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The Obama administration is now completely wedded to the idea that there's nothing fundamentally wrong with the financial system — that what we're facing is the equivalent of a run on an essentially sound bank. As Tim Duy put it, there are no bad assets, only misunderstood assets. And if we get investors to understand that toxic waste is really, truly worth much more than anyone is willing to pay for it, all our problems will be solved.
The Concience of a Liberal
Seeded on Wed Jun 3, 2009 8:36 AM EDT
Article Source: The New York Times- Enjoy this article? Help vote it up the 'Vine.
- Public Discussion (15)
Underlying all this, apparently, is the theory Tim Duy sums up so aptly:
Policymakers are assuming that restoring proper functioning in credit markets - and confidence in general - is equivalent to a housing price rebound. They seem incapable of envisioning a world in which this is not the case. This tunnel vision prevents policymakers of trying to devise policy which assumes that the many of the assets in the banking system are simply “bad.” For Bernanke and Geithner, there are no bad assets. Only misunderstood assets.
- 1 vote
#1 - Wed Jun 3, 2009 8:40 AM EDTSo in other words they believe the American people are as stupid as the government was for bailing the banks out in the first place. And bascially being condescending to everyone by simply saying we dont understand. I think the bottom line is the American Public does understand that the banks are not doing the job they are supposed to do and got themselves into their own mess, but hey who am I to say.
- 1 vote
Semper,
From the article: what we have is nothing but a confidence problem
Hmmm. Reminds me of that classic line from Cool Hand Luke:
What we have here is a failure to communicate.
Sure, they think the financial system is just fine. Of course, "just fine" means that they will take the time-honored ways of getting out of this mess with the massive spending programs. They have two choices:
1. Raise taxes---followed by more unemployment, lower productivity and a worsening economy.
2. Monetize the debt by printing more money---followed by inflation, a drop in the value of the dollar and a worsening economy.
This is not a recession. This is the beginning of another depression. It will not end until this @!$%# is out of office, along with all the other liberals who are spending our kids and grandkids into slavery through taxation. The same thing happened during the Great Depression as we are about to see. FDR @!$%#ed that "capital has gone on strike," meaning that businesses were not investing because of the uncertainty introduced into the market by government tinkering and confiscatory taxation. Damn. FDR even had an "undistributed profits tax" which taxed the savings of businesses. The Depression didn't end until the "stimulus" of WWII. (Hmmmm. Hope BHO reading of history is as thin on that issue as it is on how Hoover and FDR "fixed" our economy.) The Obama Depression will not end until the scoundrels who caused this mess are out of office or greatly reduced in numbers.
The idea that investors will think that toxic assets are not, ummmmm, toxic is wishful thinking. So the "old ways" of manipulating the economy will be attempted---to no avail.
- 4 votes
#2 - Wed Jun 3, 2009 9:10 AM EDTHey cfd! Good to see you again my friend!
The Obama Depression will not end until the scoundrels who caused this mess are out of office or greatly reduced in numbers.
BINGO!
The left still can't accept that concept. They continue to believe that just because it walks like a duck and quacks like a duck, it really isn't one simply because those opposed to their ideologies say it is!
Liberals honestly believe we are saved by this Congress and administration.
- 4 votes
Semper,
Good to see you again. I thought that maybe you went to s h i t and the hogs ate you.
You bring up a good issue with this thread. Check this out. One of the links from the article to other articles at NYT talks about subsidizing investors who invest in "toxic assets." http://www.nytimes.com/2009/03/21/business/21bank.html?hp Here's what it says, in part:
The plan is likely to offer generous subsidies, in the form of low-interest loans, to coax investors to form partnerships with the government to buy toxic assets from banks.
Another offshoot from the NYT article (http://krugman.blogs.nytimes.com/2009/03/03/zombie-financial-ideas/) here's a bit of interesting text:
Policymakers are assuming that restoring proper functioning in credit markets - and confidence in general - is equivalent to a housing price rebound. They seem incapable of envisioning a world in which this is not the case. This tunnel vision prevents policymakers of trying to devise policy which assumes that the many of the assets in the banking system are simply “bad.” For Bernanke and Geithner, there are no bad assets. Only misunderstood assets.
- 2 votes
#3 - Wed Jun 3, 2009 10:25 AM EDTAmerica doesn't know how deep we are in it, and how much deeper it's going to get!
The bank I helped charter (Westsound Bank - 8 branches) went into receivership last month. They got a little too greedy in the Mortgage frenzy. I banked with them from day one, and all loans were frozen without any warning. This included my business line of credit. It has almost crippled us as a small business! My cash flow came to an abrupt halt, and I was forced to tap my personal cash reserves to stay afloat these past four weeks! The FDIC still hasn't responded, and my new bank has approved my line of crerdit, but can't release funds until the old bank completes their closeout of the account.
And I am but a mere speck! Some 35 US banks have collapsed so far, and me thinks it isn't over yet!
- 3 votes
#4 - Wed Jun 3, 2009 7:56 PM EDTSemper,
This @!$%# in the White House is nothing but a @!$%#ing fascist. Here's his list of deeds and things he'd like to do.
Nationalize the auto industry.
Control much of the banking and finance industry.
Nationalize healthcare.
Pass Cap and Trade.
Pass a Value Added Tax.
Control the energy sector of the economy.
Also on his wish list, the things he would do, given the chance:
Raise income taxes on the highest wage earners.
Appoint a flock of liberal federal judges.
Find a way to abridge the Second Amendment.
Abandon Israel.
Sign a Kyoto-type treaty on the environment.
And because he's going to @!$%# up the economy, he will have to:
Reduce or eliminate the tax deduction for mortgages.
Reduce or eliminate the tax deduction on charitable giving.
Raise taxes in one way or another on everyone.
We will not come out of this mess for many years, if ever in our lifetime.
Invest your money in pitchforks and hanging ropes.
- 4 votes
How about the fact that we are now being referred to as a muslim nation according to the POTUS.
- 4 votes
#5 - Wed Jun 3, 2009 11:27 PM EDTflower,
Good to hear from you.
Napolitano had her list. Out of the blue, I woke up an extremist.
The other day I woke up and found out I was Muslim.
Go figure.
- 1 vote
As Tim Duy put it, there are no bad assets, only misunderstood assets. And if we get investors to understand that toxic waste is really, truly worth much more than anyone is willing to pay for it, all our problems will be solved.
Ok--lets put it another way--if it smells like poo, looks like poo, and tastes like poo--it isn't poo? I was born recently but not yesterday.
For those that don't understand, junk cars aren't really junk cars, we just need to get the buyer to understand that junk cars are really worth more than anyone is willing to pay for it.
What an awful mess.
That is puting it lightly.
- 1 vote
#6 - Wed Jun 3, 2009 11:51 PM EDTOwn Up,
Ok--lets put it another way--if it smells like poo, looks like poo, and tastes like poo--it isn't poo?
Of course it's s hi t, and we are going to have a steady diet of s hi t sandwiches for at least four years. It's going to be worse than learing to each your veggies.
- 2 votes
#7 - Thu Jun 4, 2009 7:32 AM EDTSo Bernanke finally comes out,and says this administration needs to stop spending.
No s h i t Sherlock. This should have happened a long time ago,but no the Government says no tis only a flesh wound,and we should all learn how to sing Don't worry be happy!! Morons
- 4 votes
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