Letters to the Editor

Letters posted here are associated with the following article:
"The next time we have Black Monday"
Congress will wring its hands, and taxpayers will foot the bill. A prediction of the consequences of bank deregulation, from 17 years ago.
Andrew Leonard [2008-04-04]
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  • Well that's fine if you live in Norway and the government is the largest part of the GDP

    In a very high tax country like Norway, they take from the shareholders and give back to the shareholders more or less. We don't have that kind of equation. Write down to zero and letting them fail evaporates several hundred billion in capital that can't be made up, unless you're the one proposing we tax everyone accordingly. Me? I'd resist having the government step in to dictate what my investment is worth (0) and then tax me to pay for it.

    -- Electro Robot
    [Read Electro Robot's other letters]
    Sunday, April 6, 2008 01:50 PM

  • Electro Robot

    I'd resist having the government step in to dictate what my investment is worth (0) and then tax me to pay for it.

    Would you resist having the market dictate that your investment is worth nothing, and then have the government come in and bail you out?

    Of course not. Pubs never do.

    By the way. Where did that myth of Republican 'fiscal responsibility' come from?

    -- walter_map
    [Read walter_map's other letters]
    Sunday, April 6, 2008 02:30 PM

  • A-yep, Sucks

    <<blockquote>>The Fed can't plug the gap between the inflated valuations and market valuations because that much money doesn't exist. Instead, it's trying to throw enough money at the markets to support confidence in asset valuations, including confidence in grossly inflated credit derivatives.<</blockquote>>

    So shouldn't we just have nationalized Bear-Sterns?

    To sum up for blunder-simple readers:

    We've got a huge boatload of paper which banks claim is worth tons of money, but which cannot be liquidated, because no one believes the paper is worth what the banks say it is.

    But the banks can't write down ALL the paper, because then they'd be insolvent.

    That covers it, right?

    Looks like there's no solution here, at least not amongst the "serious" thinkers.

    Thank goodness I'm poor and have nothing.

    When does the revolution start? I'm stocking up on coffee and cigarettes. What else would be good? Sugar, maybe? Chocolate?

    -- blunderdog
    [Read blunderdog's other letters]
    Monday, April 7, 2008 01:00 PM

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