Wall St Bailout? "We should not be rushed into this!"

ablarc said:
^ Architects are canaries in a coal mine. My business is down to 20% of normal cash flow. Most of my clients tell me they can't pry money out of their banks.

That's why the government needs to make lending attractive again (and --it goes without saying-- borrowing).

That's what I was getting at in another thread.
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I'm faaaar from being an expert in any of this stuff, but from what I've read, 'attractive' loans (i.e. low interest) carry very slim margins for banks. How do you make up for slim margins? Volume. You start loaning money to anyone with a pulse.

And here we are....

Most of post-70's boom was built on credit. We can't sustain that kind of growth indefinitely.
You can't dig yourself out a hole and you can't borrow your way out of debt.
 
statler said:
I'm faaaar from being an expert in any of this stuff, but from what I've read, 'attractive' loans (i.e. low interest) carry very slim margins for banks. How do you make up for slim margins? Volume. You start loaning money to anyone with a pulse.
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You make my point for me; my plan substitutes markup for volume. The banks make more money with fewer loans. In the present situation they've stopped making loans even to the credit-worthy. My plan would change that; read it again.

Has nothing to do with borrowing out of debt. The national debt is another, separate issue. You solve that by getting out of Iraq, raising taxes on the rich and --long term-- building reasonable environments.
 
You solve the national debt by cutting spending drastically, reducing the size of government, limiting future growth of government (thus preventing future overspending), lowering and restructuring taxes to encourage domestic industries attractive to investment.

Taxing rich people doesn't work, they move their money elsewhere and it encourages companies, with all their nice middle class jobs, to move elsewhere, in addition to shifting investments. There shouldn't be any taxes on income or investment, to encourage people to become rich through successful businesses and investments. A national sales tax that hits everything coming in or out of the country equally (to be fair to free trade agreements as a non directed tariff) would be a much fairer means of taxation. People and businesses would only pay taxes on what they consume, which would quite accurately gradate the level of taxes paid from the uber rich buying million dollar yatchs to a hobo buying booze. The constitution originally banned income taxes for good reason, too bad Woodrow Wilson's amendment changed that.
 
If Wells Fargo is willing to buy all of Wachovia without any government assistance or subsidy, doesn't that mean the bailout is not needed? The market is working out the problem on its own.
 
FYI...London's derivatives market is twice as large as New York's.

Expect some interesting times ahead.
 
statler said:
I'm faaaar from being an expert in any of this stuff, but from what I've read, 'attractive' loans (i.e. low interest) carry very slim margins for banks. How do you make up for slim margins? Volume. You start loaning money to anyone with a pulse.

And here we are....

Most of post-70's boom was built on credit. We can't sustain that kind of growth indefinitely.
You can't dig yourself out a hole and you can't borrow your way out of debt.
Click to expand...

You're absolutely right that you can't inflate forever, and you can't pay debt with even more debt.

All money in our system is debt because all money is loaned into existance. Let's say a bank loans $100 into existance with 5% interest attached. Where does one obtain that 5% interest to pay the bank if it was not created along with the original $100? More money has to be loaned into existance to pay it back.

Therein lies the problem with fractional reserve banking system and compound interest. It's an exponential dead-end.
 
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