Depression Diary
 

Ah, this is great reading, and a little scary too!

Benjamin Roth's chilling chronicle of hard times

For more, click on the first, second, third, and fourth parts. This is the fifth installment. Part six (I think)

I'll be the first to say I really don't know if govt bailouts started by Bush and escalated by Obama are necessary or working. But one thing I know, we sure don't want this avalanche of financial destruction to rain down on us. :dead: The chain reaction effect of runs on the banks, can you imagine? Yikes!

Mookie, what are your thoughts?

I can not say with any certainty that the bailout helped, hindered or was a complete waste of time. Did it help those that actually received money? Well sure. Did it help me directly? Not that I'm aware of. The markets have stablized it would seem. That is a good thing. Yes, it would be quite ugly if we went into an economic crisis as Roth did.

Yeah. This is a good follow up article on the diary.

To a point Mr Brinkley is correct. Look at the movie, "It's a Wonderful Life", what happens when the deposit is lost? Collapse of the bank and the home owners. Jimmy telling Mr. Brown, why your money is tied up in Mr. Greens house and Mr. Green, your money is tied up in Mr. Smiths house. You get the picture. A run in the bank. Banks need to keep solvent. It was hard to do when loans are defaulting like they are.

In the UK the banks were bailed out to the tune of approximately £150 billion.

The initial cost to the citizens of the UK over the next 24 months is estimated to be somewhere in the region 50,00 job losses and massive cuts in public services (dependant on which source you enquire of......this one being UNISON the largest public sector union in the UK).

It is believed the debt may not be repaid for at least 15 years.

Banks continue to pay out huge bonus sums to the highest paid employees :nope:

I agree with your premise but you need to watch the movie again dood! :DL The run and the lost deposit are two separate events.

My thoughts are this cold is absolutely kicking my ass. I do have some thoughts on this, i'll share them when my brain can actually function.

In the meantime, one of the best books on the bailouts is Bailout Nation by Barry Ritholtz. I can't think of a better place to start, whether you're big into economics or not, Ritholtz lays it out in easy to understand language exactly how we became a bailout nation:

http://www.amazon.com/Bailout-Nation.../dp/0470520388

:o Changing the subject slightly, has anyone watched the Frontline program about Brooksley Born and the CFTC? Caution, this may incite your passions.

You are correct but it was just an example made easy to understand. :D My money is tied up here and there but here and there are defaulting. I'm feeling the pain.

From Neal's posted link

Alot in Washington think the entire system will "just take care of itself." More often it does. When it does'nt, time to look for a scape goat.

Yeah, I'm a free market guy, and the fewer rules, the better. but that doesn't mean zero rules. People cheat and smart people will screw up the system if there is no oversight.

A lot in Washington no longer believe in the market will always fix itself, Greenspan and Gramm among them.

I'm trying to watch it, but vista updated itself in the middle of the show:damn:. I love the ominous music they play...:haha:

Sure, few rules but certainly needs to have good strong oversight as you suggest. Just say, "Madoff." That is enough for me. Seeing the pictures of how he was living LARGE and now those that entrusted him have ZERO. Incredible.

Hmmm... I was a bit surprised this thread and that program did not get a lot more responses here, seeing how long people here can discuss the bailouts, financial crisis, Wall Street bonuses, etc.... :hmmm: Stuff like Wal-Mart profits got more discussion here that some of the underlying causes of the global financial crisis.

Well, whatever. I listened to another interesting program this morning on NPR:


The Magnetar Trade: How One Hedge Fund Helped Keep the Bubble Going (you can listen to it here). If you have no idea what a Credit Default Swap or an equity tranch is, you may like this--it explains many of these "complex" financial things pretty well as it goes along. It helped me understand areas I was fuzzy on. :DL

Other links to the Magnetar story are at Propublica, the outlet that built the story.

If you haven't watched the Brooksley Born story on Frontline, I would be interested to know why. :yep:

Spend more is nonsense, IMHO. Of course if they are truly going to be Keynesian, they should also cut spending and taxes during good times.

The current crop of keynesians are sort of like being half-bulimic—all binge, no purge.

The critical problem during the FDR years was the experimentation. Business decided to wait out the insanity. Also, they went crazy with idiotic regulation. Not surprising given key economic advisors thought the CCCP was peachy keen, and the wave of the future.

Read The Forgotten Man for a different take.