No Bailing Out the Wealthy

Started by rcallicotte, September 22, 2008, 02:28:28 PM

Previous topic - Next topic

PG

See this is where the whole proof thing would normally be required. This situation was reached by people taking risky decisions that seemed like a brilliant idea at the time but were completely unsustainable in the long term, I'm of course talking about subprime mortages.
For those who aren't aware, the idea is to lend money to those who normally would never be allowed credit, i.e. those that are sub prime or under-banked. However lenders needed something to back these mortgages up, they weren't going to just give money to people who most likely wouldn't be able to pay them back, so they did a dirty little trick. They realised that the economy was incredibly strong and so they sold the debt to another bank, they get their money back, the next bank can then sell the debt on at a higher price because of the interest that has acrued. The idea should've been that the original bank could buy back the debt once those who borrowed the money in the first place had paid it back with interest. This amount would be much greater than the value the debt had risen to by that time. The problem is, this only works when the economy is strong, when people can afford to pay their bills and banks are confident to lend to each other. If banks aren't lending then the debt doesn't get back to the right place. These are the debts that the government are trying to pay for with the bailout bill.
Figured out how to do clicky signatures

rcallicotte

"The government should not intervene. It should leave overleveraged financial institutions to default on their derivatives obligations and, if necessary, file for bankruptcy. Much of the crisis has arisen from miscalculating the risks involved in a large book of positions in these derivatives. It is only logical that these institutions pay for their poor management...Let the poorly managed, overly risk-taking financial institutions fail! Always remember that Wall Street and the real economy are not the same thing." - Ari J. Officer and Lawrence H. Officer
So this is Disney World.  Can we live here?

efflux

That is absolutely right, calico.

Otherwise we face the calamities I am talking about.

PG

Quote from: calico on October 02, 2008, 03:13:34 PM
"The government should not intervene. It should leave overleveraged financial institutions to default on their derivatives obligations and, if necessary, file for bankruptcy. Much of the crisis has arisen from miscalculating the risks involved in a large book of positions in these derivatives. It is only logical that these institutions pay for their poor management...Let the poorly managed, overly risk-taking financial institutions fail! Always remember that Wall Street and the real economy are not the same thing." - Ari J. Officer and Lawrence H. Officer

Did you read my post? Bankruptcy just means that the debt is written off. Which means that the debt is consumed in inflation, so it's the taxpayer who pays anyway when interest rates go up.
Figured out how to do clicky signatures

rcallicotte

Interest rates don't have to go up.  It could be regulated. 

The alternative is thievery.
So this is Disney World.  Can we live here?

PG

Interest rates are used as a tool to control inflation. If the estimated 1.5 trillion bad depts are written off then inflation will go sky high, the only options would be a massive push in interest rates or devaluation of the currency. Both are bad news for everyone. That includes those at the top that you seem to despise so much.
Figured out how to do clicky signatures

rcallicotte

#36
I don't seem to despise the wealthy who are only greedy and don't care about others.  I pity them.

Ever watch a biography on anyone with mega-riches?  Even if they don't fit into my above discreet explanation of greed and heartlessness, they tend to be lonely, depressed, miserable and basically disappointed.  "Huh.  Is this frikkin' it?"

So this is Disney World.  Can we live here?

efflux

There is no reason to particularly despise rich people but there is every reason to despise rich people to wish to have more power than others within the democratic process.

JimB

#38
Quote from: PG on October 02, 2008, 03:57:17 PM
Interest rates are used as a tool to control inflation. If the estimated 1.5 trillion bad depts are written off then inflation will go sky high, the only options would be a massive push in interest rates or devaluation of the currency. Both are bad news for everyone. That includes those at the top that you seem to despise so much.

Re-nationalising the Federal Reserve from private hands would write off everyone's need to pay income tax. That would be the healthiest boost to the economy if the bad debts were written off as bankruptcy, giving an average American person up to 80% extra income to spend on the economy, rather than it going into the coffers of a select few to pay off loan interest rates for the cash they loan to the US every year. None of your income tax goes towards public needs (only to the Federal Reserve in repayments) which can be comfortably covered by corporation tax alone.

Apparently.
Some bits and bobs
The Galileo Fallacy, 'Argumentum ad Galileus':
"They laughed at Galileo. They're laughing at me. Therefore I am the next Galileo."

Nope. Galileo was right for the simpler reason that he was right.

efflux

Governments by the people must control the money for the people. The Federal Reserve should not be privatized. People often say that central banks should be independent to avoid political interference i.e. manipulations at time of elections. Could that be any worse than the interference if they are private?

Yes, that's correct about the Federal Reserve. In the US it takes all income tax just to pay for the Federal Reserve's interest from loans to the government.

In the UK the Bank Of England was nationalised on 1 March 1946, and gained "independence" again in 1997 by the hijacked Labour party which used to be a party for working people until asshole Tony Blair took over so now there is no balance in UK politics just like the US. Money controls it.

efflux

Notice how Tony Blair now has his position at J.P Morgan. He is a traitor and is guilty of treason. A hanging offense in the UK until Tony Blair himself changed that law. He should be hanged from the nearest lampost.

old_blaggard

Quote from: efflux on October 05, 2008, 09:54:04 AM
He should be hanged from the nearest lampost.
Well, luckily for us, we have a member here on the forums from whom he can be hanged :P.
http://www.terragen.org - A great Terragen resource with models, contests, galleries, and forums.

PG

#42
Quote from: efflux on October 05, 2008, 09:54:04 AM
Notice how Tony Blair now has his position at J.P Morgan. He is a traitor and is guilty of treason. A hanging offense in the UK until Tony Blair himself changed that law. He should be hanged from the nearest lampost.

Really really not actually. Treason against the Queen was the only standing offense punishable by death but it was reduced to a life sentence in 2005. And regarding your previous post. If you despise peoples desire to make more money than others then go find a nice little communist country because that's all it boils down to. And you may remember that it was Gordon Brown who was chancellor, not Tony Blair, the former was the one who has let our economy decompose into the weak state it's in.
Figured out how to do clicky signatures

efflux

It's treasonous to hand power over to another country.

If you go into a police station with evidence of Tony Blair's crimes including the Iraq war, they are obliged to investigate it. If they don't they are also complicit in treason and breaches of international law because international law is part of our local law. You can not have this unanswerable to anyone corruption at top level. That's one law for our leaders and another for us. Of course this sort of thing has always gone on but the world is different now. We can not continue in this way.

I never said I despised anyones desire to make more money than others. Communism doesn't work except as yet another invention of the super rich global bankers. Wait till David "Commie" Cameron gets in. That was his nickname. Notice how he says he will do socially what Margaret Thatcher did economically. Of course that's if we get that far considering the quadrillions of toxic $ derivatives that will be the next crash force.

An interesting fact is that people from former Soviet block countries are a lot more informed about political issues than the average UK person. I know this because I work with people from these countries.

Tony Blair was the front man stooge for must be almost a decade but got next to no criticism compared to Gordon Brown. That's because nobody does anything until the problems arrive at their doorstep. Not that Brown is much better but the criticism is not balanced. Brown probably doesn't care about England anyway. Notice how the UK has been run by Scottish politicians. Scotland, A country seeking independence. Doesn't anyone think that is a bit strange? Does anyone know here that the modern monetary policy of the world was invented by the Scottish except for the initial idea that it had to have built in moral obligation.

People do not live within their means. This is essentially the problem.

Will

I say that we, as a group, invest in ice sculptures and beanie babies. The depreciation of those is less than you think. From there we buy up a majority of the market, keep the ice in storage still the fresh water crisis hits a peak then melt them down. As for the beanie babies we get around 97% of them then we sell them like they sell diamonds, releasing only a limited amount each year and make the populace think they are a girls best friend. 
The world is round... so you have to use spherical projection.