BF2S Forums How nice, welfare is alive and kicking

Yes, yes it is.  Corporate welfare at its finest.

You can bet that Rush Limbaugh didn't talk about this one much.  He'd rather come down on the poor.

Whatever the case, I actually agree with McCain on this particular issue.  We shouldn't have bailed out Bear Stearns, and we shouldn't bail out homeowners either.  The market engenders a certain amount of risk that shouldn't be subsidized by the government.

So Rush is actually against corporate bailouts too?  Could've fooled me...  He also supports the War on Drugs but is an abuser of oxycontin.  I just figured he was a hypocrite on fiscal policy too....

Still, I would argue that the government should only intervene on making contracts more transparent.  Bailing out people is a mistake, but forcing investors to be more honest is a good thing.

I'm right there with you, Lotta.  We should approach this the way we did with Enron.  No bailing out -- it's more like posting bail.

Protectus, Ben Bernanke wants to save the banking system from something we have never seen before, nor want to face. He also believes enough inflation can defeat deflation (as is his case about the Great Depression).

This is far from over. I expect to see Merrell Lynch, CitiGroup, Lehman Brothers, Goldman Sachs, and a ton of hedge funds in the same situation as Bear Stears; insolvent over night. The CEO of Bear Stearns said they didn't have a liquidity problem 5 days before their stock crashed and burned, and now Lehman Brothers is borrowing through the discount window, despite saying they didn't need to. You can't trust them, and they will be back at the discount window again. How many Bear Stearn insiders got out before they lost all their investments through them?

Well anyways Bear Stearns was marked to be killed when the next financial crisis happened after they did not help bail out LTCM back in 98. They were the odd man out, and now the crows have come in to kill on another one that fell. That toxic waste (subprime CDOs) is now backing the US dollar. Way to kick foreign investors in the junk. Yea screw them! We are America damn it!

But I agree, screw Wall Street. Let banks fail, let the housing bubble deflate (and screw these realtors suckering in people still), double interest rates, and let the market clean out whatever junk is in the system. You can't stop the market from doing that, so we better just man up before it gets really ugly, but I think that is too late. The country is like an obese person who really needs to lose some weight before he ends up having a massive heart attack.

I'll go out on a limb and say hyperinflation could be here within 2 years, maybe in a few months depending how the pendulum swings. Just a matter of time. But hey, maybe it will erase all that $60 trillion in debt and entitlements David Walker was talking about. What's Ben got up his sleeve? Selling us short.

Last edited by Phrozenbot (2008-04-03 06:05:56)

FEOS wrote:

CameronPoe wrote:

Corporate welfare: extra ivory backscratchers for execs.
Social welfare: food and shelter for the poor.

PS Did New Orleans get $29bn in rebuilding funds?

Nope. New Orleans got $62.3bn in Federal money.

Commendable I must say.

I completely agree Protectus. They (the banks and the Fed) got us into this mess. But Bear Stearns was just one player in this house of cards. It's part of the shadow banking system, or the massive derivatives market ($400-$516 trillion, whoever you quote) that is largely unregulated because it is too complicated and the risk is spread out all over the place. OTC's, CDO's, CDS's, you name it.

Bear Stearns subprime CDS's were only 10% of the original value once they had to mark them to market, and were very damn near to expose the real value of them all, making every bank that held on to them insolvent. JPmorgan had much more, and they would have been next, so this was really more of a bailout for them than Bear. Although ultimately it was a bail out of the financial sector.

And these turds at Bear Stearns were the best paid CEOs on Wall Street before this debacle happened. 1 year of record profits and somehow people think they are amazing CEOs. Bull. These guys just got lucky, until the real risk management came. And I can't blame them for failing, only that they were too stupid to get into such a shady system. Warren Buffet, arguably the finest modern investor, called credit derivatives "weapons of mass destruction."

However the same story will be happening again soon. I expect Goldman Sachs to be announcing some large losses soon. Are they next? They are just throwing money into a financial black hole. By the time this is over our dollar will be so weak, foreigners will sell off their bonds and the Fed will have to monetize all of it, plus have $13-14 trillion dollars floating around washing up on our shore.

And people think the Fed is good. There is a reason why the founding fathers warned against central banks. You reap what you sow I guess. What happened to democracy in some places when the world went into a worldwide depression back in the 20-30's? I can only imagine what changes might happen here and throughout the world. Will we ditch the dollar for the Amero? NAU?

Last edited by Phrozenbot (2008-04-03 10:02:38)