Growing Evidence That The Upturn Is Upon Us
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And there may be those that would profit from all this potential downside by shorting indexes eh WWW? And not being on the housing ladder... 
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Some people will have put their money in a "safe" sensible prudent money market fund to save for their pilot training but will now be screwed because the money markets have frozen and they can't easily get their money out... and they may even have lost a slug of it.... these are the people the $700bn is aimed at bailing out
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Nothing to do with it being an oppotunity for short selling then ? I'm sure knowing that the market will eventually sort itself out will be of great comfort for people who are retiring in the next few years or for people who's endowment mortgages are going to mature.
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Heli-port a money market fund does not invest in the stock market. It is mean to be invested in "cash like instruments" with very little risk.
Many are sold as being "safer than deposits" as they spread your risk around a number of different banks. They are not mutual funds
Many are sold as being "safer than deposits" as they spread your risk around a number of different banks. They are not mutual funds
For every short seller there's a long buyer. Please don't say you believe the paper thin Strawman that the Politicians set up just so they could call him Bogey and ban him?
This has nothing to do with any self interest. I've bought my farm remember and I'm out of the SM now short or long. I'm with the 200 US economists who signed this letter to Congress this week about the bailout:
http://faculty.chicagogsb.edu/john.c...ge_protest.htm
Depositers are easily protected many times over for a fraction of the $700billion starter price of the bailout.
There is only one solution to the debt bubble of unseen and unimaginable size and that is a major recession. That's the bottom line. Anything anyone tries in government to avoid that just makes it worse.
We didn't need 4 new business/first only airlines serving the North Atlantic or Hong Kong routes and a mild recession corrected that misallocation of capital. We don't need over 50 European short haul low cost airlines and a deeper recession will correct that. We don't need over a dozen long haul full service national airlines in the EU and, once again, the only fix is a full blown recession. You can't regulate a solution. You can't campaign a solution or wish one into existence.
The Free Market can sort it all out in short order IF its left to work. The $700B Bailout is an interference in the Free Market and its works and as such I oppose it on both practical and ideological grounds.
The quicker the bust the shorter the recession the sooner the recovery the better for Wannabes.
Ultimately.
WWW
This has nothing to do with any self interest. I've bought my farm remember and I'm out of the SM now short or long. I'm with the 200 US economists who signed this letter to Congress this week about the bailout:
To the Speaker of the House of Representatives and the President pro tempore of the Senate:
As economists, we want to express to Congress our great concern for the plan proposed by Treasury Secretary Paulson to deal with the financial crisis. We are well aware of the difficulty of the current financial situation and we agree with the need for bold action to ensure that the financial system continues to function. We see three fatal pitfalls in the currently proposed plan:
1) Its fairness. The plan is a subsidy to investors at taxpayers’ expense. Investors who took risks to earn profits must also bear the losses. Not every business failure carries systemic risk. The government can ensure a well-functioning financial industry, able to make new loans to creditworthy borrowers, without bailing out particular investors and institutions whose choices proved unwise.
2) Its ambiguity. Neither the mission of the new agency nor its oversight are clear. If taxpayers are to buy illiquid and opaque assets from troubled sellers, the terms, occasions, and methods of such purchases must be crystal clear ahead of time and carefully monitored afterwards.
3) Its long-term effects. If the plan is enacted, its effects will be with us for a generation. For all their recent troubles, America's dynamic and innovative private capital markets have brought the nation unparalleled prosperity. Fundamentally weakening those markets in order to calm short-run disruptions is desperately short-sighted.
For these reasons we ask Congress not to rush, to hold appropriate hearings, and to carefully consider the right course of action, and to wisely determine the future of the financial industry and the U.S. economy for years to come.
Signed (updated at 9/25/2008 8:30AM CT)
Acemoglu Daron (Massachussets Institute of Technology)
Adler Michael (Columbia University)
+198 others
As economists, we want to express to Congress our great concern for the plan proposed by Treasury Secretary Paulson to deal with the financial crisis. We are well aware of the difficulty of the current financial situation and we agree with the need for bold action to ensure that the financial system continues to function. We see three fatal pitfalls in the currently proposed plan:
1) Its fairness. The plan is a subsidy to investors at taxpayers’ expense. Investors who took risks to earn profits must also bear the losses. Not every business failure carries systemic risk. The government can ensure a well-functioning financial industry, able to make new loans to creditworthy borrowers, without bailing out particular investors and institutions whose choices proved unwise.
2) Its ambiguity. Neither the mission of the new agency nor its oversight are clear. If taxpayers are to buy illiquid and opaque assets from troubled sellers, the terms, occasions, and methods of such purchases must be crystal clear ahead of time and carefully monitored afterwards.
3) Its long-term effects. If the plan is enacted, its effects will be with us for a generation. For all their recent troubles, America's dynamic and innovative private capital markets have brought the nation unparalleled prosperity. Fundamentally weakening those markets in order to calm short-run disruptions is desperately short-sighted.
For these reasons we ask Congress not to rush, to hold appropriate hearings, and to carefully consider the right course of action, and to wisely determine the future of the financial industry and the U.S. economy for years to come.
Signed (updated at 9/25/2008 8:30AM CT)
Acemoglu Daron (Massachussets Institute of Technology)
Adler Michael (Columbia University)
+198 others
Depositers are easily protected many times over for a fraction of the $700billion starter price of the bailout.
There is only one solution to the debt bubble of unseen and unimaginable size and that is a major recession. That's the bottom line. Anything anyone tries in government to avoid that just makes it worse.
We didn't need 4 new business/first only airlines serving the North Atlantic or Hong Kong routes and a mild recession corrected that misallocation of capital. We don't need over 50 European short haul low cost airlines and a deeper recession will correct that. We don't need over a dozen long haul full service national airlines in the EU and, once again, the only fix is a full blown recession. You can't regulate a solution. You can't campaign a solution or wish one into existence.
The Free Market can sort it all out in short order IF its left to work. The $700B Bailout is an interference in the Free Market and its works and as such I oppose it on both practical and ideological grounds.
The quicker the bust the shorter the recession the sooner the recovery the better for Wannabes.
Ultimately.
WWW
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If this doesn't happen then depositors who save prudently WILL lose money. In my book that is not fair.
I agree screw the guys who borrowed wrecklessly. Throw 'em to the lions.
It is the depositors that I fear for if we go down your path WWW
I agree screw the guys who borrowed wrecklessly. Throw 'em to the lions.
It is the depositors that I fear for if we go down your path WWW
Given that the typical bank that fails has a deposit ratio of 14 times capital on loan you can go a long long way in bailing out depositers directly and by-passing the banksters. That's why they really are so opposed to a full scale comprehensive deposit protection scheme that they would all have to fund.
When things are bad the banks want it to be so disasterously hideously bad that they get bailed out.... Oh!
WWW
When things are bad the banks want it to be so disasterously hideously bad that they get bailed out.... Oh!
WWW
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So what you're saying WWW is i'm alright jack, screw everyone to punish a few and make a swift correction in the market. It'll only happen again if you you leave it to its own devices, at least with $700billion of Government money in there it will be watched like a hawk and more likely to be regulated correctly. (and no I don't think the short sellers are responsible for the bigger global problem)
Last edited by ChrisLKKB; 28th Sep 2008 at 14:14.
That's not what I nor 200 ecomomists are saying at all. The $700 billion won't help anyone in the end but will have to repayed by future taxpayers.
The solution to too much debt is not more debt.
WWW
The solution to too much debt is not more debt.
WWW
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Neither is the solution to let everyone suffer the catasprophic concequences. A silk parachute will give everyone a much softer landing than a concrete one.
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Interesting how while the west is in economic meltdown, the communists in the east are now walking in space...
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This has nothing to do with any self interest. I've bought my farm remember and I'm out of the SM now short or long. I'm with the 200 US economists who signed this letter to Congress this week about the bailout:
Indeed, the US government is planning to solve the problem from the top down, instead of solving the problem from the bottom up.
If instead of bailing out the financial institutions, they support the people who are facing foreclosure by bailing out their loans by the amount their homes lost equity, everyone, including the fincancial institutions will benefit from it.
Personally, I don't think that the bail-out will do any better to the economy. Democrats in Congress know that very well but they have a candidate to be elected and they have certainly figured a way to win the election using the bail-out problem and to solve the economic problem as well.
To get back to aviation:
Alitalia is saved. 2100 pilot jobs are guarranteed.
It's not going to be that bad in Europe, don't worry too much.
In the U.S., as I said it will hit very hard.
As a matter of fact, I got a furloughed Continental pilot with me right now.
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Just been watching the sky linked press conf this evening so the following is based on th e adlib replays to those questions:
The 700 billion isn't going into a black hole therefore it’s not necessarily a bill of 700 billion...
The cash is to "buy" the (currently) worthless debt, the majority of which IS secured insome form, eg on property of one form or another. (hence the reason its not worth much NOW).
In 30 years time (a typical US Treasury bond length) the likely hood is that those buildings will be worth significantly more than they are being bought for now. Thus it’s unlikely to cost the tax payer in the medium/long term term.
Further, Congress has required the risk of those assets not being worth more in x years time to be borne by the banks themselves.
iX.
The 700 billion isn't going into a black hole therefore it’s not necessarily a bill of 700 billion...
The cash is to "buy" the (currently) worthless debt, the majority of which IS secured insome form, eg on property of one form or another. (hence the reason its not worth much NOW).
In 30 years time (a typical US Treasury bond length) the likely hood is that those buildings will be worth significantly more than they are being bought for now. Thus it’s unlikely to cost the tax payer in the medium/long term term.
Further, Congress has required the risk of those assets not being worth more in x years time to be borne by the banks themselves.
iX.
Oh no, I agree. Its not a bill for a mere $700b. Past experience of the Savings & Loan crisis suggests the final figure will be around treble that.
History is a wonderful guide to the future. Each generation learns this the hard way.
WWW
History is a wonderful guide to the future. Each generation learns this the hard way.
WWW
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1
2
3
4
5
To show but a few,
I especially like no. 3.
George Santayana
Those who cannot learn from history are doomed to repeat it.
Those who cannot learn from history are doomed to repeat it.
David C. McCullough
History is a guide to navigation in perilous times. History is who we are and why we are the way we are.
History is a guide to navigation in perilous times. History is who we are and why we are the way we are.
George Wilhelm Hegel
What experience and history teach is this -- that people and governments never have learned anything from history, or acted on principles.
What experience and history teach is this -- that people and governments never have learned anything from history, or acted on principles.
Gerda Lerner
We can learn from history how past generations thought and acted, how they responded to the demands of their time and how they solved their problems. We can learn by analogy, not by example, for our circumstances will always be different than theirs were. The main thing history can teach us is that human actions have consequences and that certain choices, once made, cannot be undone. They foreclose the possibility of making other choices and thus they determine future events.
We can learn from history how past generations thought and acted, how they responded to the demands of their time and how they solved their problems. We can learn by analogy, not by example, for our circumstances will always be different than theirs were. The main thing history can teach us is that human actions have consequences and that certain choices, once made, cannot be undone. They foreclose the possibility of making other choices and thus they determine future events.
Karl Marx
History repeats itself, first as tragedy, second as farce.
History repeats itself, first as tragedy, second as farce.
I especially like no. 3.
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We don't have an example of allowing a globalized market to crash without intervention so how can anyone say it's not the better option. Better the devil you know perhaps.
Last edited by ChrisLKKB; 28th Sep 2008 at 22:53.
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Originally Posted by Wee Weasley Welshman
The Free Market can sort it all out in short order IF its left to work. The $700B Bailout is an interference in the Free Market and its works and as such I oppose it on both practical and ideological grounds.
The quicker the bust the shorter the recession the sooner the recovery the better for Wannabes.
The quicker the bust the shorter the recession the sooner the recovery the better for Wannabes.