skadistic
Caomhanach
Worse in the short term maybe. People are not served by propping up failing industries. Its the aversion of taking the bump that needs to be taken that makes these issues happen again and again.
More Creeping Socialism in the US.
- Thread starter Mark1031
- Start date
Worse in the short term maybe. People are not served by propping up failing industries. Its the aversion of taking the bump that needs to be taken that makes these issues happen again and again.
EdwardTking
Deity
Every major economist that I have heard of from Smith, Keynes, Galbreith to Friedman
has maintained that enterprises start, grow, change, merge, specialise, contract and die; and that the death of inefficient enterprises is a natural, necessary and healthy part of the economic cycle.
Yet the banks seem to have conned the politicians into believing that they should
have special treatment and be granted corporate immortality by the state?!
I think that this is impossible and attempts to do this are extremely unwise.
Let the bankrupt banks be dealt with as they have dealt with their bankrupt customers.
has maintained that enterprises start, grow, change, merge, specialise, contract and die; and that the death of inefficient enterprises is a natural, necessary and healthy part of the economic cycle.
Yet the banks seem to have conned the politicians into believing that they should
have special treatment and be granted corporate immortality by the state?!
I think that this is impossible and attempts to do this are extremely unwise.
Let the bankrupt banks be dealt with as they have dealt with their bankrupt customers.
Masquerouge
Deity
The banks in this specific case, yes.
But the farming and heavy industrial sectors are also very successful at getting subsidies.
And that, both sides of the Atlantic.
Julian Delphiki
Anton's key
Privatize profits, let the public pay when the risks are realized.
American Capitalism.
American Capitalism.
If our economy is being artifically sustained, we need to just let the hit happen and rebuild. And hey, if it is going to tank anyway, this is a great opportunity to cut all trade with the Godless commie heathens who rule the PRC.
NO bailout of the mortage industry. NO bailout of all the forclosures.
NO bailout of the mortage industry. NO bailout of all the forclosures.
sonorakitch
Overseas hunter
Not that I am a taxpayer funded bailout fan, but I shudder to think what would happen if the underwriter to one half of our nations mortgages falls apart.
~Chris
~Chris
Godwynn
March to the Sea
- Joined
- May 17, 2003
- Messages
- 20,524
What would happen? I don't fully understand the underwriting process.
Julian Delphiki
Anton's key
At least the industries will be bailed out.
We had our share of that few decades ago during our depression ($10 billion for banks in cash, $4-5 billion in guarantees).
IDK what would have happened without this..
Ecofarm
Deity
INDYMAC, from $48/share to buh-bye.
Federal bail-out??
Should we save freddie and fannie?
edit: Damn, wrong forum. Could mod move to OT? Thanks
Federal bail-out??
Should we save freddie and fannie?
edit: Damn, wrong forum. Could mod move to OT? Thanks
sonorakitch
Overseas hunter
Well, Freddie and Fannie guarantee or hold more than half the mortgages in the country. Imagine several trillion dollars. Now, if one or both institutions were to collapse, what would happen to investor confidence? The already doldrumed dollar?
Rates would shoot up at a time when we cannot afford it.
Foreclosure would be a happy word for millions.
Now, while a general bailout isn't the answer, I think we should look at loan guarantees...Cramer had a good piece on it today. The one thing Carter did was the Chrysler guarantee back in the 70's, and that worked pretty well.
We can't lose Freddie and Fannie. We won't.
~Chris
EDIT: Good article on the topic
PSS: Not to mention that with a failure would come a really devestating blow to the housing crisis already underway.
sonorakitch
Overseas hunter
We have a thread on this, but unfortunately the title is very misleading.
http://forums.civfanatics.com/showthread.php?t=282495
~Chris
http://forums.civfanatics.com/showthread.php?t=282495
~Chris
Ecofarm
Deity
Ah, I hadn't looked at the thread. Wasn't in the mood for a socialism = ? debate.
And this is within the last hour or so:
http://money.cnn.com/2008/07/11/news/companies/indymac_close.ap/index.htm?postversion=2008071118
That's the big bank I'm talking about and it is bust.
Hold on a second; think about the bankruptcy reform act of 2005.
a small part of the entire reason we are in this mess is due to credit expansion and the lowering of credit quality. when the law was enforced in october of 2005 we were starting to see the bubble really take off. Think about the reasons the two are interconnected; if people can't declare bankruptcy easily the risk of default will be lessened and more credit will be given.
Too lax a bankruptcy law and lenders will be more prudent but individuals wont.
Too strict a bankruptcy law and lenders will be less prudent because individuals don't provide a large risk of default by law.
The good news is that Freddie and Fannie both have long term debt for the most part and cash.
Rashiminos
Fool Prophet
Not really a surprise.
Moderator Action: Duplicate threads merged.
