GLINDA

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Member Since: 9/2006 Last Seen: 3/09/2010

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Sooner Fed bail-outs than the 1930s revisited

News Type: Opinion — Seeded on Wed Mar 19, 2008 1:32 PM EDT

Article Source: Telegraph

world-news, recession, economics, depression, markets, bear-stearns, the-fed, bail-outs

Seeded by Glinda

Put a clothes peg on your nose. The moral stench of bail-outs for the über-rich will be sickening. None of us wants to pay a farthing to rescue the bankers and assorted debt pimps who got us into this financial mess, and in doing so exposed our societies to such harm.

...

Yet we must forbear. It was such sentiments that turned the 1930 recession into a slump. "Liquidationists" prevailed: they insisted with Puritan zeal - or malice - that speculators should be driven to the wall amid a cathartic purge of the Roaring Twenties.

Great Debt Delusion: A world addicted to easy credit must go cold turkey	Telegraph	Sun Mar 16	0
Foreign investors veto Fed rescue	Telegraph	Mon Mar 17	1
Paterson Acknowledges Extramarital Affairs	The New York Times	Tue Mar 18	3
Woman masturbated on while sleeping on plan	SkyTalk	Wed Mar 19	0
The Iraq War Is Killing Our Economy	AlterNet.org	Tue Mar 18	3

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{"commentId":1596860,"authorDomain":"witchofthenorth"}

Glinda

America is not facing "recession-as-usual". It is in the grip of a property crash. House prices have fallen by 10 per cent so far; Goldman Sachs fears they may fall by 30 per cent in the end. The sub-prime mortgage industry has already disintegrated. Some 241 lenders have gone bust, or shut their doors.

The crisis has since spread to prime mortgages. Fannie Mae and Freddie Mac - the fortress agencies that guarantee 60 per cent of America's $11 trillion mortgage market - began to crumble last week. Even bodies standing at the top of the credit system are no longer deemed safe. As Barclays Capital put it, this was a "tsunami event".

Or in the words of City veteran David Buik at Cantor Fitzgerald: "No one in living memory has ever seen a banking crisis like this. I am older than God, and the outlook has never looked as bleak."

Well.

That's pretty @!$%#ing scary.

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#1 - Wed Mar 19, 2008 1:33 PM EDT

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