Except that the government doesn't have the money to meet FDIC failed deposits. It also doesn't have any way to meet the Fanny Mae and Freddy Mac guarantees. It's BROKEN and their "bail out" is not going to actually help all of the companies and individuals who have more than $100,000 in one bank.
We have no real free market; instead partial government regulation, Federal insurance and partial controls that have CREATED this issue.
What they will do, is manage the mess to hide their lack of ability to meet the FDIC and Fanny Mae/Freddy Mac historical requirements while hiding amidst the crisis. In the end, there will be no government involvement beyond "taxpayer" investments.
It will undo a system in place for many years, recently broken by failure to provide oversight in government involvement. Economists have long been forecasting these events, starting in 2001; no legislator acted, instead our gridlocked parties, each without a solution or agenda that in total flowcharts to consistent success, drew salaries, often on bank boards - like McCain.
It's a wee bit hard to sit by and listen to the rhetoric that profit is bad for "big executives" as if we live in a socialistic regiem. [A $500,000 salary is still acceptable - I see?]
The solution will reduce only the government losses, the financial fall is of course the market righting itself. Buying and selling, and repackaging and selling unsecured or partially secured and mostly vapor debts in the way of real estate loans under the umbrella of Freddy Mac and Fanny Mae was just the start, but it began in the late 1990's.
If you didn't notice, American's continual denial that there IS A PROBLEM, complete failure to understand the credit systems, and unwillingness to change anything seems to be broken wide open. As I drive around the Matrix's spell seems to have lifted. Everyone sees the huge number of homeless beggars, storefronts empty, and worse.
The press continues to report the full ramifications on CNN and network news.
The ramifications for the American dollar as unsecured loans are made, and the government begins to play the market are also huge.
This is far too little too late.
Add to this the potential insurance giant liquidity changes from socialized medicine, and it's the END of the WORLD as we know it?
|| Obnosis.com
Date: Sun, 28 Sep 2008 21:11:52 -0700
From:
eric.cope@gmail.com
To:
plug-discuss@lists.plug.phoenix.az.us
Subject: Re: OT: Emergency Buy Out
I thought I answered that question. Yes. The longer we drag this out, the harsher it will be when the house of cards falls. You can not prevent the economic cycle. Good companies will survive. Bad ones will fail. It is absolutely required that this cycle take place. Its how progress is enabled.
On Sun, Sep 28, 2008 at 5:16 PM, Craig White <
craigwhite@azapple.com> wrote:
On Sun, 2008-09-28 at 16:52 -0700, Eric Cope wrote:
> If you could point out the free market, I would appreciate it. A free
> market has two required market forces, profit AND loss. When the
> government removes the chance of loss (like with Fannie, Freddie,
> FDIC, etc), people and corporations are not only permitted, but
> encouraged to participate in foolish economic agreements. We do not
> enjoy a free market. We are enduring within a perverse bastardized
> socialist system.
>
> Oh, and by the way... the only depression we have ever suffered is due
> to government interference.
>
> And, if we have artificially overhyped our economy with tax-based
> systems, then yes, we need a recession to bring us back to reality.
> It was the housing bubble that knocked some sense into people
> regarding real estate. They would have learned their lesson if we
> didn't bail them out...
>
> Economics is not about generating warm fuzzies for everyone. Its about
> doing whats right for everyone. That does not include giving anything
> to anyone.
----
"Oh, and by the way... the only depression we have ever suffered is due to government interference."
It's a good thing you aren't resorting to simplistic blame for
historical events.
I think it was revealed today that Hank Paulson dragged along his
previous compatriot, Lloyd C. Blankfein of Goldman Sachs to the Federal
Reserve meeting regarding the bailout of AIG insurance wherein it
becomes suspect because this is somewhat unprecedented. Paulson because
of his previous employment at Goldman Sachs knew that Goldman Sachs was
a major trading partner of AIG and that the failure of AIG would cause
substantial if not irreparable harm to Goldman Sachs. It's clear that
the conflicts of interest throughout are really, really ugly.
But again, all of the blame, finger pointing and decrying the lack of
true free market practice merely distracts from the question that I
asked...
If Congress elects to provide no aid other than to federally
insured/underwritings and you accept the premise that without providing
more capital to the market place and businesses continue laying off
people, investment portfolios continue to devalue...
are you willing to accept a recession, possibly a deep recession or even
a wide scale depression so that taxpayers do not 'bail out' private
interests?
I think that is a very key question and merely tossing blame doesn't get
anywhere near the answer...at some point, you have to stand up and be
counted.
Craig
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