In the Fed's and Treasury's game of whack a mole, the moles are winning. Treasury Secretary Hank Paulson didn't bail out Lehman, correctly judging that a bailout would be no real solution. But don't think this marks the end of government attempts to relieve the financial crisis.

If there has been one uninterrupted trend of the past century, it has been the steady socialization of risk -- especially financial risk. Deposit insurance was created and then expanded. In the S&L meltdown, even uninsured depositors were saved. Subsidy after subsidy was piled up to encourage mortgage debt. All the fiscal and monetary powers were mounted to rescue banks from their Third World lending misadventures. The "system" was protected from the failures of Penn Central, Continental Illinois, Long Term Capital, the crashing dotcoms and telecoms, etc.

And when even massive liquidity provided by a government lender of last resort proves insufficient? Today's confidence hemorrhage probably won't stop until government supplies what the financial markets have failed to supply (except in small instances) -- a buyer of last resort for unwanted mortgage-related assets.

It was careless, of course, to hold a financial crisis in the middle of a presidential election. And neither ticket this year is especially confidence-inspiring when it comes to economics -- more likely to one-up each other in denouncing "bailouts" and "greed" than to contribute anything constructive. Note the rich irony of Barack Obama and John McCain's sudden, after-the-fact recriminations over the severance packages of Fannie's and Freddie's departed chiefs -- for, if there ever was a case where two U.S. Senators had a duty to be on the ball before-the-fact, it was in overseeing these two "government sponsored enterprises."
http://online.wsj.com/article/SB122153761735041767.html

I was wondering what the conservative posting block thought about the Feds injecting $50 billion of the American Publics monies into Wall Street ?

Or what they thought when they found out it was actually $70 billion. Doesn't matter what they all say anyway. We have to pay for it. But Economics like this are good for America aren't they?

http://online.wsj.com/article/SB122153761735041767.html

Why did the *Government bail-out Bear Sterns.?











* In March of '08 The Federal Reserve Bank of New York provided
an emergency loan to avert a sudden collapse.

Or what they thought when they found out it was actually $70 billion. Doesn't matter what they all say anyway. We have to pay for it. But Economics like this are good for America aren't they?
Letting failing businesses go under is ultimately good for America, because a free market is self-correcting.

Letting failing businesses go under is ultimately good for America, because a free market is self-correcting.

May I say Borg, I tend to agree, tho at what cost to the world.
How many people unemployed, company closures, it could take years to stabilise the markets by the time this run is finished.

As the world leader in free enterprise, I would hope the regulatory Authorities take a good look at what is happening and learn from it, so it doesnt happen again.

Originally posted by Paulc
May I say Borg, I tend to agree, tho at what cost to the world.


The cost to the world in my opinion is minimal. Another crappy businessman who won't be allowed to make the same mistake twice. They should have never been allowed to get so big in the first place. Either way the tax payers are going to take the hit. Let's at least not have to worry about these morions making us do it again.

This all stems from the collapse of the housing market.
I said here about a year ago, that the falsifying of mortgage applications, which has been going on for twenty years, was maybe the largest crime since WW2.

Everyone was at it, from the worker who claimed he earned triple what he infact did, to the broker who knew this, and didnt care as long as he got his commission, to the finance houses who were happy to lend
on property they knew was market driven and not a realistic value, they were all getting their cut and looking the other way.

Now the bubble has burst, and we're starting to see [especially in Europe] just how much of this extorted monies were being pumped into American finance houses, to make even more money, they deserve no sympathy, yet to stabilise things, we, the people, will have to bail some out and let others sink.

As the world leader in free enterprise, I would hope the regulatory Authorities take a good look at what is happening and learn from it, so it doesnt happen again.

I can't help but think that what they'll learn is that they shouldn't have bailed out so many of these companies, because it made people think there are no consequences to reckless management.

How about a simple law of a change for CEO pay. Instead of offering stock options at the price of their tenure, make them mandadated stock paid at the time of their left employment their at the price when they were hired.