Economic Crisis of 2008/2009

[WanderingKnight]

This is not capitalism. This is a nasty mix of corportism, debtism, and socialism.

Capitalism has been slowly being smothered to death since 1913. This fall was predicted decades ago by people schooled in the Austrian school of economics.

You've just described what capitalism has evolved into since the big crash of 1929. In the seventies, however, there was a big comeback of the classic approach to a laissez-faire market, boosted by the boom of communication and so-called globalization.

See China today and you'll see that free-market capitalist policies are alive and well even in today's world. The US in particular likes to pound itself in the chest when it comes to defending the freedom of the market. That, however, doesn't seem to stop them from intervening in the market when things get ugly.

By the way, Bush's "one dollar, one dollar" speech was quite funny since something very similar was said by Argentine president Duhalde in 2002 with the huge crash of the neoliberalist policies taken during the 90s.

(And also, Argentina was taken as a prime example as to why and how neoliberalist policies can crash and burn so awfully--one just has to wonder why the US government hasn't paid attention to that).

[Kyuusai]

Originally Posted by Xellos-_^

just this march he told the wsj he was all for dereg. Its only last 2 weeks that he all for more regulation.

Originally Posted by cors8

McCain has been a gymnast this past week on the economy.

Both accurate. "Regulation" and "deregulation" are very broad terms, of course. It's the specifics that matter.

It's a pity I can't pos-rep WanderingKnight's post. It deserves it.

[mg1942]

Originally Posted by WanderingKnight

(And also, Argentina was taken as a prime example as to why and how neoliberalist policies can crash and burn so awfully--one just has to wonder why the US government hasn't paid attention to that).

Many countries benefited from it because they seek to escape the stagflation era of the '70s. Yours might be an isolated case. Of course, Neoliberalist policies can crash and burn if it's not well implemenmted, or if policies have many loopholes.

[WanderingKnight]

Yours might be an isolated case.

It is an isolated case in the sense that it was one of the countries where neoliberalist policies were applied more ruthlessly--but that doesn't change the fact that the US is seeing things crash and burn for exactly the same reasons.

[cors8]

http://news.yahoo.com/s/ap/bank_change

The last 2 giant investment banks, Goldman Sachs and Morgan Stanley, are now classified as bank holding companies.

This means they can create commercial banks and are under regulation from the Federal Reserve.

[yezhanquan]

Yesh.. With that move, the top 5 investment banks in the US has ceased to exist.

[4Tran]

Originally when I heard about this government bailout, it looked like they were panicking, and doing what they could to prevent some sort of massive stock market crash. At the time, it smelled pretty fishy since it didn't seem to address any of the main problems, and because a crash was (and still is) all but inevitable. All it would seem to accomplish would be to delay the crash and cause it to be more severe than if no action had been taken. It depended on at what value the government was going to buy up the debts for. If it was little more than nothing (what they're really worth), then it wouldn't be such a horrible deal, but if it was anywhere near their face value, then the taxpayers were going to get hosed.

As we get more information, my feelings on the matter have changed, and I see it more and more like nothing short of kleptocracy in action. It seems to be nothing other than an unlimited amount of funds given over to the Treasury for little apreciable gain (other than delaying the crash for a period of time). In effect, it's:

Give us $700,000,000,000 now, and more when we ask for it.

It's hard to think up of uglier legislation than this. That is, other than spending gold reserves as part of the deal, and that already seems part and parcel of the package. The big spike in commodity prices (+$25 for oil in a single day! Are you kidding me?) is a sign of things to come.

Originally Posted by james0246

It was the "Greatest Generation" that removed our currency from the gold standard and helped to create the Federal Reserve that has so foolishly squandered our resources.

Moreover, while the Federal Reserve's recent (from Greenspan on) policies have been a bad idea, moving away from the gold standard was an inevitablity. Instead of being some sort of universal panacea, a gold standard serves to artificially constrict the economy and prevent a lot of the reaction to events that the Federal Reserve is capable of.

[Reckoner]

Personally I'd like to throw the CEO's of Merrill Lynch, Fannie May and Freddie Mac, Lehman Brothers, and AIG all in jail for being crooks and idiots. Also, these guys do not deserve to walk out of their jobs with like ten million dollars. "Sorry we fired you for screwing up badly and sending our economy further into a downward spiral, so here's ten million?" This is disgusting.

[Vexx]

This is beginning to look like The Last Great Looting Of The Treasury by the administration before they leave.....

yeah, yeah, rush that through, don't read the fine print - everything was fine til last week.
And the Dem leadership will be too spooked and scared to say, "hey wait a minute..." and ignore the alarms from their own ranks.

[Xellos-_^]

Originally Posted by Reckoner

Personally I'd like to throw the CEO's of Merrill Lynch, Fannie May and Freddie Mac, Lehman Brothers, and AIG all in jail for being crooks and idiots. Also, these guys do not deserve to walk out of their jobs with like ten million dollars. "Sorry we fired you for screwing up badly and sending our economy further into a downward spiral, so here's ten million?" This is disgusting.

disagree with you regarding Merrill's ceo since he only been on the job since ate last year. Him selling merrill to bofa was probably only thing that save it form bankruptcy. All the other ceo's need to be tar and feather.

[OtseisRagnarok]

Again, aren't these the same conditions that led to the Great Depression? Speculative buying, buying on credit, banks collapsing.
If you ask me, it was all engineered by the global illuminati to gain further control over the world's banking system. Too many banks spoil it for them, so they're trying to bottleneck the competition.

[Solace]

Originally Posted by OtseisRagnarok

Again, aren't these the same conditions that led to the Great Depression? Speculative buying, buying on credit, banks collapsing.
If you ask me, it was all engineered by the global illuminati to gain further control over the world's banking system. Too many banks spoil it for them, so they're trying to bottleneck the competition.

There's no global hidden agenda group. Just global greed and stupidity.

Since I can't figure out how to link to the specific videos, I'll just link the page:
http://60minutes.yahoo.com/segment/193/obama_mccain

Watch the clips of McCain and Obama on the Economic Crisis. I'll be honest, McCain earns points for saying "we screwed up".

Edit: Adding this gem:

"The reason why they're tumbling down so much is because nothing has happened," Ladenburg Thalman analyst Dick Bove told CBS News correspondent Anthony Mason. "We don't know exactly when the government's gonna step in. We don't know exactly what the government's gonna buy."

http://news.yahoo.com/s/ap/20080922/...P8hiH1NPxv24cA

It's Monday. The economic plan was outlined Friday. Did investors expect the government to snap their fingers and fix everything over the weekend?

[Xellos-_^]

So the foreign companies want the US to buy thier worthless securities but their country is not willing to chip in to help out.

http://www.nytimes.com/2008/09/23/bu...l?ref=business

i say if your government isn't willing to chip in then no bail out.

[Vexx]

Originally Posted by Solace

Edit: Adding this gem:



http://news.yahoo.com/s/ap/20080922/...P8hiH1NPxv24cA

It's Monday. The economic plan was outlined Friday. Did investors expect the government to snap their fingers and fix everything over the weekend?

Wall Street and their major investors this today (and most of this week) reveals themselves to be whining crybabies who got caught breaking the cookie jar. These aren't typically individual investors but the large institutional investors -- whom I've found over the years to have an impact far exceeding their collection of clues.
Everyone take notes on which congressmen leap in to "protect the CEOs from these 'dealbreaking' ideas" like taking responsibility for their actions.

[4Tran]

Originally Posted by OtseisRagnarok

Again, aren't these the same conditions that led to the Great Depression? Speculative buying, buying on credit, banks collapsing.

There's a bit of difference between then and now. In the runup to the Great Depression, much of the world's economy was reliant on German war reparations, and the German economy's collapse was its trigger. We also haven't seen a bank run anywhere close to that of 1929 yet. Of course, if a massive bank run of that nature were to occur, we'd be in even more trouble since banks are so under capitalized nowadays. Still, what we're seeing is the biggest financial crisis since then, and it'd be foolish to try to underplay that. What the governments haven't admitted to yet is that a major stock market collapse is inevitable and that they'd be better off trying to mitigate the effects of such a collapse rather than trying to futilely prevent it.

Originally Posted by OtseisRagnarok

If you ask me, it was all engineered by the global illuminati to gain further control over the world's banking system. Too many banks spoil it for them, so they're trying to bottleneck the competition.

There's no need to reach for conspiracy theories here. This mess can be attributed to simply human greed and concentration on short-term profits at the expense of long-term disaster.

Originally Posted by Solace

It's Monday. The economic plan was outlined Friday. Did investors expect the government to snap their fingers and fix everything over the weekend?

It's actually a bit more complicated than that. If anything, the government probably should have been taking more of a wait-and-see attitude than this wild flailing about. So far, there have already been huge amounts of oftentimes weird regulations placed on the market, and there's so much flux in the rules that massive swings are inevitable. It's awfully hard to figure what's up when the rules that were in play at the opening bell have been thrown out the window by the closing bell. Well... that and investors are dumb.

[Green²]

Originally Posted by 4Tran

It's hard to think up of uglier legislation than this. That is, other than spending gold reserves as part of the deal, and that already seems part and parcel of the package. The big spike in commodity prices (+$25 for oil in a single day! Are you kidding me?) is a sign of things to come.

The bailout weakens the dollar further, so just about everything could be expected to go up in cost. But they are just betting that you won't notice it until after the elections.

[4Tran]

Originally Posted by Green²

The bailout weakens the dollar further, so just about everything could be expected to go up in cost. But they are just betting that you won't notice it until after the elections.

That's only partially the problem. The reason why commodities went up so much yesterday probably had more to do with the fact that investors were fleeing from equities. The government bailout plan doesn't do much to bolster confidence in that sector, so they started panicking. What I was referring to is that this instability is going to create a lot of wild swings on Wall Street for the next little while.

If Nouriel Roubini is right, inflation isn't going to be a significant problem for the foreseeable future, and he's been on the money so far.

[Vexx]

To some extent... its kind of interesting watching a pack of testicle-waving "tough wall street bulls" so rapidly dissolve into screaming little girl squids because "mommy" might be telling them to play nicer.

Cheering my Oregon congresspeople on for saying "hey wait a minute!" (both the Dem and Repubs). Actually, I'm cheering on all the Repubs in the Senate and House saying "hey wait a minute" when they're reading the fine print.
First clear indication that the fascist lock-step might be shearing a bit.

[karasuma]

http://www.fedupusa.org/

[karasuma]

The problem

The solution