Posted on 03/03/2009 7:34:49 AM PST by SeekAndFind
The financial crisis is reaching a climax. Either Washington will let the banking system go into cardiac arrest, or it will take measures to bring it back to life so it can vigorously function again. The frightening severity of the crisis and the political imperative not to let banks collapse the way they almost did in 1933 will force the Obama Administration to take the necessary actions.
--Get rid of mark-to-market accounting rules, which are unnecessarily destroying the balance sheets of banks and other financial institutions. For regulators and auditors to force banks to repeatedly write down the value of their regulatory capital based on an impaired market is an astonishing absurdity. Selling anything in a distressed market always leads to artificially low prices. If mark-to-market accounting had been in effect in the early 1990s, when we last had a financial crisis, most of the major commercial banks would have gone under. We'd have had another Great Depression. To appease those who think there is use in this kind of pricing of assets, include it in a footnote.
--Bring back the uptick rule for short sales, and demand that the SEC enforce regulations against naked short-selling.
--Have the Federal Reserve aggressively buy mortgage-backed securities from banks. This would trigger a mass of refinancing at low, fixed rates of 4.5% to 5%. Housing prices would move up, and housing sales would revive.
Nationalize banks? A horror. You can bet that would truly paralyze the flow of credit: Does anyone believe Washington can manage banks?
Sadly, in human affairs it is sometimes necessary for a crisis to reach an acute, mortal stage before effective action is taken.
(Excerpt) Read more at forbes.com ...
I really do not understand the opposition to this. Our financial system is way to over leveraged. This country and the globe has been growing "real wealth...read stuff' that have improved the lives of millions of people, however the wealth was created by debt....too much it appears. The foundations of this wealth were shaky enough that an incompetent queer public servant like Barney Frank could engineer a global financial meltdown. Shame on us!
The financial charlatans and their corrupt government sycophants have had their shot and hopefully they will be shot soon. We need to grow real wealth on this globe. Reduce government, reduce the cost of government and watch savings build. Savings and thrift are the foundations of growth.
"Mark to fantasy" good one!
Before 1938, there was 1933. And it would have been easier to fix if we had paid attention. By 1938, our collective heads were so far up our rear ends—or in the sand—that it was way, way too late.
Why anyone expects world historical clever conspiracies from a barely coherent hack sophist from Chicago machine politics is beyond me...
Forbes is being honest and helpful. But Hussein does not want “honest and helpful.” He and his brownshirt minions have deliberately created the financial crisis and will ride it to the national panic and ruin they seek. In that way, Big Brother can come to the rescue and save the day by nationalizing...that is stealing, intimidating, taking over both public and private concerns. Happy, secure, profitable people/businesses make poor takeover targets for Marxist dictators. Forbes and far too many others still believe that this entire event is not one of pure deliberation and longterm planning. They can’t imagine the existence of such evil. Well, stick around. We will wake up one morning and our liberty will be gone...taken by our criminal government, all for the “greater good.” Got ammo?
If it is 1933 all over again, a libtard like Kennedy, needs to practice insider trading and sell all his stocks only to create an even more libtarded family that will live off the trust fund as they run the nation into further turmoil for decades to come.
Forbes is being honest and helpful. But Hussein does not want “honest and helpful.” He and his brownshirt minions have deliberately created the financial crisis and will ride it to the national panic and ruin they seek. In that way, Big Brother can come to the rescue and save the day by nationalizing...that is stealing, intimidating, taking over both public and private concerns. Happy, secure, profitable people/businesses make poor takeover targets for Marxist dictators.Great comment.Forbes and far too many others still believe that this entire event is not one of pure deliberation and longterm planning. They can’t imagine the existence of such evil.
Only if today is 1933, what country are we in? America, Germany of the USSR? It looks like a mix of all three!
what I cannot fathom is that no one has ended the mark to market accounting rule yet. Also, why no one has done more to regulate short selling. Those two things are hammering the economy in a way I have never seen.
FDIC cleans em up puts em back. Team Obama destroys em like Stalin.
who will regulate short selling? Barney frank? That’s the problem
“FDIC cleans em up puts em back. “
just like how the wonderful social security takes care of our retirement and freddie mac takes care of all the mortgages.
The stupid can and will be malicious. There is a certain comfort to be found in a deciding to be stupid so that one can improve one’s maliciousness. Perhaps I can restate my first statement as follows: “The malicious will be willfully stupid in pursuit of greater maliciousness.”
In present case in re Obama, it is to my view a single-mindedness of spite that is his driving motive.
Dead. On. Accurate. There is a reason why I had a "Forbes 1996" sticker on my car. We are caught is a vicious cycle of:
Increased Distressed Sales =====> Lower home values =====> Declining home equity =====> Rising foreclosures =====> Increased distressed sales
I was on a call with one of the top Wall Street housing analysts and she laid out this case. She was pleading for the regulators to impose some sanity and has called out "mark-to-market" rules as a major contributor to the problem. Because of this, she is calling for 5,000,000 more lost homes due to foreclosure over the next 3 years which with further exacerbate the already horrific housing market. The really bad news is that housing leads consumer spending which leads the economy. Based on these facts, the housing market will not begin to recover until 2011.
The depression saw the market drop 90% over a year or so. Currently it is down about 50% so much more pain coming.
Median home price in Phoenix one year ago was $225,000. today it’s $120,000..........
Forbes is wrong. 1933 is NOT COMING. IT’S ALREADY HERE AND GONNA GET MUCH MUCH WORSE!
social security something anyone under the age of 25 will never see boy that lock box idea sure worked out well.
My fear is not that it's 1933, it's 1917, and we're repeating what happened in St. Petersburg and Moscow.
Somewhere in Hell, a former seminary student from Gori, Georgia with a penchant for mass murder is smiling at what's happening in America today, as his long-term plans for our demise are coming to fruition ...
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