Washington Post: "very real risk of a global financial meltdown"
DriftingByTheStorm
Posts: 8,684
Not the words of DBTS The Fearmonger.
These are straight out of a Washington Post article on the socialist revolution currently in play up in Washington, DC.
The article also reiterates what i have been saying for some time now: this crisis will last a period of YEARS, it will NOT suddenly disappear when Obama takes office.
Financial Rescues Show That Faith in Free Market Is Shaken
By Steven Pearlstein
Washington Post Staff Writer
Friday, September 12, 2008; Page A01
Self-reliance. Individual responsibility. A faith in free markets and a belief that people should have the opportunity to fail or succeed on the basis of their hard work and ingenuity. These are qualities that have been as central to the national identity as they have been to the American economic model.
Which is why it is so extraordinary that the government now finds itself hip-deep in the direct management of the financial system, rescuing four of the country's biggest financial institutions -- Bear Stearns, Fannie Mae, Freddie Mac and now Lehman Brothers -- from the harsh discipline of markets and the consequences of their own misjudgments.
This unprecedented intrusion of government is coming in the waning days of the administration of a Republican president who made privatization, deregulation and a faith in free markets the centerpiece of his economic policies and of his political agenda.
But now, facing the very real risk of a global financial meltdown and the prospect that he could go down in economic history compared to Herbert Hoover rather than Ronald Reagan, the president and his appointees have decided to set aside their principles in favor of economic and political pragmatism.
It was only a decade ago, after the heads of some of Wall Street's biggest banks and investment houses were invited to a meeting at the Federal Reserve Bank of New York and merely encouraged to mount a private rescue for a failing hedge fund, that there were howls of protest from both the left and the right about undue interference. Although no public money was involved, nor any exercise of regulatory powers, the Fed's behind-the-scenes effort to prevent the collapse of Long-Term Capital Management was seen as an abandonment of free-market principles.
Today, those objections seem almost quaint.
In March, the Fed agreed to lend J.P. Morgan Chase $29 billion to finance the purchase of Bear Stearns at a price and on terms effectively dictated by the secretary of the Treasury. And to forestall the risk of other failures, the Fed for the first time opened its lending window to investment banks that were not normally subject to its regulatory oversight.
Then, last weekend, the government used its broad regulatory powers to force Fannie Mae and Freddie Mac to accept a federal takeover that could potentially require taxpayers to lend or invest hundreds of billions of dollars to prop up not only the two housing giants but also the depressed market for mortgage-backed securities.
Now, officials from the Fed and the Treasury are carefully orchestrating the breakup and sale of Lehman Brothers to rivals and investors. Although it is unclear whether any government money or guarantees will be involved, there is a chance that a part of the venerable Wall Street firm will wind up in the hands of a foreign bank.
If these actions had been taken in Moscow, Paris, Beijing or even Brasilia, they would have seemed merely confirmation of long-standing socialist instincts and traditions. But in Washington, they are revolutionary. As with the Great Depression, it has taken a full-blown financial crisis to shake the faith that free markets will always deliver better outcomes than politicians and bureaucrats.
It will be several years, and probably several more rescues and interventions, before the crisis has subsided. There is already talk of $25 billion to $50 billion in federal loans to the auto industry, along with an economic stimulus package chock full of "public investments."
And there is a consensus, even among Republicans, that financial deregulation went too far and that a new and more robust regulatory architecture will be needed.
But even after the economy has recovered and financial markets return to normal, a generation of Americans that has lived through the savings-and-loan crisis of the '80s, the Internet bubble of the '90s and the current credit crisis is likely to retain both a lingering suspicion of unregulated markets and a willingness to use the powers and resources of government to enhance economic stability.
These are straight out of a Washington Post article on the socialist revolution currently in play up in Washington, DC.
The article also reiterates what i have been saying for some time now: this crisis will last a period of YEARS, it will NOT suddenly disappear when Obama takes office.
Financial Rescues Show That Faith in Free Market Is Shaken
By Steven Pearlstein
Washington Post Staff Writer
Friday, September 12, 2008; Page A01
Self-reliance. Individual responsibility. A faith in free markets and a belief that people should have the opportunity to fail or succeed on the basis of their hard work and ingenuity. These are qualities that have been as central to the national identity as they have been to the American economic model.
Which is why it is so extraordinary that the government now finds itself hip-deep in the direct management of the financial system, rescuing four of the country's biggest financial institutions -- Bear Stearns, Fannie Mae, Freddie Mac and now Lehman Brothers -- from the harsh discipline of markets and the consequences of their own misjudgments.
This unprecedented intrusion of government is coming in the waning days of the administration of a Republican president who made privatization, deregulation and a faith in free markets the centerpiece of his economic policies and of his political agenda.
But now, facing the very real risk of a global financial meltdown and the prospect that he could go down in economic history compared to Herbert Hoover rather than Ronald Reagan, the president and his appointees have decided to set aside their principles in favor of economic and political pragmatism.
It was only a decade ago, after the heads of some of Wall Street's biggest banks and investment houses were invited to a meeting at the Federal Reserve Bank of New York and merely encouraged to mount a private rescue for a failing hedge fund, that there were howls of protest from both the left and the right about undue interference. Although no public money was involved, nor any exercise of regulatory powers, the Fed's behind-the-scenes effort to prevent the collapse of Long-Term Capital Management was seen as an abandonment of free-market principles.
Today, those objections seem almost quaint.
In March, the Fed agreed to lend J.P. Morgan Chase $29 billion to finance the purchase of Bear Stearns at a price and on terms effectively dictated by the secretary of the Treasury. And to forestall the risk of other failures, the Fed for the first time opened its lending window to investment banks that were not normally subject to its regulatory oversight.
Then, last weekend, the government used its broad regulatory powers to force Fannie Mae and Freddie Mac to accept a federal takeover that could potentially require taxpayers to lend or invest hundreds of billions of dollars to prop up not only the two housing giants but also the depressed market for mortgage-backed securities.
Now, officials from the Fed and the Treasury are carefully orchestrating the breakup and sale of Lehman Brothers to rivals and investors. Although it is unclear whether any government money or guarantees will be involved, there is a chance that a part of the venerable Wall Street firm will wind up in the hands of a foreign bank.
If these actions had been taken in Moscow, Paris, Beijing or even Brasilia, they would have seemed merely confirmation of long-standing socialist instincts and traditions. But in Washington, they are revolutionary. As with the Great Depression, it has taken a full-blown financial crisis to shake the faith that free markets will always deliver better outcomes than politicians and bureaucrats.
It will be several years, and probably several more rescues and interventions, before the crisis has subsided. There is already talk of $25 billion to $50 billion in federal loans to the auto industry, along with an economic stimulus package chock full of "public investments."
And there is a consensus, even among Republicans, that financial deregulation went too far and that a new and more robust regulatory architecture will be needed.
But even after the economy has recovered and financial markets return to normal, a generation of Americans that has lived through the savings-and-loan crisis of the '80s, the Internet bubble of the '90s and the current credit crisis is likely to retain both a lingering suspicion of unregulated markets and a willingness to use the powers and resources of government to enhance economic stability.
If I was to smile and I held out my hand
If I opened it now would you not understand?
If I opened it now would you not understand?
Post edited by Unknown User on
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Comments
The depressing thing about it is that last paragraph. The more socialist we go, the less freedom we have. This entire failed system be it health care or failed markets all of it, have some roots in irresponsible behavior and some roots in bad government.... and the answer is more FEDERAL government oversite? No thanks. People want guarenteed lives now from the bottom to the top. Everything henceforce can be homogenous I guess.
Look Pac, i HEAR ya.
I don't know WHAT i'm after anymore.
When this all was just a small bump in the ocean out a hundred miles (and i mean at the end of last summer when i was in heae hollering bloody murder that this shit was coming) ALL i was trying to do was RAISE AWARENESS of it.
I thought that there was a fundamental lack of recognition that a massive new crisis was brewing. I went over the numbers endlessly, compared it to the Savings and Loan Crisis, and made repeated attempts to alert people that a SERIOUS and potentially catastrophic crisis \ collapse was pending.
That was over 12 months ago.
Every day, and every month since, i have been met with, at best skepticism, and at worst cat calls of lunacy and fearmongering.
It seems pretty clear to me that if i wasn't dead on, i was at least well within the ball park of reasonable occurrence.
And again, all i was trying to do was RAISE AWARENESS and get people to question their financial positions, and hopefully to get them to proactively respond to the collapse ... to shore up any investments they may have, and to position themselves so that they weren't facing personal catastrophe.
Maybe that doesn't fit the bill of anyone in here.
Maybe no one here is sitting on a house that has lost 20% of its value or more. Maybe no one here is now stuck in a home they don't want, or can't afford. Maybe no one here is sitting on a portfolio and scratching their head saying "what happened", maybe no one is worried about this stuff.
I dunno.
What can we do?
Well, i'm not sure. I got out of nearly all of my holdings when the DOW was still drowning around 14k ... and i made sure i wasn't personally up against a wall with any credit or expenditure items. I also am not a home owner, so i'm good there.
It is STILL not too late for people to analyze their personal finances and make sure they aren't going to be in the poor house or up against irreconcilable obligation if shit gets even worse.
I just don't want to see people hard up from preventable circumstances.
And further, the point of all this was on some level an attempt to wake people up to the massiveness of the scandal being perpetrated against them with this communist Federal Reserve based system which ALWAYS and ONLY serves to foot YOU with the bill for beyond-speculative "investments" (junk\garbage\toxic waste) made by the largest of the large banks, which OWN the Federal Reserve.
I was trying \ still am trying to rat out a scam of epic proportions.
Sadly, i get the feeling many will fail to see that until the situation becomes so dire that they MUST have someone to blame, and even then, i see much doubt that some will allow that reality to ever sink in.
My aim is the same as ever,
i hope that one day the people of America may actually get their country back, but it won't happen until they start to see the lies all around them.
???
If I opened it now would you not understand?
of course it is. it should be. our whole free market utopia has proven to be a resounding failure. it's sent us back to what is essentially a feudal system. those with incredible wealth are lords, and the rest are peasants. those at the top have the power to buy influence and control information to extend their power. i'm all for personal individual responsibility, but until we check those at the top, capitalism cannot work. that means there will always be a hint of socialism that is necessary. the wealthy cannot trample on the rest of the world unchecked, as they have proven to be able to do. the same system of checks and balances used to ensure that no one branch of government becomes too corrupt and tyrannical must be applied to the markets somehow.
i hope there is a collapse. i hope the stock market completely tanks and the world trembles. let's scrap this bullshit and start over.