Econ: The Forecast is...?

[Zkribbler]

Today, the Administration announced its plan for dealing with the banks' toxic assets:

In midafternoon trading, the Dow rose 274.78, or 3.8 percent, to 7,553.16 after being up nearly 338 points at its high of the day.

[Arrian]

Day to day stock market swings, Zkrib? Really?

-Arrian

[Zkribbler]

The last time Guitner was allowed to talk, the market dropped 4%.
I figure he still owes us 0.2%.

[Theben]

$1 trillion to buy toxic assets, where the govt matches $$ for $$ paid by investors? More or less guaranteed? I can't see why someone wouldn't buy if offered free money. OF course the market went up!

[Naked Gents Rut]

Dear god, we are ****ed...

[Imran Siddiqui]

[Imran Siddiqui]

$1 trillion to buy toxic assets, where the govt matches $$ for $$ paid by investors? More or less guaranteed? I can't see why someone wouldn't buy if offered free money. OF course the market went up!

Free money for the people on Wall Street makes the market go up?! I'm shocked!

[Victor Galis]

$1 trillion to buy toxic assets, where the govt matches $$ for $$ paid by investors? More or less guaranteed? I can't see why someone wouldn't buy if offered free money. OF course the market went up!

If only it were like you say They're offering investors something like 10 to 1 or 12 to 1 leverage.

Willem Buiter explains it much better than me:

http://blogs.ft.com/maverecon/2009/03/the-new-toxic-and-bad-legacy-assets-programs-of-the-us-treasury-surreptiously-squeezing-the-tax-payer-and-the-fed-until-the-ppips-squeek/

[chequita guevara]

Dear god, we are ****ed...

Yep, time to get that passport and start looking at emigration.

God, that makes me want to scream.

[Naked Gents Rut]

Yep, time to get that passport and start looking at emigration.

QFT

[chequita guevara]

At least if it were spent on increasing productive capacity . . . but to pay off bad loans to greedy idiots who shouldn't have made them in the first place? Time to oil up the guillotine.

[Kidlicious]

We have plenty of capacity. Increasing it would be the same thing and just giving money away.

[The Mad Monk]

Yeah, we're sitting idled right now.

[Jon Miller]

Production is sitting idle, people want more stuff, people are unemployed....

This seems to be a problem where the people who hold the wealth aren't the ones who want more stuff. This is an issue in a capitalist economy.

JM

[Victor Galis]

It seems to me to be a distribution of wealth issue. It's actually been developing over the last few decades, but home equity loans and rising home values have masked that issue until last year.