxx> wrote in message

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Neil Cavuto on Fox Noise last night was lambasting home owners who
"got in over their heads" and now want government help getting out.
He
reminds that "it all comes down to personal responsibility" and "No
one makes us sign mortgage papers. We sign them." He opposes
government bailouts for homeowners facing foreclosure due to
questionable loans.

But he supports a federal bailout of banks and lenders who *made*
the
quesionable loans. He supports a federal bailout of the investors
who
bought the "securities" of packaged questionable loans. He thinks
the
government should bail these folks out with direct financial
assistance and by further cutting interest rates. He thinks it would
be "good for the market. It would stabilize the market."

So, people who already made a lot of money lending bad money should
be
bailed out. The people facing the loss of their homes need to stand
and and take "personal responsibility." Typical right-wing thinking.
Help the corporations and screw the people.

Neither should be bailed out, and we should privatize our money supply
so
this nonsense cannot happen again.

If there were no bailouts, you'd see the economy react not unlike an
automobile running without any motor oil. It would be ugly.

You're saying private enterprise cannot exist without a government to
provide "bailouts"? Are you serious?

That's not at all what I said. I was speaking specifically about the
current situation. Given the degree of sub-prime (and to a lesser
degree, hedge fund) defaults, government $$ injections were required
in order to stabilize the economy (I don't really see it as a
"bailout", but that point is debatable). Otherwise, it would be a
catastrophe unlike anything we've seen in recent memory (IMO). Walk
through it from the ground up and it becomes pretty clear.

I disagree. Banks and hedge funds that made risky investments should be
allowed to fail. The economy as a whole will not suffer. Our money supply
is around $12 trillion, and these bad investments number in the low hundreds
of billions.

You can't have profit without some risk.



For the record, I'm not advocating zero penalty against the lenders,
but I think if the government were to do nothing it would be
devastating. Do I *know* this? I'm not nearly that smart, but I do
know some smarter folks in the know who tell me it's a very slippery
slope. Central banks have intervened under the banner of maintaining
liquidity in money markets - an especially sore spot after the events
of 1998 when LTCM (famous hedge fund) went bankrupt in the wake of the
Asian financial crises and Russian debt default. During that last
spell 11 banks were organized in New York to buyout the remaining
positions of multi-billion dollar fund that was well on its way to de-
railing the US financial system. Life eventually got back to normal.
The truth is no one knows what would happen if gov'ts adopted a
laissez faire approach since it's never been tested, particularly in
an era when derivative contracts are used rampantly. The LTCM
experience is the closest we can get to simulating recent events. In
the short term, trading would likely grind to a halt and it would
become almost impossible to obtain capital

.

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