Did NO ONE listen to Bernanke's testimony the other day?

[halik]

"No 700Bil bail out... huge government....government should give me 700bil... $10K/person... any random ignorant remark about 700b"

Seriously, has did no one listen to Bernanke speak? Ron Paul himself ask him why are we meddling with free market and that we should just let shit happen. His response was that in the 1930s, that was Fed's exact plan of action. They let the banks fail and then just helped liquidate assets... the events that stemmed from that were "not very good".

Here's what happened to libor last week:
Text

Credit dried up overnight! I am one of the many, many people that have variable debt fixed to libor +xx (Gradschool loans that is). If that situation was allowed to unwind, i would find myself paying creditcard-apr rates on my college loans. Same goes for people with variable car loans, ARMs indexed to libor and so on.

The second thing that happened last week was that 3mo treasury bill yields were depressed down to near zero. If the demand for risk-free investments is so high that investors need near 0 return on their money, what kind of a return would they need for risky investments? Think about that one...

 

[brencat]

Sorry to depress you but I believe a Depression is unavoidable. We sowed the seeds of our destruction when we borrowed beyond our means. You can have one hell of a party and it can go on and on for a long time, but eventually it comes to an end and there is one hell of a hangover after the fact -- and the hangover is worse the longer the party is allowed to continue. That's why this bailout must fail. It will be painful no matter what. Let's just get on with it before we make it worse and wipe out the dollar even more.

Just because we haven't actually hit the ground yet, doesn't mean we weren't dead the moment we jumped out of a 50-story window. In other words, we were dead the moment we borrowed more money than we ever have the hope of paying back. That includes individuals living beyond their means, using their house as an ATM, and buying BMWs and plasma TVs on $30k salaries.

 

[DisgruntledVirus]

Originally posted by: brencat
Sorry to depress you but I believe a Depression is unavoidable. We sowed the seeds of our destruction when we borrowed beyond our means. You can have one hell of a party and it can go on and on for a long time, but eventually it comes to an end and there is one hell of a hangover after the fact -- and the hangover is worse the longer the party is allowed to continue. That's why this bailout must fail. It will be painful no matter what. Let's just get on with it before we make it worse and wipe out the dollar even more.

Just because we haven't actually hit the ground yet, doesn't mean we weren't dead the moment we jumped out of a 50-story window. In other words, we were dead the moment we borrowed more money than we ever have the hope of paying back. That includes individuals living beyond their means, using their house as an ATM, and buying BMWs and plasma TVs on $30k salaries.

I have about a $30k/yr salary, and I only have a plasma TV that I had to save up for out of your list....

 

[halik]

Originally posted by: brencat
Sorry to depress you but I believe a Depression is unavoidable. We sowed the seeds of our destruction when we borrowed beyond our means. You can have one hell of a party and it can go on and on for a long time, but eventually it comes to an end and there is one hell of a hangover after the fact -- and the hangover is worse the longer the party is allowed to continue. That's why this bailout must fail. It will be painful no matter what. Let's just get on with it before we make it worse and wipe out the dollar even more.

Just because we haven't actually hit the ground yet, doesn't mean we weren't dead the moment we jumped out of a 50-story window. In other words, we were dead the moment we borrowed more money than we ever have the hope of paying back. That includes individuals living beyond their means, using their house as an ATM, and buying BMWs and plasma TVs on $30k salaries.

We will be paying for one way or another, but having the credit markets dry up would be catastrophic. With the bail out, we can gradually unwind the assets for which the market pricing mechanism has failed.

It will be shitty and banks will go out of business/ take more losses, but it won't stop out credit system. It will merely return back to proper operations - that is only people that can afford the debt will get it.

 

[Genx87]

I really dont believe a lot of people understand that the banking industry isnt like letting ford fail. If the banking industry fails so does our economy. I hate bailouts but this is about the only one I can imagine that I would support.

Read the wiki article on the great depression and look at the reasoning behind it. It is like we are back in 29/30 all over again. Bail them out and regulate their ass.

 

[StageLeft]

So, Halik, do you think that we can either hit a depression immediately without bailout or use bailout and hit at least a long protracted recession, which you believe is preferable?

If it TRULY is the case that credit will dry up without 700B, sure we might as well fire that last round in the clip. I don't know that 700B is enough. It may simply drag this reckoning out several months. This is not 1930, though; could people not borrow from foreign banks? Granted, China just told its banks to stop lending to US banks, but is having foreign masters for a while an option, too?

 

[bl4ckfl4g]

I like how both (D) and (R) support capitalism when they are making money but support communism and theft when they don't.

 

[SP33Demon]

Originally posted by: halik
Credit dried up overnight! I am one of the many, many people that have variable debt fixed to libor +xx (Gradschool loans that is). If that situation was allowed to unwind, i would find myself paying creditcard-apr rates on my college loans.

I'm assuming you mean private, were you ineligible for federal?

 

[halik]

Originally posted by: bl4ckfl4g
I like how both (D) and (R) support capitalism when they are making money but support communism and theft when they don't.

Dude did you actually read anything in the o/p? The subtitle applies to you specifically...

 

[halik]

Originally posted by: SP33Demon

Originally posted by: halik
Credit dried up overnight! I am one of the many, many people that have variable debt fixed to libor +xx (Gradschool loans that is). If that situation was allowed to unwind, i would find myself paying creditcard-apr rates on my college loans.

I'm assuming you mean private, were you ineligible for federal?

I believe my unsubsidized feral and my MI-loan (out of business now, the auctions failed) are both variable. I know the latter is for certain, I had the option of going fixed or variable.

 

[Wreckem]

Originally posted by: bl4ckfl4g
I like how both (D) and (R) support capitalism when they are making money but support communism and theft when they don't.

The bailout is never going to get out of the House. A huge majority of the Dems and Repubs in the House oppose the bailout as planned.

 

[halik]

Originally posted by: Skoorb
So, Halik, do you think that we can either hit a depression immediately without bailout or use bailout and hit at least a long protracted recession, which you believe is preferable?

If it TRULY is the case that credit will dry up without 700B, sure we might as well fire that last round in the clip. I don't know that 700B is enough. It may simply drag this reckoning out several months. This is not 1930, though; could people not borrow from foreign banks? Granted, China just told its banks to stop lending to US banks, but is having foreign masters for a while an option, too?

I don't believe protracted recession is the case, if restart the pricing for securitized instruments it will be more like the late 80s debacle.

The combination of 700B for what basically amounts to a price floor on these assets and additional liqudity provided by central banks world wide will be enough to keep credit rolling.

As for your second question, libor stands for LONDON INTERBANK OFFERING RATE. It's the international market for banks to lend money to each other.

 

[bl4ckfl4g]

Originally posted by: halik

Originally posted by: bl4ckfl4g
I like how both (D) and (R) support capitalism when they are making money but support communism and theft when they don't.

Dude did you actually read anything in the o/p? The subtitle applies to you specifically...

Yeah I read it and I don't care. We shouldn't be bailing these idiots out. You commies support capitalism when you are making money and want to turn to socialism when you are flailing.

 

[bl4ckfl4g]

Originally posted by: Wreckem

Originally posted by: bl4ckfl4g
I like how both (D) and (R) support capitalism when they are making money but support communism and theft when they don't.

The bailout is never going to get out of the House. A huge majority of the Dems and Repubs in the House oppose the bailout as planned.

God I hope so but I have a bad feeling about it.

 

[SP33Demon]

Originally posted by: halik

Originally posted by: SP33Demon

Originally posted by: halik
Credit dried up overnight! I am one of the many, many people that have variable debt fixed to libor +xx (Gradschool loans that is). If that situation was allowed to unwind, i would find myself paying creditcard-apr rates on my college loans.

I'm assuming you mean private, were you ineligible for federal?

I believe my unsubsidized feral and my MI-loan (out of business now, the auctions failed) are both variable. I know the latter is for certain, I had the option of going fixed or variable.

Yeah, you might be in some trouble but it's hard to say what your rate will be tomorrow. I lucked out with fdrl fixed.

 

[halik]

Originally posted by: SP33Demon

Originally posted by: halik

Originally posted by: SP33Demon

Originally posted by: halik
Credit dried up overnight! I am one of the many, many people that have variable debt fixed to libor +xx (Gradschool loans that is). If that situation was allowed to unwind, i would find myself paying creditcard-apr rates on my college loans.

I'm assuming you mean private, were you ineligible for federal?

I believe my unsubsidized feral and my MI-loan (out of business now, the auctions failed) are both variable. I know the latter is for certain, I had the option of going fixed or variable.

Yeah, you might be in some trouble but it's hard to say what your rate will be tomorrow. I lucked out with fdrl fixed.

I think it's got a fixed number of adjustments in a year, so I could still be safe. Loans aren't actually floated in real time, it would be a huge mess trying to figure out how much money you owe every month.

 

[frostedflakes]

I tend to agree that a lot of people just seem to be knee-jerking on this issue. As infuriating as it is, I'm sure this has to be done. However, when the market stabilizes, there better be massive reform in our financial markets.

 

[Dari]

Originally posted by: Genx87
I really dont believe a lot of people understand that the banking industry isnt like letting ford fail. If the banking industry fails so does our economy. I hate bailouts but this is about the only one I can imagine that I would support.

Read the wiki article on the great depression and look at the reasoning behind it. It is like we are back in 29/30 all over again. Bail them out and regulate their ass.

That was tried for 66 years and Congress deemed it not necessary.

 

[halik]

Originally posted by: frostedflakes
I tend to agree that a lot of people just seem to be knee-jerking on this issue. As infuriating as it is, I'm sure this has to be done. However, when the market stabilizes, there better be massive reform in our financial markets.

^^ the truf ^^

Coincidentally that will put an end to the Ron Paul nuttery movement.

 

[OrByte]

I have yet to hear anyone say that this bailout or "rescue plan" is going to fix matters to the point where we can avert any future crisis as a result of this wall street mess.

Simple fact is, no one knows, and the best the experts can come up with is this 'rescue' plan.

When confidence is shot to hell like that, then these are truly historical times.

Comparing this to the 1930s probably isn't the smartest thing, but its all we have to go by.

 

[SP33Demon]

Originally posted by: halik

Originally posted by: frostedflakes
I tend to agree that a lot of people just seem to be knee-jerking on this issue. As infuriating as it is, I'm sure this has to be done. However, when the market stabilizes, there better be massive reform in our financial markets.

^^ the truf ^^

Coincidentally that will put an end to the Ron Paul nuttery movement.

There's never been a better time to be a Ron Paul supporter, haven't you heard? A shame this couldn't have happened 6 months ago. Furthermore, I'd love to see McCain (or any other GOP fraud) debate Paul on the economy.

 

[smack Down]

Sorry, but Bernanke is full of shit.

Didn't he say that if he cut rates it would solve the problem.
Didn't he say bailing out his buddies over at bear would solve the problem.
Didn't he say bailing out the his buddies over at the GSE would solve the problem.
and the same about AIG. Now he wants use to believe him when he says this will really solve the problem.

 

[bamacre]

Here is Paul vs. Bernanke...
http://www.youtube.com/watch?v=dv6rQ0U01Yc

Bill Anderson over at lewrockell.com had this to say...

Contrary to his statement, the Fed was not taking advice from Andrew Mellon in the early 1930s. As Murray Rothbard points out in America's Great Depression (some here), the Fed did try to reflate, but it did no good.

Furthermore, Bernanke's response is not logical. He earlier agreed that there was price fixing during the Great Depression, but then claims that the Fed listened to Mellon and "liquidated" everyone. Had there been the liquidations, there would have been no depression. One cannot both have price fixing and not have price fixing simultaneously.

 

[piasabird]

They can start by increasing the Prime lending rate above 4%. Having an artificially low rate of say 2% is making it too easy for corporations to get further and further in debt.

 

[SleepWalkerX]

Originally posted by: bamacre
Here is Paul vs. Bernanke...
http://www.youtube.com/watch?v=dv6rQ0U01Yc

Bill Anderson over at lewrockell.com had this to say...

Contrary to his statement, the Fed was not taking advice from Andrew Mellon in the early 1930s. As Murray Rothbard points out in America's Great Depression (some here), the Fed did try to reflate, but it did no good.

Furthermore, Bernanke's response is not logical. He earlier agreed that there was price fixing during the Great Depression, but then claims that the Fed listened to Mellon and "liquidated" everyone. Had there been the liquidations, there would have been no depression. One cannot both have price fixing and not have price fixing simultaneously.

I'm surprised Ron Paul didn't stop Bernanke from his other lies on the spot. The Fed DID intervene and try to inflate out of the deflation. But at least he stopped him on the Congressional legality of issuing coins vs. bills of credit.

Idiocy levels are high when you fail at history.