Rolling US Economy Into The Shitbin Thread

The National Debt clock (which now greets you on the BBC homepage) irritates me for some reason.

I think it's the font of 'family share'. All that money and they put something so cheap looking. So unlike property developers to do that.

http://static.guim.co.uk/sys-images/Guardian/Pix/pictures/2008/10/08/bell512.jpg

what's crazy to me is that we're running full-steam into government ownership of both 1) investment finance 2) retail finance and 3) homes (i.e. mortgages) but not because there's any great plan or ideas about what to do with these things

I guess the plan is that the government will divest itself of all these assets once it's safe to do so.

All these rescue plans seem to be predicated on the assumption that the state can and has to be the final guarantor of the system, but isn't all this something of a shell game? Banks won't lend to banks, so the government provides a pool of money that they can lend from. To set up this fund, governments issue bonds that banks buy. So banks really are lending to banks, aren't they? With the figleaf that the government will cover any bad debt. But with what money? With the money the banks lend them, via bonds. It's a confidence game. But if Iceland goes bankrupt, won't bonds suddenly seem a whole lot less safe? Is there a chance that banks will not only not lend to banks, but not lend to governments either?

Then governments can print money and inflate our way out of the crisis, hooray!

It worked for the Weimar Republic! Oh wait...

Worked for Germany

http://www.bitsofnews.com/images/graphics/economy/weimar2.jpg

and Zimbabwe

http://starphoenixbase.com/wp-content/uploads/2008/04/zimbabwe-zim-currency-slide.jpghttp://newsimg.bbc.co.uk/media/images/40094000/jpg/_40094536_zim102203.jpg

xpost

note the time limit on the zimbawean bank note.

Talking to a friend in the civil service last night revealed that all spending targets for health, education, child poverty, everything are in tatters now. No one has a fucking clue what effect this is going to have on overall spending.

I think we do have a clue, there is going to be less of it, or higher taxes, or both.

Sign of the times, AP can't afford to send a snapper out for a photo of the new improved debt clock.

Lol Simon Heffer.

Will Hutton and Larry Elliot predictably on the other side of the debate.

http://www.guardian.co.uk/business/blog/2008/oct/08/economics.creditcrunch
http://www.guardian.co.uk/business/blog/2008/oct/08/economics.creditcrunch

oh jeesus that heffer article

Anyone over the age of 40 will recall the abiding result of the days when we had a socialist economy in this country: poverty. We had better prepare for some more of that.

heffer = hysterical nincompoop

This notion that governments bailing out banks = socialism is one of the more ridiculous memes generated by the crisis.

i just love the idea there's been no poverty since thatcher took power

I guess the plan is that the government will divest itself of all these assets once it's safe to do so.

It would be a shame if the (US or UK) govt doesn't use its presumably temporary equity stake in the banks and in the homes of millions of citizens to institute a few diktats -- environmental stuff, city planning stuff -- some of which will hopefully bring in the ducats over the long term regardless of what happens to the billions in shitty mortgages

CalculatedRisk blog linked to a remarkably prescient Paul Volcker speech given at Stanford in early 2005. I couldn't find the transcript of the speech online, but I did find this op-ed from the Washington Post which he adapted from the speech. I guess his warnings sort of fell on deaf ears at the time:

An Economy On Thin Ice
http://www.washingtonpost.com/wp-dyn/articles/A38725-2005Apr8.html

This notion that governments bailing out banks = socialism is one of the more ridiculous memes generated by the crisis.

― Zelda Zonk, Thursday, October 9, 2008 6:57 AM (2 hours ago) Bookmark Suggest Ban Permalink

Whether it's ridiculous or not, I'd be upset if it wasn't out there. For years the right has criticized government-controlled/funded education and medical using just that term and to not bring it up at this time would be hugely hypocritical. Glad they are sticking to their guns.

Many aren't

This notion that governments bailing out banks = socialism is one of the more ridiculous memes generated by the crisis

"In America, the only respectable form of socialism is socialism for the rich." --John Kenneth Galbraith

i just love the idea there's been no poverty since thatcher took power

I just love the idea that there wasn't any poverty until socialism.

So if we keep this up maybe we won't have to go to war with the Russians again. They will be comrades!

Wait I thought the Russians were the cowboy capitalists now?

nyt savages greenspan niiice http://www.nytimes.com/2008/10/09/business/economy/09greenspan.html

Ms. Born was concerned that unfettered, opaque trading could “threaten our regulated markets or, indeed, our economy without any federal agency knowing about it,” she said in Congressional testimony. She called for greater disclosure of trades and reserves to cushion against losses.

Ms. Born’s views incited fierce opposition from Mr. Greenspan and Robert E. Rubin, the Treasury secretary then. Treasury lawyers concluded that merely discussing new rules threatened the derivatives market. Mr. Greenspan warned that too many rules would damage Wall Street, prompting traders to take their business overseas.

*mouth agape*

“We have the irony of a free-market administration doing things that the most liberal Democratic administration would never have been doing in its wildest dreams,” American financial historian Ron Chernow told The New York Times.

dow below 9000 now

http://consumerist.com/5061209/mothers-cookies-goes-out-of-business-kills-off-circus-animals

In the cat fight between market-force deflation and government-backed inflation, deflation seems to be beating the shit out of inflation right now.

i like the limp-dick day wallstreet is having right now, esp considering the DOW UP 100 OMG from 11 AM this morning

For those of you who aren't too savvy on this kind of fan-meets-feces stuff that's happening lately, if delfation beats the living shit out of inflation, then money is going to be scarce as frog hair until a shit ton of debt has been repudiated, and credit will be tighter than a howler monkey's anus for the next several years.

defaltion == v. high unemployement rates & many bankrupt businesses & people with cash in their pocket will keep it there.

Mother's Cookies Goes Out Of Business, Kills Off Circus Animals

noooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooo

ooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooo

Senate begins probe on AIG's allocation of bailout funds:

http://www.reuters.com/article/rbssFinancialServicesAndRealEstateNews/idUSN0931689720081009

ill

also lol 600 pts

jesus

So, uh, basically we're all fucked and the bailout is already revealed to be a huge fucking farce, right?

I was thinking about the American right's obsession with communism/socialism and their tendency to associate anything they oppose with it - whether its market regulation, healthcare, civil rights, etc. It seems to me that they always return to this canard because opposing Stalin/Mao/Castro/whoever was pretty much the only time the American right ended up being on the right side of history. McCarthyism, Vietnam, and other misadventures notwithstanding, this is the one issue in the 20th century that conservatism can actually conceivably claim the moral high ground on: Stalin/Mao/Castro were a bunch of totalitarian bozos who needed to be opposed, and history has largely vindicated this POV. So any time the right is trying to win an argument, they always try to steer it back to this topic as if it is the only safe rhetorical ground that they are familiar with and comfortable with defending. The problem is most issues CAN'T be related to the "glorious struggle against international communism" and thus the more time has elapsed since the end of the Cold War, the more ridiculous and desperate this tack comes across.

many x-posts

I'm hearing the "socialism" term a lot - what confuses me is hearing Obama branded as "socialist" for his health care plan, but not the entirety of Congress and Bush getting the same label for the bailout, despite the bill itself being called "socialist."

680 pts down 7.33% that's epic.

A lot of this right rhetoric is basically "Support the team, denounce the management" which has been the GOP's trick into winning elections since Nixon. What's making this election potentially historic is that many people who felt comfortable with the above are going to become disappointed/shocked en masse. It happened a little when Clinton won in 1992, but Clinton's victories were always rationalized with "that damn Perot" being a factor. If Obama wins, it won't be a Clinton style win, much to the chagrin of the Clintons.

I love the fact that the base don't get why they are losing. Barring events or an awesome Republican presidential candidate who persuades them how retarded they're being, this could be the start of a British Labour-in-the-1980s style wilderness.

Wrong thread. Sorry Tombot.

Sheeeit, I thought my "Dow will hit 1,000" post was a joke...

Mackro, do you expect Obama to renounce his "I love markets" pander? (I heard him say it.)

Is the bailout's prime benefit sposed to be psycho-lo-logical? cuz that $ "isn't in the system yet," NPR keeps saying.

my maternal Republicans-4-life family are all going crazy right now. It's interesting because they say they all like Palin, don't really like McCain, are really afraid of Obama, etc. but they're telling me things about the government that sounds like they've been reading the fucking Daily Kos! ("Brian, you know they have a cure for cancer and a cure for AIDS. They just won't give us the information because the pharmaceutical companies want to profit", etc.) So, I think there are a lot of incredibly delusional, loud, and highly conflicted Republicans right now.. and it's kinda scary, given that many of these people are a bit trigger happy, literally.

Morbs: I'm honestly surprised Obama isn't suffering more for his partaking in the bailout, or more to the point, that McCain isn't hopping on the anti-bailout bandwagon, but I was told above that being anti-bailout was bad for the election. (well, no shit, nothing is "good" right now, right?) On this issue, Obama's lucky he's against McCain and not against pretty much any other Republican candidate (stressing "this issue")

Was it literally "I <3 Markets"?