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Originally Posted by loquitur
Right now it's a prediction, Host - your opinion. We'll know in a year if you're right, won't we? I just think it's an overreaction. Not every slowdown is a cataclysm. We haven't had a cataclysm since the 1930s, and to get that one we needed a perfect storm of worldwide economic foolhardiness. But look, you might be right and I might be wrong. We'll know in a few months.
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This is not prediction, loquitur:
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....the Fed has also opened its discount window to non-banks
for the first time since the Depression.....
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It is upon us....it is the same bullshit as descibed by:
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Originally Posted by Gaetano Salvemini
....the State pays for the blunders of private enterprise... Profit is private and individual. Loss is public and social."....
Under the Axe of Fascism (London: Victor Gollancz, 1936), p. 416.
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...and, it didn't work last time out, because it is about creditworthiness of borrowers, and market value of collateral, not about availability of funds to borrow.....
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http://news.google.com/archivesearch...UTF-8&oe=UTF-8
New York Times, October 11, 1931
New Era In Banks Seen In Hoover Plan
Last week brought forth two developments of extreme important to bankers, each of which, in a different way, is calculated to assist the banks of the country in meeting the hardships brought upon them by the prolonged depression.
The most important step was President Hoover's announcement early Wednesday morning of plans for a $500,000,000 corporation to discount sound banking assets which are not eligible for rediscount at the Federal Reserve Banks.
[...]
the formation of the credit organization outlined by President Hoover, on which work was speedily begun by a group of New York bankers, is expected to have a profound effect in relieving bankers of one of their greatest sources of anxiety. The institution is to be called the National Credit Corporation, will provide facilities whereby
banks all over the country may realize upon sound assets that are not liquid at present due to abnormal conditions.
So what exactly were those sound assets that were were "not liquid at present"? Why mortgage-backed securities of course. Just like today.
http://news.google.com/archivesearch...UTF-8&oe=UTF-8
New York Times, October 8, 1931
Real Estate Men On Hoover Plan
Skepticism as to President Hoover's plan to liquidate frozen bank assets was expressed yesterday by Charles G. Edwards, president of the Real Estate Securities Exchange. The exchange deals almost exclusively in real estate bonds, of which it is estimated that $1,500,000,000 at par value are in default throughout the country.
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"President Hoover's financial plan," Joseph P. Day said in part, "is a step in the right direction towards making real estate investment more liquid. The system will make it possible for the Federal Reserve Bank <h3>to issue acceptance notes against sound real estate securities, thus stabilizing their values. Real estate mortgages are commonly regarded in banking as frozen assets. The Hoover plan seeks to take these substantial investments from the frozen asset class and give them a recognized value."</h3>
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They were not "frozen assets"....the bids for these "assets", just as now, were based on their perceived value at that moment in time. Market participants perceived that they would be worth very little, immediately or soon after they were purcahsed. The Fed is accepting shit from these criminals on wall street, and loaning them money as if they were putting up "shinola" as collateral....at 2.25 annual interest.
Here is the way it worked last time...we are fortunate to be able to see the results, in advance, of taking in the brokerage firms' "shit" at the Fed discount window, but the Fed is doing it anyway....desparate? Cornered?
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http://news.google.com/archivesearch...UTF-8&oe=UTF-8
CREDIT IS NARROWED DESPITE EASY MONEY; Reserve Bank Here Deplores ...
$3.95 - New York Times - May 30, 1932
... outcome of the 1931 credit program of the Federal Reserve Bank of New York, ... The report, transmitted to the Federal Reserve Board by J. Herbert Case, ...
The inferior ability of an easy-money policy to bring credit into use when confidence is lacking was demonstrated by the outcome of the 1931 credit program of the Federal Reserve Bank of New York, according to the annual report of that institution, made public today.....
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...and on July 8, 1932....the Dow 30 Industrial Average <a href="http://finance.yahoo.com/q/hp?s=%5EDJI&a=06&b=8&c=1932&d=06&e=9&f=1932&g=d">closed at 41</a>....down more than 350 pts. from it's Sept., 1929 high at 393 pts.
It's a broken system, loquitur....not a prediction....a broken system now, receiving welfare from the taxpayers....first time it's happened in 77 years.
You'll come to think it's never gonna bottom, never gonna end....just as your great grandfather did, last time it happened!