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Do you disagree with the Fed's position as a lender of last resort, as well as the existence of FDIC? It's not equivalent, but it looks like what's going to happen is that the federal government is going to try to move to a model of being the absorber of risk of last resort.
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12-17-10 Mohamed Bouazizi NEVER FORGET
Stadtluft Macht Frei
Killing it is the new killing it
Ultima Ratio Regum -
By the way, I haven't yet decided if I'm in favour of pulling the financial industry's chestnuts out of the fire or not.12-17-10 Mohamed Bouazizi NEVER FORGET
Stadtluft Macht Frei
Killing it is the new killing it
Ultima Ratio RegumComment
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That's what they are doing, but market discipline is lost. In the long run, it will be a net negative. Otherwise, the private sector would have been turned over to the US Fed. Gov't long ago for it to run.Originally posted by KrazyHorse
Why not? The US Fed. Gov't is able to absorb larger amounts of risk than individual private enterprises are. If the bailout is engineered correctly (big IF) then why can't they leverage that capacity to both unclog markets and turn a profit?I came upon a barroom full of bad Salon pictures in which men with hats on the backs of their heads were wolfing food from a counter. It was the institution of the "free lunch" I had struck. You paid for a drink and got as much as you wanted to eat. For something less than a rupee a day a man can feed himself sumptuously in San Francisco, even though he be a bankrupt. Remember this if ever you are stranded in these parts. ~ Rudyard Kipling, 1891Comment
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Again, refer back to my post on lender of last resort/provider of liquidity/bank insurer comment. Do you disagree with the idea that these roles have been net positives?12-17-10 Mohamed Bouazizi NEVER FORGET
Stadtluft Macht Frei
Killing it is the new killing it
Ultima Ratio RegumComment
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The Fed/Treasury are being abused in this cycle because they aren't charging enough for taking on those risks. It needs to be punitive, such that some sort of discipline results. Less TARP, more AIG.Originally posted by KrazyHorse
Do you disagree with the Fed's position as a lender of last resort . . . but it looks like what's going to happen is that the federal government is going to try to move to a model of being the absorber of risk of last resort.I came upon a barroom full of bad Salon pictures in which men with hats on the backs of their heads were wolfing food from a counter. It was the institution of the "free lunch" I had struck. You paid for a drink and got as much as you wanted to eat. For something less than a rupee a day a man can feed himself sumptuously in San Francisco, even though he be a bankrupt. Remember this if ever you are stranded in these parts. ~ Rudyard Kipling, 1891Comment
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Social Security is such a cluster****. One of the few political issues that still gets me angry.I cannot believe that you guys pay almost 12% of your salaries into a government-run retirement scheme that's STILL going bankrupt.Comment
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I agree that it should be punitive. And also that they may be allowing themselves to be too generous. The fact that these enterprises are limited liability provides all sorts of perverse incentives to some banks, however. To be fair to the Fed/Treasury this is the first time anybody's really tried this on this scale.12-17-10 Mohamed Bouazizi NEVER FORGET
Stadtluft Macht Frei
Killing it is the new killing it
Ultima Ratio RegumComment
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It makes me angry too. I don't pay it, but my wife does. 12% of 80000 is 9600$ a year into that ****hole.Originally posted by Naked Gents Rut
Social Security is such a cluster****. One of the few political issues that still gets me angry.12-17-10 Mohamed Bouazizi NEVER FORGET
Stadtluft Macht Frei
Killing it is the new killing it
Ultima Ratio RegumComment
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I'd gladly accept national healthcare in exchange for the death of Social Security. Unfortunately we're probably going to get both and a FUBAR federal budget now.Comment
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The real problem with discussing market discipline is that I'm not sure if market discipline actually applies to events which only take place once every 50 years (let's say).
On this time scale it is easy for me to imagine that market participants basically forget, or are incentivized to forget. When you can easily go your whole career without seeing something like this happen, do you really price it in?12-17-10 Mohamed Bouazizi NEVER FORGET
Stadtluft Macht Frei
Killing it is the new killing it
Ultima Ratio RegumComment
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I don't think Americans would include it, Germans maybe would?
JMJon Miller-
I AM.CANADIAN
GENERATION 35: The first time you see this, copy it into your sig on any forum and add 1 to the generation. Social experiment.Comment
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I don't think Americans would include it, Germans maybe would?
JMJon Miller-
I AM.CANADIAN
GENERATION 35: The first time you see this, copy it into your sig on any forum and add 1 to the generation. Social experiment.Comment
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At least the discipline would last for a portion of the 50 years.Originally posted by KrazyHorse
The real problem with discussing market discipline is that I'm not sure if market discipline actually applies to events which only take place once every 50 years (let's say).
On this time scale it is easy for me to imagine that market participants basically forget, or are incentivized to forget. When you can easily go your whole career without seeing something like this happen, do you really price it in?I came upon a barroom full of bad Salon pictures in which men with hats on the backs of their heads were wolfing food from a counter. It was the institution of the "free lunch" I had struck. You paid for a drink and got as much as you wanted to eat. For something less than a rupee a day a man can feed himself sumptuously in San Francisco, even though he be a bankrupt. Remember this if ever you are stranded in these parts. ~ Rudyard Kipling, 1891Comment
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I'm not sure that much discipline is worth the price being paid for it.12-17-10 Mohamed Bouazizi NEVER FORGET
Stadtluft Macht Frei
Killing it is the new killing it
Ultima Ratio RegumComment
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When I've lived on my own, it was on ~$400-$500/mo. I had a car then too. Rent and costs associated with the car were my main expenses. Food was ~$100/mo, if that. Rocky mountain states you can live pretty decent on very little.Originally posted by Jon Miller
Considering that my room and board is ~14k, I think that Aeson's 6k gives him ~20k which is what I make a year.
Not sure how to price in room and board when I live in CA though. It'd be higher, definitely... but if I had to pay it (or my Aunt was paying that much more because I was there) I wouldn't be there in the first place.
If I did the work I was doing down there, as a paying job, I'd probably have made quite a bit more (but had to work more too). (And not been able to afford to live down there, at least not on the ocean side of I-5
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