dude, how is the view from the throne? what exactly are you going to do. last time i looked, no one was putting a gun to people's heads to force them to borrow money. its boom/bust cycle and dumb money is the last in at the top... if you want a villian, i would look for the guy that kept real rates negative for an awful long time... Head Fed Bankster, Allie G (now retired and more likley to speak the truth). he actually did encourage ARMS just for giggles, what exactly are you gonna rather than sitting around...
If you bail out idiots who take too much risk they'll just take extra risk next time around. If Greenspan had a spine he's have solved the liquidity issues caused by LTCM but fucked all the investors. Instead he bailed them out. They consequently took more risk in the dot com bubble and needed a another bailout. He bailed those guys out and then they took more risk in this credit/mortgage/housing bubble. Do you have any idea how fucked we are if Bernake bails these idiots out and let's them think it's ok to take that much more risk the next time around? Speculators speculate. When they win the get richer, when they lose they're supposed to get poorer. His incompentency, Greespan somehow figured that speculators who lost deserved to be richer too and we're all poorer for his lack of vision.
AAA, I'm surprised that you of all people isn't livid about the potential political fallout of continued market turmoil or recession. You can bet your ass Bush and his father have talked about this. This market and housing mess is on every night now in every news media. Does this look like healthy newsflow for incumbents?: U.S. Stocks Drop, Erasing S&P 500's Gain for 2007; Banks Fall - Bloomberg(08/15/2007 4:26 PM) Countrywide, Mortgage Lender Bond Risk Rises on Default Fears - Bloomberg(08/15/2007 4:27 PM) Two-Year Treasury Yield Near 18-Month Low on Subprime Concern - Bloomberg(08/15/2007 2:30 PM) Crude Oil Rises on Concern Storm May Threaten U.S. Production - Bloomberg(08/15/2007 4:30 PM) S. California home sales hit 12-year low - CNN/Money(08/14/2007 5:04 PM) Consumers' free-spending faces obstacles - LA Times(08/15/2007 5:27 AM) U.S. Consumer Prices Rose at Slower Pace in July - Bloomberg(08/15/2007 8:29 AM) Lender reports rising defaults - LA Times(08/15/2007 5:39 AM) Many Buyers Must Try, Try Again As Condominium Market Shrinks - Wash. Post(08/15/2007 5:42 AM) U.S. Industrial Production Rose 0.3% in July; Factory Use Up - Bloomberg(08/15/2007 8:32 AM) Capital flows to U.S. fall back in June - CBS Marketwatch(08/15/2007 8:33 AM) Southland home sales hit 12-year low - LA Times(08/15/2007 5:28 AM) Subprime Mortgage Security Sales Grind to a Halt - Bloomberg(08/15/2007 4:26 PM) Subprime Problems Spread Into Commercial Loans: Morgenson - NY Times(08/15/2007 5:18 AM) Commercial paper market under pressure - FT(08/15/2007 5:40 AM) Our Risky New Financial Markets - WSJ ($)(08/15/2007 5:43 AM) Sentinel: A Sign Of Worse Things To Come? - Forbes(08/15/2007 5:43 AM) U.S. Three-Month Treasury Bill Yield Falls Most Since Oct. 1989 - Bloomberg(08/15/2007 4:28 PM) Hedge fund losses prompt exits as deadline looms - Wash. Post(08/14/2007 9:50 AM) Hedge funds prepare for mass redemptions - FT(08/14/2007 9:28 PM) Limitations of computer models - FT ($)(08/14/2007 9:32 PM) Fear makes a welcome return - FT ($)(08/14/2007 9:34 PM) How Rating Firms' Calls Fueled Subprime Mess - WSJ ($)(08/15/2007 5:36 AM) When Buyers Snub Sellers - WSJ ($)(08/15/2007 5:52 AM) Sentinel moves to halt client redemptions - CBS Marketwatch(08/14/2007 1:59 PM) Goldman cuts fees to save fund - FT(08/14/2007 9:16 PM) Goldman Fund Cuts Fees to Woo Investors After Loss - Bloomberg(08/15/2007 5:09 AM) Basis Capital Tells Investors Loss May Exceed 80% - Bloomberg(08/15/2007 5:12 AM) How a Goldman hedge fund shrank a third in a week - Reuters(08/15/2007 5:16 AM) Investors Mull How to Get Out Of Hedge Funds - WSJ ($)(08/15/2007 5:52 AM) US banks create trading system - FT(08/14/2007 9:20 PM) Testing times for complex $1,500bn industry - FT(08/14/2007 9:23 PM)
a mortgage "bailout" would keep r.e. artificially high. all the folks that acted responsibly and are waiting for housing prices to adjust to their level are gonna be left wanting and paying for the dullards. how so? well, if homes go default/foreclosure, then prices will adjust downward, and actually the eventual buyers will have less debt at lower home prices. after the storm the market emerges with a greater degree of stability. dont forget, anyone who bought in 1995-1997 in a major market has seen a huge appreciation; problem is that they sucked out the equity to consume. the market adjustment is fierce, the real estate adjustment will be painful, but a lot less so for folks with cash and ltd or no debt. i will say that buyers of "AAA" rated paper are the real bag holders. new reality show idea: bagholders meet their borrowers - swiss insurance execs and risk management MBAs travel to east L.A. and Salinas barrios get- togethers with their "homies." nice:eek:
Not that I necessarily disagree, but I don't see anything in your post that identifies *why* he is clueless. What exactly is he doing wrong? Remember, 6 months ago he was harangued for being soft on inflation. Now he is being slated for not recognising the "severity" of the current "crisis". You can't have it both ways. Give us some specifics - what precisely is Bernanke doing wrong, and what would you do differently to rectify his failings, if you were in his position?
I can remember it like it was yesterday, him recommending adjustable rate mortgages at the bottom of the easing cycle. I thought it was some sort of error on his part hahaha.
Don't you remember George Bush saying in August 2006 " more americans now own their home their ever before" It was all part of the big plan to keep republican power, it failed. But hey the central banks are loaning money at interest, they are making money hehehe.
Stagflation. Get used to it. The Treasury market has been saying all decade that the recovery is soft. On the other hand Wheat is $7 a bushel with Crude three quarts of the way to a hundo. So what does a Central Banker do? As Zhivodka said, inject liquidity but keep the overnight target symbolically high. Not that liquidity is the answer. Often it's just the gasoline ala' 2001 that causes the fire ala' 2002. It doesn't really matter though. The fed could cut to zero and asset prices would find their waterline and value ain't at these prices.
funny how nobody on this board seems to ever question the role of the US OCC (a key dpt of the Treasury => Gvt) in all this... thats where all the clueless guys are, and have been for a long time...
If bernanke is smart he will just let the chips fall where they may. Intervention will just delay the inevitable.