Korean Job Discussion Forums

[mises]

[Join Me]

Maybe it is time for those of us who are Americans to change our lifestyles. What other country in the world would let you buy a home with a few thousand down and anything else you want with 100% financing and no cash up front. We got ourselves into this mess...now it is time to pay up.

[mises]

An adjustment will happen. It is not possible to prevent. But the government is trying to keep the party going and sustain the late 90's model when it has clearly failed.

Citi has 300k employees. That is too many, obviously. Going forward the financial sector will be much smaller (80% smaller +/-). Most people in the FIRE economy will need to retrain and find productive employment. The government ought to focus on that and not keeping insolvent firms from failing. Every cent thrown at these banks (and Bank of America is, if not next, then certainly in line) is wasted.

* $2.4 trillion in commercial paper purchases by the Fed.
* $2 trillion in other loans and pledges from the Fed.
* $1.4 trillion in rescue committments, including higher deposits insurance. Bloomberg explains: "The FDIC, chaired by Sheila Bair, is contributing 20 percent of total rescue commitments. The FDIC's $1.4 trillion in guarantees will amount to a bank subsidy of as much as $54 billion over three years, or $18 billion a year, because borrowers will pay a lower interest rate than they would on the open market, according to Raghu Sundurum and Viral Acharya of New York University and the London Business School."
* $892 billion for the Treasury's TARP and other Hank Paulson rescues.
* $300 billion from FHA to guarantee mortgages through the Hope for Homeowners program, designed to keep distressed borrowers from foreclosure.
* $444 billion bailout bucks for Sheila Bair's mortgage program. Bloomberg: "Not included in the calculation of pledged funds is an FDIC proposal to prevent foreclosures by guaranteeing modifications on $444 billion in mortgages at an expected cost of $24.4 billion to be paid from the TARP, according to FDIC spokesman David Barr. The Treasury Department hasn't approved the program."

http://clusterstock.alleyinsider.com/2008/11/our-7-4-trillion-bailout

[caniff]

This is really spiraling out of (even apparently the Fed's) control.

I have for some time been aware, in a general sense, that the US was in line for an eventual major economic shakeup (taxpayer shakedown?) Still, I never would have expected things to unravel as quickly as this.

We are also faced with a situation where Bush and Co. has zero clout (and offers nothing but stop-gap measures such as throwing more money at the problems) and Obama's people are not yet vested with the power to step in to take the reins (remains to be seen how effective they will be once there).

As McCain might say, 'My friends, these are difficult times.'

[mises]

[Ya-ta Boy]

OK, mises. It's time to be honest. Just how much of this grim economic news do you believe? I mean 'really believe'? Yes, I know you read right-wing economists. And yes, I remember that you said '80 %' of economics is ideology.

I know you have said you think it's best to let the banks etc go bankrupt as that is the quick way to rip the band aid off. But something tells me (mostly Paul Krugman) that you are just 'hoping for the worst' so as to justify your ideological view.

Something tells me that 75 years from now your grand kids and my great-grand kids will be arguing that Obama should have/shouldn't have done whatever...much like Kuros says that FDR screwed up the New Deal while ignoring what could have happened if he hadn't done the New Deal.

I think what I'm saying is this: The views that were obsolete in 1932 are even more obsolete 75 years on in 2008 but they sound good to the people who live in an ideological paradise of a world that never existed outside of a text book.

[mises]

[Ya-ta Boy]

[mises]

[Kuros]

[mises]

I agree. But the problem is we are a backwards looking bunch. Whenever something bad happens to us now, we immediately look in the past for a similar event and then try to apply the lessons from that to the current predicament.

There are any number of reasons as to why this crises is different from the depression. I don't see much that we can learn from that experience that will help us move past this.

[mises]

[sojourner1]

I hope the government creates millions of new jobs by training people to go out on site to manage these banks and corporations with the goal of returning them to profitability and then keeping it that way through accountability. While this spells America becoming a socialist state, it will be better for the majority of Americans, but bad for that 1% upper crust population, because the majority will be gainfully employed in their respective fields and have what they need in order to live their lives without the anxieties our current failed capitalist system forces upon most of us.

A socialist system that is effectively managed and productively producing profit is more sustainable and offers a way for most to survive while the country can pay down debt, personally and as a nation. Just because a company or bank is held by the government doesn't mean it can't operate at a profit. We don't need a privatized laizze faire capitalist system. We need to restructure and realign the government to manage the economy, financial sector, large corporations, investing, and all employment to ensure it's done fairly and in a way that is sustainable.

[RJjr]

Savor today's economy and every luxury because it will get a lot worse.