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By Merekat (Tue Jul 15, 2008 at 08:54:29 AM EST) (all tags)

Yesterday I giggled to myself at teenage libertarians insisting that Freddie Mac and Fannie Mae should be allowed to crash and die as according to economists this is the proper and natural thing to do.

Clearly they don't see a scenario whereby they'd be held accountable by homeless middle america with guns.

My german assessment included some tips and strategies for improvement. One was rather intriguing. I should read German poetry and prose aloud so that I become accustomed to a formal presentation style of speaking German without having to search for words myself as my physical speech is apparently rather 'closed' at the moment.

My appetite is gradually returning after France. Today I managed a whole baked potato for lunch. I no longer feel quite like I wobble with each step. This is good.

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Hello internet | 32 comments (32 topical, 0 hidden) | Trackback

France always turns me off as well by debacle (4.00 / 1) #1 Tue Jul 15, 2008 at 09:03:41 AM EST

Freddie Mac and Fannie Mae should be allowed to crash, because the money they're going to be propped up with doesn't exist.

"I'm very responsive to certain stimuli, and pain is pretty much at the top of that list." - BadDoggie

Bailing out Freddie and Fannie . . . by slozo (4.00 / 1) #2 Tue Jul 15, 2008 at 09:15:05 AM EST

. . . how does that help middle america exactly? Is this some sort of bail-out trickle-down Reagonomics theory, or what?

Inquiring minds want to know.

Mortgages, runs on banks by theboz (4.00 / 3) #3 Tue Jul 15, 2008 at 09:16:09 AM EST

Read up on the great depression. The propping up of banks would have either limited, slowed, or eliminated the great depression. At least, that's the theory we're testing now.
- - - - -
That's what I always say about you, boz, you have a good memory for random facts about pussy. -- joh3n
[ Parent ]

What is interesting by Herring (4.00 / 2) #5 Tue Jul 15, 2008 at 09:44:07 AM EST

is the idea of what amounts to nationalisation. Interesting how "the free market will save us all!" turns out not to be true in times of real crisis.

I'm English, and as such I crave disappointment. - Bill Bailey
[ Parent ]

Yes by jump the ladder (4.00 / 1) #6 Tue Jul 15, 2008 at 09:55:17 AM EST

I think they've fogured that one out since the Great Depression. Although the free(ish) market with some govt intervention does seem to work better than state planning unless you want to just produce T34s or Soyuz rockets.

[ Parent ]

Difference here by Herring (4.00 / 1) #9 Tue Jul 15, 2008 at 10:32:46 AM EST

is that the US govt - as well as guaranteeing $5trillion that makes Northern Rock look like pigeonfeed - is saying that it will, if necessary, take a stake in the 2FMs to prop up the share price.

I'm English, and as such I crave disappointment. - Bill Bailey
[ Parent ]

: take a stake ... to prop up the share price by wiredog (4.00 / 1) #10 Tue Jul 15, 2008 at 10:56:45 AM EST

No. More like to prop up the liquidity. If the USG buys into them then the regular shareholders get screwed. Just like the regular shareholders at Bear Sterns got screwed. Which is why the shareholders are running away.

Earth First!
_{(We can strip mine the rest later.)}
[ Parent ]

What free market are you referring . . . by slozo (4.00 / 1) #7 Tue Jul 15, 2008 at 09:59:58 AM EST

. . . to? Any actual free market (doublespeak for controlled market) will quickly fall into a series of monopolies and oligopolies.

Don't worry, Big Brother will save you . . . because he's always looking out for your best interests, of course.

[ Parent ]

That'sa remarkably uninformed opinion by Clipper Ship (2.00 / 2) #14 Tue Jul 15, 2008 at 12:25:07 PM EST

[ Parent ]

And that's a remarkably useless comment (nt) by slozo (4.00 / 1) #16 Tue Jul 15, 2008 at 01:11:59 PM EST

[ Parent ]

You provided no evidence and just by Clipper Ship (2.00 / 2) #17 Tue Jul 15, 2008 at 01:16:01 PM EST

spouted the beginnings of Text-book Marxist/Libertarian ranting. The above poster gave some fairly specific reasons for his opinion, you just returned with the musings of the Moderate Left sans evidence.

[ Parent ]

I don't have to present evidence . . . by slozo (4.00 / 1) #19 Tue Jul 15, 2008 at 01:43:58 PM EST

. . . that is under your nose. It is common knowledge that what we in the west call the free market is basically ruled by oligopolies, or a couple dozen or so corporations.

Marxist/Libertarian? That's at least the third time I have had to stifle gusts of laughter at the office . . .

[ Parent ]

Well done. by Clipper Ship (4.00 / 1) #21 Wed Jul 16, 2008 at 07:55:26 AM EST

Any more wild claims you plan on making that have limited connection to reality but that we should all accept at face value because you say the evidence is so plain its just the lazy who don't want to track down your sophomoric accusations? I.D, perhaps? Aliens? Area 51?

[ Parent ]

Classic error . . . by slozo (4.00 / 1) #22 Wed Jul 16, 2008 at 11:18:02 AM EST

. . . going for the ad hominem attack too early in the thread.

[ Parent ]

Even better error: by Clipper Ship (4.00 / 2) #23 Wed Jul 16, 2008 at 11:28:30 AM EST

espousing nutty ideas in public. You should stop.

[ Parent ]

Next time, add some ground black pepper . . . by slozo (4.00 / 1) #24 Wed Jul 16, 2008 at 11:33:50 AM EST

. . . and hot chilis.

Needs more authority to be substantial.

[ Parent ]

Still waiting for that obvious and uncontented by Clipper Ship (4.00 / 1) #25 Wed Jul 16, 2008 at 11:37:19 AM EST

info you suggested was out there.

[ Parent ]

It's still under your nose . . . by slozo (4.00 / 1) #26 Wed Jul 16, 2008 at 11:49:44 AM EST

. . . right where I told you it was.

[ Parent ]

: Ah, yes. by Clipper Ship (4.00 / 1) #27 Wed Jul 16, 2008 at 12:15:08 PM EST

Nothing add but conjecture.
Hey, thanks for the info!!

[ Parent ]

I don't think I'd call any of slozo's opinions by garlic (2.00 / 0) #29 Thu Jul 24, 2008 at 05:31:26 PM EST

moderate.

[ Parent ]

Yeah, having read a few things I'd call him by Clipper Ship (2.00 / 0) #30 Thu Jul 24, 2008 at 05:35:31 PM EST

neither moderately uninformed nor moderate in his politics. I don't think he actually has any politics. I think he just does what the TV tells him to.

[ Parent ]

I don't think so. by garlic (2.00 / 0) #31 Thu Jul 24, 2008 at 05:37:43 PM EST

not enough consiracy theories on TV. Corporations are out to get you, don't ya know.

[ Parent ]

: Well, about that I can only get personal, so I'll by Clipper Ship (2.00 / 0) #32 Thu Jul 24, 2008 at 10:20:00 PM EST

leave off it. However, his main problem is that he doesn't try hard enough to be informed before speaking.

[ Parent ]

I thought both institutions by Breaker (4.00 / 3) #12 Tue Jul 15, 2008 at 11:26:19 AM EST

Were originally state backed anyway?

So, if the government gets involved again I wonder if there'll be spontaneous chorus's of "Fannie's coming home, she's coming home". Or drowned out by the bankers going "woo, free money for us, downside risk for the taxpayer!".

[ Parent ]

see by Merekat (4.00 / 3) #4 Tue Jul 15, 2008 at 09:19:49 AM EST

Here's the thing. It doesn't matter what it actually would do, it is how it would be perceived if it was not done that is perhaps the bigger issue.

[ Parent ]

WasPo by sasquatchan (4.00 / 1) #8 Tue Jul 15, 2008 at 10:15:55 AM EST

Pulitzer prize winning business columnist addresses that (well, did yesterday in an on-line Q&A, reprinted in today's paper): http://www.washingtonpost.com/wp-dyn/content/article/2008/07/14/AR2008071402271.html

[ Parent ]

Your pullitzer prize winning gov't shill . . . by slozo (4.00 / 2) #11 Tue Jul 15, 2008 at 11:02:43 AM EST

. . . forgot to also mention that many kinds of investments and most accounts are insured to a certain point.
http://www.marketwatch.com/news/story/bill-donoghue-after-indymac-failure/story.aspx?guid=%7B05C812C6-7018-4105-89A0-6A75D8E62641%7D&dist=hpts

He also forgot to mention that the primary winner of a bank bail-out is not the common man . . . it's the damn bank and it's investors. It's the bank insurers. The big money-big risk investor. The common man is basically covered by various forms of insurance.

"People don't get rich buying Fannie and Freddie bonds. They are held by banks, pension funds, money-market funds, insurance companies -- intermediaries for the common man."

Hilarious stuff.

[ Parent ]

Huh ? by sasquatchan (4.00 / 1) #13 Tue Jul 15, 2008 at 12:21:38 PM EST

I dunno if it's a straw man, or misdirect/red-herring.

The FA talked solely about fannie/freddie. Who is making loans now to the common/every day man ? Not commercial banks. Fannie/freddie.

Bank investors: All the stockholders of indy mac are left with nothing.

If you don't understand how banks, pension funds, insurance companies etc operate, or if you just believe they exist so big cat CEOs can rip them off, I can't talk rationally with you.

Before the next blizzard/natural disaster hits Toronto ask your insurer how/where the invest your premiums.

[ Parent ]

Um, maybe you should re-read . . . by slozo (2.00 / 0) #18 Tue Jul 15, 2008 at 01:38:54 PM EST

. . . the article you gave the link to.

"The common man who has his deposits in a bank that has its capital invested in "safe" instruments like Fannie and Freddie paper."

Bank investors and stockholders are not the common man.

Funny that you talk about straw men.

[ Parent ]

: you are defeating your argument by sasquatchan (4.00 / 2) #20 Tue Jul 15, 2008 at 02:27:58 PM EST

Going back to what I said, if you don't understand how banking, insurance and other industries work (ie what they do with the money you give them), we can't have this discussion.
In short, if you give money to the bank, and expect the bank to pay you interest, the bank has to put the money to work somewhere, somehow. They don't stick it under a mattress. So they buy things like fannie/freddie bonds.
So if fannie/freddie get bailed out, it's your money vis a vis the bank's investment thereof, that's being saved.
Stockholders in fannie/freddie may lose their shirts. Stockholders in IndyMac now have worthless paper.
And in 2005, over 50% of US households held stock/securities. (Either directly, or in retirement plans). So yes, stockholders are made up of common men.

[ Parent ]

Banking Liquidity by jimgon (4.00 / 2) #28 Wed Jul 16, 2008 at 05:45:02 PM EST

Freddie and Fannie help to provide liquidity to to the banking system. It allows banks to get quick returns on mortgages instead of waiting thirty years for the payback plus interest. This in turn allows the banks to lend out the money again. If the banks had to wait thirty years to get back the money they lend, then the lending would quickly grind to a halt. Americans don't buy houses, they sign mortgages. Stop the flow of mortgages and you stop the selling and buying of houses. Then no one can get out of houses that they no longer want, and they're effectively trapped. That will get middle aged Americans to break out their guns.

[ Parent ]

And they're the same kids who claim by ObviousTroll (4.00 / 1) #15 Tue Jul 15, 2008 at 12:41:07 PM EST

that now that oil is traded in euros no one cares what happens to the US anymore.

Have they seen the european stock indexes? Japan?

--
Has anybody seen my clue? I know I had it when I came in here.

Hello internet | 32 comments (32 topical, 0 hidden) | Trackback


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