Timothy Geithner, savior for the banks....

Interesting article on Obama's economic team and the choices they've made:

"To my mind, there are three ways to deal with an insolvent financial institution:

Bankruptcy. Allow the institution to collapse (like Lehman Brothers)

Nationalization. Seize the assets of that institution and nationalize it (like Northern Rock, AIG, or Fannie Mae)

Bailout. Inject capital into the institution in order to allow it breathing room until it can meet capital adequacy levels.

As you can see, governments have tried all three solutions. However, there are vast differences between the three.

The bailout solution is the most ‘anti-free market’ choice and seems to be the favored solution of governments everywhere. It props up organizations, giving them an unfair advantage at the expense of other more prudent institutions. It also acts as a subsidy, which favors domestic institutions over foreign rivals. Bailouts increase moral hazard by rewarding risky and reckless lending practices. And they are often the result of crony capitalism due to the power of the financial services lobby. There are many other problems with bailouts. All around, bailouts are a poor solution."



http://www.nakedcapitalism.com/2009...iew-of-treasury’s-handling-of-the-crisis.html

 

They've publicly stated they didn't.

First you're upset people are being bailed out. Now you're upset we didn't bail everyone out? Its not a "gamble" - banks have collapsed before. Drexel did in the early 90s after the SEC shut down Millken - nothing happened to the economy. Its clear that the severity of this crisis took everyone by storm, even people who were predicting doom and gloom.

Fuld also refused to sell at reasonable prices and basically screwed himself over because he felt that Lehman was worth more than people were offering for it. Thain was clever enough not to make a decision that stupid. He was far more aggressive in seeking a buyer than Fuld was.

 

http://blogs.aljazeera.net/americas/2009/11/17/did-geithner-co-cave-banks

 

Representative Peter DeFazio (D-OR) says that Geithner should be be fired.

[ame="http://www.youtube.com/watch?v=o2Muu0tNsw8"]YouTube- Ed Show - Rep. Peter DeFazio (D-OR04) levels Goldman Sachs, Summers, and Treasury Sec Tim Geithner[/ame]

 

Right. Except that even Profs at your own school will tell you what you just wrote is pure bullshit. MOST economics believe competing currencies is feasible, even Keynesians. You're an idiot, then again you thought the stimulus was a good idea and now you've been proven wrong. Are you going to admit you're wrong considering the value of the dollar, the amount of debt and unemployment? Of course you won't. You believe in reinflating bubbles. You're a hack Bojendyk and you're a dishonest baand d person. Period.

 

Not really. Peter Schiff, Ron Paul and Roubini predicted all of this....no suprise all were against the economic policies of Clinton, Bush, Obama and oppose TARP. Let's be honest, we should have listened to them when the Fed was slashing interest rates and expanding the money supply. But we didn't and now you're trying to rewrite history much like Bojendyk. P.S. Bojendyk has called for an increase in the money supply too, how is that working out?

 

Surprise, surprise--here comes Microwave with another bucket of fail!

Peter Schiff also predicted that the foreign stock markets would fare better than the US markets in 2008, a prediction that lost his funds an abnormally large amount of money. He also predicts that gold with hit $5000 an ounce--yes, you read that right: $5000/ounce--within a couple of years. Maybe he'll prove us all right, or maybe he'll just release another set of compelling, self-selective YouTube clips to persuade us that he was right about everything.

(I feel duped by Schiff, because I thought those initial YouTube clips were awesome. I only later learned that he made mistakes just as egregious with his own fund as the people he criticized and suffered huge losses because of it, although his fund generally performs quite well.)

Roubini conditionally supports Obama and Geithner.

And when did I call for an increase in the money supply before the current crisis? Oh yeah: never.

How are those predictions regarding inflation going, Ted?

 

Most of the professors at my school believe in the gold standard?

Are you out-of-your-mind ********ing high? You know that Friedman was a huge advocate of floating currency, right?

If you think that stimuli haven't been effective, then you haven't been paying attention to the global economy.

 

Yes, really.

Schiff is a self-interested promoter who wants to show how good his funds are. As bojendyk points out, he was wrong on many other things. Roubini was also surprised at how bad it has been. I will also add that as a perma-bear, Roubini was bound to be right eventually. Sitting on your perch screaming "rain, rain" everyday, doesn't make you a genius when it rains.
As for Paul - he didn't predict any of this at all.

Huh? You mean when they were trying to prevent our financial system from failing? Lets be honest - we should never listen to Ron Paul about economics.

What history am I trying to rewrite?

So far, given the shock we suffered? Pretty well.

 

Paul's hobbyhorse is hyperinflation that is always coming but never arrives. Still, credit where it's due: I found comments from Paul from 2003 in which he talks about the impending housing bubble.

And Schiff's fund was apparently a stellar performer for quite a while but tanked last year. But he also has a hell of a case of hindsight bias: remember what I said about investment banks, but forget what I said about foreign markets.

 

Roubini? The NY professor perma Bull? Why does anyone even listen to this guy? Call me when he starts/runs or manages his own fund. If he were, he would be broke by now, considering how wrong he has been in the past. Ron Paul doesnt manage money, hes a politician, and another perma Bull.
Peter Schiff does deserve a mention since his fund has actually preformed rather well, and survived the hedge fund melt down that we had last year. Kudos to him for making it out of that one.

 

Watched Geithner today, almost felt sorry for the bugger before remembering who actually headed the NY Fed DURING the crisis. In government, we reward incompetency.

 

It didn't take a genius to predict a housing bubble. That was apparent.

You mean perma-bear, right? As for Schiff - yes, he has done better than some that closed. But being better than running a fund than Cioffi and Tannin (acquitted yesterday) doesn't make you some sort of economic Nostradamus.

 

Let's keep listening to all these smart Wall Street types. They have been right more than Paul, not. Who wants to bet unemployment will be going to 12%?

 

Yet Bernanke missed it.

Haha yes, thanks for the correction
It says a lot in my world. Your opinion is only as important as how well you can capitalize on it, otherwise, predicting is a dime a dozen crowded game.

 

Atrios cuts to the quick. No jobs, no recovery. Obama & advisers miscalculated big time, probably to appease all those in the "don't do too much" crowd:

Do Something


I know I'm repeating myself here, but 10.2% and rising unemployment is not acceptable. If I traveled back in time to January 2009 and managed to convince Larry and Timmeh that I was not insane, and informed them that whatever they planned to do would still cause unemployment to be at 10.2% in October, they probably would have panicked and convinced their boss to do more (or different). But now we're at 10.2% it's like it isn't really happening. What would have been unthinkable back then is now a non-panic inducing status quo.

I don't know why that is.

And foreclosures are up for "good" borrowers, not just the unwashed sub-prime scum the media highlighted last year:

http://www.calculatedriskblog.com/2009/11/mba-forecasts-foreclosures-to-peak-in.html

 

Unemployment is going to get worse. What people haven't been able to accept is that for 30+ years, we've been shipping all the middle-class manufacturing jobs to Asia. That American dream of finishing high-school and earning enough to support your family at the local [insert industry here] is gone forever.

A service-based economy is good for those who can get college degrees, and who have some sort of work ethic. The problem is that 30% of Americans have college degrees. 70% don't. They've been working in Real Estate and construction, they've been living off of credit cards and home equity loans and now... that's all gone.

There isn't a lot the government can do about it other than attempt to raise the price of manufacturing in Asian countries by requiring them to protect the environment and provide benefits for employees in order to trade with us, which will strike some as protectionism.

I am still of the opinion that as little government intervention as possible will help the market determine what is to replace these jobs faster. Propping up failed industries or putting everyone on the government payroll isn't a long-term solution. Hell, it isn't really even a short-term solution, as we've seen.

 

It doesn't matter how much money you make, when you spend 50-70% of your take-home pay on a mortgage, you're one car breakdown away from missing a payment. And it's also hard to pay the mortgage when you (or your spouse) have no job.

 

Here is Ron Paul in 2006 predicting imminent inflation.

Here is Ron Paul in 2002:

Exploding deficits and uncontrolled spending, sure. There are other things Paul has gotten right.

But Paul's biggest claim is that we'll be destroyed by inflation. His archives only go back to 2002, but his inflation paranoia, I believe, goes back much farther than that.

Let me know when Paul is finally right about inflation. I won't hold my breath.

 

If Ron Paul wasnt so damn extreme, he would have a much larger fan base. Why does he have to take everything to edge of destruction? It hurts his image. If only he had been a bit more moderate... he would have been spot on. The dollar is indeed going the way of the toilet paper, and inflation is present, and will rise in the near future... That's all that he had to say and he would be right.

 

Paul hasn't been right at all, actually. Besides, no one here is talking about "Wall Street types", whatever those are.

You mean Greenspan, I presume? Yes, he can be blamed for much of this.

Most of Obama's advisors acknowledged that the stimulus was too small. However, they keep arguing they passed the biggest stimulus that was politically feasible.

Yes, but its not gone because of shipping those jobs to China. Its gone because manufacturing has become capital intensive rather than labor intensive. What ********tards like Michael Moore refuse to acknowledge is that factories today employ far fewer workers than they did 30 years ago. Our productivity has increased so much we simply don't need all the extra people we once employed.

Yes, times will get tough for people with no work ethics.

That won't help.

Yes, you've mentioned your batshit insane theories of "we need a great depression to recover from this". I don't buy it and neither do most sensible people. Thank God.

Yes, recessions are tough times.

Um........that's a bit like saying that if Ron Paul wasn't crazy, he wouldn't be crazy. Well, yeah. But he IS crazy.

 

Nobody in this thread knows a ********ing thing about economics.

So Lindsey, Geitner, et al, "should have done something different"?

Pray tell, what would that have been?

What guaranteed response to the financial meltdown would have prevented 10.2% unemployment?

What?

You don't ********ing know, because NOBODY ********ing knew.

SHUT THE ******** UP FOR CHRIST SAKE AND ACCEPT THE FACT THAT IN SOME CIRCUMSTANCES THEIR ISN'T A SOLUTION THAT PREVENTS UNEMPLOYMENT!

 

QFT and repped. Really if the Republicans after Bush would have just let everything collapse, what do they they think the unemployment rate would be now? 25% or 30%?

 

Feel free to yell about your own inferiority - I see no reason for you to ascribe it to me as well.

 

Hes got the idea, its just that its on steroids.

Greenspan missed it, yet Bernanke was in denial up until it blew up.