What I Like About Communism
- Thread starter oldtime
- Start date
Yes it was ~150RUB - the monthly wage of an engineer.
Do you mean that doctors and teachers worked for free?
You are almost right.
How many carpenters have you seen in Kremlin infirmary?
As a person who used live in the Soviet Union for 30+ years, I can say that YOU have no clue but a lot of propaganda in your head.
Quote from MarketMasher:
http://www.nytimes.com/2009/01/23/business/worldbusiness/23sweden.html
"Swedenâs Fix for Banks: Nationalize Them"
Sweden never fully nationalized their banks. Some weak banks were temporarily placed in a type of receivership, recapitalized and then taken public again. It was selective, not a wholesale takeover of the banking industry by the government. Though I do agree that the existing shareholders of American banks that needed massive infusions should be wiped out. Their equity should have been reduced to zero. The same thing should have been done at GM. Instead they wiped out the bond holders. What sense does that make?
One of my closest friends is Swedish and works in the banking industry in Stockholm. He says that most people completely misunderstand what happened in Sweden. He said many people believe that the government stepped in and took over the entire industry. That's not what happened.
You need to write a rebuttal to the NY Times then.
And Simon Johnson too...
http://baselinescenario.com/2009/01/26/sweden-banking-crisis-for-beginners/
"Why Sweden? Because Sweden had its own financial crisis in the early 1990s, and by many accounts did a reasonably good job of pulling out of it. A housing bubble, fueled by cheap credit, collapsed in 1990, with residential real estate prices falling by 25% in real terms by 1995 and nonperforming loans reaching 11% by 1993, while the Swedish krona fell in value by 30%, hurting a banking sector largely financed by foreign funds. As Urban Backstrom said in a 1997 paper, â[the] aggregate loan losses [of the seven largest banks] amounted to the equivalent of 12 percent of Swedenâs annual GDP. The stock of nonperforming loans was much larger than the banking sectorâs total equity capital.â In other words, the banking sector as a whole was broke.
So what did Sweden do? If the options on the table in the U.S. right now are (a) additional recapitalization, (b) an aggregator bank to buy up bad assets, and (c) nationalization, the Swedish solution included all three. First, in late 1992, the government guaranteed all bank creditors (but not shareholders), with no upper limit. Because investors did not at the time question the solvency of the government, this meant that they would continue to lend money to the banks, and the central bank provided unlimited liquidity just in case. Although the U.S. has guaranteed new debt issued by banks, and there is virtually an implicit blanket guarantee for at least the largest banks, there is still uncertainty among bank creditors, as witnessed by credit default swap spreads.
However, even if an insolvent bank has access to credit, it is still an insolvent bank, hoping somehow to become solvent, so itâs unlikely to lend or, even worse, it may be tempted to make extremely risky loans as the only possible path to solvency. As a condition of government support, government auditors reviewed the balance sheets of the all the banks involved, with the goal of taking writedowns immediately and showing the true state of affairs.
When it turned out that two major banks, Nordbanken and Gota, were insolvent, they were nationalized (Nordbanken was already largely state-owned), giving the state control of over 20% of the banking system (by assets). Gota was merged into Nordbanken, which only held onto âgoodâ assets, and the âbadâ assets were moved to two new entities, Securum and Retriva. These entities were capitalized by the government, and bought 21% of Nordbankenâs assets and 45% of Gotaâs assets.
This is an example of the good bank/bad bank plan that has gotten so much attention lately. Nordbanken itself (the good bank) was recapitalized by the government, to the tune of 3% of GDP, and become a healthy bank, while Securum and Retriva were told to get whatever value they could out of the bad assets."
Soooo....when reviewing the audit of the Federal Reserve and how much they needed to loan out to the banks during the crises to shore themselves up, how many of them were actually solvent....?
The 20% number is consistent with what my Swedish friend told me. He said the government controlled about 20% of the industry. That means about 80% was not controlled by the government. Twenty percent is significant, but it's not a nationalization of the industry.
We disagree on the meaning of "nationalization," though we agree that the shareholders should get thrown overboard if the government has to step in.
Nice post 222. Basically communism does not have any sync with the selfish human psychology. Thus when artificial laws that defy the nature are forced upon humans, then pain and misery results.
The most I would go is socialist system where there is free health care and some support like 3 month welfare for those who are suddenly hit by a calamity of sorts.
Oh I never said anything about nationalizing the Industry. Or even permanent nationalization.
But like Sweden - do it to the insolvent ones.
From the audit of the Fed included in Dudd-Funk, the ones that drew heavily from the Fed even when saying "We don't need the money" just might qualify...
Otherwise, we might end up like in Simon Johnson's article, where insolvent banks refuse to lend, or worse, take huge risks to try and become solvent again....