And what happens to CEOs of these financial institutions that are going belly up? They are still rich and just have to find another job where they can exploit the system. These people have lots of money and they aren't dumb enough to put all of it into the same place. No, when big oil dies it is the poor/middle class that will suffer not those who got rich off big oil.

I'm sick to my stomach that we're privatizing profits and socializing debts.

What's your economic theory of choice, rb?

it doesn't matter here, will: i'm just watching the spectacle and thinking in a social-democrat like way about how to move away neo-liberalism and the rule of the Tiny Brained.

we can talk about economic theory in general another time--i think if i started, it'd derail things and besides, this is kinda interesting...

That depends on whether or not we can recoup. If we can't they could be held responsible and they're going to have to make an Enron run.

I'm also of the theory that when Americans are finally shaken from our comfort, we'll protest so hard the French will be jealous. It's been a while since a nation-wide protest, especially a violent one, but if we get honestly pissed and shaken from apathy, it's a real possibility. A true collapse of Wall Street or oil drying up without an alternative could result in such protests.
-----Added 18/9/2008 at 05 : 52 : 13-----
Fair 'nuff. :thumbsup:

Sounds good, but if you really think our polititians would implement such a plan, I have a bridge in Alaska you might be interested in.:)

like i said, it makes as much sense from a business standpoint as the Tiny Brain alternative--more even. and i think this is a big enough disaster that lots of things are going to become plausible that didnt seem so over the past 30 years of reactionary economic ideology.

i am more sure of something else, though: mc-cain/palin really really cannot be elected.

Good to know, thanks Will. I only read her book Anthem in high school, never made it around to Fountanhead (which all my conservative friends appear to be reading, hence why it's getting on my nerves).Yes, sorry... but hey, give it a few more weeks, and we might not need the 0. :pYeah, same here... the dollar sucked ass against the króna until the Bear Stearns bailout, basically. The average rate for last year was 63 krónur to the dollar... now it's up to 93, and climbing. This is partly due to the dollar strengthening compared to the króna (recently), but as of a few days ago... yeah, you should see it against the Euro. The króna has NEVER been this low compared to the Euro, in the last 7 years that the Euro has been in business. 139 króna to the Euro, last I checked.

the kr has climbed to the point where Skogafoss is looking for fares to go to Iceland for Thanksgiving!

Yeah, it's almost reached 2001-02 levels, which is when I first came here and thought 100 kr to the dollar was normal (and have measured all other exchange rates in Iceland against that, since then, haha).

Could she look for tickets for me and ktsp through NYC to Seattle for Christmas? We're buying on the other side, which means that our tickets are still going to be about $1000 each. :sad:

give me dates, and windows of time that's acceptable. 2 days on either end for variation of fares.

They banned it for financial stocks.

The Guardian wins.

Ha! Okay, I was half-joking... :) but we've already almost nailed it down to departing Dec 21 and coming back on Jan 8, and can't find anything less than about 65,000 kr per person. (Right now, that's $684... apparently the kr is now 94 to the dollar, great!)

/just another icelandic threadjack. :shy:

I'm thinking the same thing. Their implicit message is that "you are a moron", but as the crisis unfolds it becomes clear that they are the ones lacking foresight, judgement, and imagination. Not only that, but the financial crisis has a direct link to McCain in his "maverick" days (which also includes that hot hot hot love affair with Keating.) Gramm and Thain are going to be very heavy millstones.

I dunno, there's so much around McCain's neck already, but his base is still strong.

His base is his base, the 25%-30% of the people who would vote for Ronald Reagan's stuffed corpse. That's not going to win him the election.

The Obama campaign scored a hit on Clinton by going after Mark Penn. They should be putting Gramm and Thain in the spotlight soon.

Very bad polling news for McCain this week: He's behind in Indiana according to a Selzer poll. That's seriously bad. There's absolutely no way he wins if he even has to fight in Indiana. With the exception of 1964, Indiana has gone Republican in every presidential race since 1940. 10% behind in Colorado? 8% back in N. Mexico?

I'd have to say that as the financial system melts down, people outside his base are less and less impressed with his economic acumen.

Oh, I know Obama is going to win the popular vote and likely get more delegates. My concern is how close the race will be. In 2000, the race was a dead heat which allowed to SCOTUS to help steal the damned thing.

If there is an honest-to-goodness collapse, the POTUS won't matter.

It would matter a great deal. Think of 1932. Another term of Herbert Hoover would have made for a very different 1930s and a very different 20th century. The election was critical because of the crisis.

I think there would be a more active response from the populace in the case of a full collapse this time around. Instead of scrounging for work, there would be a combination of exodus and massive protests.

The "New Deal" won't work again. The only way to avoid future collapses is economic reform of the kind that would blow most people's minds, such as no more debt and backed currency.

His economic acumen would be comical if it wasnt so serious.

His flip flops on regulation

His comment that the American economy is strong....then clarifying it later..."what I really meant was the American workers are the best in the world"

His criticism of Obama contributors and lobbyists influence when he has surrounding himself with former Freddie/Fannie lobbyists, including his campaign manager

His claim that as Chair of the Commerce Committee he was on top of the banking/credit issue, when in fact his committee had no jurisdiction over banking, investment/securities, and related issues (that would be the Banking Committee)

His most recent suggesting that, as president, he would fire the head of the SEC...when the president does not have the authority to fire heads of independent agencies outside of the Executive branch.

Depends on what you think he was wrong on. Trickle down and supply side? Yeah, that was retarded. Cutting taxes from nearly 80% and dealing with the USSR, he was absolutely correct.
-----Added 19/9/2008 at 12 : 10 : 05-----
So what then, would you suggest? Nationalized economies? Partial free market? Free market but with some oversight and minimal regulation?

I don't think the concept of free market is too blame. It's the corruption. In fact, we don't have a true free market.
-----Added 19/9/2008 at 12 : 17 : 33-----
Roach, if the free market and Ayn Rand novels (and their teen readers) offend you so much, what would you propose (besides a book burning)? A command central economy? Nationalized economy? Redistribution of labor and wealth to be decided by a centralized government to be run by the intellectual elite? What about a proper free market with some regulation and oversight?

All you do is bash, bash, bash. It's as if you take a sick pleasure in watching the economy decline at the moment while eating your popcorn.

Really, what do you think? Do you think this is a temporary hiccup or the beginning of the end? If it's the end, what do you think will take its place?
-----Added 19/9/2008 at 12 : 21 : 23-----
What gets on your nerves? The references or the actual novels? The only people referencing Ayn Rand are the ones bashing it. Someone recommended an Ayn Rand novel in a different thread and got bashed for it. I haven't read any of her stuff but now I'm curious as to why her books are so offensive to people. Must contain a lot of graphic violence, baby killing, homophobia, misogyny and racist stereotypes or something to have so many people over react to the mere mention of her name.
-----Added 19/9/2008 at 12 : 22 : 53-----
At the moment, it is a dead heat. The Dems had better get going in ramping up their campaign.

Cutting taxes was a part of his plan. The lack of oversight from government was connected to the S&L crisis. As for the USSR, we could have handled that better (of course we were both in diapers at the time, so anything I put out there is going to be hindsight so I won't get into it).
The last one sounds okay for the time being. It would ruffle way too many conservative feathers to start regulating a lot. What I hope happens is people are actually held responsible this time. Keating was a joke, and a lot of people got out of the S&L thing scott free.
That may be true, but less capitalist markets seem to be doing better right now. I'm not saying anything is perfect, but you've gotta shoot for the best you can. If there's a solution that's capitalistic, I'm all for it. If there's a solution that's less capitalist, that's fine too.
I'm sure they've got something up their sleeves.

Corruption will exist in any system, it is a flaw in mankind.

"The enemy of corruption is transparency and accountability." ~ Willravel, 2008

Agreed, S&L was the crap and totally uncalled for. As for USSR, yes hindsight does skew things a bit, but given the context, I think The Gipper did all right.

Maybe, maybe not. I think it would depend on what kind of regulation and hopefully, there will be enough people in the middle to keep extremists on either side at bay. We have to let them know it can longer be "business as usual" you know? Maybe the elections will yield an interesting make up in the Congress (more moderates, middle, progressive types from any party and indies). But yes, I also agree with the last one.

I was thinking the same thing! Really, enough is enough. Accountability and responsibility (supposed tenets of conservatives and Republicans).

I like your open mindedness and outlook. I happen to agree as well. Thanks for your candor and for sharing your thoughts.
-----Added 19/9/2008 at 03 : 42 : 13-----
True, very true. But we should still do our best to mitigate it.
-----Added 19/9/2008 at 06 : 20 : 07-----
Well roachie, it looks like you got your wish. Short-selling has been temporarily banned. Not sure what to make of it. I kind of liked short-selling but if we need to ban it, then I guess we need to ban it. Still, a temporary ban does seem prudent at this time.

SEC bans short-selling - Yahoo! News

jorgelito--i'm really not clear on why you impute all these odd motives to what i put up. i've made myself pretty clear--in this context, the only position i see as reasonable is a social-democratic one. this is a mixed economy. trick is that neoliberalism is also a mixed economy--there is no such thing as a "free market" outside the purple prose of ayn rand or the dreams of 18th century political economists---the problem with neoliberals is that they are ideologically and aesthetically opposed to "regulation" so they don't think in those terms---which sets up the incoherent, reactive nonsense you've seen over the past few weeks from the administration--which has intensified an already problematic situation--which was enabled by the administration and its predecessors since reagan.

since markets presuppose regulation, it seems more coherent to think of them in those terms and operate with a perspective that sees in regulation constraints that can be used to direct socio-economic activity---and if you think that way, it becomes easier to address social problems that follow from economic activity. for example, neoliberal-land typically does not even include space for wondering about the relationship between massive consumer debt--of which the shit mortgage problem is but an expression--and the avoidance of the implications of the processes of--say---outsourcing of production. like the good dr bindujeet put it, much of the us is a factory town without the factory at this point. that's not coherent as a social arrangement, that's not coherent as a form of capitalism, and the **only** way it's acceptable is if you think "markets" are like the weather and the consequences of market relations inevitable.

that's delusional, though: if that were true, capitalism would have collapsed by 1870.

it looks like the state is undertaking *both* options: the sec banned shortselling AND there's some theater going on to create the Magic Debt-Absorbing Machine.

more on this later.

The references bother me, because they are being made by people whom I never knew to be interested in any kind of reading (we went to high school together, the ones I am talking about), and all of a sudden they're pulling out Fountainhead references like they've been following Rand for the last decade. I'm not convinced that they've actually read the book--hey, I haven't, either--but it seems to have become a Republican hand-me-down point that my friends use when I'm arguing with them. I have the same feeling of "offense" when they throw the Bible at me, in a political way.

From what I remember in Anthem, no, there is not baby killing and all the rest... anyway, that's not what offends me. It's just that people are quoting her, I feel, without actually reading the book. Kind of like the whole "I can see Russia from my island" thing. Just more disingenuity that pisses me off.

Or maybe I'm just on cynical override these days... :)

Given the news of the past few days in the financial sector and the lack of confidence that appeared earlier in the week on wall Street, I think in the end these events will again show the resilience of the American economy. The economy is strong and will flourish in the years to come.

resilience or denial?????

Because it's always bad to spend money you don't have, or when your expenses are more than your income.

this isn't anything but a shell game of transferring the debt so that the boomers don't pay for it, but the gen Y'ers and future will.

There's an obit for neoliberalism here:

This week's financial crisis marks the end of an epoch | Business | guardian.co.uk

It's a bit anglocentric, but the same basic points apply to the situation aux Etats unis, the main one being that the markets have responded positively to regulation. There will still be people fighting the old war, just like there were soldiers in caves in the Phillipines fighting WWII into the 1970s, but for the rest of us, neoliberalism is kaput.

I think when the economy needs hundreds of billions of tax payer dollars pumped into it to keep it standing it can no longer be considered "strong."

I think this is a mere band-aid- at some point all this borrowing is going to come back to bite us in the ass.

I hope you are right. The rally this morning and yesterday afternoon seems to be in response to more government oversight. I have a hard time understanding how these large banks and insurance sompanies can be going belly up. Wasn't it obvious that real estate prices were going to fall/correct? Isn't it now obvious that they will fall until the average wage earner can afford to buy with a standard mortgage? Why didn't the leaders of these companies see this? Something is very wrong.

what seems at stake is not the swinging about of the stock market, and not whether any of the reactive measure that have been put into place so far "work" but more (a) what the move ultimately is that is being hammered out now--the "big" one and then, more broadly (b) the extent to which the collapse of neoliberalism comes to be reflected in a discursive shift both at the level of how the relation of regulation to economic activity is thought about, implemented, adjusted, etc. lagging behind this will be a shift in the dominant ideological framework, the language of staging/describing...

i think the guardian obit is a pretty good summary of the story so far...

Yes, I want to see more of this. The only way out is to get yourself out of debt, and spend less than you earn. this isn't college math, but simple grade school arithmetic.

Hmm... that's not my take on it at all. I don't think people took the Great Depression lying down. Not in the least. I think you're projecting today's passivity onto the past. How about that Bonus March? The 8 hour day? Sit down strikes? The Pullman strike? There was plenty of grassroots adaption/resistance, too. You can hear about some of this in Studs Terkel's Hard Times.

To be sure, we have a different set of problems today. They will require a somewhat different set of solutions, but, as it turns out, the New Deal financial regulations were very good ideas. A "backed currency" is not. It's economic nonsense. What is gold worth? It's so-called intrinsic value is as imaginary as paper's. "No more debt" takes us back to the stone age -- and i mean that literally.

I would have grabbed a really big stick and gone out for blood had I been president, just like I would be doing right now. These kinds of failures are completely unacceptable and you have to scare the shit out of the next generation of congresspeople and captains of industry so that they do their best to avoid it. The president isn't just a figurehead, he (or she) has real clout and has a lot of weight to toss around be it in government and the private sector.
Start with letting the OFHEO do their job. The Office of Federal Housing Enterprise Oversight was built specifically to ensure that government sponsored enterprises function correctly. Congress stopped the OFHEO from doing their jobs with Fannie and Freddie because they were concerned about messing up the housing boom (talk about a lack of foresight, yikes). Fast forward 3 years and *surprise!* the tax payers are dropping billions on someone else's mistake.
Let's just share that one.
You running for office? :oogle:

Although of course I agree in principle, it is much easier to spend less than you earn in a household, small business, or even a large corporation than it is for a government of a large country. There are social programs in place, infrastructure, land management, agreements to be kept around the world, people to work with, and so on. You know this.

This country is not the same as it was since Reagan. Its simply isnt and it hasnt been. If you read the foreign presses you will see that it has been coming for a long time, the dissatisfaction with our politics, and it started then. Although Clinton was much more liked around the globe than these other sitting presidents, he didnt do as much as I would have liked and I think in some ways he fucked us up too.

I believe the rb is right, there is a big wind blowing this way. I dont believe this has to do with our spending habits per se. I think it has to do with greed here, and is punative internationally. I think the jig is up, as is our influence.

what's simultaneously not surprising and a bit alarming in paulsen's statement this morning is the "bad apples in an otherwise healthy batch of produce" way of framing what's been happening. if this thinking frames the program that's being fashioned--the magical debt-sponge institution----

which i think we should all benefit from, don't you?---let's declare a universal debt holiday--pull the plug on the entire machinery for a minute, push reset. ok everyone is liquid now. let's start over. without that, you might start thinking that marx was right about the particular unfreedom within capitalism for everyone except the holders of capital, that the state is little more than an expression and instrument of defense of class interests, on and on....

but that can't be true as we're in a post-class society and the problem is only those bad people who mention class, who seek to divide and/or express their resentment-----

then the Magic Debt Sponge will not be framed in a comprehensive enough manner to do much of anything beyond it's immediate functions.

what this has to do with is, in the end, how you understand the mortgage business, whether you connect it to the usage of debt as a mechanism for buying social solidarity that's been pushed to its limits by neoliberalism, or whether you see it as separate.

this is one of those questions that i think an index of the political divisions within the american monocrop ideology,

at the moment, my theory of what's coming is way too cynical.
suffice it to say that the next election looms ever larger, and that i think if mc-cain/palin are elected, the united states will find itself shifted from empire to a nebulous space closer to that of the "3rd world" than its position of empire. gone are the days when the americans will be able to export the irrationalities of their socio-economic order and use the imf/world bank system to force southern hemisphere countries to accept them. the empire is crumbling, but that doesn't mean there's only one possibility as to outcome.

Analogy time:eek: For those who don't like analogies in general and my analogies specifically, you have been warned.

Have you ever seen a Rocky movie? In every movie, Rocky has his confidence shaken, but in every movie his inner strength and potential is there. In every movie Rocky, fundamentally strong, has needed reassurance or a little push from another character, either Adrian, Mickey, Apollo, etc. He gets that push and is ready to fight. During the fight he takes the best shots from his opponent, he never gives up, his inner strength comes to the surface. Rocky overcomes, Rocky is a winner. Our economy is like Rocky, with a little help our economy will overcome, our economy will win.:thumbsup:

:rolleyes:Anaolgy is now completed, o.k. to continue with normal discourse.:thumbsup:

The economy neatly follows the rules of narrative fiction?

That's a great little fantasy. Real life isn't like that.

Here's one challenge to the analogy: when is this movie supposed to be over? When is the denouement? When exactly will we look around and say, "Hey, everybody! We MADE IT!!"? A year? Ten? What will the next day be about, a sequel?

LIFE ISN'T LIKE THE MOVIES.

Greed is a given. The problem began with Fannie Mae and Freddie Mac creating a secondary market for mortgage loans. These institutions used leverage to over-extend the industry. They had the benefit of getting below market money to buy and package loans that they could sell at market rates. They had no incentive or reason to stop doing more and more. The irony is that we have known for years that these organizations were bankrupt, depending on how you valued the underlying assets, or at the very least unreasonably leveraged. The Bush administration actually tried to reform these organizations but was not able to because of Congress.
-----Added 19/9/2008 at 01 : 35 : 25-----
You think there will be an end to "Rocky" movies? I think I rented Rock XV last week or was it Rock VI, not sure, but I loved it.