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 like to think of this time as a political/financial 9-11. 1933 doesn’t apply quite as well to these times.
Crappy Days Are Here Again
with apologies to [Music and Lyrics by J. Yellen and M. Ager]
So long sad times
Go long bad times
We are rid of you at last
Howdy gay times
Cloudy gray times
You are now a thing of the past
Crappy days are here again
The skies above are clear again
So let’s sing a song of cheer again
Crappy days are here again
Altogether shout it now
There’s no one
Who can doubt it now
So let’s tell the world about it now
Crappy days are here again
Your cares and troubles are gone
There’ll be no more from now on
From now on ...
Crappy days are here again
The skies above are clear again
So, Let’s sing a song of cheer again
Crappy times
Crappy nights
Crappy days
Are here again!
More like 1938 Europe
LOL 1933 coming again? It’s here and probably already passed....wishful thinking Steve....This is gonna be alot worse.
Yep and the dumb shits that have been elected to run the country are out to make sure it happens.
More 1776 and 1861.
I still shake my head everday in amazement that we’re here...and we let it get here....so quickly, without challenging anything and the people primarily responsible are the people telling me I’ve got to pay..while they don’t pay...
Yes we need to go back to “mark to fantasy” based accounting, yeah right.
Right on.
Consider for a moment that they’re not dumb, but have a purpose. It’s called “power”. Got enough food in the pantry? Bottled water? How about ammo?
We are suffering from economic terrorism. Problem is: it is our government doing the terrorising.
Instead of a heart attack a better description would be gangrene in the feet. Either the feet will have to be removed and we deal with the consequences, or if you delay the decision the rot will spread and kill the patient. AIG is at the top of the list of many rotting banks - continually handing them money is dooming the life of the patient.
>>>>>>President Obama could steal the tax issue once and for all from the GOP if he took up the flat tax.
Steve, you're dreaming.
hope you enjoy the bank nationalizations
They need to put back in the uptick on short sales.
I read somewhere that the banking crisis was caused when they blocked short sales on a handful 15 major banks. The hedge funds were left with only a few banks to establish hedge positions against and that caused so much short selling in those few banks that it caused them to fail, resulting in a general lack of confidence in banking in general.
They need to find a way to avoid this situation ever occuring again. Either never block short trading in a portion of an industry, or block it in the entire industry.
But they also need to block the uncovered short trading. And put in place severe penalties for failure to deliver.
Another example of a billionaire who touts the "free market" but is suddenly pleading for the government to come in and buyout everything.
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