Cramer had Kent Conrad on tonight. Senator Kent Conrad basically made an exasperated plea for Fed chairman Poole's resignation for saying it would take a 'calamity' to justify a fed rate cut I just wonder exactly why Cramer and Conrad think the over-leveraged borrowers and lenders who stretched their means in pursuit of excessive, speculative returns are entitled to a bailout in any form... whether they're millions of over-leveraged households, or their marginal debt merchants risky economic decisions sometimes fail, and fail dramatically. here in the US, we aspire to practice free market capitalism, and will only remain that way in the absence of leveraged speculator bailouts ...... no bailout. bank big, bust big. an essential feature of honest capitalism
Could not agree more. It has been frustrating. Not just Kramer and Conrad, but Senator Dodd was on CNN today for a couple hours demanding fed cuts as well. It is more popular to bail out foreclosures, but it unnecessarily rewards people who made bad decisions. That cannot be good for any economy. Currently it appears the fed is happy bailing out the banks only with the 1/2 point discount rate cut last Friday, which is just as bad. Such a break allows the institutions which have profited from sub-prime mortgages unduly and carelessly to continue business as usual in the spirit that it will trickle down. It would be nice if people saw sub-prime lending for what it is, gambling. When you gamble if you win, you win great, but if you lose, you should not be bailed out by the government at the expense of everyone else.
lol yes guys. i don't usually tune in to cramer or cnn money, but i also noticed a slight deluge of mainstream criticism. i just happened to have it on tonight and couldn't resist. that voice needs more vocal counterparties i just wonder how deeply these risks have been socialized. it's like everyone spent 5 years trying to squeeze into the 'too big to fail' category. it's less of a bailout they're asking for, and more of a privilege
Unregulated free markets -- no thanks. We tried that before. Roaring 1920's, the President said 'the business of America is business.' Unregulated credit and stock margins got overheated (like all free markets do), crashed, and gave us the Great Depression. Nope, the best economy is a mixed economy. Capitalism tempered by some regulation, taxation and government spending. You can't run your car on just gasoline or just air. There's an optimum mixture of gas and air that generates the most power. That's the flaw with pure free markets -- it's trying to run the economic motor with pure gas and no air.
i see where you're coming from. but unless we can empirically differentiate sincere 'victims' of the credit bubble from what i personally believe are a vast majority of willful opportunists ... it seems impossible to render a fair solution leveraging in a debt society isn't something we're born with, it's something many but definitely not all people conveniently choose to participate in loose money was also clearly advocated and promoted from the highest levels of policy, from greenspan's rates to bush's 'ownership society' so imo, the 'mixture' should be a constant, same on the way up as on the way down. ie they should regulate the next credit expansion better