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Well, then... nationalize them already and break them apart. All we need is for the government to still have to coddle them when the second foot comes stomping down as foreclosures peak again.
Not knowing the details, I don't know whether nationalizing makes sense at this point or not. I don't understand why people are so vocal on this stuff when they are not only lacking knowledge on the subject (not meant as an insult, most of us are laypersons in this stuff) but also lack the sort of information required to back a good judgment even if we had the knowledge. Its all ideologically driven...
Quote:
Originally Posted by chuck22b
The banks aren't babies.... they know how to allocate funds to prevent losses (hence why a lot of the government funds have been to build reserves rather than to be loaned back out)....
They know how to allocate funds to prevent losses? Why would allocating funds prevent a loss, it would mitigate a loss. One of the main issues here is counter-party risk. You tell me how you hedge against counter-party risk.
So when exactly did you join the communist/socialist party? As for socialized errr I mean nationalized that was/is being done by Chavez and was done in Russia. How do you think it worked out for them?
And speaking of ideological driven take specimen A.
Are you against the FDIC? Probably not. Do you know what the FDIC does when a bank fails? I will tell you, it nationalizes it. It takes over the bank and then slowly liquidates it or sells it.
Nationalizing the big banks would be no different, the only problem is that they are too large for the FDIC to handle.
Also, your ideology blinds you. The nationalization of Russia's oil industry has done a lot of good for the country. So how did it work out for them? Rather well. Also, just to note the Russian economy did worse while it was listening to the West than it did under communist rule. More recently, it has been ignoring the west's gibberish and is doing much better. The nation is even back to getting in the way of America dominance again!
Not knowing the details, I don't know whether nationalizing makes sense at this point or not. I don't understand why people are so vocal on this stuff when they are not only lacking knowledge on the subject (not meant as an insult, most of us are laypersons in this stuff) but also lack the sort of information required to back a good judgment even if we had the knowledge. Its all ideologically driven...
I agree, none of us have all the information or all the knowledge. What we do have are basic understanding of micro and macro economic phenomena as applied to a larger picture and to our current situation.
So thus, we speak in generalities instead of the details. None of us knows the true extent or the strategies our leaders are going to deploy unless there are people here "in the know".
What hopefully is obvious by now is that the banks/companies/etc. took on too much risk, over leveraged, wagered on each other to the point that they're tied together, and now the government has to be involved to be the final counter party OR even the fall guy. And that is why as stakeholders in more than one way - we all have opinions and are all very vocal about what is going on. We don't want to be the fall guy.
New precedents are being set everyday. And everybody is watching cringing or celebrating depending on who you are.
Quote:
They know how to allocate funds to prevent losses? Why would allocating funds prevent a loss, it would mitigate a loss. One of the main issues here is counter-party risk. You tell me how you hedge against counter-party risk.
Sorry, I meant mitigate losses... prevention time is long gone. The point of having additional counter-parties is to reduce risks. The problem with our financial system is that everybody has colluded so much that they are all at risk. There's really no way to shield anyone from all the risks associated except by increasing reserves and deposits.
The unraveling would separate out the weaker ones from the stronger ones and also make them all weaker than they were before. Otherwise, you introduce another third party, aka, govco, to take the risks and be the "fall" guy to take the risks/losses.
So, in short.... we are ALL counter parties to the risks banks and everybody else with a loan or gave out a loan took. There is no more hedges or someone else to hand over the risk. We have to pay the piper for deeds done. Ideally, those responsible and/or took the most risks would have the most losses.
it did not work out rather well for russia. the problem with nationalization is that you need private enterprise capital to invest the money to develop the product (i.e. oil exploration, etc.) and if the government takes the incentive away that capital disappears. here is an excerpt on what happens next:
But Russia is expected to be hardest hit, with most of its revenues coming from HIGH TAXES ON OIL EXTRACTION.
Back in September, before OPEC announced it was considering cutting back production by as much as one million barrels per day, Russia’s deputy Prime Minister and Minister of Finance Alexei Kudrin announced that the country would be in deficit if oil prices fell below $70 per barrel. A forecast by the Economic Expert Group, a Russian economic consulting firm, backs this up, saying prices for 2009 would have to hold fast at $95 per barrel to avoid an economic breakdown.
ruh-row!
Last edited by floridasandy; 05-01-2009 at 06:25 PM..
No thanks, I value my individualism, and freedom tooooo much to simply lie down and become a mindless drone, you have right at it though. And while youre droning along with the crowd, will YOU be looking out for my interests?
And BTW, I've never asked for any handout/bailout from the govt. So there's(one of) my contribution(s) to your perfect society.
Like you, I am an individualist, but admittedly it's getting old. It's no fun anymore. And no, I am not looking out for your interests. I am just as selfish and greedy as the next person. I live in the same society that you live in, and as we both know...it's is far from perfect.
Is this "flu" scare designed to take our focus off of all the bailouts, etc.? Our economic situation and unbridled corporate greed are far more frightening and more of a threat then the flu, IMO.
And speaking of ideological driven take specimen A.
Are you against the FDIC? Probably not. Do you know what the FDIC does when a bank fails? I will tell you, it nationalizes it. It takes over the bank and then slowly liquidates it or sells it.
Nationalizing the big banks would be no different, the only problem is that they are too large for the FDIC to handle.
Also, your ideology blinds you. The nationalization of Russia's oil industry has done a lot of good for the country. So how did it work out for them? Rather well. Also, just to note the Russian economy did worse while it was listening to the West than it did under communist rule. More recently, it has been ignoring the west's gibberish and is doing much better. The nation is even back to getting in the way of America dominance again!
But russia is hardly a case study. They bascailly nationalised the oil indutry and gave the workers nothing. They in fact set the terms . It is quite different from our structure. Besides looking at russias planned economy past when the governamnt owned and controlled all means of production doesn't make it look that good.How do you think the oil industry got that good before the russian governamnt took over when it was in shambles befire;private ownership with investors. In fact looking at China and what decentralizing control and allowing private owenrship shows a society going from stavation to a every growing and expanding ecommoy and people actaully gaining from this.There is a reason the FDIC either shutdown or sells those banks ;because looking at governamnt operations of companies like faniie and freddie even with a board its been a disaster. you can't make good businesss decisions by politcal motivation.
Is this "flu" scare designed to take our focus off of all the bailouts, etc.? Our economic situation and unbridled corporate greed are far more frightening and more of a threat then the flu, IMO.
Ditto. Distract and extract.
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