The "I think it's a fair question" open thread.

By DocJ - Posted on October 6th, 2008

Tagged: Op-Ed

Given that, as of 14:20 EST today, the Dow was down about 6.5% and the NASDAQ was down about 7.75%, is it fair to say that The Bailout^TM has done little - or nothing - positive with regard to markets both domestic and global?

In other words - are you telling me that had we not forked-over a huge chunk of government cheese and other bailout goodies last week the markets (and they're actually worse overseas, if you can believe that) would actually be worse today than the free-fall they're in now?

Like I said, I think it's a fair question. Feel free to answer, not answer, or add your own "I think it's a fair question" question. It is, after all, a Monday Open Thread!

It Poured JP8 on a bonfire

Submitted by Knight_of_the_Mind on Mon, 2008-10-06 10:37.

Senator Huey Long from LA once opined that hard work was nearly as overrated as monogomy. Once the Govt. starts rewarding screw-offs w/ $700B bail-outs, it triggers a race to the bottom.

1) You get $$$ by being the worst bank in the US. Sec. Treas. will quite literally pay you to suck harder.

2) You get taxed for doing well. Sec. Treas. has no funds to pay someone else's "Slacker Leave" unless he taxes a productive entity. Who would be enough of a dumb-@$$ to acutally produce under those circumstances?

How about them COWBOYS!!!

Here's something to loosen everything up..

Submitted by speciallist on Mon, 2008-10-06 21:06.

"40 million American households that read TMR are generally happier than those people in households that don't read TMR."

It is a fair question, but the answer depends on the meaning of

Submitted by streetwise on Mon, 2008-10-06 10:40.

is :>)

If the bailout's purpose is to help stabilize the money markets, then modest declines in lending rates are an indicator that it may be working.

If the bailout's purpose is defined as saving the equity markets from the consequences of bad investment decisions, the answer is clearly no. IMO, that was not its purpose.

Well, then I suppose we can all hope...

Submitted by DocJ on Mon, 2008-10-06 10:46.

... the those inclined toward equity markets in the future have learned their lessons.

But they probably haven't - and likely won't. Will they.

As for the broader issue, I'm hearing more and more people are screaming for thinks like "SBA loans" and the like because credit markets were still, at least in theory, frozen. It's probably fair to say that it might take a couple of days before we know if the markets become "unfrozen" but it's still somewhat obvious that the passage of the bailout did not have the immediate effect some, clearly, hoped it would have. No?

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Diplomacy is the art of saying 'Nice doggie' until you can find a rock.

Equity markets MUST correct for overvaluation.

Submitted by streetwise on Mon, 2008-10-06 11:26.

In the credit markets, precision and timing are huge factors affecting confidence, which is the indispensable attribute of a healthy market.

Congress's delay, needless expansion of the original Paulson 3-pager, the morphing of the bill into an egregious pork-a-thon, the need for efforts to scale back same, the poison injected by Madam Speaker into the bloodstream before the first vote and the need for a time consuming damage control effort in the Senate have all damaged confidence.

The fact that the fiasco has enhanced the propsects of The One isn't helping either.

I didn't think I was arguing that.

Submitted by DocJ on Mon, 2008-10-06 11:34.

Unless you think the overvaluation was caused in no small part by the "Guaran-damn-teed by the U-S-Treasury" nature of these crap investments - with which I agree.

Only the "lesson" to which I was alluding was not a repeal of basic supply/demand/price/value, but rather "Well, then next time don't buy the government cheese thinking it's roquefort - you idiot bastards!"

FWIW, I don't think Paulson's "pass my bill in 3-days or the sky is gonna fall" approach to the PR problem was helping anyone's confidence, either.

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Diplomacy is the art of saying 'Nice doggie' until you can find a rock.

Get Rid of Non-Recourse Loans

Submitted by Knight_of_the_Mind on Mon, 2008-10-06 12:07.

That would end "Jingle-Mail". That would take away an implicit put option that undermines the value of every mortgage in the US as an investment vehicle. How about them COWBOYS!!!

A $5T new "New Deal"?

Submitted by DocJ on Mon, 2008-10-06 10:51.

Hey, it could happen?

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Diplomacy is the art of saying 'Nice doggie' until you can find a rock.

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