Quote:
Originally Posted by Niggardly Jigger Chiggers
I have a Down-syndrome level of comprehension regarding economics.
I know the Federal Reserve is not a government agency.
I also know they print paper money which is backed up by zero commodities.
I know they distribute this paper and then expect interest back on it, which requires them to continue printing more worthless paper.
I know that taxpayers are required, under threat of imprisonment, to pay this interest for reasons which have never, ever, no-no-never been explained to the taxpayers.
And I'm pretty sure that these payments on bankers' interest far exceed anything that goes toward things such as social programs or anything that might tangibly benefit the average Joe or Jose or Kwame.
So I'm going to pose this question as simply as possible:
Why are we required to bail out fat fucking do-nothings who live like corpulent leeches on our labor? Did I miss the lesson where they teach you exactly when and how they're required to do ANYTHING to help us? As far as I can tell, we're duty-bound like galley boatmen to not only pay back our debts, but to do it with INTEREST while we're paying THEIR debts.
Your help and insight is appreciated during this time of crisis. |
Are you saying you are a "fat fucking do-nothings who live like corpulent leeches"?
The ones who created the mess, profiting from placing at great risk the capital of others and creating a house of cards which when collapsing will undermine all trust required for markets to work, have long ago walked away with their ill-gotten plunder. That they took away your wealth even as you tried to have nothing to do with them, speaks to the need for bailing out you and most of us.
Think about it. Let's say you bought a plot of land at a fair market price, paid for with your labor, built on it a house with your own labor, paying for any materials with your labor. When you are done, this property is appraised most likely at a price higher than the sum of your labor at fair market value, reflecting your initiative. The breaking of trust by those profiting with nothing at risk has most likely destroyed the market for your property so that you will likely get a price less than your labor.
The first reason is the uncertainty in the market, with other properties falling in value as too many are offered.
The second reason is the forced deleveraging means banks aren't able to make loans, so those without cash can't hope to pay you what a rational price for your property is.
The third reason is the shortage of cash might make your labor worthless as you can't get paid what is fair, or your employer can't get the cash to pay you, making your need to tap into the value of the property which is the fruit of your labor, but that you can't because banks won't trust that you or they won't be able sell your property that secures the loan.
So, you have suffered a loss that might turn into a real loss even though you avoided all risk in order to avoid all loss.
The Fed and Treasury are acting to prevent assets like securities and firms with tangible and intangible assets from being dumped on the market when no one in the market has the cash to pay for them. They hope to restore some of the lost trust, so there won't be the pressure to dump assets for cash, or at least keep asset values from falling further.
The bad paper written since 2002 is like thousands of poison jelly beans mixed into the ten thousand jars of jelly bean shipped to customers and stores. The odds are low that you will be poisoned eating jelly beans, but how can you know? Every one sane stops eating jelly beans, or at least figures out how to detect the poison and carefully inspects each one. Even knowing how to detect the poison, you likely go on a diet.
The Fed is trying to take some of the suspect jars off the market, but some of the jars their forcing their store keepers to swallow, so the stockholders of Bear Stearn, Countrywide, have swallowed some poison, maybe a lot. But at least that takes some off the market. Other jars the Fed is taken and replaced with good ones from it own manufacturing plant.
So, the Fed is trying to bail out you and I, but it is true that some who played some role in this are bailed out as well, while others with less role are hit hard. I just checked my retirement, and my collateral damage is 15-16% minimum. I hope the Fed keeps it to that level and prevents it from increasing to a 30-35%. As it is, my break even will require a 20% rise in stock prices if it doesn't go down more.
I really hope the Fed bails me out by elimnating the uncertainty that's driving the market down.
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