What is Digg?402 Comments
- austin63, on 09/16/2008, -4/+98Great so we all just paid $282 for 7 shares of a $4 stock. brilliant. You wonder why the fed cant balance a budget.
- sjbdallas, on 09/17/2008, -2/+87Dear Government:
I have about $50K in student loans I can't pay and I need to buy a a car. Since you're in the business of giving away money to those who make poor decisions, please forward about $70K to me ASAP. - sockpuppets, on 09/17/2008, -2/+79
Maybe after I'm done bailing out AIG, Freddy & fannie and the entire mortgage industry I'll be able to afford some food for my family.
Thanks, government! - chupavacas, on 09/16/2008, -1/+69Speechless. I have no speech.
- richmomz, on 09/17/2008, -5/+62Our biggest mistake was allowing the formation of these "super banks" in the first place. If a financial institution grows so large that "it is too big to fail" it should be broken up into smaller pieces, just like any other monopoly, so that they CAN fail without wrecking the economy. Otherwise they can be as reckless as they want, knowing full well that the taxpayers will bail them out if they screw up.
So much for the "virtues" of de-regulation: what a fcuking mess! - inactive, on 09/16/2008, -6/+51Our government sucks. This is where we need to revolt.
Thomas Jefferson addressed this in the damn constitution. Why the hell are these private interests controlling our money with no consequence if they ***** everything up? I don't understand, what we can do? I'm sure getting out of Iraq will help because that sure as hell will reduce the deficit but is the government supposed to take over all of these private interests? I like laissez-faire, don't get me wrong but we need to prevent this depression before it happens. Create jobs and hurry the hell up, use some of the tactics used during the Depression. - Hockey13, on 09/17/2008, -3/+47The belief here is that a major bank/insurer failing will cause such turmoil in the financial markets that they need to step in to control the market from spiraling out of control. This is a fallacy that implies that somehow the Federal Reserve can save the industry in which I work from the purging that necessarily needs to happen. When these companies fail, their stock prices become so cheap that competitors will swoop in and buy them. If the company is truly so terrible that nobody will buy them, their failure will be a good thing for the market on the whole. Maybe it won't seem that way in the short term, but often it makes much more sense to bite the bullet now than have to pay for our mistakes again later.
Shall we consider the case of Lehman Brothers? On Sunday, in a closed-door meeting unseen by the voting public, the Federal Reserve and the Treasury failed to coerce the top Investment Banks to reach a deal to bail out LEH. Nothing happened and the Fed didn't extend a line of credit. So what happened? Did the world explode? No, Barclays waited a few days for the price of LEH shares to scrape the basement floor before purchasing some of its assets, then the world keeps on turning. When a company fails, the valuable assets are often sold off. The risk of bankruptcy is something that every investor of LEH stock and bonds knew when they purchased them, and it was priced in based on the market conditions at the time. There is risk in markets, and eliminating the risk through the vehicle of the central bank simply perpetuates mispricing problems.
There are hundreds of small companies waiting in the wings to scoop up LEH's old clients, and this bailout system encourages an oligarchy of the known companies based on the incorrect belief that the failure of some of the older companies will ruin the world. Just like in every industry, sometimes financials just make stupid decisions. They may not have seemed very stupid at the time, but hey that's called progress and innovation...we realize the error of our ways. The companies that were at the forefront of those stupid decisions need to die. It's evolution...it's progress...it's capitalism. Yes jobs will be lost in the short term, but it's better than the cost to everyone else of supporting another bailout through printing more money.
Remember, taxes come in two main forms: direct money taken by the government and inflation. If you have $10 today and after one year you can only buy $9 worth of goods with those $10, the government has in effect taken a 10% tax. The rich and upper middle class have the means to invest to beat inflation, and the poor, with a $15,000/year paycheck, are stuck with the bill.
The plus side? People are still smart. Good ideas surface to pull us out of the mire. It's times like these that force people to think far outside the box and ultimately change the world for the better. - Moisgreat, on 09/17/2008, -4/+44It's refreshing to see that "less government" thing working out. WTF!
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..................................., - noheadhorseman, on 09/17/2008, -3/+38usa going ussr
- JasonHilton, on 09/17/2008, -0/+35We have $85 billion to loan? Or are we just going to print more money...
- cyberdork, on 09/17/2008, -0/+30You know what's funny. If you watch CNBC you see the same people who usually want the government stay out of the free market and get rid of all regulations are now the ones who scream the loudest for government help and applaud all the bail-outs.
Bunch of hypocrites!
They only support free market as long as they make some money, if the market turns on them they cry like babies. - SC4RP, on 09/17/2008, -0/+26They screw up.
We get stuck with the bill.
and some CEO walks away with a multi-million dollar bonus.
All because of a Government of the business, buy the attorneys for the money. - badwithcomputer, on 09/17/2008, -5/+25Deuce Bigalow: Look, I think there's been a mistake.
Fluisa: Did you say steak?
Deuce Bigalow: No mistake.
Fluisa: Oh see now you got me all excited. - Bagos1, on 09/17/2008, -1/+19Well said. This privatization of profit and socialization of loss is not the way it should work. AIG, of all people, were in the high risk high return game. If anything, these things should collapse so a new generation can do it better.
This consolidation of everything under these new oligarchies is not a good direction and further inhibits innovation.
On top of all of this, it will not change the eventual outcome. More of these will fail in the coming months...and there is no real way of bailing them out. They ran their businesses poorly. They should no longer exist. - S5S5S5, on 09/17/2008, -1/+19Keep in mind the government helped cause this in the first place.
"Many blame the central bank under Alan Greenspan for keeping interest rates too low and for boosting the nation's money supply too much. This created an easy-credit environment that encouraged less-qualified home buyers. It also created a period of such low yields that many investors sought better returns in securities backed by subprime mortgages"
http://www.azcentral.com/business/articles/2008/07 ... - mcla007, on 09/17/2008, -4/+21I think the headline needs changing: "Shadow organisation buys majority stake in AIG with $85 billion in counterfeit dollars!!!" Calling the process a "loan" dignifies what is basically a criminal act.
- PhilLesh69, on 09/17/2008, -2/+19Sorry, you don't make millions of dollars a year running a business into the ground. You aren't worth $100 million plus.
You are just a taxpayer. All you are worth is 30% of your income to feed the wealthy and powerful. - PhilLesh69, on 09/17/2008, -0/+15Did you see the report on the nightly news about the "generic drugs from india that the FDA has banned"??
The generic drugs are questionable because of some questionable manufacturing process, or some other nebulous claim. But if you have any of those drugs, it's okay to take them, because all samples they've tested are fine. You just can't buy any more once your refill runs out, you'll need to buy the brand name american pharmaceutical versions from now on.
I've always known that the revolving door between corporations and the government existed, and I've been especially aware of the fact that both the FAA and the FDA are run by former (and soon to be even higher paid future) executives from the industries they regulate, but this just screams of a protectionist move after intense lobbying from the PhRMA lobbyists. - inactive, on 09/17/2008, -0/+15http://www.youtube.com/watch?v=dib2-HBsF08
- DigitAl56K, on 09/17/2008, -1/+15You know what is worse than this?
Since the Lehman Brothers collapse the Fed is issuing cash loans based on equities as collateral - while markets are crashing! Who will cover the cost of the value deficit when companies fail and the stocks are worth even less? Let's count the options: 1. The taxpayer. 2... anyone got a 2? Anyone?
The Fed is robbing the taxpayer blind in this latest scheme and nobody is even talking about it! What a great way to ditch ***** equitites: trade them to the Fed for cash and default on the loan! - nedzeve, on 09/17/2008, -1/+15Wait... what does the Federal Reserve Bank have to do with the federal budget? It doesn't.
Fiscal policy: Executive / Legistlative
Monetary policy: Federal Reserve Bank
Your 12th grade civics teacher is crying right now. - tbredofsin, on 09/17/2008, -1/+15France is a MESS right now...
- inactive, on 09/17/2008, -1/+14Disagree. The government, which represents the people, should not have to bail out a private-profit making business. If the business can't stay afloat, it means it is inefficiently run and deserves to fail. Artificially bailing out failures is inefficient and sends out a completely wrong message to other large institutions.
Failure in the market is healthy for the economy in the long-term. Weak and poorly-run businesses shouldn't continue to exist because of the higher opportunity cost of their resources.
The last thing the American economy needs now is the continuation of printing money. It needs to stop.
Empires fall when they can't be maintained. Excessive printing of money will destroy the value of the currency. When the currency is destroyed, everything will fall apart. - moses141, on 09/17/2008, -5/+18Please - email your legislators! We cannot continue to let this happen on our watch.
We're gonna spend $300/person only to save the guys that made $10M bonuses last year. Unbelieveable.
They tell us that letting these guys fail will mean the end of the world, but all that's happened since this crisis came to a head is:
1) gas prices have plummeted
2) consumer prices are down/inflation is down
3) the dollar has strengthened against the Euro
Seems to me like the monetary policymakers in Washington and at the Fed (most of whom worked for or have huge stakes in these investment banks) are trying to pull the wool over our heads.
Let's stop this now! - nedzeve, on 09/17/2008, -2/+15So, the US Government now owns the world's largest insurance company?
So after 8 years of rule by the "party of small government" we now own an insurance company.
What the hell? - PeppermintPig, on 09/17/2008, -0/+12This is exactly what the libertarian economists warn against. Fiat money, no sense of value, lack of accountability to clients. You might 'save' a company in the short term, but everything is connected and the dominoes are falling!
If people go to jail, but the Fed is still doing what it's been doing, how will things improve? How does a handful of people going to jail bring back the equity in people's homes? How will that solve the actual problems???????? Maybe a handful of people like yourself will feel good that some executives are going to jail, but it's such a misleading goal.
You want a witch hunt? Look in the mirror, you support this because you support what the government is doing! Government and the Fed itself is complicit because it continues cause the situation.
You have no clue what you're talking about. No clue at all! - magoghm, on 09/17/2008, -1/+13Helicopter Ben Strikes Again!
- bluesman3535, on 09/17/2008, -1/+13Since we all voted on this I'm overjoyed.
- mcla007, on 09/17/2008, -0/+11Don't you know this was done to "preserve householder wealth" (Fed's words)? Some fine way to preserve householder wealth by creating $85 billion of counterfeit money.
- metapop, on 09/17/2008, -4/+15the dollar is dying.... ron paul predicted it, and everyone laughed at him.
"...we're depending on the creation of money out of thin air, which is nothing more than debasement of the currency. It's counterfeit. And it is a natural, predictable consequence that you're going to have people benefit from it and other people suffer."
what a corrupt government... we've all been robbed and fooled, and the (corporation owned) media has squashed the only voice speaking truth. - PeppermintPig, on 09/17/2008, -1/+12Actually, KMartSheriff, if France provides SC4RP's ideal form of governance, then he should consider moving there.
Getting rid of 'greed' is not possible. You can't ignore human behavior. People in government are not exempt. It's impossible to do good with other people's money. - PhilLesh69, on 09/17/2008, -1/+12stagmire,
if those thousands of people live paycheck to paycheck, so be it. If they were intelligent, they can do like I've done several times after losing a job, live of their savings for 3, 6 even 12 months. If they can't do that, ***** them. I've been out of work before, and I never filed for unemployment, I just lived off of my reserve savings, the savings I put away just in case I lost my job. You know the "have 6 months pay in case you lose your job" that you should have been told to have if you paid attention in college?
Resumes being *****? Mine has been ***** so many times I've worked my way up from a $40k a year job in 1992 to a $110k a year job where I can call my boss the night before and say "I'm working from home tomorrow, I'll see you the day after" and when I do go into work, I usually get there between 10:30 and 11:30 am, and I always leave before 4:00 pm "because of the traffic".
Besides, sometimes poorly run businesses should be liquidated. Bailing them out only reinforces poor business practices.
You do know that Macy's filed for bankruptcy back in like 1992 or something like that. Now they've bought up a few regional department stores and are doing quite well. The government did not bail them out, so they struggled to figure out how they ***** up and fixed themselves. Sure, they got court assistance to avoid defaulting on their debt obligations, but they weren't just handed taxpayer funds to do it, they were forced to negotiate and readjust expenses and revenues to do so.
My inane, meaningless nonsense only confuses you because you're an ideologue or a misinformed person who has bought into the "woe is me" cries of the extremely wealthy robber barons who ***** themselves by running their businesses poorly. - inactive, on 09/17/2008, -1/+11Except it wasn't an insurance company - it was an asset manager / airline leaser / "financial product" innovator and a million other things. They also dramatically expanded their insurance business into auto, home, life and other basic crap they never used to do.
The insurance business still makes money and is tightly regulated. Even most of the non-insurance stuff did OK. It was the financial products group which killed them. - digjam, on 09/17/2008, -1/+11$50 billion were pumped yesterday...$85 billion loaned to AIG today....at this rate....govt will run out of paper to print the money.. :)
- PhilLesh69, on 09/17/2008, -2/+12You've been buying all the propoganda bought and paid for by the people who need you to believe this idea that if the robber barons go broke, we'll all go broke. But that is just their attempt to get bailed out and make us all pay the bill.
I'm going to do just fine no matter how badly the really wealthy screw up their own businesses and portfolios.
I guess if you live paycheck to paycheck, and are in debt up to your eyeballs, you're scared enough to believe them, but it isn't so. - chuckDontSurf, on 09/17/2008, -1/+11Well, let's just add that to the $87 billion the Fed just paid to JPMorgan to finance the Lehman bankruptcy: http://news.yahoo.com/s/nm/20080916/bs_nm/lehman_d ...
Anyone's head exploded yet? - BotchaMcCoola, on 09/17/2008, -2/+12Where do they get all that money. It is almost as if they can make it magically!
- gamebittk, on 09/17/2008, -0/+9I somehow deleted my comment trying to edit it... It read:
The fed owns a major financial institution? This isn't how things are supposed to work in a free market... - pfranz, on 09/17/2008, -2/+11If it's a sound investment and they're going to make money, then why didn't someone else lend them the money? The Fed was waiting for the market to intervene so it didn't have to. It only came in at the last second.
I'm not saying this was a bad decision. I'm just still trying to sort this all out for myself. - Hooke, on 09/17/2008, -3/+12Game over.
- inactive, on 09/17/2008, -1/+10I hate this system. Too bad neither Obama or McCain even talk about the Fed and it's completely unconstitutional existence.
- SSPink, on 09/17/2008, -3/+11@tehxen3
You act as if there is a choice between bail-outs and recession when in fact their isn't. The choice is between recession now without the government further in debt, or recession a little later with the government further in debt. - craftyguy, on 09/17/2008, -2/+10...and so it begins.
- KMartSheriff, on 09/17/2008, -6/+14@ThinkOutTheBox
No. How about ***** like you stay out of America. - Richandler, on 09/17/2008, -0/+8Hahaha. The illusion that the American taxpayer owns even this government is laughable. When was the last time the people made a major decision in this country.
- PeppermintPig, on 09/17/2008, -2/+10Even when they say they support the free market, they're lying. They support the protectionist rackets until they ***** up and then they ask government to bail out these illegitimate business models.
The free market is two people making exchanges without using force or coercion, or having the state impose taxes. There's nothing free about intellectual protection law used to strike down competition. What we have now is anti-competitive collusion between the Government and corporations. It's mercantilism, it's fascism, it's corporate welfare, but it is not a free market. Profit isn't a dirty word if people procure said profit in an ethical manner. - Gonthim, on 09/17/2008, -0/+8You're behind the times friend. That's socialism v1.0. Socialism v2.0 is where only the risk and debt is distributed to the masses.
- PhilLesh69, on 09/17/2008, -1/+9really? If all financial firms collapse, the people making money off of financial firms will have none. How bad is that?
I'll still have money if all of the brokerage firms, insurance aggregators and mortgage lenders disappeared tomorrow.
I'm sorry, but if you think you would have no money if that happened, you either live paycheck to paycheck, or you really don't understand how money works. - bryanedds, on 09/17/2008, -2/+9No...
If you understand anything about economics, you'll understand that these backs NEED to FAIL in order for the necessary market corrections to come about.
This is only putting of the inevitable and worsening the ultimate collapse. All the FED is doing is making it putting off the necessary correction and making the situation worse.
Economic illiteracy seems to be digg's specialty.... -
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