"John Galt" <whoisjohngalt@[EMAIL PROTECTED]
> wrote in message
news:StHBj.82348$ng7.41418@[EMAIL PROTECTED]
>
> "Econotron" <njmfis-1@[EMAIL PROTECTED]
> wrote in message
> news:jmHBj.6270$e52.6175@[EMAIL PROTECTED]
>> "John Galt" <whoisjohngalt@[EMAIL PROTECTED]
> wrote in message
>> news:IiHBj.68839$Gv.41834@[EMAIL PROTECTED]
>>>
>>> "Econotron" <njmfis-1@[EMAIL PROTECTED]
> wrote in message
>>> news:COGBj.7587$y83.7323@[EMAIL PROTECTED]
>>>> "John Galt" <whoisjohngalt@[EMAIL PROTECTED]
> wrote in message
>>>> news:16DBj.70348$6i4.24471@[EMAIL PROTECTED]
>>>>> John Galt:
>>>>> "Christopher Helms" <Chrishelms132@[EMAIL PROTECTED]
> wrote in message
>>>>>
news:1a1d7aef-1c8c-49d4-bee5-e5b506ff87c9@[EMAIL PROTECTED]
>>>>> On Mar 11, 3:46 pm, stuff_st...@[EMAIL PROTECTED]
wrote:
>>>>>> On Tue, 11 Mar 2008 13:30:17 -0700 (PDT), perrie
>>>>>>
>>>>>> <perryneh...@[EMAIL PROTECTED]
> wrote:
>>>>>> >We'll see if it continues tomorrow, won't we?
>>>>>>
>>>>>> http://biz.yahoo.com/ap/080311/wall_street.html
>>>>>>
>>>>>> Dow Jumps More Than 400 Points After Fed, Other Central Banks Move
to
>>>>>> Ease Credit Crisis
>>>>>>
>>>>>> NEW YORK (AP) -- Wall Street finally found a reason for a huge
>>>>>> rally>Tuesday, after the Federal Reserve said it plans to pump $200
>>>>>> billion
>>>>>>
>>>>>> into the financial markets to help ease the strain from the credit
>>>>>> crisis. The Dow Jones industrial average shot up more than 416
>>>>>> points,
>>>>>> its biggest one-day point gain since July 24, 2002.
>>>>>>
>>>>>> The Fed's program is part of a worldwide effort to help struggling
>>>>>> banks and mortgage providers. The Fed -- acting in concert with the
>>>>>> European Central Bank, the Bank of Canada and the Swiss National
Bank
>>>>>> -- agreed to loan investment banks money in exchange for debt,
>>>>>> including slumping mortgage-backed securities.
>>>>>>
>>>>>> The move is meant to essentially create a market for assets that
>>>>>> investors have been too scared to buy. That freeze-up in demand had
>>>>>> sent asset values plunging and caused huge losses for some of the
>>>>>> world's biggest banks.
>>>>>> .. .
>>>>>>
>>>>>> "It's not just a rate cut. I think it's a very creative way to do
>>>>>> financing," Conroy said. "It shows the Fed is willing to do things
>>>>>> that are a little out-of-the-box to shore up credit issues. I
really
>>>>>> think they went to the heart of the issue."
>>>>>>
>>>>>> **** - a $200 billion bailout? Who's going to get the tab for this?
>>>>>>
>>>>>> And why is the fed saving the markets? It's charter is to manage
>>>>>> employment and inflation.
>>>>>
>>>>>
>>>>> The Fed isn't saving the markets. It is saving the banks, or trying
to
>>>>> by continuing to flood the banking system with extremely cheap,
>>>>> inflationary dollars. The idea is to get the banks to start loaning
>>>>> money again. The banks who the Bush administration has been taking a
>>>>> 1920s, Calvin Coolidge style approach to. Like in the 1920s, the
Bush
>>>>> administration allowed the banks to run free, free, free. They
>>>>> encouraged the Fed to pursue a loose money/ cheap credit policy just
>>>>> like in the 1920s. Hell, they even wanted the banks to be allowed to
>>>>> start playing the stock market again. Then, just like in the 1920s,
>>>>> the banks went overboard, over extended themselves and got into
>>>>> trouble. In the 1920s it was loaning easy money to stupid people so
>>>>> they could buy stocks they couldn't afford on huge margins. You were
>>>>> fine as long as your stock kept going up, which it failed to do
around
>>>>> October of 1929. The loans went bad and the banks got stuck when the
>>>>> market corrected and suckers-I mean investors- suddenly couldn't
make
>>>>> margin calls. This time it was loaning money to stupid people to buy
>>>>> houses that they couldn't afford. The loans were fine as long as the
>>>>> housing market kept going up, which it failed to do. People suddenly
>>>>> owed more on their houses then the houses were worth. Then, just
like
>>>>> in the 1920s, the banks went almost overnight from a loose, easy
>>>>> credit stance to an almost no credit stance. They got stuck with all
>>>>> sorts of bad debt and the proud, mature, independent, lassais faire
>>>>> banks went crying to the government to bail them out as though the
>>>>> taxpayers had some fiduciary responsibility for the well being of
the
>>>>> banking industry. **** the banking industry. They got themselves
into
>>>>> this mess, they can get themselves out. That's the position an
actual
>>>>> conservative would take. "Oh, the government must help or some of
the
>>>>> nations biggest banks will fail." Good. Let them fail. It will be a
>>>>> lesson to the others the next time they start getting all tingly in
>>>>> the crotch about giving credit to morons just because some brain
dead
>>>>> administration thinks it's the right, conservative thing to do.
>>>>>
>>>>> ***
>>>>> In 1929, the Fed attempted a TIGHT money policy after the October
>>>>> correction, an action which is generally considered to (along with
>>>>> some other poorly thought out goverment policies) have turned a
>>>>> necessary correction into a full blown Depression.
>>>>>
>>>>> What the Fed is doing now and what they did then could not be more
>>>>> different.
>>>>>
>>>>>
>>>> That is according to the self-serving monetarist fairy tail.
>>>
>>> Are you saying that the Fed did *not* tighten money supply in 1929?
>>>
>> I am saying that they did, and it was the right thing to do.
>
> Apparently we agree, since they did in fact tighten, and it did in fact
> lead into Depression.
>
We certainly do, up to that point. But I suspect that our opinions may
diverge, when dealing with desirability of the depression.:-)
e.
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