Volcker:Bernanke is a fool, condemned to repeat history

[zdreg]

Quote from m22au:

I watched a good interview on Bloomberg earlier today. The interviewee was Bill Fleckenstein and he was asked a similar question.

He likened it to asking someone with a hangover what they would do to cure it. The simple answer is "not to get into the situation in the first place".

Fleckenstein has a view similar to me: banking system bailout was unfortunate but important, however QE2 is ridiculous.

please post link as i could not find it.

I doubt that fleckenstein would have approved a bailout with the same set of executives remaining in their positions or handing these sicks banks to a few large banks.

yes the bailout is important. but for what reason? to create a too big to fail doctrine? to make it easy for the federal government to become the allocator of credit in the US? instead of letting wilbur ross etc buy assets on the cheap the obama government is trying to nationalize the economy . there was a free market solution and the government and executives who had the most to lose put the brakes on a free market solution. instead we will have distortions
for years as reallocation of resources will not take place as people wait for continuing bailouts,

 

[Larson]

Quote from intradaybill:

Why to you think a man who caused the first major one-day stock crash has any credibility at all?

What is his counter-proposal to what Bernanke is doing?

I keep hearing criticism but no alternative viable proposals. Especially form people here who have no touch with economics.

Proposals people, proposlas, otherwise shut up...

Where do you come up with these outrageous, ridiculous claims that The Fed Chairman caused the 87 crash? Were you there? If you were then I know for a certainty that you are a troll. If you were not around, then i will just assume you to be an ignoramus spouting off drivel.

 

[denner]

Quote from zdreg:

please post link as i could not find it.

I doubt that fleckenstein would have approved a bailout with the same set of executives remaining in their positions or handing these sicks banks to a few large banks.

yes the bailout is important. but for what reason? to create a too big to fail doctrine? to make it easy for the federal government to become the allocator of credit in the US? instead of letting wilbur ross etc buy assets on the cheap the obama government is trying to nationalize the economy . there was a free market solution and the government and executives who had the most to lose put the brakes on a free market solution. instead we will have distortions
for years as reallocation of resources will not take place as people wait for continuing bailouts,

Exactly. The fools who continue to support this charade and then challenge the logic of those who oppose it always end with this "what would you have done" AS IF THERE WERE NO OTHER ALTERNATIVE.

I've argued that an orderly, telegraphed liquidation of the TBTF banks on a major scale (even if it meant a real depression, not this 'silent" depression bullshit) was in full order. If housing prices dropped 90%, so be it..the cost of living would have plunged, the excesses brought about by bubble economcs would be on their way to being purged.

The public sector and the unions would have been target number 2. The private sector is on their own as far as retirement, health care, the public sector and unions would be told the same. No more debt issuance to cover pension shortfalls, no more diversion of operating costs to shore up that gigantic ponzi.

BUT, with an overall reduction in bubble pricing and economics, the cost of living would decline to a point that people aren't indebting themselves and future generations just to achieve the typical middle class lifestyle.

More than anything, the alternative was to cut out and greatly reduce the role of banking interests in running this country into the ground. Sure, it's damn near impossible here, but since we are dealing with "what if's", that's my answer in brief.

 

[zdreg]

Quote from Larson:

Where do you come up with these outrageous, ridiculous claims that The Fed Chairman caused the 87 crash? Were you there? If you were then I know for a certainty that you are a troll and a moron.

u don't need such a high degree of certainty for your statement to be true. read intra's prior posts,

 

[m22au]

Quote from zdreg:

please post link as i could not find it.

I doubt that fleckenstein would have approved a bailout with the same set of executives remaining in their positions or handing these sicks banks to a few large banks.

yes the bailout is important. but for what reason? to create a too big to fail doctrine? to make it easy for the federal government to become the allocator of credit in the US? instead of letting wilbur ross etc buy assets on the cheap the obama government is trying to nationalize the economy . there was a free market solution and the government and executives who had the most to lose put the brakes on a free market solution. instead we will have distortions
for years as reallocation of resources will not take place as people wait for continuing bailouts,

Regarding bank bailouts, I believe that they should have occurred, however the thing that I would have done differently is to provide equity on terms much much more favourable to the US Government.

ie, it is outrageous that Citi and BAC were bailed out 2 or 3 times, and that the govt did not take 79.9% stakes in them.

Fleckenstein video:
http://www.bloomberg.com/news/2010-...ys-fed-is-absolutely-right-with-qe-video.html

 

[Larson]

Quote from denner:

Exactly. The fools who continue to support this charade and then challenge the logic of those who oppose it always end with this "what would you have done" AS IF THERE WERE NO OTHER ALTERNATIVE.

I've argued that an orderly, telegraphed liquidation of the TBTF banks on a major scale (even if it meant a real depression, not this 'silent" depression bullshit) was in full order. If housing prices dropped 90%, so be it..the cost of living would have plunged, the excesses brought about by bubble economcs would be on their way to being purged.

The public sector and the unions would have been target number 2. The private sector is on their own as far as retirement, health care, the public sector and unions would be told the same. No more debt issuance to cover pension shortfalls, no more diversion of operating costs to shore up that gigantic ponzi.

BUT, with an overall reduction in bubble pricing and economics, the cost of living would decline to a point that people aren't indebting themselves and future generations just to achieve the typical middle class lifestyle.

More than anything, the alternative was to cut out and greatly reduce the role of banking interests in running this country into the ground. Sure, it's damn near impossible here, but since we are dealing with "what if's", that's my answer in brief.

+1

 

[zdreg]

Quote from m22au:

Regarding bank bailouts, I believe that they should have occurred, however the thing that I would have done differently is to provide equity on terms much much more favourable to the US Government.

ie, it is outrageous that Citi and BAC were bailed out 2 or 3 times, and that the govt did not take 79.9% stakes in them.

Fleckenstein video:
http://www.bloomberg.com/news/2010-...ys-fed-is-absolutely-right-with-qe-video.html

thanks.

your solution is based upon a difference in philosophy. In my opinion the private sector could have handled the situation without the waste and distortions resulting from government intervention

 

[m22au]

Quote from zdreg:

thanks.

your solution is based upon a difference in philosophy. In my opinion the private sector could have handled the situation without the waste and distortions resulting from government intervention

If we were both Treasury / Federal Reserve employees in 2008 then I would have been open to listening to your suggestion, and open to the idea of accepting it as a better alternative to my idea.

Either way, I think we are in agreement that the bailouts were structured in a manner that was far too kind to stockholders of the companies concerned.

 

[shortie]

Quote from intradaybill:

Why to you think a man who caused the first major one-day stock crash has any credibility at all?

What is his counter-proposal to what Bernanke is doing?

I keep hearing criticism but no alternative viable proposals. Especially form people here who have no touch with economics.

Proposals people, proposlas, otherwise shut up...

Ben caused the Flash Crash then.

one new flash crash for each QE is the new money game.

watch your stops!

 

[olias]

Quote from intradaybill:



What is his counter-proposal to what Bernanke is doing?

I keep hearing criticism but no alternative viable proposals. Especially form people here who have no touch with economics.

Proposals people, proposlas, otherwise shut up...

Exactly. Let's get real and acknowledge that Bernanke is in a tough spot. I'll concede that QE is a terribly inefficient way to spur the economy, but what else is he going to do? What other tools does he have at his disposal?