'The cost to protect the debt of Morgan Stanley (MS) and Goldman Sachs Group Inc. (GS) surged to the highest levels since the weeks after Lehman Brothers Holdings Inc.s bankruptcy as concern intensified that Europes debt crisis will infect the global banking system.' http://www.bloomberg.com/news/2011-...sk-gauge-rises-to-highest-since-may-2009.html
Are the masses going to be economically ignorant/gullible enough to let these ding dongs get bailed out again? Probably.
Do you fools actually think letting the globalized economy just collapse is going to benefit us in any way? You know it's not a conspiracy. If the Global economy collapses we're all dead meat and going to be living in animal skins and reading by candlelight! YAY! 19th century living!
So please prove to me using links to unbiased facts that the global economy will collapse if these banks are not bailed out? And I am not in the slightest bit interested in 'economists' opinions. Most of them completely missed the housing crash...their words mean nothing to me. Only facts/stats.
These aren't the issues that define conservatism. Small govt. and balanced budgets do define the movement. Gays are fine if they aren't leftists.
LOL. I know Al, I was being facetious. However, I must say I would take a national leftist over a globalized rightist. At least America stays intact and there is a chance of fixing whatever they did. There's no fixing dead.
Kind of late on the trigger. the US Banking industry has been a high risk investment since 2005, much like all Detroit auto makers. By the time the broadcast sellers get the word out, all the smart ones have made their market move and are profiting off the ones who just racted to the downgrade. If you look at the USA capitalist industry stagnation, it began around 2002 and the corporate profiting off the government and taxpayer direct happened around 2003. What we see the market sellers advertise now is just to drive the stock market down. But no matter what they throw out there, the stock marked has a hard time getting down 20% off its annual high. Most seasoned investors are already heavy invested in emerging countries, and so are the major investors of the world. Only the slow ones are still tied up in the USA markets. As there is no profit from bonds, and minimal profit from corporations and commodities.
I agree. America (imo) has a lot of falling to do before it can get back up again...unless there is a fairly major war - instigated by America - that could put that on hold for a long while. The American economic empire has been very slowly crumbling for a long time - and propping it up with debt is one of the last desperate measures to delay the inevitable. But once the debt tap runs dry - the question is will the neo-cons let America's absolute supremacy go quietly? Or will they then try to play their last card; the most powerful military in history (relative to the rest of the world) - in a desperate attempt to hold on to that supremacy? I do not know.
Want an unbiased opinion from an economist you tend to agree with and is against any bail out knowing full well the result? Here it is: Stay with this as it's about connecting the important and very important.. Facts are Q2 wasn't to stimulate the US Economy, but to bailout European Banks who were having issues funding themselves along with Euro/Dollar swaps between the ECB and the Fed (more then the normal). The bank which was borrowing from the Fed the most over the last 3 years wasn't even on the radar screen to many Americans (this is important). Today, everybody knows it... the bank was Dexia. Among the other banks who were borrowing massive amounts from the Fed Discount window (3 years or even to this day) include Bank of Scotland (very important) and Depfa Bank Plc (very important). Now that Q2 has ended these banks which are actually subsidiaries to huge banking groups or even owned by Foreign Government now are posting massive loses again (Q2 covered up these loses by infusing them with cash). Bank of Scotland is part of Lloyds Banking Group which 41% of it is owned by the United Kingdom. Depfa is now part of Hypo Real Estate which 100% by the German government. Lloyds was downgrades this week along with other British banks. Now we are in the area of not the PIIGS being at stake but the UK and Germany when it comes to Sovereign Debt issues. Now with the PIIGS the major holders are in Europe while the US sold Credit Default Swaps on PIIGS debt. So the US would lose out as well. These banks are Morgan Stanley and Goldman Sachs types. What you would see is what we saw in 2008 but probably 100 times worse. As these Banks thanks to Obama, Congress, and the Fed they have been pushed to make loans (use their capital reserves), so they have very little reserves to cover the CDS they have on the books. To put in perspective and how it will play out... since 2009 US banks have loaned a total of $500 billion to Europe. $100 billion of it to PIIGS Governments and Banks. The rest went to "Stable" countries that are bailing out the PIIGS, mainly Germany and France. Now when (as it's not a question of if but when) any of the PIIGS formally fail, French banks like Société Générale (SocGen) and Deustche Bank will collapse overnight (which is worse then Lehman). US banks will have to pay on the CDS no matter what. MS and GS don't have those reserves as they rely on short term lending to fund themselves and with capital drying up due to a default somewhere in Europe it would be impossible for them to get the funding so they would go into default status as well. Now Small/Mid and Major US banks have exposure to MS and GS and you really don't want to get there if you can avoid it, because we would be living in the 1900s within a few weeks as capital dries up in business and even at your power company or it could be massive inflation in which point you won't be able to afford power let alone a loaf of bread.
Most of the time, the best way is the hardest way. The fact the whole western world revolves around a few banking houses, is proof in its own right what needs to happen. We have tried to free the west for centuries from these houses. The founding fathers did everything they could to keep them at least out of the state, to which they managed to circumvent almost a century ago. We need to let them all crash and burn, accept the consequences and hardships as a heroin addict getting over addiction, and restructure society so they never have control again. You cannot argue central planning while supporting central banks. Too many hard working capitalists have been hoodwinked. All these banks are under control of the member banks of the FED. If not directly, than indirectly.
I agree 100%. I appreciate austrianecon's detailed explanation. He clearly knows much more about the inner workings of the banking industry then I do. But I agree with you....let those that cannot survive without government assistance crash and burn. What it does to the economy, it does to the economy...this nonsense is bringing the Western world to the edge of madness. Trillion dollar yearly deficits, stagflation, people growing dependent on printing presses for economic growth, prime rates held at record lows...and still they are not low enough for the central banks, government spending almost out-of-control, high unemployment with no end in sight, rising inflation (that is going to continue to rise and rise if the above keeps up). Actually, correction - it IS madness (imo). IT MUST end. And the only way I see that happening is a MASSIVE shock to the system...people must be hit in the head with a hammer of reality. You are right, most people in the West (and Japan) have become addicts - and the heroin is 'cheap' money. And like every hard addiction - quitting is absolutely imperative and it WILL BE VERY PAINFUL...there is no way to avoid that now. And every month we delay, the withdrawl symptoms will get worse and worse. So let all the banks that need to die...die. And if it causes a major depression...so be it. America survived the last one and that was without almost all of the welfare safeguards that are around now. No one will starve (with food stamps), or need die of exposure (not with welfare housing - and if they run out of that, just let them live in all the millions of foreclosed houses that these failed banks will have just lying around), or lack of medical care (with medicaid and medicare) or from lawlessness (bring the troops home and let them patrol the streets if need be - they did it in Iraq...why not in America?). 'But it will be painful'. Of course it will...VERY...but nothing can stop that from happening now (imo). Just grow up, face it and hit the reset button on America's economy. And this time...get it right.
The fact is that most of the money to be lost in a financial collapse has already been siphoned from the real economy of the exchange of goods and services in order to be invested in the false economy of speculation. The speculative economy is now orders of magnitude larger than the real economy so small downturns there will have drastic effects on the much smaller economy in goods and services which the vast majority of the planets inhabitants depend on for their livelyhood. The entire world economy has become hostage to speculators. A massive financial collapse, while causing temporary cash flow problems in the real economy, would free it from the speculators currently holding the economy hostage through blustering threats of economic calamity. Well, the real economy is already in a continuing calamity so the world economy has reached a point where it would would be better off by repudiating the speculators, letting them collapse and removing them from the power equation. Nationalizing the banks and directing their resources to national interests instead of private profit would go a long way to restoring a stable path to economic growth and prosperity.
I swear man, everytime I hear a leftist speak I want to smack them. Is there any major sector of the economy that should not be nationalized? Because it seems to me, that if you engage in any economic activity at all, liberals want to regulate or nationalize it in some manner. Health Care and Finance are Americas two most important sectors of the economy and the only two that are actually growing and you want to nationalize them. Foolish doesn't even describe it. Nationlization of banks is pure marxism. There is no other way to describe it.
Article 1 - The Legislative Branch Section 8 - Powers of Congress The Congress shall have Power To lay and collect Taxes, Duties, Imposts and Excises, to pay the Debts and provide for the common Defence and general Welfare of the United States; but all Duties, Imposts and Excises shall be uniform throughout the United States; --I doubt anyone would call our tax code uniform To borrow money on the credit of the United States; --I doubt they meant from their own central bank To regulate Commerce with foreign Nations, and among the several States, and with the Indian Tribes; --Signed over to the WTO To establish an uniform Rule of Naturalization, and uniform Laws on the subject of Bankruptcies throughout the United States; --Something tells me they intended for immigration laws to be enforced, and for corporations not to be able to escape bankruptcy by having many firms under control of one. To coin Money, regulate the Value thereof, and of foreign Coin, and fix the Standard of Weights and Measures; --According to SM, the founders were Marxists. I think not. To provide for the Punishment of counterfeiting the Securities and current Coin of the United States; --More proof of the founders intent on a national monetary system, under state control. Not leased out. To establish Post Offices and Post Roads; --Proof that commonwealth law not only exists in capitalist society, but that without the state we would not only not have interstate roads, we wouldn't have most residential roads. To promote the Progress of Science and useful Arts, by securing for limited Times to Authors and Inventors the exclusive Right to their respective Writings and Discoveries; --IP law is constantly attacked. Not just by anarchists and leftists, but libertarians. Right here on this forum. To constitute Tribunals inferior to the supreme Court; --One of the few things still strong, though more strong than they intended. Moving into the realm of writing legislation verses just judging legislation on constitutional merit. To define and punish Piracies and Felonies committed on the high Seas, and Offenses against the Law of Nations; --A very small but important piece, as it shows the founders never intended there to be a power larger than nations. Founders were not globalists, regardless of what libertarians or neocons preach. To declare War, grant Letters of Marque and Reprisal, and make Rules concerning Captures on Land and Water; --All modern American wars are either police actions or illegal, there is no between. Proof the founders never imagined our armed forces being used for global interests, as they established congress as the highest authority. To raise and support Armies, but no Appropriation of Money to that Use shall be for a longer Term than two Years; --Cannot be appropriated for longer than two years. The main reason why congress doesn't declare wars in these modern times, so they can avoid this simple rule. To provide and maintain a Navy; --The navy is constantly being shrunk, and is ill equipped for a 3rd world war. Not only are we building ships with the speed of Iceland, through globalism and the passing of free trade legislation, our congress has done more to provide and maintain a Chinese navy. Treason. To make Rules for the Government and Regulation of the land and naval Forces; --The Geneva convention should have never been signed. To provide for calling forth the Militia to execute the Laws of the Union, suppress Insurrections and repel Invasions; --I imagine the passage that led to the ruling of the supreme court that the national guard constitutes militia pertaining to gun rights. To provide for organizing, arming, and disciplining, the Militia, and for governing such Part of them as may be employed in the Service of the United States, reserving to the States respectively, the Appointment of the Officers, and the Authority of training the Militia according to the discipline prescribed by Congress; --Same as above. At all times be weary of your rights as a gun owner. To exercise exclusive Legislation in all Cases whatsoever, over such District (not exceeding ten Miles square) as may, by Cession of particular States, and the acceptance of Congress, become the Seat of the Government of the United States, and to exercise like Authority over all Places purchased by the Consent of the Legislature of the State in which the Same shall be, for the Erection of Forts, Magazines, Arsenals, dock-Yards, and other needful Buildings; And To make all Laws which shall be necessary and proper for carrying into Execution the foregoing Powers, and all other Powers vested by this Constitution in the Government of the United States, or in any Department or Officer thereof. The only reason why I posted this section of the constitution is so people will know not only is our nation under attack from the left, but by neocons and libertarians as well, as SM's support of the 12 member banks who make up the FED proves.
