Bail faster! ...and rocket fuel to get away.

[aciel]

If you're anything like me, you probably have no clue what's going on with this bail-out thing. Many of you probably don't care.

But you should. Remember the Great Depression? That will be us.

Comments

[cowsandmilk]

a couple things

[aciel]

It's not about recovery of the 700b. It's about supporting a failed business model.

[cowsandmilk]

Except it isn't. What's causing the action is things like companies not being able to find commercial paper. There are thousands of successful, profitable companies that rely on commercial paper to maintain inventory and perform product transitions. This is the reason why a stock market collapse is expected without the bailout. If (successful) companies cannot buy their inventory for the holiday season, that will be a catastrophe and wreak havoc on many companies that have good business models.

Economists don't disagree with the need for a bailout, they disagree with Paulson's 3-page proposal, and to a varying degree with what's currently being proposed by Congress. Giving Paulson the ability to buy the securities at a premium price is the wrong strategy. Giving Paulson the ability to inject capital in a well-regulated manner for preferred shares with instruction for gradual buyback of those shares is much more in-line with prevailing economic theory.

[aciel]

Not being able to find paper? Where does THAT come from?

[a_glaciered_sun]

Yeah, um. I basically had a mini panic attack when I heard that my bank (Washington Mutual) had gone under and been bought out by JPMorgan Chase.
Luckily, nothing with my account has changed but still. One of the largest bank failures ever? C'mon.

I think this is the only time in my entire life that I was thankful for not having any money in my bank account.

[aciel]

Well, it's much more complicated than that. The FDIC insures your deposited money. The worrisome thing is...well...I can't even figure out how to sum it up. If you own stock, you may well be screwed.

Go watch the video I just posted. It explains things really well.

[aciel]

Urgh. I thought the FDIC insured your deposit money. Apparently it might not matter. =/

[stuck]

I have a couple of friends whose WaMu accounts have been frozen :(

Though i don't know you, I hope yours hasn't as well

[stuck]

I'm not diametrically opposed to the bail-out plan - I'll leave that realm for the government minimalists; while a principled view, it is, in my mind, wholly irresponsible view if you think, like I do, that the government should be responsive to the wants and needs of its citizenry. The vast majority of the citizenry doesn't want to see an economic depression. A bail-out is not necessarily a bad way to prevent this (though it may rub some ideologues the wrong way

[aciel]

I'm very curious--what do you think of the "Money as Debt" video I posted?