Politics + Economics = Armageddon

I think Nancy Pelosi has done a good job. The economy bubble has already bursted. It is just illusion. Why not save the US tax payers $700 billion?
I don’t have 401K, IRA or any form of investment. I have nothing but student loan and credit care debt, so I guess I have nothing to lose. Thanks to Bush Adminstration.

Yes, the economy bubble has busted, but there is still a $700 trillion derivatives bubble that is just waiting to burst.

Also I don’t blame Bush Administration. They’re just paper pushers. I think we should be pointing the finger at Greenspan / the Federal Reserve. Clinton also deserves some blame for his role in repealing the provisions of that Glass Steagall Act.

Thanks for outing yourself Johns Wu. I had no idea I Was subscribed to a wing-nut who is all too willing to let the bums who got us into this fix try and bail us out. Punch up this article from the world’s leading economist, with a few nobel prize winners included, who seem to disagree strongly with one Johns Wu.

John, you’ve just lost a lot of readers with your ranting. I used to like this site, but I have just lost ALL respect for you. I suddenly have no idea what your credentials are, but they are not strongly grounded in either reality or market economics. Stick rating bank deposit rates and credit card offers.

I’m actually of the opinion that they made a good choice. Here’s why.

Scenario 1: the bailout gets passed and the stock market falls.

Scenario 2: the bailout doesn’t get passed and the stock market falls…hard, real hard…

So either way the stock market will go down. Only difference is, all that debt stays in the hands of the financial institutions and doesn’t get strapped to the backs of tax payers. And eventually, the market will reach bottom and begin the slow climb up to “normal” levels.

Looks like this article has stirred up some debate!

Something has to be done to defuse the derivatives time bomb. The $700bn bailout may not be the best plan, but that’s b/c theres no EZ solution. Haters will argue that future generations of Americans will be footing the bill over the next 100 to 300 years, but the alternative is for OUR generation to re-live the great depression over the next 10 years!

I invite pencil pushing economist PhDs, to come up with a REAL solutions rather than criticizing real proposals.

For starters, one alternative is to force financial institutions to cut dividends on their stock, using the billions they save to cover their obligations.

I’ve been a bond trader at a very big boutique firm for over 17 years, and never have I seen credit spreads like this.

If I were a betting man, which I am, I would bet that Congress will have no choice but to approve this bailout in some new form. The lawmakers will tack on some new provisions to make people happy, but in the end, the Treasury has to step in. We are hearing that a new vote will come up on Thursday.

The politicians will put up a show, pretending like it’s a tough decision for them to make, but ultimately they will cave in. The pressure from the markets is like a gun to their heads. They have no choice, it’s just a matter of time.

In the meantime, there’s no telling how the markets will move. The financial landscape is changing and with so many daily fundamental changes, the old rules do not apply.

I’m not sure what credentials you have to post such a ridiculous rant, but the fact of the matter is that the bailout would just be another market manipulation by the hand of government. Who do you want controlling our banking, the private sector or the government? I will always choose the private sector because they act in self interest, and are motivated to make what they consider the best choice for themselves. Read up a little on some more advanced economic theory, like mechanism design, before freaking out about derivative bubbles. I won’t be visiting again, to read such garbage.

Time and time again we try to “correct” the market and all of its risk by creating artificial stimulus and look what it does! The end result is always inefficiency. Well my friends, I think we’re finally going to get a correction and is it going to hurt? Yes. Will we all be better off in the future? It depends on how YOU decide to play the game.

Bravo, John Wu, Bravo,

Someone needs to step out of the middle of the political rhetoric and tell everyone the emperor has no clothes.

The reason for going forward in the bailout is not to save the fat cats, it is to prevent a second great depression. We could potentially be witnessing historic events unfold before us. What happened after the great depression? WWII anyone? Russia is willing to cross borders for economic reasons (oil). Put people in economic crisis and they take desperate measures (Germany barrels of cash for bread in late 30s).

People need to inject some common money sense into the political speak the stupid politicians are throwing around. Our politicians are using this crisis for personal and political gain. And it is all because of this &*#$ election. And yes I think Pelosi is one of them. She either didn’t have the support to begin with and staged this, or she alienated her support by using the situation for personal and political gain. That also goes for any idiot who changed their vote for the same reason. No wonder we as a country have such a low opinion of our congress.

This is your money and well being at stake, not some nameless fat cat like some of the politicians are throwing around. YOU own some of these securities in your 401K, YOUR ability to get a future home loan is at risk and the resale value of YOUR existing home, YOUR job could be cut if the economy goes into a depression. The securities they are buying with the bailout will have value that can be at least partially recovered, if they don’t let this go on too long. I don’t care if they publically guillotine the financial officers and hedge fund operators, add that to the bill.

Doesn’t anyone who is criticizing John ever want to buy another home on credit, get better a better job or decent raise, not see their 401K drop like lead, or god forbid see their son or daughter in the middle of yet another war caused by economic turmoil?

For those of you who want analysis:

http://globaleconomicanalysis.blogspot.com/

The global banking system has frozen up, but they are just BUSINESS, and I don’t think they can keep the money in the bank forever. It is just a catch!
Everyone around the world is waiting for the rich American to “save” the world. What about the rich European and Asian? They are all “wait and see” while the Bush Administration throw $700 billion in US taxpayer money down a black hole.

Joe had an idea above, but he missed a few digits in his thought process. There are many more than 200 people in the US, Joe. 200 million people, each given 1 million dollars, doesn’t add up to 200 million but to 200 trillion (a few dollars more than the current crisis entails, no?).

Um, why is Nancy Pelosi “a hippie”…? Sounds like you’re the one mixing politics and economics.

Craig,
Thanks for the support!

FOLKS, THE FLEECING OF AMERICA STARTED YEARS AGO, ITS JUST NOW BEGINNING TO SHOW ITS UGLY HEAD. GIVING FREE HOMES TO EVERYONE THAT DID NOT DESERVE A HOME, THE REST OF US IS PAYING FOR THEIR HOMES. FOR THE VERY PEOPLE THAT DON;T WORK..
THE RANGELS, MAXINE WATERS, BARNEY FRANKS, DODD THE DE-O-CRATES.
I HAVE NEIGHBORS THAT GOT NEW HOMES, THEY DON’T MOW THEIR LAWNS, THEY HAVE JUNK EVERYWHERE. THE NEIGHBORHOOD HAS GONE TO TRASH. NOW WHICH IS BEST FOR THE NEIGHBORHOOD. RESALE THE HOMES OR LEAVE THE TRASH WHERE IT IS,, NOW THE GOVERNMENT IS STILL PUSHING HOME SALES WITH NOTHING DOWN. I HAVE A 1930 HOME, WHICH I PAID FOR AS A SINGLE MOTHER. WORKED TWO JOBS AND WENT TO SCHOOL AT THE SAME TIME. GOVERNMENT HAS NEVER PAID BE A DIME. I HAVE BEEN UNEMPLOYED AND DID NOT DRAW FROM THE GOVERNMENT. IT USE TO BE A DISGRACE TO ALLOW THE GOVERNMENT TO KEEP YOU UP. MY GRANDFATHER WOULD NOT ACCEPT SOCAL SECURITY. HE CONSIDERED IT WEL-FARE. WE HAVE NO SHAME ANYMORE.
IF WE HAD ALL THE BILLIONS OF DOLLARS THE WALL STREET WALKED AWAY WITH, IT WOULD JUST ABOUT PAY FOR THE BAILOUT. ADD UP JUST A FEW, START WITH FRANK RAINES, FRED AND FANNIE CEO, $90 MILLION, 162, 105,56, 44,42,24,19,16,13,9,8,22, THESE ARE MILLION DOLLARS CEO’S THAT WALKED AWAY TO THE GOLF GLUBS.
“HOW CAN SOMEONE WHO BLOWS A BILLION DOLLARS ON A POLITICAL CAMPAIGN BE FISCALLY RESPONSIBLE”?
NEED I SAY MORE.

I think the stock market and housing prices are still too HIGH, and there are still too many crappy bank like WaMu out there. We should just let them die instead of wasting our taxpayer money. NO BAILOUT !

I find it interesting when people who claim to be free market advocates are only that way when the markets are showing positive results or are “working” the way they want. But there is a flip side to free markets. We’re seeing that now. A true free market thinker will advocate that the markets do what they will do and those caught on the short side suffer the consequences. The argument that the bailout is a necessary evil, just doesn’t hold water if you feel capitalism and the free market system is the best one. Let the chips fall where they may. The market will work itself out and the country will emerge stronger than ever. But now, we just put an expensive bandaid on a wound that will not be healed by applying a bandaid. We’re going to regret this bailout. Big time.

Paulsen did not have the best idea. Gordon Brown of England has the policy now seconded by Nobel Economics winner Krugman. Finally, Paulsen has changed the plan so it resembles the British plan. He originally offered a 3 page document…What an insult. Read Krugman’s NY Times column today, you can get it online.

Because profit is “privatized” and debt is “socialized” the bailout is really corporate welfare.
It can be more accurately seen as socialism for the wealthy who will put it in their pockets and throw a party.

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Hah> This is not a made up comment.