Funny that so few complained when the regulatory framework that might have stopped all this was dismantled. Always remember, the first step toward socializing the losses is privatizing the profits.

BAIL

Bush better hurry if he's going to bankrupt us before he leaves. It's going to be close. I pity the person who has to try to clean up the mess.

Aww, man. I'm at the bottom of the page and I can still see the boobies. Come on, this thread has so much potential!

Hobodeluxe: Bush better hurry if he's going to bankrupt us before he leaves. It's going to be close. I pity the person who has to try to clean up the mess.

Don't worry. McCain will fix this mess.
If there's anything that can fix a mess like this, it's more of the same old, same old.

Gregory F. Stuart: Of course the free market works. You're an idiot if you don't believe privization is the solution to all of our problems. You need to get a job, tardmitter, and read Ayn Rand more. Jesus.

Now that there is some quality troll bait.
9/10

Subby, you fail at economics. That is called "injecting liquidity". Not bailing out.

Do people still believe America has a free-market economy? That's an even bigger gaffe than ignoring the fact that the country was founded by racists and slave-owners who wanted liberty.

The Free-Market is purely theoretical on a national stage and exists in no major economy in the world. And the people that think we have one are more annoying than the people who say "communist state"

JackHandy: Subby, you fail at economics. That is called "injecting liquidity". Not bailing out.

My sarcasm meter must be broken. I can't tell if you actually believe this shiat.

/I am a Libertarian
//Injecting liquidity is not laissez-faire

JackHandy: Subby, you fail at economics. That is called "injecting liquidity". Not bailing out.

That's a gorgeous post. A little too gorgeous.

JackHandy: Subby, you fail at economics. That is called "injecting liquidity". Not bailing out.

no, injecting liquidity is what i did to your mom last night

/ba-dum-ching

JackHandy: Subby, you fail at economics. That is called "injecting liquidity". Not bailing out.

I saw Ron Jeremy do that once.

andrewagill: My sarcasm meter must be broken. I can't tell if you actually believe this shiat.

People who understand it believe it. And you're right, it is not laissez-faire. That doesn't change the fact that it isn't a bailout either.

needs more 'on fire'

EatHam: andrewagill: My sarcasm meter must be broken. I can't tell if you actually believe this shiat.

People who understand it believe it. And you're right, it is not laissez-faire. That doesn't change the fact that it isn't a bailout either.

yes it is. the money didn't disappear, it just moved. it became liquidity elsewhere.

they made bad business decisions, they paid the consequences, such is the risk of doing business. we bailed them out.

People who understand it believe it. And you're right, it is not laissez-faire. That doesn't change the fact that it isn't a bailout either.


Actually, it is a bailout. Under the terms of the Bear Stearns buyout by JPM, the Fed assumes over $30 billion in risk.

Also, the Fed is accept the paper value of mortgages at 100% as collateral for their loans to banks and wall street, despite knowing that the true value of the paper is much lower.

And, you'll be glad to know that you, the tax payer, is on the hook for the Fed's generosity.

Link

theigorway
And, you'll be glad to know that you, the tax payer, is on the hook for the Fed's generosity.

so, fire? yes?

theigorway: Actually, it is a bailout. Under the terms of the Bear Stearns buyout by JPM, the Fed assumes over $30 billion in risk.

I've explained this like 100 times now, but suffice to say, if you want to actually learn about it, there's plenty of places to do so. There is plenty of blame to go around, and a lot of it does go directly to the Bush administration, but a bailout this isn't.

burndtdan

yes it is. the money didn't disappear, it just moved. it became liquidity elsewhere.

they made bad business decisions, they paid the consequences, such is the risk of doing business. we bailed them out.

A bail out is like what happened in the S&L crisis in the 80's, Long Term Capital in 98, and the current stimulus package bailing out homeowners who made bad financial decisions and got in over their heads.

This is making more liquidity available to banks to prevent a "run on banks" They are simply loaning the banks more money.

What they did for Bear Stearns was not even a bail out. There was a run on Bear Stearns, people started withdrwing more money than Bear Stearns had in liquid assets and the Fed stepped in to prevent them from going bankrupt by fostering a deal for JPO Morgan to buy them. This prevented a market crash. Had they not done this, there may have been another October 1987 plunge.

Be thankful, Bernanke has been this proactive. We may pay for it later in higher inflation but he should get high marks for what he has done so far.

I've explained this like 100 times now, but suffice to say, if you want to actually learn about it, there's plenty of places to do so. There is plenty of blame to go around, and a lot of it does go directly to the Bush administration, but a bailout this isn't.

I don't give a shiat what you've explained genius-boy. Maybe you haven't realized it yet, but the Fed isn't following it's original charter.

theigorway: I don't give a shiat what you've explained genius-boy.

That is obvious by the content of your posts.

OK. Can you dumb it down for idiots like me?

The way I understand it, my elected officials are giving my tax dollars to a company because this company did some financially irresponsible things.

Is that true?

If it is, I don't give a shiat if you call it a bailout or Sister Mary Rottencrotch. It's a Bad Thing.

Yeah reward stupid and let stupid do stupid again. I know thats stupid .

andrewagill: The way I understand it, my elected officials are giving my tax dollars to a company because this company did some financially irresponsible things.

Is that true?

Actually, they're not doing it through tax dollars. They're doing it by making the dollars you currently have worth less.

But yes, that's the gist of it.

Wow. This went green on Fark and got greenlit by their own editors with this gem:

Fed offers $100 million more to banks

Fed Offers $100 Billion More to Commercial Banks to Fight Credit Crisis

If we can't agree on whether it's million or billion, no wonder our economy is in trouble. Or maybe between the writing of the article and the publishing the dollar sank so badly that $100B is the new $100M?

JackHandy: Subby, you fail at economics. That is called "injecting liquidity". Not bailing out.

I'm looking forward to injecting a little liquidity later on tonight.

andrewagill: The way I understand it, my elected officials are giving my tax dollars to a company because this company did some financially irresponsible things.

Is that true?

In short, no, it isn't true. For a variety of reasons...
1. The Fed does not receive funding from Congress
2. Guaranteeing loans only requires a payout if the loans default.
3. Even if some of the loans default, the total liability the Fed would have would be far less than the $30b that they are guaranteeing


The Federal Reserve's income is derived primarily from the interest on U.S. government securities that it has acquired through open market operations. Other sources of income are the interest on foreign currency investments held by the System; fees received for services provided to depository institutions, such as check clearing, funds transfers, and automated clearinghouse operations; and interest on loans to depository institutions (the rate on which is the so-called discount rate). After paying its expenses, the Federal Reserve turns the rest of its earnings over to the U.S. Treasury.

m0llusk: the first step toward socializing the losses is privatizing the profits

Nonsense. That's what's happened here, since corrupt cronies run the government. There's no reason both costs and profits can't both be truly privatized. They just didn't want that.

Churchill2004: m0llusk: the first step toward socializing the losses is privatizing the profits

Nonsense. That's what's happened here, since corrupt cronies run the government. There's no reason both costs and profits can't both be truly privatized. They just didn't want that.

Methinks you missed his point.

EatHam: 1. The Fed does not receive funding from Congress

Correct. They do what they do through seigniorage. Basically an updated version of coin clipping. You don't have to tax people if you can just make your own money at the cost of decreasing the value of theirs.

EatHam: 2. Guaranteeing loans only requires a payout if the loans default

Which these loans will, and everyone knows it. Hence the fact that no one else will touch them.

EatHam: 3. Even if some of the loans default, the total liability the Fed would have would be far less than the $30b that they are guaranteeing

If that were true, these loans would be commercially viable. Obviously they're not.

Real simple boys & girls:

Joe customer deposits his $10,000 in hard earning money from working at the gas station. The bank pays him interest. They don't leave it in the vault with his name on it for when he one day comes to withdraw it. They lend it out to other people, and charge them interest. Now multiply that by 100 million other Joe Customers and thousands of other banks. If they all go to withdraw their money at one time..uh oh...the money is not in the vault anymore, it is loaned out to other people. What to do? Borrow money from the Federal Reserve.

The Fed is simple providing more loans to these banks because of this reason.

This is not related at all to Bear Stearns, the Mortgage bailout or anything else. Just providing more liquidity to banks than usual.

Churchill2004: Which these loans will, and everyone knows it. Hence the fact that no one else will touch them.

You do know that we aren't talking about mortgages, right? And that even if we were, that these instruments contain thousands and thousands of them?

Churchill2004: If that were true, these loans would be commercially viable. Obviously they're not.

Your first premise is false.

JackHandy
There was a run on Bear Stearns, people started withdrwing more money than Bear Stearns had in liquid assets and the Fed stepped in to prevent them from going bankrupt by fostering a deal for JPO Morgan to buy them.

this sort of thing is why people think of the banks and the fed as one entity.

doyner: Methinks you missed his point

Not at all. I disagreed with it.


JackHandy: ust providing more liquidity to banks than usual

At what cost? TANSTAAFL.

Churchill2004: Not at all. I disagreed with it.

Interlaced sarcasm and follow-on commentary...

He was implying (I think) that the privatizing of profits was an indicator that you and I would take it in the ass for these farks. I agree with you that these people that make $100+M per year should be the first to pay for such silly speculation, but then who else can afford to donate millions to congressional/senatorial/presidential campaigns?

EatHam: You do know that we aren't talking about mortgages, right? And that even if we were, that these instruments contain thousands and thousands of them?

I know what's going on. The bank is handing checks to banks so they won't go under. We're seeing a slow-motion run on the banks.

EatHam: Your first premise is false.

You're correct. I was mistakenly referring to the mortgage mess. Though there is the real fact that the Fed is standing between bad banks and the consequences of the bad credit they lent out. Credit that the Fed provided them in the first place.

RanDomino: this sort of thing is why people think of the banks and the fed as one entity.

They essentially are, and are about to become even more so.

Seeing Churchill2004 entering this thread feels like realizing an earthquake is starting.

"Well, when you steal $600, you can just disappear they will call you a welfare cheater. But when you steal $600 million, they will find you, unless they think you're already dead empty the treasury to bail you out."

Churchill2004: I know what's going on. The bank is handing checks to banks so they won't go under. We're seeing a slow-motion run on the banks.

Look, you're wrong. It's easily provable. If you want to look it up, you can. I'm not going to argue with you.

doyner: He was implying (I think) that the privatizing of profits was an indicator that you and I would take it in the ass for these farks.

Safe bet.

doyner: I agree with you that these people that make $100+M per year should be the first to pay for such silly speculation, but then who else can afford to donate millions to congressional/senatorial/presidential campaigns?

Exactly. The government is selling to the highest bidders powers that it has no actual claim to. Powers that mostly stem from the twisted view of the Constitution that governs American jurisprudence. Yet the people most dissatisfied with the problem are those calling for... giving the government more power.

EatHam: Look, you're wrong

Well, that settles that.

EatHam: You do know that we aren't talking about mortgages, right? And that even if we were, that these instruments contain thousands and thousands of them?


Dude you are so wrong.



"Big investment houses took the Federal Reserve up on a first-of-it-kind offer Thursday to let them borrow Treasury securities and put up risky home-loan packages as collateral. It was the latest effort to ease a painful credit crisis."

theigorway
"Big investment houses took the Federal Reserve up on a first-of-it-kind offer Thursday to let them borrow Treasury securities and put up risky home-loan packages as collateral. It was the latest effort to ease a painful credit crisis."

So, when those properties inevitably never recover their value, who pays? well, well all know the answer to the that (start everything on fire), but the question is, exactly how do we end up paying? (fire)

theigorway: Dude you are so wrong.

No, I'm not. Home-loan packages are not mortgages, nor do they carry the same risk as an individual mortgage. Nor are they what got BSC in to trouble. At its most basic, you could say that, but that's not the reality.

EatHam: No, I'm not. Home-loan packages are not mortgages, nor do they carry the same risk as an individual mortgage. Nor are they what got BSC in to trouble


Geez dude - just admit you're wrong. Whether you call it a SIV, CDO, or CMO, it's still a security based on mortgages. And, when a bunch of those mortgages go into default, the security loses value.


Let me spell it out for you, since you seem to be retarded. The federal reserve is buying bad debt (aka mortgages) from banks and investment houses at super-low interest rates so they don't go under. That's called a bailout son - not injecting liquidity.

andrewagill: /I am a Libertarian

The current use of Libertarian puzzles me. In the UK when I was a student in the 70s the was Libertarian was a polite term for an Anarchist, usually a non-violent one who didn't believe in bombing the state. The basic tenet of the belief system was that given total licence people would naturally share with each other leading to a utopian socialist system.

Now it appears to mean someone thinks that everything should be left to the market. The basic tenet of the belief system is that given total licence people would naturally trade with each other leading to a utopian capitalist system.

is the fed going to bail out individual homeowners?

jamspoon: In the UK when I was a student in the 70s the was Libertarian was a polite term for an Anarchist, usually a non-violent one who didn't believe in bombing the state

Anarcho-capitalism (which is non-violent) is a form of libertarianism. Murray Rothbard, for example, was an anarcho-capitalist. I think he invented the term.

They're a minority, though they used to be more prominent within the libertarian movement. Most now are minarchists (government stays around but only does a few things).

I wasn't aware the term libertarian was much in vogue in the UK, though. They only got their own Libertarian Party in January.

jamspoon: The basic tenet of the belief system was that given total licence people would naturally share with each other leading to a utopian socialist system

What? No. That's not even remotely libertarianism. That's closer to Noam Chomsky's "anarchist" socialist philosophy. That is, in fact, the theoretical goal of Marxist communism.

jamspoon: Now it appears to mean someone thinks that everything should be left to the market

Not the market as is, but an actual free market. The market as is is screwed up, and we know it.

jamspoon: given total licence people would naturally trade with each other leading to a utopian capitalist system

Not "utopian". There's nothing utopian about anarcho-capitalism. It doesn't purport that everything will be "perfect" under its propositions, merely that they will be better. Which is the same as every other philosophy.

jamspoon: The current use of Libertarian puzzles me. In the UK when I was a student in the 70s the was Libertarian was a polite term for an Anarchist, usually a non-violent one who didn't believe in bombing the state. The basic tenet of the belief system was that given total licence people would naturally share with each other leading to a utopian socialist system.

THIS.

Now it appears to mean someone thinks that everything should be left to the market. The basic tenet of the belief system is that given total licence people would naturally trade with each other leading to a utopian capitalist system.

not so much this.

When I joined the party, I got a card featuring the Libertarian pledge:

I HEREBY CERTIFY THAT I DO NOT BELIEVE IN OR ADVOCATE THE INITIATION OF FORCE AS A MEANS OF ACHIEVING POLITICAL OR SOCIAL GOALS

I still believe it. I don't know what the fark the Glenn Reynolds `Libertarians' believe, but it's not this.

/Incidentally, EatHam, I'll address your comments shortly.

Churchill2004
Anarcho-capitalism

Anarchists and Anarcho-syndicalists (and all the other breeds) despise Anarcho-Capitalists because they don't seem to understand that Corporations are predatory entities by design. fyi

I wasn't aware the term libertarian was much in vogue in the UK, though.

yeah, the word Libertarian is used synonymously with Anarchist all over Europe.