On Fri, Feb 6, 2009 at 9:17 PM, Robert Munn <[email protected]> wrote: > Different issue. I sounded the alarm over the possibility of systemic > failure of the banking system, which was addressed (however poorly) with the > TARP. It didn't restart the economy, but it should keep the banking system > intact. This pig of a bill tries to do everything for everyone that > Democrats owe, and in the end it could do more harm than good.
It's not at all a different issue. The systemic collapse of the banking system is spawning a systemic collapse of the broader economy. The finance industry has been propped up a bit, but unless the flow of goods and services increases and consumer confidence rebounds, the partial prop up of the finance industry will be for naught. The financial industry is still sitting on a metric ass ton of bad debt that everyone is afraid to try and judge the worth on. That means that financial liquidity is still very low even as the balance sheets of some of the larger banks (the ones left) have stabilized a bit. No one is really calling in the bad debt because that would spawn another huge round of mark downs that everyone is trying to avoid. So it is just floating there on the books with an unreal valuation and hopes that the overall system will rebound enough to allow the banks to vaugely gracefully deal with the horrendous book keeping problems awaiting them. In order for that to happen, companies need to have the confidence to invest in capital upgrades and consumers need to have a feeling that they will be employed for awhile. Only then will we see a stabilization of housing prices, a return to solid companies involving themselves in the debt market and bonds mellowing out. And that will happen when the market for goods and services kicks in and allows some breathing space for people that are otherwise panicked. This is the natural next step in the very same bail out that you yourself supported and for the same logic. Banking is not in total free fall at the moment, we haven't had a big bank failure in a couple months. But the propping up of that system will all be for naught unless a big player comes in to reinforce the demand side of the equation and stimulate a market for a period of time that allows liquidity to be restored. The one player big enough to do that is the federal government. You may not like it and I certainly understand that but it is a simple fact. It is classic economics and you delude yourself if you think otherwise. I'd like to think that you supported the bail out because of intellectual insight and not partisan behavior. I was heavily against Bush and most everything he did, but I swallowed my pride and backed the bailout because I was convinced of the danger even though my instincts told me to let the fuckers fail. Suck it up and let your intellect guide you through the situation, not partisan rancor and habit. Judah ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~| Adobe® ColdFusion® 8 software 8 is the most important and dramatic release to date Get the Free Trial http://ad.doubleclick.net/clk;207172674;29440083;f Archive: http://www.houseoffusion.com/groups/cf-community/message.cfm/messageid:287662 Subscription: http://www.houseoffusion.com/groups/cf-community/subscribe.cfm Unsubscribe: http://www.houseoffusion.com/cf_lists/unsubscribe.cfm?user=89.70.5
