Korean Job Discussion Forums

[Ya-ta Boy]

Economists have wondered for some time why hedge funds weren�t suffering more amid the financial carnage. They need wonder no longer: investors are pulling their money out of these funds, forcing fund managers to raise cash with fire sales of stocks and other assets.

The really shocking thing, however, is the way the crisis is spreading to emerging markets � countries like Russia, Korea and Brazil...
In fact, says Stephen Jen, the chief currency economist at Morgan Stanley, the �hard landing� in emerging markets may become the �second epicenter� of the global crisis.

Meanwhile, U.S. policy makers are still balking when it comes to doing what�s necessary to contain the crisis...But last week Joe Nocera of The Times pointed out a key weakness in the U.S. Treasury�s bank rescue plan: it contains no safeguards against the possibility that banks will simply sit on the money. �Unlike the British government, which is mandating lending requirements in return for capital injections, our government seems afraid to do anything except plead.� And sure enough, the banks seem to be hoarding the cash.

There�s also bizarre stuff going on with regard to the mortgage market...

What�s happening, I suspect, is that the Bush administration�s anti-government ideology still stands in the way of effective action.

http://www.nytimes.com/2008/10/27/opinion/27krugman.html?_r=1&ref=opinion&oref=slogin

[ddeubel]

I said many weeks ago here on this forum --

the only solution is NOT to give to banks, financial institutions. RATHER, to give to the people the monies / funds with a requirement within X weeks, they must deposit their money in x, y, z bank. This money wouldn't be available (but guaranteed) for 2 years and the depositor would garner the full value at that time and nothing less (the deposit being guaranteed).

"WE the people" , if you understand my drift and what is the major mover of economics despite the obvious ignorance of this by so many ....

This would mitigate the above. The pursuant competition would forestall any "sitting on it"...

DD
http://eflclassroom.ning.com

PS . And let me remind others that this is a purely nonpartisan position and in spirit is both Rep. and Dem.

[sojourner1]

That's good the banks are hoarding cash so they can back up deposits. How long those will last is anyone's guess. Without that, no one has anything, but worthless paper. If that crashes then expect wide spread bank failures, economic collapse, and Feds walking off the job due to not being paid as a result of a lack of cash flow because of no debt instruments moving in the market. That would be because China and world are getting out of US Treasury notes for fear they won't be paid. This finance and business stuff is the worse threat to national security, but the Bush administration never saw it that way despite it being the truth. Can I say the real threat bit us in the ass while we were focused on using guns and money to fight some Muslim terrorists? That's been a distraction engineered by the rich all along to keep attention away from economic issues. Can I say we've been deceived and duped by lobbying corporations cajoling the government to make the biggest mistakes in favor of the rich to get richer? Yep. I see no hope or trust in this system and it's leadership we have, even with the new president. It's pure crap and deserves to crash. I hope the rich lose all they've gained when the US dollar and many other currencies tank out in the late stages of the crisis resulting from their engineering of a cheating game. If not that, then the people should just stand up and take it from them by force.

The Krugman is right, things are getting worse.

[bacasper]

[ontheway]

Yes, things are getting worse. Or, to put it more accurately:

More and more people are adjusting their expectations to face the reality of just how bad things are and just how bad the future is already destined to be. It's not really that things are getting worse. The truth is that things are progressing just as we had expected long ago. It's just that only real economists knew what was coming.

Krugman may be surprised. Others are witnessing the expected and predicted outcome of the Federal Reserve's socialist monetary policy, expanding the money supply unbacked by any real assets.

The fact that Krugman didn't know until now that hedge funds were suffering outflows doesn't mean that others didn't. This was in the news weeks ago.

Forcing banks to lend out their bailout money, pushing down interest rates in the housing market - yikes! (Stupid British policy.) This is just a repeat of the bad government policies that helped to cause the bubble that has now burst. It was, of course, the inflation - the unbacked expansion of the money supply that is the ultimate cause.


Ddeubel's idea of somehow giving money to the people would be better than giving money to the banks. The banks should hang on to the money, of course, so as to stay in business and be able to serve some customers prudently. This WILL save the banks, and they do deserve it since they were cheated by Federal Reserve policy. But, they do not deserve to be bailed out more than the people do. Everyone was screwed by the Federal Reserve's socialist monetary policy. Socialism always fails, always hurts the poor and middle classes the most, and our current crisis is another example.

Likewise, lowering interest rates, especially mortgage interest rates, is just an attempt to reinflate the bubble and would be an attempt to put even more money into bad loans which will just cause a bigger crash later.

So, yes, it would have been better to just give $10,000 to every American citizen. Every one. No exceptions. It would still equal the $3 trillion already down the drain in the various bailouts by the US Government. It would still be inflated currency printed out of thin air and would continue the destruction of the dollar, but at least each individual and each family would have an equal window of opportunity to pay down their own debts, secure whatever assets they feel would help them weather the coming financial shit blizzard.

Giving this money to the people would still be bad policy, but better than what we're doing.

Better yet would be to go back on the gold standard. A 100% gold backed dollar is the only thing that will stop the crisis and end the cycle of malinvestment, inflation, recession, or worse, bubble, bust and depression that has been caused throughout history by going off the gold standard.

Going back on the gold standard is much easier than all the devastation that is yet to come from the stupid socialist policies that the Federal Reserve, from Wilson to Bush and eventually Obama, has and will continue to foist upon Earth's innocent, igonorant inhabitants.

[bacasper]

[ontheway]

[huffdaddy]

[Gatsby]

http://inaugurationday2009.com/



.

[bacasper]

[mises]

If the state isn't able to print as much money as she wants, and if fractional reserve banking is pulled in, there will be less credit to lend.

[Kuros]

[mises]

[Ya-ta Boy]

I see no one has posted any disagreement with Krugman's assertion that things are getting worse. That makes me sad. I was hoping someone would post that a respected economist thinks the blue bird of happiness has landed on Wall Street and things were now improving.

[mises]

It is most certainly going to get worse. The credit card implosion will be horrible and we're just getting started with the recession.