# Wall Street Has Failed - Obama



## Aussiejeff (8 January 2009)

> PRESIDENT-elect Barack Obama has warned "*Wall Street has not worked*" and promised a "substantial overhaul" of US financial markets in the wake of the worst economic crisis in generations.
> 
> In an interview with CNBC a day ahead of his major speech laying out details of his economic stimulus package, Obama did not rule out the plan growing beyond its current near $800 billion ($1.1 trillion) price tag.
> 
> ...



http://www.news.com.au/heraldsun/story/0,21985,24887795-5005961,00.html

Goodbye, Wail Street (The Original). 
Good Morning Wail St (The Clone, Mk 2).
Hello, Mega Deficit. 

Good Luck, Yanks!!


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## Stormin_Norman (8 January 2009)

why has wall street failed? because it went down? because it went up?

what has failed was government intervention in the markets for the past 10+ years and it is what is deepening the problem.

what caused this problem is being proposed as the solution. get with it.


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## GumbyLearner (8 January 2009)

Aussiejeff said:


> http://www.news.com.au/heraldsun/story/0,21985,24887795-5005961,00.html
> 
> Goodbye, Wail Street (The Original).
> Good Morning Wail St (The Clone, Mk 2).
> ...




He is right and finally America has a President who has the humility to admit they have failed at something.


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## Naked shorts (8 January 2009)

Well im not surprised.

Is there a street in China that has all the financial institutions lined up on it?

I'd better get learning its name


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## Doris (8 January 2009)

GumbyLearner said:


> He is right and finally America has a President who has the humility to admit they have failed at something.




Sounds like al anon!  First you must admit there's a problem then you can try to deal with it.



> "So it's going to be a substantial overhaul.
> We're going to have better enforcement, better oversight, better disclosure, increased transparency".




Hear hear!  This is Obama's pledge/goal for all aspects of government.

As Whitlam once said:  It's time!
As Obama says: Now is the time!  Yes we can!


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## GumbyLearner (8 January 2009)

Stormin_Norman said:


> why has wall street failed? because it went down? because it went up?
> 
> what has failed was government intervention in the markets for the past 10+ years and it is what is deepening the problem.
> 
> what caused this problem is being proposed as the solution. get with it.




I especially like the quote from BradK over on the Weekend at Bernie's Madeoff thread. 

Quote

*Clearly this guy thinks he is above the law... oh wait, he IS above the law - wait... he WAS the law... 

America is sick sick sick - look at who they are handing out medals of freedom to now! 

Puke
Brad*
Great Post BradK

Id like to thank Mr.Phil Gramm from Taxus.

Thanks for repealing the Glass-Steagull Act of 1933 and also putting your name to the Gramm-Leach-Bliley Act of 1999 that replaced Glass-Steagull and took out so many banks on Wall Street and peoples jobs last year, this year and next. 

And also thanks for being so "in-tune" with the train wrecked market you left Barack Obama, Mr.Bush.


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## MRC & Co (8 January 2009)

This goes way beyond the little street where the wall used to stand.

It goes as deep as the culture of the spendthrifts in Western society!

Sounds like Obama is going to introduce more red tape, without knowing WTF his even talking about.  What a charming idiot!


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## sam76 (8 January 2009)

Naked shorts said:


> Well im not surprised.
> 
> Is there a street in China that has all the financial institutions lined up on it?
> 
> I'd better get learning its name




Wang Street.


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## GumbyLearner (8 January 2009)

sam76 said:


> Wang Street.




They could rename it this -> Bona Fide Arm's Length Firewall Street

But that would involve too much Keynesian spending by New York City Hall
and its a bit long!


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## MRC & Co (8 January 2009)

Oh, I forgot to mention, ban the shorts 

:horse:


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## Temjin (8 January 2009)

sam76 said:


> Wang Street.




I will vote for that. 



> "So it's going to be a substantial overhaul. We're going to have better enforcement, better oversight, better disclosure, increased transparency".




What's better? Please explain.... ohhhh yeah, more regulations and less free market. Woohoo!


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## Knobby22 (8 January 2009)

Temjin said:


> What's better? Please explain.... ohhhh yeah, more regulations and less free market. Woohoo!




Yes, read a book about the rob-ber barrons in the US around 1860-70.No rules at all then. Worked so well that the public demanded regulations.

I suggest you study some history before mouthing extremist platitudes.


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## MrBurns (8 January 2009)

A lot of Yanks are seriously worried about what Obama might have up his sleeve or might not.


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## noirua (8 January 2009)

MrBurns said:


> A lot of Yanks are seriously worried about what Obama might have up his sleeve or might not.



Privately Obama is loving all this.  Always best to takeover from a loser, you must win. 
You'r right though, as the first 12 months of Obama is going to be a nightmare for the financial sector. All the poorer people, blacks to the fore, are expecting the Earth from the new President and he will try to deliver, no matter what.


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## MrBurns (8 January 2009)

noirua said:


> Privately Obama is loving all this.  Always best to takeover from a loser, you must win.
> You'r right though, as the first 12 months of Obama is going to be a nightmare for the financial sector. All the poorer people, blacks to the fore, are expecting the Earth from the new President and he will try to deliver, no matter what.




I'm told they are scared that he might have a secret agenda of some kind, he just said that Wall St is a failure, so what does he intend to replace it with ? 

A big worry is that he might try to transfer wealth from the rich to the poor, oh well we'll see soon enough but watch the Dow if any of this starts to look true.


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## Uncle Barry (8 January 2009)

"Sounds like Obama is going to introduce 
more red tape, 
without knowing WTF his even talking about. "
__________________

Arr, sorry but are we talking about one krudd from Australia or what ?
Or did they just swap a few ideas ?


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## MrBurns (8 January 2009)

Uncle Barry said:


> "Sounds like Obama is going to introduce
> more red tape,
> without knowing WTF his even talking about. "
> __________________
> ...




There's absolutely nothing that can't be fixed with more red tape and/or a good summit !


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## Uncle Barry (8 January 2009)

Mr Obama recently stated he would lift the employment level by 3million, so I asked my brother in law, who lives in the United States how the new God of America would do this with the very increasing levels of unemplyed. 

He said, easy, Mr Obama will increase the size of the public service by over 3million !

BUT we will all have to pay for it with more taxes, which will slow things down even more...... he also added something about madness.

Or was it krudd that said something like that ?


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## Stormin_Norman (8 January 2009)

MRC & Co said:


> Oh, I forgot to mention, ban the shorts
> 
> :horse:







> New York Times, October 18, 1930, Saturday
> 
> With trade depression continuing in spite of recent assurances that it would surely end with arrival of Autumn, and with the stock market also falling below the prices reached in last Summer's drastic downward readjustment, it was not perhaps surprising that search for something peculiar and abnormal in the way of cause should have begun.
> 
> ...




when someone short sells, they must buy. they make a profit selling high and buying low. when the market reaches a point, they decide that the price is 'fair' in their view and will buy out of their short sell.

banning short selling is effectively banning these purchases. it also disallows profit to be made in a falling market.

both these things only increase the bear market. not stop it.


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## GumbyLearner (8 January 2009)

Knobby22 said:


> Yes, read a book about the rob-ber barrons in the US around 1860-70.No rules at all then. Worked so well that the public demanded regulations.
> 
> I suggest you study some history before mouthing extremist platitudes.




Well said Knobby22!

Yeah lets have no rules like a bunch of drunken financial anarchists.

What a joke that there were not laws to govern the most common failings of the social contract.

Obama should bring in some regulations...Noooooooo! 

I think its good that he's going to keep these bastards honest by introducing adequate regulations. Bush allowed the Madeoff family to run the NASDAQ and all the mega-mergers to create this crisis of confidence. Now these same neo-con tools have turned to their ugly cousin Marx to bail their banker buddies out on Wall Street! Give me a break, your telling me thats this is the free market, garbage thats just laying the boots into honest hard-working people who are responsible and save their money. Most of these "white-collar" criminals will not see a days jail time for this, so if Obama is to protect the majority against these parasites, fantastic! If government is the only deterrent to their irresponsible over-leveraged fraudulent behaviour to protect consumers, investors, small business and workers. Sensational! SO BE IT!!!

http://en.wikipedia.org/wiki/Glass-Steagall_Act

The banking industry had been seeking the repeal of Glass-Steagall since at least the 1980s. In 1987 the Congressional Research Service prepared a report which explored the case for preserving Glass-Steagall and the case against preserving the act.[5]

AND Bushs best mate from Taxus Phil Gramm was it's architect in 1999.

http://en.wikipedia.org/wiki/Gramm-Leach-Bliley_Act

*The argument for preserving Glass-Steagall (as written in 1987):*

1. Conflicts of interest characterize the granting of credit – lending – and the use of credit – investing – by the same entity, which led to abuses that originally produced the Act

2. Depository institutions possess enormous financial power, by virtue of their control of other people’s money; its extent must be limited to ensure soundness and competition in the market for funds, whether loans or investments.

3. Securities activities can be risky, leading to enormous losses. Such losses could threaten the integrity of deposits. In turn, the Government insures deposits and could be required to pay large sums if depository institutions were to collapse as the result of securities losses.

4. Depository institutions are supposed to be managed to limit risk. Their managers thus may not be conditioned to operate prudently in more speculative securities businesses. An example is the crash of real estate investment trusts sponsored by bank holding companies (in the 1970s and 1980s).

*The argument against preserving the Act (as written in 1987):*

1. Depository institutions will now operate in “deregulated” financial markets in which distinctions between loans, securities, and deposits are not well drawn. They are losing market shares to securities firms that are not so strictly regulated, and to foreign financial institutions operating without much restriction from the Act.

2. Conflicts of interest can be prevented by enforcing legislation against them, and by separating the lending and credit functions through forming distinctly separate subsidiaries of financial firms.

3. The securities activities that depository institutions are seeking are both low-risk by their very nature, and would reduce the total risk of organizations offering them – by diversification.

4. In much of the rest of the world, depository institutions operate simultaneously and successfully in both banking and securities markets. Lessons learned from their experience can be applied to our national financial structure and regulation.[5]

The repeal enabled commercial lenders such as Citigroup, which was in 1999 then the largest U.S. bank by assets, to underwrite and trade instruments such as mortgage-backed securities and collateralized debt obligations and establish so-called structured investment vehicles, or SIVs, that bought those securities.


*Two separate United States laws are known as the Glass-Steagall Act. The Acts (Glass & Steagall) were both reactions of the U.S. government to cope with the collapse of a large portion of the American commercial banking system in early 1933. While many economic histories attribute the collapse to the economic problems which followed the Stock Market Crash of 1929 it is clear that the U.S. banking collapse of 1933, which came three and a half years later, was only partially the result of the stock market collapse in October 1929.

The Republican Hoover administration had lost the November 1932 election to Franklin Delano Roosevelt, but his administration did not take office until March 1933. The lame duck Hoover Administration and the incoming Roosevelt Administration could not, or would not, coordinate actions to stop the run on banks affiliated with the Henry Ford family that began in Detroit, Michigan, in January 1933. The Federal Reserve chairman Eugene Meyer was equally ineffectual.

Both bills were sponsored by Democratic Senator Carter Glass of Lynchburg, Virginia, a former Secretary of the Treasury, and Democratic Congressman Henry B. Steagall of Alabama, Chairman of the House Committee on Banking and Currency.

Congressional Research Service Summary:

In the nineteenth and early twentieth centuries, bankers and brokers were sometimes indistinguishable. Then, in the Great Depression after 1929, Congress examined the mixing of the “commercial” and “investment” banking industries that occurred in the 1920s. Hearings revealed conflicts of interest and fraud in some banking institutions’ securities activities. A formidable barrier to the mixing of these activities was then set up by the Glass Steagall Act.

The object of the Glass Steagull Act was to keep M&A across the board in the finance fields of banking, brokerages and insurers from merging into the orgy of failure that we are seeing today.

If CDOs, overvalued OTC derivative action, shonky accounting and increased money supply weren't enough! 

Im going to listen to Split Enz History never repeats! *


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## nomore4s (9 January 2009)

Stormin_Norman said:


> when someone short sells, they must buy. they make a profit selling high and buying low. when the market reaches a point, they decide that the price is 'fair' in their view and will buy out of their short sell.
> 
> banning short selling is effectively banning these purchases. it also disallows profit to be made in a falling market.
> 
> both these things only increase the bear market. not stop it.




lol, it was tongue in cheek, I'm pretty sure MRC knows what short selling is and how it works


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## Stormin_Norman (9 January 2009)

nomore4s said:


> lol, it was tongue in cheek, I'm pretty sure MRC knows what short selling is and how it works




i know. i was adding to his point.

re: the industrialists at the turn of the last century (Rob barons). it could be argued they made amaerica the great country it became, and has now fallen from.


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## wayneL (9 January 2009)

Doris said:


> Sounds like al anon!  First you must admit there's a problem then you can try to deal with it.
> 
> 
> 
> ...




Oh Gawd,

If Obama is anything like Whitlam, we're ####ed.


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## GumbyLearner (9 January 2009)

wayneL said:


> Oh Gawd,
> 
> If Obama is anything like Whitlam, we're ####ed.




If Obama is anything like Bush welcome to the Gulag!


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## wayneL (9 January 2009)

GumbyLearner said:


> If Obama is anything like Bush welcome to the Gulag!



...and other horrors.


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## GumbyLearner (9 January 2009)

wayneL said:


> ...and other horrors.




Yes WayneL.

There is going to be a lot of negative or stagnant numbers for a long time.

I just hope that business activity is not smothered by the Obama administration but at the same time something very serious must be to done to flush out the pretenders who are damaging the confidence and the integrity of the system. Kenneth Lay was small fry compared to whats going on now from a confidence point of view. 

More to the point the market have just gone along with the likes of Madoff and banks without the market correcting itself. Free-market capitalism is not meant to be governed by an oligarchy of a few players on Wall and Fleet St. It involves just as much the mum and pop businesses who employ people and go about their daily lives. If they make bad decisions they go out of business. As opposed to the current bailout system for the big boys. I know in many cases in Australia, where small business employ more people per dollar of turnover than the big players. These are the real people getting screwed to the wall at the moment! IMHO!  

And continued monetary stimulus, nationalized failout schemes and excuse after excuse are just digging bigger holes for the world economy.

Like explod said on the Gold Thread earlier today, Obama will be blamed for the sins of his predecessors just like Jimmy Carter. I hope this guy gets a fair go and is not blamed 6 months down the track by the uninformed headline readers for the administrative ignorance of the Bush Administration over the last 8 years and circle-jerk that has become Wall St. 

All is not well and yes things do need to change.


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## Knobby22 (9 January 2009)

GumbyLearner said:


> All is not well and yes things do need to change.




Well said GumbyLearner.

I can't believe that the problems that we are having now due to lack of regulation, (not in Australia which is well regulated), that there are people who believe that it can be solved by even less regulation.

OK, let's have one man control the world's oil supplies (it did happen).
Let's have another corner the silver and gold market. 
Let's have a monopoly in Telecommunications, let Telstra run free and we can all willingly pay whatever they want.
Let's have all Australia's banks merge as they desire and then pay them whatever they want.
Let's remove all protection from foreign dumping of goods, 
let Woolworths/Coles control pricing on all the petrol stations.

To some people,the answer to everything is less regulations.

This shallow form of thinking leads to a statement like:
"I could get to work faster if I didn't have to stop at red lights."

I don't understand how some people think.


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## Stormin_Norman (9 January 2009)

there's regulations, then there is government influence in the markets.

regulations are fine, government influence in the markets isnt.


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## Naked shorts (9 January 2009)

Knobby22 said:


> OK, let's have one man control the world's oil supplies (it did happen).
> Let's have another corner the silver and gold market.
> Let's have a monopoly in Telecommunications, let Telstra run free and we can all willingly pay whatever they want.
> Let's have all Australia's banks merge as they desire and then pay them whatever they want.
> ...




Would you also complain if these monopolies were subject to a hostile takeover?


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## Stormin_Norman (9 January 2009)

monopolies are not bad.

its what drives growth; the desire to monopolise a market.

abandon patents too?


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## Knobby22 (9 January 2009)

Naked shorts said:


> Would you also complain if these monopolies were subject to a hostile takeover?




Yes of course. The take over people would want to raise prices even higher for their customers so they could get their return. 

Let's privatise water and sell it to the Packer family. Let's say to them there are no regulations and you can charge what the market can bare.

The result - a lot of smelly Australians!!


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## Knobby22 (9 January 2009)

Stormin_Norman said:


> .
> 
> abandon patents too?





Yes, why not? 

Drug companies could then stop wasting their time finding new cures for disease and cancer. 

We could also copy any movie till the movie companies no longer bother to produce anything new. 

Sounds utopian.


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## Aussiejeff (9 January 2009)

Knobby22 said:


> Yes of course. The take over people would want to raise prices even higher for their customers so they could get their return.
> 
> Let's privatise water and sell it to the Packer family. Let's say to them there are no regulations and you can charge what the market can bare.
> 
> The result - a lot of smelly Australians!!




or...

A lot of smelly Australians exclaiming "bugger this for a lark!", packing their bags and heading orf to Kiwiland!


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## Stormin_Norman (9 January 2009)

Knobby22 said:


> Yes, why not?
> 
> Drug companies could then stop wasting their time finding new cures for disease and cancer.
> 
> ...




 exactly. perfect competition creates monopolies, and monopolies create perfect competition.

the desire to make a new means of production which is more efficient then the old means creates the monopoly. as they product is cheaper for the consumer and more profitable for the monopolist.

then the monopoly creates competition because the idea is widely adopted and competition efficiency reduces margins, as smaller competitors enter and undercut the monopoly.

then it happens all over again. stopping monopolies stops the incentive to create a new means of production which is more efficient.

stopping competition stops the new means of productions' lower real costs being widely adopted across the economy.


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## Knobby22 (9 January 2009)

Stormin_Norman said:


> exactly. perfect competition creates monopolies, and monopolies create perfect competition.
> 
> the desire to make a new means of production which is more efficient then the old means creates the monopoly. as they product is cheaper for the consumer and more profitable for the monopolist.
> 
> ...





There is some truth in what you are saying however it depends on what is being monopolised. There has to be a way of competing effectively with the monopoly. A Telstra monopoly would eventually lead to a wireless solution to compete. An oil monopoly may lead to alternate power sources but the road would be difficult and painful for the world. A water monopoly would be very hard to live with.

(We are getting rather deep here.)


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## Stormin_Norman (9 January 2009)

water is a public good.


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## Knobby22 (9 January 2009)

Stormin_Norman said:


> water is a public good.




So how do you define when should a monopoly be allowed?


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## Naked shorts (9 January 2009)

Knobby22 said:


> Yes of course. The take over people would want to raise prices even higher for their customers so they could get their return.



What are you on about?

*Hostile *take overs Nob, normally split the company up and sell off the pieces.

You say you dont like big bad monopoly companies, but you also say you dont like such companies to be taken down?


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## Stormin_Norman (9 January 2009)

Knobby22 said:


> So how do you define when should a monopoly be allowed?




in everything. however water should be a public monopoly. food is also a public good, but it has substitutes. water doesnt.


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## Knobby22 (9 January 2009)

Naked shorts said:


> What are you on about?
> 
> *Hostile *take overs Nob, normally split the company up and sell off the pieces.
> 
> You say you dont like big bad monopoly companies, but you also say you dont like such companies to be taken down?




Why would you split a monopoly and ruin your profits? That's just dumb. 

Give me an example where that has occurred?


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## Naked shorts (9 January 2009)

http://en.wikipedia.org/wiki/Ronald_O._Perelman


> his characteristic style: Buy the company, sell everything but the core business




What would you say about his style of takeovers on big business?

Just as long as you weren't about to contradict yourself. Im happy.


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## mayk (9 January 2009)

interesting interview with Peter schiff


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## knocker (9 January 2009)

well how about obama choof head :


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## GumbyLearner (9 January 2009)

Knobby22 said:


> Why would you split a monopoly and ruin your profits? That's just dumb.
> 
> Give me an example where that has occurred?




Great point Knobby22.

I can think of one.

When Jeff Kennett privatised The Met in Melbourne and sold off the train lines to competitive tender. All went broke except for one, Connex. Now instead of a well serviced, reliable, affordable public transport system. Melbourne has a frequently unreliable, run-down, expensive, overcrowded private monopoly where commuters are unsafe waiting on ghost town train platforms waiting for the next train, if it arrives on time. 

Competition my ****!!!!!

Good old Jeff had to sell off a lot State assets because of Pyramid in
Geelong. But the sale of public transport in Melbourne has proved to be dumb.

I wonder if old Jeff has played Railroad Tycoon, Knobby22! LOL


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## GumbyLearner (9 January 2009)

mayk said:


> interesting interview with Peter schiff





I think Peter Schiff is an outstanding commentator and there a very few in the world who were able to forsee the current economic problems.

He talks about excessive borrowing, over-consumption, lack of saving, speculation in the property market, the errors of bailouts and the subsequent debasement of the US Dollar. It is difficult for anybody to refute his arguments on these points. 

However, Mr. Schiff makes no mention of lenders, I mean the over-leveraged must have got their money from someone. Or the legislative structures that were put in place by US Governments which enabled Wall St and a like to lend such money to borrowers.

I would like to hear Mr. Schiffs arguments for or against, on the abolition of the Glass Steagull Act.

Does he believe that this law created too much "red tape" for the banking/financial services industry? 

Does he think that the current crisis was merely a result of peoples excess and in no way at all attributable to lenders not making adequate inquiries as to the liquidity and capacity of those that they lent money? Its existed in English common law for centuries, its called the Indoor Management Rule. Its also entrenched in the Corporations Law of Australia.

It would be great to hear his views about the actual frameworks in place that regulate banking in the United States.

I mean Id love to live in a Utopian universe where I could claim an ideal meta-theory about the productive nature of people and the ability of the market to govern itself. Fact is though some peoples eyes get bigger than they're stomachs. You can have any theory in the world you like, but if someone like Bernie Madeoff can have a defacto quasi-control of the SEC through lax regulation. Over $250 million dollars worth of cheques in his office-desk drawer ready to send out of the country the day he is arrested. Also send over a million bucks worth of cartier diamond jewelry and watches to his family while on bail, does he really believe that regulations are not required??  

It certainly makes me wonder if the price of freedom from regulation is really worth it.

I mean if someone just robbed a bank and was ready to wire the money to another destination outside of the country, isnt that enough evidence of flight from the crime itself.

The US regulation system is ****** to say the least.

Schiff has said he is against the bailouts, but why did the system come to the point of needing bailouts? Was it just mortgagees and over-consumption? Did big business and the "free-market" make any errors??

The door swings both ways in life.


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## Glen48 (9 January 2009)

Here is what OB wants to do:
From BBC News.
What caused Japan's recession?
Japan has been suffering stagnant economic growth and a series of recessions for more than 10 years. How has a country once seen as the ruler of the 21st century come to such a pass? And what, if anything, can the government do about it?

Why is Japan's economy in decline?

Japan is still suffering from an economic crisis that hit the country in 1989-90, when the "bubble economy" of high land prices and high stock market prices collapsed.

Both banks and businesses had much of their assets in either land or in cross-shareholdings with companies to which they were allied.

Suddenly, these assets - and therefore the debts on which they were secured - were wiped out.

As a result, banks became burdened with bad debts and lending to companies for expansion dried up.

Gradually, companies which produced in Japan have shifted some of their factories abroad, increasing unemployment.

And as unemployment rose to record levels, people have stopped spending so freely, causing prices to drop.

This makes everyone more reluctant to spend in the hope that they might get even greater bargains in the future.

What might happen next?

Japan has been seriously affected by the world economic slowdown.

In the past, exports by its large and successful companies have helped sustain its economy, but with the US economy wobbling, this is much more difficult.

The day of reckoning for the banking sector is getting closer, with banks being forced finally to declare their non-performing assets.

In addition, Japan is suffering from a large debt overhang from its excessive government borrowing, which will have to be reduced to lower long-term interest rates.

What has the government tried to do?

The government has repeatedly tried to stimulate the economy by spending money on public works.

The result has been some very well-equipped - if often unnecessary - regional infrastructure projects, but relatively little of the money spent reached those who have been made unemployed.

Much of it has in fact gone into the coffers of Japan's huge construction companies, which have very close links to ruling party politicians.

The spending has kept them afloat; without it many might already have gone bust. As it is, the first domino fell in December 2001, as Aoki Construction went under with debts totalling 522bn yen ($4bn).

And the massive outlay means government borrowing has reached 130% of GDP, higher than any other industrialised country.

This means that in the long run Japan will have to reduce its spending levels, at a time when it is facing increased pressures from an ageing population and the increased cost of health care.

And that could prove politically painful.

Can lower interest rates help?

Japan already has near zero interest rates.

It has now said that it will also buy Japanese government bonds to help boost the money supply

But despite the low interest rates, with the worsening economic prospects it is not easy to persuade either consumers or companies to borrow more money.

And long-term interest rates are dragged down by the huge government debt burden, despite the low overnight rates.

What are the prospects for reform?

The Japanese government says it is committed to structural reforms like eliminating its budget deficit and forcing the banks to declare the real extent of their losses.

But its reform programme has been made difficult by the severity of the downturn.

Making more banks insolvent could prolong the economic slowdown and eventually cost the government a lot of money if it has to assist with the bail-out.

And cutting government spending is a tricky political process.

The incumbent Prime Minister, Junichiro Koizumi, is known to be a reformer, and he has stressed his determination to press on with economic reform even if it means short-term hardship.

But there is little evidence so far that Mr Koizumi's words are being put into practice.


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## Naked shorts (9 January 2009)

GumbyLearner said:


> Schiff has said he is against the bailouts, but why did the system come to the point of needing bailouts? Was it just mortgagees and over-consumption? Did big business and the "free-market" make any errors??




Who said the system needs bailing out? 

The government is to blame because they encouraged the use of *debt *through organizations such as Fannie Mae, Fredde Mac and Ginnie Mae.

The system started growing in line with debt, thus debt fueled growth. It has been this way for the past 20-25 years. Its called a super bubble. 

Another point to note, every large company on Wall st has be either sold, bankrupt, or bailed out by the government.

Wall St has most definitely failed


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## GumbyLearner (10 January 2009)

Naked shorts said:


> Who said the system needs bailing out?
> 
> The government is to blame because they encouraged the use of *debt *through organizations such as Fannie Mae, Fredde Mac and Ginnie Mae.




Not me. Yes government and big business are both complicit in this!

I agree NS Wall St failed.

And the banks bought **** from door-to-door salemans in the form of CDO's, subprime and the Alt-A's that we will hear aboutin the near future.

Again I just want to come back to an integral point.

Why didnt the banks make adequate inquiries about the liquidity and capacity of the people they lent to or the **** mortagages they purchased?  Why weren't they 'put on notice' that somthing was surely wrong with the financial situation of those that were loaned money? 

That is a lenders responsibility not a governments!!!!


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## Naked shorts (10 January 2009)

GumbyLearner said:


> Why didnt the banks make adequate inquiries about the liquidity and capacity of the people they lent to or the **** mortagages they purchased?  Why weren't they 'put on notice' that somthing was surely wrong with the financial situation of those that were loaned money?




Because house prices always go up:


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## GumbyLearner (10 January 2009)

Naked shorts said:


> Because house prices always go up:




Precisely!

So this is where the private sector have determined value that didnt exist. I didnt vote for them and you didnt vote for them. Of course neither of us are US citizens but the point remains that these people assumed to govern an industry for their own purposes without government interference.
And of course they are in the US, but the US market is the greatest and largest of all markets so it affects Australian business and the global economy too!

Well what about the people that weren't involved, that saved their money and now have to wear the burden of these unelected rulers of finance! Should the average responsible fella in the street wear their loss? The US banks knew the game they were in, why should diligent hard-working mom and pop businesses suffer for the sake of these irresponsible lenders!

The rule of law has to come into play to stop this kind of **** from happening again!


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## Aussiejeff (10 January 2009)

Glen48 said:


> What has the (Japanese) government tried to do?
> 
> *The government has repeatedly tried to stimulate the economy by spending money on public works*.
> 
> ...




Some salutory lessons somewhere in that lot for KRudd &Co., perhaps? Especially the bit about getting the country into a big deficit situation then having to slash spending perhaps when the econ and the masses of unemployed, unhealthy, aged people need it most?

Blind Freddie can see the predicted timeline for economic recovery is pushing out every week. The incoming data from World Econs gets worse by the day, verily by the hour. I shudder to think what might come to light if the Fed & CIA start to dig deep into many of Unca Sam's Crooked Company Cookbooks. Maybe they should stay "schtum" and cover up the rest. Do we really want to know how many more Ponzi's and Madeoff's there REALLY are?

Now, even The Great Messiah Obama is making bleak assessments for the Yank-E-Con out to 2010 or longer. Bless him.

Not much hope then, for our dear little OzEcon making the once-predicted strong recovery from the middle of '09 courtesy of a KRuddathon of Spending? Probably nope. Nada. IMO.


aj


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## Aussiejeff (10 January 2009)

I See Red.

http://www.bloomberg.com/?b=0&Intro=intro3

A clear vote of confidence for the Wail Street system heading into the weekend.


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## Glen48 (10 January 2009)

While CEO can be paid mega $$ PA and transfer every thing in to their Wives name nothing will change. Look at how much money Bond was making each day in Jail and how people like Adler can do their small amount of time an walk free with every thing in tact upon release.
If CEO's and  scammers know  they are seen as a lesser crim. than a bank robber who get a longer term for less money whats me worry?


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## Naked shorts (10 January 2009)

GumbyLearner said:


> Well what about the people that weren't involved, that saved their money and now have to wear the burden of these unelected rulers of finance! Should the average responsible fella in the street wear their loss? The US banks knew the game they were in, why should diligent hard-working mom and pop businesses suffer for the sake of these irresponsible lenders!
> 
> The rule of law has to come into play to stop this kind of **** from happening again!



Do you think the people in power wanted this to happen? 

And you want to stop people from gaining power? You know just as well as I do that this can never happen. There has *always *been someone in power since forever.

This is not about to change.

You can:
> Hate the players (even though the players will never go away)
> Hate the game (even though the game will never change)
> Play the game

Im not saying that what has happened is just, it's disgusting to think of all the elderly that have lost all their super. Im saying that this kind of thing can/will happen again, and you'd best be prepared by playing the game.

We have globalization now, this will be the first ever global economic crash. What a time to be alive!


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## GumbyLearner (10 January 2009)

Naked shorts said:


> Do you think the people in power wanted this to happen?
> 
> And you want to stop people from gaining power? You know just as well as I do that this can never happen. There has *always *been someone in power since forever.
> 
> ...




Games without rules usually end in arguments and/or brawls.

Id like to play, WHAT ARE THE RULES?


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## Knobby22 (1 February 2019)

Dr Dao - a doctor with patients to serve the next day - was "selected" by United Airlines to be removed from an overbooked plane.

As he had patients to tend the next day he did not think he should leave the plane. So the airline sent thugs to bash him up and forcibly removed him.
The video (truly sickening) went viral. But the airline did not apologise. The problem it seems was caused by customer intransigence.

They apologised after what Tepper and Hearn think was true public revolt, but what I think was more likely the realistic threat to ban United Airlines from China because of the racial undertones underlying that incident.
If a "normal" company sent thugs to brutalise its customers it would go out of business. But United went from strength to strength.

The reason the authors assert was that United has so much market power you have no choice to fly them anyway - and by demonstrating they had the power to kick your teeth in they also demonstrated that they had the power to raise prices. The stock went up pretty sharply in the end.
Oligopoly - extreme market power - not only makes airlines super-profitable. It gives them the licence to behave like complete jerks.

http://brontecapital.blogspot.com/


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