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Fed cuts rate by 3/4 point!!!

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NoStateofMind

Diamond Member
Oct 14, 2005
9,711
6
76
Originally posted by: LegendKiller
Originally posted by: PC Surgeon
Originally posted by: LegendKiller
Originally posted by: Dissipate
Originally posted by: LegendKiller
I know you certainly do, but many other's don't.
Including you, because you contradict yourself. On the one hand economics is not a hard science and yet on the other hand we can expect the Fed to accurately master plan the economy? :confused:
Did I ever say that the Fed should master, has mastered, or will master plan the economy?

I think you're quite confused as to what the Fed is doing.
Would controlling banks be in that line of reasoning?
Providing a liquid monetary system is in the line of reasoning. The Fed's decisions are predicated upon several variables.
Even at the expense of the taxpayer when banks make obvious bad loans?
 

senseamp

Lifer
Feb 5, 2006
35,035
5,121
126
Originally posted by: Dufusyte
Originally posted by: senseamp
Don't worry, we have a wonderful government who will borrow and spend all the money it can get its hands on on our behalf.
Actually they are forcing the money into our hands - witness the Economic Stimulus Checks arriving in your mailbox this summer.

This is just the first of Helicopter Ben's money drops. They are testing the distribution system. Expect Ben to start dropping more and more money into your mailbox in the coming years.
That is why you can't lose if you short both real estate and USD in equal proportion.
The only way to avoid the overpriced housing bubble from bursting is to devalue the dollar faster than housing prices fall.
I was reading in Amsterdam the small money changers don't take US dollars from tourists anymore, because by the time they take them to the bank they lose more money than they make on the exchange. That is how pathetic the dollar is becoming, it's no longer a convertible currency in some circles.
 

NoStateofMind

Diamond Member
Oct 14, 2005
9,711
6
76
Originally posted by: senseamp
Originally posted by: Dufusyte
Originally posted by: senseamp
Don't worry, we have a wonderful government who will borrow and spend all the money it can get its hands on on our behalf.
Actually they are forcing the money into our hands - witness the Economic Stimulus Checks arriving in your mailbox this summer.

This is just the first of Helicopter Ben's money drops. They are testing the distribution system. Expect Ben to start dropping more and more money into your mailbox in the coming years.
That is why you can't lose if you short both real estate and USD in equal proportion.
The only way to avoid the overpriced housing bubble from bursting is to devalue the dollar faster than housing prices fall.
I was reading in Amsterdam the small money changers don't take US dollars from tourists anymore, because by the time they take them to the bank they lose more money than they make on the exchange. That is how pathetic the dollar is becoming, it's no longer a convertible currency in some circles.
:shocked:
 

LegendKiller

Lifer
Mar 5, 2001
18,256
68
86
Originally posted by: PC Surgeon
Originally posted by: LegendKiller
Originally posted by: PC Surgeon
Originally posted by: LegendKiller
Originally posted by: Dissipate
Originally posted by: LegendKiller
I know you certainly do, but many other's don't.
Including you, because you contradict yourself. On the one hand economics is not a hard science and yet on the other hand we can expect the Fed to accurately master plan the economy? :confused:
Did I ever say that the Fed should master, has mastered, or will master plan the economy?

I think you're quite confused as to what the Fed is doing.
Would controlling banks be in that line of reasoning?
Providing a liquid monetary system is in the line of reasoning. The Fed's decisions are predicated upon several variables.
Even at the expense of the taxpayer when banks make obvious bad loans?
Do you understand what would happen if they didn't?

Look, the cows are out of the barn, it's a shitty situation and one that needs to be addressed. Everybody knows they fucked up and those that don't will get a wake up call similar to BSC and perhaps jail time.

However, the key thing now is to get the cows BACK in the barn. The way to do that is not to raze the barn and let the cows run wild. It's to get the cows back in and fix the fricking doors.

Do you understand what would happen if more banks failed without intervention? I really don't think you do.
 

senseamp

Lifer
Feb 5, 2006
35,035
5,121
126
Originally posted by: LegendKiller
Originally posted by: PC Surgeon
It doesn't take a rocket scientist or a college degree to see that decreasing interest rates will cause inflation. Also that if reducing the interest rate doesn't have the desired effect, it wouldn't be in any stretch of the imagination to see that it probably won't work in the near future. What is the term for someone doing the same thing expecting a different result? Exactly.

Inflation is the end result, which is, the hidden tax if you will. Most of the population doesn't know this and just goes about their day oblivious. Of course they notice the gas prices, bread and cheese price increases but they do not know why. What do you think would happen if every American knew what the FED was doing to their money and that the rise in Oil/Gas prices isn't because of OPEC production output, but because of the weak dollar created by the FEDs' 24hr printing press?
What alternative is there?
Be an adult and take our lumps. We are living beyond our means for too long, and are overdue for a recession. Undermining our currency to avoid it is not going to make our problems go away, but instead it will exacerbate them by weening the world off the dollar completely. Americans will have to work more and/or spend less. Yes, we are going to have a liquidity crisis, just like a shopaholic who spends all his credit cards to the limit and can't get more credit has a liqudity crisis and has to cut down on borrowing and spending big time.
 

LegendKiller

Lifer
Mar 5, 2001
18,256
68
86
Originally posted by: senseamp
Originally posted by: Dufusyte
Originally posted by: senseamp
Don't worry, we have a wonderful government who will borrow and spend all the money it can get its hands on on our behalf.
Actually they are forcing the money into our hands - witness the Economic Stimulus Checks arriving in your mailbox this summer.

This is just the first of Helicopter Ben's money drops. They are testing the distribution system. Expect Ben to start dropping more and more money into your mailbox in the coming years.
That is why you can't lose if you short both real estate and USD in equal proportion.
The only way to avoid the overpriced housing bubble from bursting is to devalue the dollar faster than housing prices fall.
I was reading in Amsterdam the small money changers don't take US dollars from tourists anymore, because by the time they take them to the bank they lose more money than they make on the exchange. That is how pathetic the dollar is becoming, it's no longer a convertible currency in some circles.
So, because their margins are narrow and the dollar devalues at a small rate, it's now "pathetic"? what's pathetic is your logic.
 

blackangst1

Lifer
Feb 23, 2005
20,990
853
126
Originally posted by: senseamp
Originally posted by: LegendKiller
Originally posted by: PC Surgeon
It doesn't take a rocket scientist or a college degree to see that decreasing interest rates will cause inflation. Also that if reducing the interest rate doesn't have the desired effect, it wouldn't be in any stretch of the imagination to see that it probably won't work in the near future. What is the term for someone doing the same thing expecting a different result? Exactly.

Inflation is the end result, which is, the hidden tax if you will. Most of the population doesn't know this and just goes about their day oblivious. Of course they notice the gas prices, bread and cheese price increases but they do not know why. What do you think would happen if every American knew what the FED was doing to their money and that the rise in Oil/Gas prices isn't because of OPEC production output, but because of the weak dollar created by the FEDs' 24hr printing press?
What alternative is there?
Be an adult and take our lumps. We are living beyond our means for too long, and are overdue for a recession. Undermining our currency to avoid it is not going to make our problems go away, but instead it will exacerbate them by weening the world off the dollar completely. Americans will have to work more and/or spend less. Yes, we are going to have a liquidity crisis, just like a shopaholic who spends all his credit cards to the limit and can't get more credit has a liqudity crisis and has to cut down on borrowing and spending big time.
Vagueness FTW!
 

LegendKiller

Lifer
Mar 5, 2001
18,256
68
86
Originally posted by: senseamp
Originally posted by: LegendKiller
Originally posted by: PC Surgeon
It doesn't take a rocket scientist or a college degree to see that decreasing interest rates will cause inflation. Also that if reducing the interest rate doesn't have the desired effect, it wouldn't be in any stretch of the imagination to see that it probably won't work in the near future. What is the term for someone doing the same thing expecting a different result? Exactly.

Inflation is the end result, which is, the hidden tax if you will. Most of the population doesn't know this and just goes about their day oblivious. Of course they notice the gas prices, bread and cheese price increases but they do not know why. What do you think would happen if every American knew what the FED was doing to their money and that the rise in Oil/Gas prices isn't because of OPEC production output, but because of the weak dollar created by the FEDs' 24hr printing press?
What alternative is there?
Be an adult and take our lumps. We are living beyond our means for too long, and are overdue for a recession. Undermining our currency to avoid it is not going to make our problems go away, but instead it will exacerbate them by weening the world off the dollar completely. Americans will have to work more and/or spend less. Yes, we are going to have a liquidity crisis, just like a shopaholic who spends all his credit cards to the limit and can't get more credit has a liqudity crisis and has to cut down on borrowing and spending big time.
What lumps do you propose? Aren't bankers losing jobs? Aren't shareholders losing money? Aren't investors losing billions in write downs?

Do you want the entire market to collapse just to satiate your ideal of having a "strong currency"? Do you want the entire market to come to a halt within a week? All borrowing stop? How then, would these debts be paid? Who would have jobs when nobody can borrow?

You may say I am being alarmist, but your alternative would create a BSC out of nearly every bank.

What exactly does a "strong currency" get us, besides cheap oil? It makes our exports less competitive, our tourism less competitive, imports far more competitive...etc.

 

senseamp

Lifer
Feb 5, 2006
35,035
5,121
126
Originally posted by: LegendKiller
Originally posted by: PC Surgeon
Originally posted by: LegendKiller
Originally posted by: PC Surgeon
Originally posted by: LegendKiller
Originally posted by: Dissipate
Originally posted by: LegendKiller
I know you certainly do, but many other's don't.
Including you, because you contradict yourself. On the one hand economics is not a hard science and yet on the other hand we can expect the Fed to accurately master plan the economy? :confused:
Did I ever say that the Fed should master, has mastered, or will master plan the economy?

I think you're quite confused as to what the Fed is doing.
Would controlling banks be in that line of reasoning?
Providing a liquid monetary system is in the line of reasoning. The Fed's decisions are predicated upon several variables.
Even at the expense of the taxpayer when banks make obvious bad loans?
Do you understand what would happen if they didn't?

Look, the cows are out of the barn, it's a shitty situation and one that needs to be addressed. Everybody knows they fucked up and those that don't will get a wake up call similar to BSC and perhaps jail time.

However, the key thing now is to get the cows BACK in the barn. The way to do that is not to raze the barn and let the cows run wild. It's to get the cows back in and fix the fricking doors.

Do you understand what would happen if more banks failed without intervention? I really don't think you do.
The cows are never coming back to the barn. Them staying in the barn was dependend on foreigners financing our deficits and out of control spending. Now, whether because of defaults or currency devaluation, financing our deficits will not be very attractive to foreigners. They will either lose their money due to defaults or currency devaluations, but it will be a loss none the less. If american borrowers/banks default, yes that is going to hurt big time, but it will clear the air of losses eventually, and we can move on. If we decide to take the easy way out and devalue our currency, next time these borrowers lend to us, they will insist on being paid back in their own currency. We will lose the major advantage we had over many years of having the world on the dollar standard and having the luxury of borrowing in our own currency and not worrying about currency risk when repaying loans. In the long term, that will make things a lot worse for the US.
 

LegendKiller

Lifer
Mar 5, 2001
18,256
68
86
Originally posted by: senseamp
The cows are never coming back to the barn. Them staying in the barn was dependend on foreigners financing our deficits and out of control spending. Now, whether because of defaults or currency devaluation, financing our deficits will not be very attractive to foreigners. They will either lose their money due to defaults or currency devaluations, but it will be a loss none the less. If american borrowers/banks default, yes that is going to hurt big time, but it will clear the air of losses eventually, and we can move on. If we decide to take the easy way out and devalue our currency, next time these borrowers lend to us, they will insist on being paid back in their own currency. We will lose the major advantage we had over many years of having the world on the dollar standard and having the luxury of borrowing in our own currency and not worrying about currency risk when repaying loans. In the long term, that will make things a lot worse for the US.
So, the "hard way" is to keep the value of the currency, crush the credit markets and create runs on the vast majority of banks, creating a deflationary spiral and sinking us into a long-term recession or a depression?

Wow, I thought we had learned our lesson in 1929. I guess not.
 

blackangst1

Lifer
Feb 23, 2005
20,990
853
126
Originally posted by: senseamp
Originally posted by: LegendKiller
Originally posted by: PC Surgeon
Originally posted by: LegendKiller
Originally posted by: PC Surgeon
Originally posted by: LegendKiller
Originally posted by: Dissipate
Originally posted by: LegendKiller
I know you certainly do, but many other's don't.
Including you, because you contradict yourself. On the one hand economics is not a hard science and yet on the other hand we can expect the Fed to accurately master plan the economy? :confused:
Did I ever say that the Fed should master, has mastered, or will master plan the economy?

I think you're quite confused as to what the Fed is doing.
Would controlling banks be in that line of reasoning?
Providing a liquid monetary system is in the line of reasoning. The Fed's decisions are predicated upon several variables.
Even at the expense of the taxpayer when banks make obvious bad loans?
Do you understand what would happen if they didn't?

Look, the cows are out of the barn, it's a shitty situation and one that needs to be addressed. Everybody knows they fucked up and those that don't will get a wake up call similar to BSC and perhaps jail time.

However, the key thing now is to get the cows BACK in the barn. The way to do that is not to raze the barn and let the cows run wild. It's to get the cows back in and fix the fricking doors.

Do you understand what would happen if more banks failed without intervention? I really don't think you do.
The cows are never coming back to the barn. Them staying in the barn was dependend on foreigners financing our deficits and out of control spending. Now, whether because of defaults or currency devaluation, financing our deficits will not be very attractive to foreigners. They will either lose their money due to defaults or currency devaluations, but it will be a loss none the less. If american borrowers/banks default, yes that is going to hurt big time, but it will clear the air of losses eventually, and we can move on. If we decide to take the easy way out and devalue our currency, next time these borrowers lend to us, they will insist on being paid back in their own currency. We will lose the major advantage we had over many years of having the world on the dollar standard and having the luxury of borrowing in our own currency and not worrying about currency risk when repaying loans. In the long term, that will make things a lot worse for the US.
Geez man you dont have a clue. Or at least lack foresight.
 

smack Down

Diamond Member
Sep 10, 2005
4,507
0
0
Originally posted by: LegendKiller
Originally posted by: Dissipate
Originally posted by: LegendKiller

How did the Fed orchastrate BSC losing every piece of liquidity it had?
You are joking right? Two words: housing bubble, caused by ridiculously low interest rates.
So, it wasn't 11 trillion in funds fleeing from the equity markets, pushing into the debt markets from domestic and international investors that caused the situation?

Ohhh, ok, I guess a glut of funds way beyond the Fed's control has absolutely nothing to do with long-term rates, but it's the Fed's short-term rates that make the difference.

Get a fucking clue.
Lets see lets ask someone like Richard W. Fisher you know President of the Federal Reserve Bank of Dallas

In retrospect, the real fed funds rate turned out to be lower than what was deemed appropriate at the time and was held lower longer that it should have been. In this case, poor data led to a policy action that amplified speculative activity in the housing and other markets. Today, as anybody not from the former planet of Pluto knows, the housing market is undergoing a substantial correction and inflicting real costs to millions of homeowners across the country. It is complicating the task of achieving our monetary objective of creating the conditions for sustainable non-inflationary growth.
Even if the fed does prevent a crash today it will have just created a bigger one tomorrow just like it did with dot.coms
 

3chordcharlie

Diamond Member
Mar 30, 2004
9,859
1
81
Originally posted by: Dissipate
Originally posted by: LegendKiller

How did the Fed orchastrate BSC losing every piece of liquidity it had?
You are joking right? Two words: housing bubble, caused by ridiculously low interest rates.
The housing bubble was like a perfect storm - low rates, fraudulent applications, no due diligence...

Why, it would have taken almost half a brain to see the bubble only 4 years ago!

Oh wait... many of us did;)
 

smack Down

Diamond Member
Sep 10, 2005
4,507
0
0
Originally posted by: LegendKiller
Originally posted by: senseamp
Originally posted by: LegendKiller
Originally posted by: PC Surgeon
It doesn't take a rocket scientist or a college degree to see that decreasing interest rates will cause inflation. Also that if reducing the interest rate doesn't have the desired effect, it wouldn't be in any stretch of the imagination to see that it probably won't work in the near future. What is the term for someone doing the same thing expecting a different result? Exactly.

Inflation is the end result, which is, the hidden tax if you will. Most of the population doesn't know this and just goes about their day oblivious. Of course they notice the gas prices, bread and cheese price increases but they do not know why. What do you think would happen if every American knew what the FED was doing to their money and that the rise in Oil/Gas prices isn't because of OPEC production output, but because of the weak dollar created by the FEDs' 24hr printing press?
What alternative is there?
Be an adult and take our lumps. We are living beyond our means for too long, and are overdue for a recession. Undermining our currency to avoid it is not going to make our problems go away, but instead it will exacerbate them by weening the world off the dollar completely. Americans will have to work more and/or spend less. Yes, we are going to have a liquidity crisis, just like a shopaholic who spends all his credit cards to the limit and can't get more credit has a liqudity crisis and has to cut down on borrowing and spending big time.
What lumps do you propose? Aren't bankers losing jobs? Aren't shareholders losing money? Aren't investors losing billions in write downs?

Do you want the entire market to collapse just to satiate your ideal of having a "strong currency"? Do you want the entire market to come to a halt within a week? All borrowing stop? How then, would these debts be paid? Who would have jobs when nobody can borrow?

You may say I am being alarmist, but your alternative would create a BSC out of nearly every bank.

What exactly does a "strong currency" get us, besides cheap oil? It makes our exports less competitive, our tourism less competitive, imports far more competitive...etc.
So in other words everything required for a higher standard of living.

LK won't be happy until we are all heating our houses with dollars.
 

blackangst1

Lifer
Feb 23, 2005
20,990
853
126
Originally posted by: 3chordcharlie
Originally posted by: Dissipate
Originally posted by: LegendKiller

How did the Fed orchastrate BSC losing every piece of liquidity it had?
You are joking right? Two words: housing bubble, caused by ridiculously low interest rates.
The housing bubble was like a perfect storm - low rates, fraudulent applications, no due diligence...

Why, it would have taken almost half a brain to see the bubble only 4 years ago!

Oh wait... many of us did;)
Including those in the financial services industry. However, it's a not a company's job to do what in the best interest of the consumer-thats what non profits are for. It's their job to make a profit legally, by providing a product or a service the public will buy.
 

smack Down

Diamond Member
Sep 10, 2005
4,507
0
0
Originally posted by: blackangst1
Originally posted by: 3chordcharlie
Originally posted by: Dissipate
Originally posted by: LegendKiller

How did the Fed orchastrate BSC losing every piece of liquidity it had?
You are joking right? Two words: housing bubble, caused by ridiculously low interest rates.
The housing bubble was like a perfect storm - low rates, fraudulent applications, no due diligence...

Why, it would have taken almost half a brain to see the bubble only 4 years ago!

Oh wait... many of us did;)
Including those in the financial services industry. However, it's a not a company's job to do what in the best interest of the consumer-thats what non profits are for. It's their job to make a profit legally, by providing a product or a service the public will buy.
Just as it isn't in the consumer best interest to bail out the short sighted banks.
 

senseamp

Lifer
Feb 5, 2006
35,035
5,121
126
Originally posted by: LegendKiller
Originally posted by: senseamp
The cows are never coming back to the barn. Them staying in the barn was dependend on foreigners financing our deficits and out of control spending. Now, whether because of defaults or currency devaluation, financing our deficits will not be very attractive to foreigners. They will either lose their money due to defaults or currency devaluations, but it will be a loss none the less. If american borrowers/banks default, yes that is going to hurt big time, but it will clear the air of losses eventually, and we can move on. If we decide to take the easy way out and devalue our currency, next time these borrowers lend to us, they will insist on being paid back in their own currency. We will lose the major advantage we had over many years of having the world on the dollar standard and having the luxury of borrowing in our own currency and not worrying about currency risk when repaying loans. In the long term, that will make things a lot worse for the US.
So, the "hard way" is to keep the value of the currency, crush the credit markets and create runs on the vast majority of banks, creating a deflationary spiral and sinking us into a long-term recession or a depression?

Wow, I thought we had learned our lesson in 1929. I guess not.
Are you proposing we inflate our way out of this mess?
Hell, every time people borrow money and can't repay, let's just print some more money to cover the debts. Why even bother, let's all just get a corporate credit card from the Fed, so we can just send the bills directly to them. You are taking money (via inflation) from those who were responsible and did the right thing and giving it to those who created these problems for us and themselves. Noone forced banks to lend to losers, noone forced losers to borrow more than they could afford to pay. They made mistakes, now they want to socialize their problems. So when it's profits, it's their profits, but when it's problems, they are all of the sudden our problems.
If more banks collapse because they made bad loans, then they collapse. They are not too big to fail. If they are too big to fail, and the fed bails them out, they should be nationalized.
Yes, the Fed should own what's left of Bear Stearns, since the Fed is who is taking the risk.
 

3chordcharlie

Diamond Member
Mar 30, 2004
9,859
1
81
Originally posted by: blackangst1
Originally posted by: 3chordcharlie
Originally posted by: Dissipate
Originally posted by: LegendKiller

How did the Fed orchastrate BSC losing every piece of liquidity it had?
You are joking right? Two words: housing bubble, caused by ridiculously low interest rates.
The housing bubble was like a perfect storm - low rates, fraudulent applications, no due diligence...

Why, it would have taken almost half a brain to see the bubble only 4 years ago!

Oh wait... many of us did;)
Including those in the financial services industry. However, it's a not a company's job to do what in the best interest of the consumer-thats what non profits are for. It's their job to make a profit legally, by providing a product or a service the public will buy.
The best thing I could say is that these companies made decisions maximizing their immediate profits. We all know that the corporate world has a shockingly short view of the future - anything beyond fiscal year end is pretty much ignored.

The reality is that these companies were not looking after their customers, their shareholders, or anyone else by building their financial position on an obvious bubble, and they knew it. So what were they doing? I can't think of an answer other than that the little guys were pursuing commissions, and the big guys were chasing quarterly earnings statements and bonuses big enough to last a lifetime. This can be 'highly profitable' in a sense, for some people, but it is not good business.
 

blackangst1

Lifer
Feb 23, 2005
20,990
853
126
Originally posted by: smack Down
Originally posted by: blackangst1
Originally posted by: 3chordcharlie
Originally posted by: Dissipate
Originally posted by: LegendKiller

How did the Fed orchastrate BSC losing every piece of liquidity it had?
You are joking right? Two words: housing bubble, caused by ridiculously low interest rates.
The housing bubble was like a perfect storm - low rates, fraudulent applications, no due diligence...

Why, it would have taken almost half a brain to see the bubble only 4 years ago!

Oh wait... many of us did;)
Including those in the financial services industry. However, it's a not a company's job to do what in the best interest of the consumer-thats what non profits are for. It's their job to make a profit legally, by providing a product or a service the public will buy.
Just as it isn't in the consumer best interest to bail out the short sighted banks.
Oh but it is. the alternative will hurt the consumer ALOT more than the tax increase.
 

LegendKiller

Lifer
Mar 5, 2001
18,256
68
86
Originally posted by: smack Down
Originally posted by: LegendKiller
Originally posted by: Dissipate
Originally posted by: LegendKiller

How did the Fed orchastrate BSC losing every piece of liquidity it had?
You are joking right? Two words: housing bubble, caused by ridiculously low interest rates.
So, it wasn't 11 trillion in funds fleeing from the equity markets, pushing into the debt markets from domestic and international investors that caused the situation?

Ohhh, ok, I guess a glut of funds way beyond the Fed's control has absolutely nothing to do with long-term rates, but it's the Fed's short-term rates that make the difference.

Get a fucking clue.
Lets see lets ask someone like Richard W. Fisher you know President of the Federal Reserve Bank of Dallas

In retrospect, the real fed funds rate turned out to be lower than what was deemed appropriate at the time and was held lower longer that it should have been. In this case, poor data led to a policy action that amplified speculative activity in the housing and other markets. Today, as anybody not from the former planet of Pluto knows, the housing market is undergoing a substantial correction and inflicting real costs to millions of homeowners across the country. It is complicating the task of achieving our monetary objective of creating the conditions for sustainable non-inflationary growth.
Even if the fed does prevent a crash today it will have just created a bigger one tomorrow just like it did with dot.coms
The Fed had no control over 11 trillion dollars entering the housing and credit market.
 

LegendKiller

Lifer
Mar 5, 2001
18,256
68
86
Originally posted by: smack Down

So in other words everything required for a higher standard of living.

LK won't be happy until we are all heating our houses with dollars.
And you won't be happy until you're done using hyperbole and teaching everybody to be a moron who believes that a plane won't take off from a treadmill. Yeah, we all should listen to you!
 

LegendKiller

Lifer
Mar 5, 2001
18,256
68
86
Originally posted by: senseamp
Originally posted by: LegendKiller
Originally posted by: senseamp
The cows are never coming back to the barn. Them staying in the barn was dependend on foreigners financing our deficits and out of control spending. Now, whether because of defaults or currency devaluation, financing our deficits will not be very attractive to foreigners. They will either lose their money due to defaults or currency devaluations, but it will be a loss none the less. If american borrowers/banks default, yes that is going to hurt big time, but it will clear the air of losses eventually, and we can move on. If we decide to take the easy way out and devalue our currency, next time these borrowers lend to us, they will insist on being paid back in their own currency. We will lose the major advantage we had over many years of having the world on the dollar standard and having the luxury of borrowing in our own currency and not worrying about currency risk when repaying loans. In the long term, that will make things a lot worse for the US.
So, the "hard way" is to keep the value of the currency, crush the credit markets and create runs on the vast majority of banks, creating a deflationary spiral and sinking us into a long-term recession or a depression?

Wow, I thought we had learned our lesson in 1929. I guess not.
Are you proposing we inflate our way out of this mess?
Hell, every time people borrow money and can't repay, let's just print some more money to cover the debts. Why even bother, let's all just get a corporate credit card from the Fed, so we can just send the bills directly to them. You are taking money (via inflation) from those who were responsible and did the right thing and giving it to those who created these problems for us and themselves. Noone forced banks to lend to losers, noone forced losers to borrow more than they could afford to pay. They made mistakes, now they want to socialize their problems. So when it's profits, it's their profits, but when it's problems, they are all of the sudden our problems.
If more banks collapse because they made bad loans, then they collapse. They are not too big to fail. If they are too big to fail, and the fed bails them out, they should be nationalized.
Yes, the Fed should own what's left of Bear Stearns, since the Fed is who is taking the risk.
No, I am saying lets not let the entire system collapse.
 

LegendKiller

Lifer
Mar 5, 2001
18,256
68
86
Originally posted by: blackangst1
Originally posted by: smack Down
Originally posted by: blackangst1
Originally posted by: 3chordcharlie
Originally posted by: Dissipate
Originally posted by: LegendKiller

How did the Fed orchastrate BSC losing every piece of liquidity it had?
You are joking right? Two words: housing bubble, caused by ridiculously low interest rates.
The housing bubble was like a perfect storm - low rates, fraudulent applications, no due diligence...

Why, it would have taken almost half a brain to see the bubble only 4 years ago!

Oh wait... many of us did;)
Including those in the financial services industry. However, it's a not a company's job to do what in the best interest of the consumer-thats what non profits are for. It's their job to make a profit legally, by providing a product or a service the public will buy.
Just as it isn't in the consumer best interest to bail out the short sighted banks.
Oh but it is. the alternative will hurt the consumer ALOT more than the tax increase.
For some reason they don't get this.
 

senseamp

Lifer
Feb 5, 2006
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Originally posted by: LegendKiller
Originally posted by: senseamp
Originally posted by: LegendKiller
Originally posted by: senseamp
The cows are never coming back to the barn. Them staying in the barn was dependend on foreigners financing our deficits and out of control spending. Now, whether because of defaults or currency devaluation, financing our deficits will not be very attractive to foreigners. They will either lose their money due to defaults or currency devaluations, but it will be a loss none the less. If american borrowers/banks default, yes that is going to hurt big time, but it will clear the air of losses eventually, and we can move on. If we decide to take the easy way out and devalue our currency, next time these borrowers lend to us, they will insist on being paid back in their own currency. We will lose the major advantage we had over many years of having the world on the dollar standard and having the luxury of borrowing in our own currency and not worrying about currency risk when repaying loans. In the long term, that will make things a lot worse for the US.
So, the "hard way" is to keep the value of the currency, crush the credit markets and create runs on the vast majority of banks, creating a deflationary spiral and sinking us into a long-term recession or a depression?

Wow, I thought we had learned our lesson in 1929. I guess not.
Are you proposing we inflate our way out of this mess?
Hell, every time people borrow money and can't repay, let's just print some more money to cover the debts. Why even bother, let's all just get a corporate credit card from the Fed, so we can just send the bills directly to them. You are taking money (via inflation) from those who were responsible and did the right thing and giving it to those who created these problems for us and themselves. Noone forced banks to lend to losers, noone forced losers to borrow more than they could afford to pay. They made mistakes, now they want to socialize their problems. So when it's profits, it's their profits, but when it's problems, they are all of the sudden our problems.
If more banks collapse because they made bad loans, then they collapse. They are not too big to fail. If they are too big to fail, and the fed bails them out, they should be nationalized.
Yes, the Fed should own what's left of Bear Stearns, since the Fed is who is taking the risk.
No, I am saying lets not let the entire system collapse.
Fine, then let the Fed socialize failing banks.
 

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