Re: DOW Up 416.66 : Financial Groups' Correction?

On Mar 11, 5:43 pm, "John Galt" <whoisjohng...@[EMAIL PROTECTED]
> wrote:
> <stuff_st...@[EMAIL PROTECTED]
> wrote in message
>
> news:171et3di4lsljdm74hnvqb93d00br6s2mt@[EMAIL PROTECTED]
>
> > On Tue, 11 Mar 2008 16:47:34 -0500, "John Galt"
> > <whoisjohng...@[EMAIL PROTECTED]
> wrote:
>
> >>What the Fed is doing now and what they did then could not be more
> >>different.
>
> > Except it's not. It's created a whole new entity to loan money out
> > with bonds as collateral. But the bonds are about 50% over rated.
> > They're trading good paper for bad. This is not going to end well.
> > IMHO.
>
> 1929 was a tight money Fed policy. Today is the opposite. Not the same.
> Today, the goverment is going with loose money and as you point out,
> absorbing risk. Today the exposure is topped at 200B, but since they're
only
> taking the AAA stuff (yes, I know....), one would *hope* that losses
won't
> top a point or two while restarting the credit market.
>
> If the taxpayer can restart the markets at the cost of 4 to 10B, it's a
> bargain. Should have done that instead of the 150B rebate.
>
> JG

 you still peddling that libertarian myth crap.  if the free market
thought a few measly billions would bail them out of this debacle,
they would have.
 bailing out the free market only encourages more bad economic
behavior.
 giving money to those who need it the most, and dumping free trade
will go a long way to bring sustainable markets back.
http://www.aliveness.com/kangaroo/Timeline.htm

1930
	*	By February, the Federal Reserve has cut the prime interest rate
from 6 to 4 percent. Expands the money supply with a major purchase of
U.S. securities. However, for the next year and a half, the Fed will
add very little money to the shrinking economy. (At no time will it
actually pull money out of the system.) Treasury Secretary Andrew
Mellon announces that the Fed will stand by as the market works itself
out: "Liquidate labor, liquidate stocks, liquidate real estate... values
will be adjusted, and enterprising people will pick up the wreck from
less-competent people."