30 Sep 08
After that old truism of cutting ones nose to spite ones face, surely the outrage at corporate greed that led the nation to send a message to Washington, that helped defeat the bailout bill, will hurt the average person on main street far more than it will inconvenience any captain of industry on wall street?
Are Americans being hoisted by their own petard?
30 Sep 08
Originally posted by Bosse de NageAll the talking heads keep saying things like our fundamentals are good and the general feeling today has been one of slight relief as the losses were far less than expected. The notion that our economy has been decoupled from that of the US seems to be borne out by todays slight fall.
Has the rot reached Oz?
30 Sep 08
1 edit
Originally posted by kmax87The major problem for the real economy is NOT the tumble of the stock market, but the deep freeze in money markets. By this I mean that if we had the first but not the latter, then the situation would be unfortunate but not dramatic.
All the talking heads keep saying things like our fundamentals are good and the general feeling today has been one of slight relief as the losses were far less than expected. The notion that our economy has been decoupled from that of the US seems to be borne out by todays slight fall.
Edit: These two are clearly connected in this particular crisis, I'm just pointing out where the main worry might come from.
30 Sep 08
Originally posted by kmax87The JSE lost R220 billion when Trevor Manuel resigned; now he's back it's recouped although still R50 billion under.
All the talking heads keep saying things like our fundamentals are good and the general feeling today has been one of slight relief as the losses were far less than expected. The notion that our economy has been decoupled from that of the US seems to be borne out by todays slight fall.
30 Sep 08
Originally posted by PalynkaCan the money markets be thawed without the proposed bail-out?
The major problem for the real economy is NOT the tumble of the stock market, but the deep freeze in money markets. By this I mean that if we had the first but not the latter, then the situation would be unfortunate but not dramatic.
30 Sep 08
1 edit
Originally posted by Bosse de NageI think that there might be better ways. I would prefer an approach of public capital injections in banks, rather than buying these assets. Like this you can recapitalize banks (thus improving their balance sheets) and still let them bear the brunt of the losses on these assets.
Can the money markets be thawed without the proposed bail-out?
30 Sep 08
1 edit
Originally posted by Bosse de NageI liked the sound of this.
Can the money markets be thawed without the proposed bail-out?
http://www.thomhartmann.com/index.php?option=com_content&task=view&id=998&Itemid=1
But there’s another way: Create an agency to fund the bailout, loan that agency the money from the treasury, and then have that agency tax Wall Street to pay us (the treasury) back.
It’s been done before, and has several benefits.
In the United Kingdom, for example, whenever you buy or sell a share of stock(or a credit swap or a derivative, or any other activity of that sort) you pay a small tax on the transaction.
We did the same thing here in the US from1914 to 1966 (and, before that, we did it to finance the Spanish American War and the Civil War).
For us, this Securities Turnover Excise Tax (STET) was a revenue source. For example, if we were to instate a .25 percent STET (tax) on every stock, swap, derivative, or other trade today, it would produce – in its first year – around $150 billion in revenue. Wall Street would be generating the money to fund its own bailout. (For comparison, as best I can determine, the UK’s STET is .25 percent, and Taiwan just dropped theirs from.60 to .30 percent.)
But there are other benefits.
As John Maynard Keynes pointed out in his seminal economics tome, The General Theory of Employment, Interest,and Money in 1936, such a securities transaction tax would have the effect of “mitigating the predominance of speculation over enterprise.”
In other words, it would tamp down toxic speculation, while encouraging healthy investment. The reason is pretty straightforward: When there’s no cost to trading, there’s no cost to gambling. The current system is like going to a casino where the house never takes anything; a gambler’s paradise. Without costs to the transaction, people of large means are encourage to speculate – to, for example, buy a million shares of a particular stock over a day or two purely with the goal of driving up the stock’s price (because everybody else sees all the buying activity and thinks they should jump onto the bandwagon) so three days down the road they can sell all their stock at a profit and get out before it collapses as the result of their sale.
30 Sep 08
1 edit
Originally posted by kmax87Put it this way....
After that old truism of cutting ones nose to spite ones face, surely the outrage at corporate greed that led the nation to send a message to Washington, that helped defeat the bailout bill, will hurt the average person on main street far more than it will inconvenience any captain of industry on wall street?
Are Americans being hoisted by their own petard?
Lou Dobbs on CNN last night said he didn't care if he lost all of his life savings if it meant he could send a message to wall street that he doesn't like the way wall street conducts business.
What he didn't say, was that if he lost all his money, then so would EVERYONE else.
Now that's a terrible price to pay. Why not, you know, just REGULATE these guys better? Eww, scary word..."regulation"
"I'd rather lose all my money than be regulated!!!" 😵
30 Sep 08
Originally posted by Palynkayou mean beyond the $300 billion that world central banks/reserves injected into the market last week?
I think that there might be better ways. I would prefer an approach of public capital injections in banks, rather than buying these assets. Like this you can recapitalize banks (thus improving their balance sheets) and still let them bear the brunt of the losses on these assets.
The biggest problem facing the credit market is the bad investments. They have to be taken off the books. They are a cancer and the only way to do it is for someone to buy them.
30 Sep 08
Originally posted by kmax87This is one of the examples of the types of regulations that could be imposed on Wall Street.
I liked the sound of this.
http://www.thomhartmann.com/index.php?option=com_content&task=view&id=998&Itemid=1
But there’s another way: Create an agency to fund the bailout, loan that agency the money from the treasury, and then have that agency tax Wall Street to pay us (the treasury) back.
It’s been done before, and has several benefits.
...[text shortened]... ll their stock at a profit and get out before it collapses as the result of their sale.
But, Americans are loathe to pay any tax at all. My bet is that any new Regs wont' impose taxes on trades.