I think this is the beginnings of an economy based on perpetual growth and fossil fuel energy running headlong into geological energy constraints. Basically I see an undulatory downward path for the rest of my life. From here out, I think any rallies in our economic condition are going to be met with spiking commodity prices that knock us right back down.
Posted: Mon Sep 22, 2008 12:35 pm Post subject: Re: Could the bailout FAIL?
joeltrout wrote:
emersonbiggins wrote:
Once again, why will the OUTCOME be different?
Because it didn't work the first time it was tried.
If the US could repeat that outcome I think it would be a HUGE success.
The bailout is not trying to spike the DOW or make the US economy run smoothly.
It is trying to prevent a 8,000 point drop in the DOW.
joeltrout
If they wanted to prevent an 8000 down day then thee wouldn't put a ban on shortselling.
Also, there are circuit breakers in place to prevent anything near 8000 down days or even weeks.
Cut it out, joel. This is not about saving anything other than Wall Street banks and speculators.
The losses are going to happen. The taxpayer is going to eat them. You can't be that gullible. Sheesh! _________________ Civilization: the biosphere's skin disease
Posted: Mon Sep 22, 2008 12:51 pm Post subject: Re: Could the bailout FAIL?
joeltrout wrote:
I think the bailout will succed if it prevents a total economic collapse. Yes it very much could fail but at that point it doesn't matter.
The goal is NOT to make everything better.
The goal is to prevent things from getting MUCH MUCH WORSE in an extremely quick pace such as the next several months.
joeltrout
You've said some good things here, but you're missing the point of the bailout and what the current situation is (based on the statement above about the goal).
Banks and businesses alike are finding it from very difficult to flatly impossible to obtain loans. In addition, the markets for debt backed assets has collapsed - so they cannot sell the debt assets they have. Many of them depend on their credit lines to for day to day operation. This may sound strange to the average person, but corporate thought process for a long time has been that it is better to have your cash 'at work' than hanging in reserve. Hence, they push it to the limit constantly and need some credit to keep things moving from one week to the next. That credit is not available right now.
What I am saying here is that IF THIS DOES NOT FREE UP CREDIT MARKETS - ie MAKE THINGS BETTER - THEN IT HAS FAILED.
If all this does is 'slow the fall' - then it failed spectacularly. Moreover, investors will KNOW that, and you'll see a crash that makes 29 and 87 look like a Christmas rally.
We'll know over a period of weeks and months as businesses start to fail, or as credit unfreezes. Banks will be saved, for now. BUT
If those banks do not open up the credit spigots then it will do nothing for the economy as a whole, and we will still wind up in an unparalleled collapse within months. _________________ Welcome to the Kondratieff Winter
Posted: Mon Sep 22, 2008 1:03 pm Post subject: Re: Could the bailout FAIL?
joeltrout wrote:
sittinguy wrote:
I also agree this does nothing for struggling consumers.
This would hopefully prevent a financial collapse which will allow consumers to be able to borrow money.
Our economy WILL collapse if consumers aren't able borrow money for college tuition, auto loans, home loans, etc...
joeltrout
Part of the problem is that we see our selves as consumers and not as citizens. The government exists to protect citizens not consumers. Consumerism is a lifestyle and a disease that is really the root of the problem. The problem is simply put growth in a finite world is impossible. The banks must fail as surely as the sun must set as the end of the day.
There is only one solution here and that is to transition to a steady state economy and begin to power down our consumerist economy. There is no place for buying new autos and new homes in the burbs or going to college to make a higher salary to pay for it all. No place for banks in a world without growth.
What we Do need is permaculture and re-localized production. We need to get away from this idea that clerks in Wal-mal selling crap and bankers writing up ponsi scheme is the engine of wealth. Wealth is created in factories and on farms. Without those two things we as a people are nothing.
Posted: Mon Sep 22, 2008 1:12 pm Post subject: Re: Could the bailout FAIL?
I like you shady, but you're dead wrong also...on the motives behind the bailout.
It isn't designed to rescue the economy. It's designed to shove off the banks losses on the taxpayer.
THE LOSSES WILL STILL HAPPEN. WE WILL STILL CRASH.
These losses also impair the Fed, more than anyone, absent a bailout. Think about the alphabet soup facilities they set up, and the crap collateral the fed holds that would make it insolvent if it doesn't unload them in this way vis a vis a bailout:
Quote:
Treasury buys garbage, banks get treasuries. Banks take back garbage from FED and give FED treasuries
Once this is law, the collapse can and will proceed unabated.
BTW, notice oil, gold, the dollar, treasuries on the long end? Notice no more IB's anymore (viz, no more Wall Street).
Pray the bailout fails, and that those who deserve to take the losses take them.
edit: typos _________________ Civilization: the biosphere's skin disease
Posted: Mon Sep 22, 2008 1:22 pm Post subject: Re: Could the bailout FAIL?
firestarter wrote:
I like you shady, but you're dead wrong also...on the motives behind the bailout.
...
It isn't designed to rescue the economy. It's designed to shove off the banks losses on the taxpayer.
...
Pray the bailout fails, and that hose who deserve to take the losses take them.
I'm sure there are some people in the Fed and Treasury thinking that this is a way to help out their best buddy in banking, or biggest political contributor, etc. No doubt that will happen.
However, I think their motives overall are to unfreeze credit markets. That's what they've stated and, frankly, if they do not do that then nothing will save them anyway. In fact, most of them do not need more money and are probably a lot more afraid of 'the mob' - joe six pack and his buddies - than anything else. I am not a big fan of joe six pack, but an event like this can cause republican and democratic parties to dissolve - create new parties, reduce fortunes to ash, and remake the whole financial and economic landscape. These people know history and know what it means to them and their future generations. So, they have every motive to do this for the overall reason of maintaining the status quo.
As far as who deserves what in the markets - if you really think anyone deserves anything from the casino, you're badly mistaken.
And, just for the record, Gold and Oil will both resume their fall if this fails. Only by spurring the economy and increasing consumption once again can they rise. Otherwise deflation wins, So if you are betting on gold and oil, you are betting on Paulson and his bailouts. _________________ Welcome to the Kondratieff Winter
Posted: Mon Sep 22, 2008 1:37 pm Post subject: Re: Could the bailout FAIL?
Shady,
No matter what they do or don't do, it's checkmate on the largest credit bubble in history. It's going to unwind no matter what legislation goes through. The only question that now remains is who's going to absorb the losses, the taxpayer or the fraudsters?
THIS BILL DOES NOTHING TO STOP THE CRASH. IN FACT IT ACCELERATES IT. _________________ Civilization: the biosphere's skin disease
Posted: Mon Sep 22, 2008 1:44 pm Post subject: Re: Could the bailout FAIL?
Novus wrote:
What we Do need is permaculture and re-localized production. We need to get away from this idea that clerks in Wal-mal selling crap and bankers writing up ponsi scheme is the engine of wealth. Wealth is created in factories and on farms. Without those two things we as a people are nothing.
I agree 100% however this is not possible in today's society except as aftermath of some type of collapse.
Joined: Sep 08, 2005 Posts: 764 Location: Atlanta, GA
Posted: Mon Sep 22, 2008 1:50 pm Post subject: Re: Could the bailout FAIL?
Novus wrote:
Part of the problem is that we see our selves as consumers and not as citizens. The government exists to protect citizens not consumers. Consumerism is a lifestyle and a disease that is really the root of the problem. The problem is simply put growth in a finite world is impossible. The banks must fail as surely as the sun must set as the end of the day.
There is only one solution here and that is to transition to a steady state economy and begin to power down our consumerist economy. There is no place for buying new autos and new homes in the burbs or going to college to make a higher salary to pay for it all. No place for banks in a world without growth.
What we Do need is permaculture and re-localized production. We need to get away from this idea that clerks in Wal-mal selling crap and bankers writing up ponsi scheme is the engine of wealth. Wealth is created in factories and on farms. Without those two things we as a people are nothing.
Spot on, I agree with everything you said 100%. Consumerism is a disease, and it simply isn't sustainable over the long term. No ifs or buts about it.
And I do think we could do just fine in a steady-state economy without reliance on debt, but getting there from here is the hard part (BIG understatement here.)
All this bailout stuff will do is to buy a bit of time, letting things unwind slowly instead of quickly, and the authors of this plan know this without any doubt in my mind. And that's *if* it works. If it doesn't work, well, that just means we go into the dump sooner, rather than later. _________________ Nowhere to run, nowhere to hide...
...and the meek shall inherit the Earth!
Posted: Mon Sep 22, 2008 1:51 pm Post subject: Re: Could the bailout FAIL?
Quote:
And, just for the record, Gold and Oil will both resume their fall if this fails. Only by spurring the economy and increasing consumption once again can they rise. Otherwise deflation wins, So if you are betting on gold and oil, you are betting on Paulson and his bailouts.
In case they succeed the dollar will decline.
In case they don't succeed, the dollar will crash.
Posted: Mon Sep 22, 2008 1:57 pm Post subject: Re: Could the bailout FAIL?
It has already failed before it was even set into action. Anyone notice the $20 spike in oil today. Remember this day September 22nd 2008. This was the day limits to growth were reached in every undeniable way.
Is this the end of the world? No it is not but it could be if we hold onto the dying paradigm for too much longer. Change needs to be more than just an election campaign slogan. It has to be real and has to start right NOW. The first step is always the hardest and that first step should be letting go and letting the banks fail. That $700 billion would be better used in protecting the citizens from famine this winter. There are far worse things in this world than a financial crisis. Most will live through a financial collapse but few will live through a total civilization collapse and that is what is really at stake here.
Posted: Mon Sep 22, 2008 2:10 pm Post subject: Re: Could the bailout FAIL?
You guys are going to see the spike in gold and oil for what it is in a few months, maybe just weeks. It's a sucker rally.
Bear markets are notorious for sudden, sharp and large rallies. The rally in gold and oil is one of them. This rally has nothing to do with supply and demand - it is money looking for safety, nothing more and nothing less.
That money will not continue to flow to one place, it will waffle back and forth for a long time creating these spikes in various markets. Each time there is a spike, the cheering squad for that market will come out with its posts / rants etc. Each time they will be silenced as the money thrashes again and moves elsewhere. Each time it thrashes, its effects will get weaker. Eventually it will wear itself out and the bear will be over. It's what happens in bear markets.
Stay out of the casino if you don't know how it works. _________________ Welcome to the Kondratieff Winter
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