When You Don't Allow Forest Fires, Catastrophic Fires Ultimately Result

[ByLoSellHi]

I'm so fatigued hearing that the world will end tomorrow if an unknown quantity of a plan, with little to no certainty of working, paid for by the U.S. taxpayers, having inflationary and USD debasing effects, isn't passed.

Let the failures work the sick actors out of the system. Quit propping up failed institutions.

Let opportunistic capitalists pick over the carcasses and begin the process of rebuilding those worthy of it, and make money in the process, while our system is rebuilt through normal market mechanisms, even if they're painful.

This all resulted from a failure to spend money wisely, a failure to implement risk management, too much money expansion, and too many bad loans and bad lines of credit being made - why use the hair of the dog that bit us to try and fix it? This isn't a good hangover recipe.

 

[brokershopping]

Well said. To do otherwise undermines the mechanism that makes free markets work, especially at this scale.

The true value of goods and services should be determined, to as great an extent as possible, without intervention.

For example, I think home prices are still too high relative to the earnings of most Americans. If they are artificially propped up, the short term problems may ease, but most people will suffer in the long run. More importantly, the people who were correct in their value assessment will be punished by intervention.

 

[Jayford]

I agree completely. Not only are recessions normal, they are beneficial every 6 to 8 years. Clean out the crap, and get going again. With Gov intervention, we will just see the whole thing dragged out. May not be as deep, but will last far longer.

I prefer quick and painful, and then get on with business.

 

[gnome]

Quote from Jayford:

I agree completely. Not only are recessions normal, they are beneficial every 6 to 8 years. Clean out the crap, and get going again. With Gov intervention, we will just see the whole thing dragged out. May not be as deep, but will last far longer.

I prefer quick and painful, and then get on with business.

Even worse... if you blow your capital and resources trying to keep things up, you have less [and perhaps this time NONE] resources with which to rebuild...

 

[Landis82]

Quote from ByLoSellHi:

I'm so fatigued hearing that the world will end tomorrow if an unknown quantity of a plan, with little to no certainty of working, paid for by the U.S. taxpayers, having inflationary and USD debasing effects, isn't passed.

Let the failures work the sick actors out of the system. Quit propping up failed institutions.

Let opportunistic capitalists pick over the carcasses and begin the process of rebuilding those worthy of it, and make money in the process, while our system is rebuilt through normal market mechanisms, even if they're painful.

This all resulted from a failure to spend money wisely, a failure to implement risk management, too much money expansion, and too many bad loans and bad lines of credit being made - why use the hair of the dog that bit us to try and fix it? This isn't a good hangover recipe.

How ironic that you advocate Economic Darwinism at this point and time, when there was no oversight or regulation on the WAY UP that created this mess in the first place.

 

[farjeon]

I read this in this weekend's Sunday Times (U.K.)

http://entertainment.timesonline.co...tainment/books/non-fiction/article4787010.ece

Sometimes an entire era can be summed up in a single anecdote. It is September 1978, and the private office of prime minister James Callaghan decides that his official cars need replacing. Naturally they must be supplied by the state-owned car manufacturer. Let Bernard Donoughue, then head of the No 10 Policy Unit, reveal what happened next: “Two cars were ordered specially from British Leyland. They took a long time to arrive. When they finally came they were found to have THIRTY-FOUR mechanical faults and had to be sent back to be repaired and made safe. Then they were sent to be converted to the PM's special safety needs - bombproof, bulletproof etc. This all cost a vast sum of money. When they returned, the PM went for a trip in one. He decided to open the window for some fresh air and pressed the button which does this electronically. The result was that the window immediately fell in on his lap. The PM has now said that he does not wish to see the new cars again ... [we] have the problem of what to do with two large expensive cars with a quarter of million pounds' worth of security extras.”

Funny, yes, but also a salient lesson in what happens when you bail out dud companies. Hope it doesn't get that bad for you guys.

 

[Landis82]

Quote from Jayford:

I agree completely. Not only are recessions normal, they are beneficial every 6 to 8 years. Clean out the crap, and get going again. With Gov intervention, we will just see the whole thing dragged out. May not be as deep, but will last far longer.

I prefer quick and painful, and then get on with business.

You make a rather simplistic assumption that the U.S. economy only faces nothing worse than a "recession".

(Have you even looked at how frozen the Commercial Paper market is lately?)

You also make the assumption that by putting a "bid" under T-3 level assets, that this whole thing will continue to get dragged-out over time.

You also make the assumption that the current banking system will be able to make new loans, based on their existing collateral and portfolios.

Three bad assumptions, not supported by any facts already in evidence.

 

[GermanTrader]

Quote from gnome:

Even worse... if you blow your capital and resources trying to keep things up, you have less [and perhaps this time NONE] resources with which to rebuild...

I see no evidence that those in power and money want to see this country recover from a depression. I am simply being logical. The steps taken currently, and those proposed, to "soften" the fall, have all failed in the past to do anything but dig a deeper hole from which to crawl at some point in the future. Why doesn't someone in government push the rest of those cronies and yes-men to face the problems, fix them, and let the chips fall where they may?

Gnome, I think you know why, but this question is for the rest of ET, who do not, to give them something to think about... until they move on to the next post. Microwave society at work in your brain, people!

 

[gnome]

Quote from farjeon:

"... Hope it doesn't get that bad for you guys.

We have an attitude... "WE ARE AMERICA!"

Therefore we can:

1. Do anything
2. Spend any amount
3. Borrow limitlessly
4. Leverage virtually limitlessly

And it permeates from the Gummint down to the consumer.

One day, the kindness of strangers [you know, the ones who buy all of our bonds and feed our $2B per day borrowing habit] will wear thin... and they will cry "No Mas"

And we will truly be up shit's creek without a paddle.

 

[arealpissedgoy]

Quote from gnome:

Even worse... if you blow your capital and resources trying to keep things up, you have less [and perhaps this time NONE] resources with which to rebuild...

Very few grasp where it is all headed.

carefully orchestrated plan.

when it's all done with, people will be clamoring for a dictatorship.

Lazy population using foreigners ( mexicans ) to fight. dis-interested in the matters of state. engaged with the most trivial of pursuits. happy to live off the work of others. enamored with delusions of cultural and military superiority ......

Repeat of the collapse of the roman empire. A slowly rotting core