Economics

It's Bailout Time

|

The L.A. Times reports:

The Bush administration said it would ask Congress to authorize the Treasury Department to lend Fannie and Freddie more money than current limits permit and buy stock in the two companies.

Also Sunday, the Federal Reserve agreed to permit the companies to borrow directly from the central bank, as investment firms were allowed to do after the near-collapse of Bear Stearns Cos. in March. The money would tide Fannie and Freddie over while the administration and Congress rush the emergency measures through….

The plan is certain to be highly controversial, with critics saying it bails out shareholders of companies that took excessive risks during the housing boom in recent years.

Critics of government intervention say such rescues encourage irresponsible investing—thus bringing about financial-market bubbles—because investors believe the government will bail them out at taxpayer expense.

Well, yes. Meanwhile, Karen De Coster makes a pertinent point:

In listening to the constant chatter about the Fannie-Freddie crisis, one thing struck me as funny—Bloomberg analysts appeared to be perplexed that both companies are ranked Aaa by the credit-rating oligopoly, yet derivatives traders were trading both at levels that implied a credit rating at least five levels lower.

Credit ratings by the government-granted oligopolists are not the market; trading actions based on actual knowledge and/or informed interpretations of known events are the market. The act of trading credit-default swaps (tied to debt sold by Fannie and Freddie) does not hinge on implied promises on the part of the government. Sure, implied government backing has caused the security prices to be skewed for Fannie and Freddie. But what's happening here is that the market participants, in spite of an implicit government guarantee, are coming to their senses and realizing the insolvency…of both Fannie and Freddie.

NEXT: Cleveland DEA Informant Scandal Wraps Up

Editor's Note: We invite comments and request that they be civil and on-topic. We do not moderate or assume any responsibility for comments, which are owned by the readers who post them. Comments do not represent the views of Reason.com or Reason Foundation. We reserve the right to delete any comment for any reason at any time. Report abuses.

  1. Can someone please provide me with an honest sounding (honest is too much to ask) explanation for:

    http://www.nytimes.com/imagepages/2008/02/17/business/20080217_SWAP_2_GRAPHIC.html

    this graph? Thanks.
    JMR

  2. Viva Peron!

  3. JMR’s graph shattered my mind. We need an expert!

  4. JMR,

    45>21

    Really, is it that hard to understand?

    🙂

  5. The problem with that NYT graph is that it’s “old,” and a newer bloomburg story (can’t dig it up at the moment, but trust me) says the actual number is more like $60(!) Trillion, instead. There is no coverage on TV media of this despite a full court press from me (apparently, e-gold & the Ron Paul copper dollar the only financial problems worthy of enforcement instead of taxpayer subsidy). It’s so fiscally stupid it drives me NUTS, and there’s NO WAY we’ll see ANY mention of it on Cavuto until shit hits fan completely following the election. Until the election, it’s “give the addict his financial heroin” no matter how socialist it looks. But hard money libertarians like me are “crazy,” so we can’t possibly be worth listening-to, much less trusted with leadership.
    JMR

  6. When can we expect a Senate investigation of the InBev-Anheuser deal, on National Security grounds?

    Jesus- what if they start printing the labels in Portugese?

  7. I, for one, welcome the refreshing beverages of our new Portugese overlords.

  8. P Brooks,

    Im hoping the InBev deal goes thru so I can make fun of Bud drinkers for drinking “sissy Belgian beer”.

    Sam Adams will be the largest American brewer after that deal. Pabst will be the largest American beer company, but they are contract brewed, so arent a brewer.

  9. Did Portugal invade Belgium? Did I miss the war? Or was it like a soccer bet during Euro 08 or something?

  10. Didn’t find the Bloomburg one, but here’s a story

    http://everythingwarrenbuffett.blogspot.com/2008/05/reutersbuffett-backs-fed-over-bear.html

    that also mentions $60 Trillion instead of “just” $45 Trillion or so (but what’s $15 Trillion among friendly taxpayers??). For some “how deep is this shit, anyway?” context:

    That’s over 4x the 2007 est. US GDP and just under (90%) the ENTIRE PLANET’S flappin’ GDP fer Chrissakes.

    US GDP: $13.8 trillion
    World GDP: $65.6 trillion

    https://www.cia.gov/library/publications/the-world-factbook/rankorder/2001rank.html

    Sigh.
    JMR

  11. I accept the overlordship of whoever is supplying the beer.

  12. Sam Adams will be the largest American brewer after that deal.

    No kidding? That’s just weird.

    High-quality craft-work performed by an American company, while its lower quality, mass-produced, cheapter competitors are from Old Europe.

    Wait a sec, does that make US the “Chocolate-makers?”

  13. Wait, since when is anything in our monetary, controlled by the Federal Reserve, “unregulated”? And is the NYT trying to say “It’s big, so regulate it!”?

  14. *monetary system

  15. Dear Santa:

    I want a Red Ryder carbine-action 200-shot range model BB gun for Christmas.

  16. “Belgian-Braqzilian” brewer, InBev…

    2004 when the Belgian company Interbrew and the Brazilian company AmBev merged, creating the world’s largest brewer.

    [from the wiki]

  17. Yes, Nigel, the NYT’s headline is typically NYT-left-biased, and I neglected to point it out, so thanks. How I saved the graph URL in my bookmarks was under the single word, “criminality.” With a government this-big, NOTHING and NOBODY is ever anything like “unregulated.”
    JMR

  18. Pay no heed to the superfluous “q” in Brazilian.

    stupid keyboard.

  19. joe,

    High-quality craft-work performed by an American company, while its lower quality, mass-produced, cheapter competitors are from Old Europe.

    Well, while Im not a big fan of Sam Adams, I dont disagree with the assessment. However, Yuengling will be #2 – Im not willing to call them High-quality craft-work. They just never got as big as Bud/Miller/Coors did (probably do to remaining private/family owned).

    Wait a sec, does that make US the “Chocolate-makers?”

    I have no problem with that. For a while now, some of the best beer in the world has been made in the US. It was just starting to get noticed overseas. Maybe this will remove the “bad US beer” bias from the snooty Europeans.

  20. P Brooks,

    Belgian-Brazilian

    Ah, that explains the portuguese comment. InBev is headquartered in Belgium though. However, although SABMiller is headquartered in London, I always refer to them as a South African company. I guess to be consistent, I should refer to them as British. Ah, screw consistency, its funnier my way.

  21. What is the point of having all those printing presses, if you can’t print money at will?

    “I can’t be broke- I still have checks left.”

  22. JMR,

    What does that 45/60 Trillion dollar figure actually represent? It can’t represent the price paid for the swaps, since there simply isn’t that much money. Is it simply a measure of the risk insured by such swaps? And if so, how it is at all valid to compare that to other marketplaces?

  23. MP,

    I think its the value of the swaps on the open market, based on last trading prices of them. Obviously, they couldnt all be sold at that price. Same holds for the stock market, for that matter.

    I dont quite get JMR’s ramblings over them. Its obviously a bad sign that they have increased so much in value the last few years (they were undervalued when issued, the risk measurement was WAY off).

  24. Oh boy! We can look forward to a socialized home mortgage market. What could possibly go wrong?

  25. You market worshipers are hilarious!
    As long as it’s the market doing it I guess it’s ok then! You support bailouts of large corporations but the second it comes time to bail out the normal tax payer you cry foul.
    Do you want our economy to go into a worse depression than we’ve ever had? Meanwhile people are losing their homes, losing their jobs, and trying to make ends meet and all you want to do is worry about investors!

  26. My “ramblings” are about something that (like manipulating the price of precious metals) is distorting markets in order to disguise massive hyperinflation, which WILL be timed to hit the fan after the election, after which I’ll say “I told you so” and other people will continue to accuse me of “rambling.” I’ve got experience with this shit…
    JMR

  27. We can look forward to a socialized home mortgage market.

    BTW, for those who follow it, whats the talk re: the mortgage market on the raging lefty blogs? From what little I have seen in other places, leftists seem to oppose the bailouts as pro-business. So, what are they suggesting?

  28. Hey Democrat, who’s supporting ANY sort of a bailout on the truly-libertarian side? Sure as shit ain’t me!!
    JMR

  29. FYI – Here’s the source (pdf) of the $60T figure. It’s $62T, actually. What’s $2T between friends?

  30. Hey Democrat, who’s supporting ANY sort of a bailout on the truly-libertarian side? Sure as shit ain’t me!!

    The Moose is Loose! Don’t be fooled again.

  31. JMR,

    The “credit default insurance market” isnt a market distorting tool. Its a market measuring derivative. This is what I dont get. Yeah, its price points out a big problem, but that doesnt seem to have anything to do with your posts.

    Im not sure what you are trying to say.

  32. Make that completely socialized in my previous.

  33. Well, if these are not sure signs of recession, I do not know what is!
    JT
    http://www.Ultimate-Anonymity.com

  34. I guess Energized Democrat preanswered my question. What a maroon.

  35. Jesse: Linking to Karen de Coster? Don’t you know she’s one of those… those… ROCKWELL types? Prepare for the onslaught of ire once they see that you have dared to mention them on your site. I can hear Justin Raimondo’s keyboard overheating already…

  36. You support bailouts of large corporations but the second it comes time to bail out the normal tax payer you cry foul.

    “Egad! Unmasked, I am.”

    *Twirls moustache, flicks speck of dirt from spats with gold tipped rhinoceros-penis walking stick.*

  37. Although I’m opposed to the bailout, I think a couple of points need to be made to cut down the hysteria a little:

    The agencies already had a credit line with the Treasury Department for ~2 billion. They’ve never tapped that line. Basically the portion of the bailout plan that increases the size of that line is like your credit card company raising your limit on a card you’ve never used.

    I think the events of the last couple of weeks have been a “raid” on the agencies. Many of the major money center banks have never liked the existence of the agencies, because they commoditized the mortgage business and brought margins steadily down on the conforming side of the business. So they engineered a panic in the stock to discredit the agencies, and also to attempt to make impossible some pretty run of the mill recapitalizations that were coming up. If they can imperil the ability of the agencies to raise capital, they can destroy them.

    The current Treasury actions – raising the limit on the untapped Treasury lines of credit, and telegraphing that they’ll invest in the agencies if necessary – seem less like a bailout and more like a market intervention to smack around the raiders. If the raiders know that they can’t dry up the agencies’ access to capital, they can’t win. But if the raiders abandon their raid, the Treasury department will probably never actually have to advance any funds on the updated lines or invest any funds directly. It just looks more like a PsyOp than an actual bailout.

  38. And here I was hoping that nobody would bring up that DeCoster posts on LewRockwell. I read both LRC and Reason, and I’m sure plenty of other people do too.

  39. I think its price points out a big problem, so that’s what I’m trying to say, and I’m not sure what you don’t understand. Markets are being distorted, and that means we can no longer credibly argue that they’re anything like “free.” Inflation IS being masked by this distortion so that its worst effects can be delayed until after the next election, when the REAL problems will start. And when I’ll be saying “I told you so.” Oops. Rambling “I told you so.”
    JMR

  40. My biggest problem with bailing out both agencies is that, as near as I can tell, both agencies have been run by incompetent, dishonest morons. The handwriting has been on the wall for a while now that things were amiss, but everyone involved tried to cover it up and gloss over the problems rather than address them. Fuck ’em. They can go pound sand like everybody else who can’t run a business. This also applies to Bear Stearns, all the airlines, farmers, the steel industry, automakers and everybody else. Adapt to the market or die.

    Also, putting off the inevitable correction only makes it that much worse when it actually happens.

  41. I read them both every day and enjoy them both differently. I’m just trying (and apparently failing) to humorously address the rancor which those at LRC often hurl at cato and reason (especially Karen de Coster and Justin Raimondo). There is in fact even today a blog post at LRC dressing down (t)reason for pooh-poohing the gas tax holiday proposal.

  42. How many average American citizens do you guys think have even a rudimentary understanding of what is happening here?

  43. Adapt to the market or die.

    Forest fires are necessary to the health of the forest. When mankind spends 70 or 80 years suppressing them then says “hands off” . . . Well then you see a little hell on earth.

  44. JMR,

    WTF? I told YOU so 20 years ago. Who fucking cares that you can see the obvious?

    You need to write more clearly. Your ramblings sounded like you had an issue with the credit swaps.

    EVERYONE reading this is well aware of the Fed market manipulating ways. I thought you were trying to give us some new info or something. Or trying to get some, via your first post.

  45. Guys, if you check Energized Democrat’s email address you’ll figure out his post was sarcasm.

    Of course it was hard to identify as such since it’s statements are the kind that seem to be supported by a majority od the voting public.

  46. Isaac,

    Argh. Damn you Reinmoose. What happened to Reinmoose as…Energized Democrat?

  47. JMR said:

    Markets are being distorted, and that means we can no longer credibly argue that they’re anything like “free.”

    The problem I’m having with your statements is that you’re pointing to the price level of the credit derivatives market and saying that it’s obviously distorted simply due to the price level. Personally, I need a more detailed analysis before I would be ready to buy into that assertion. Given the nature of Credit Default Swaps, which are relatively complex instruments, an argument which simply points to the price level of these swaps is too simplistic.

  48. Jim Rogers doesn’t seem too impressed.

    Rogers said he had not covered his so-called short positions in Fannie Mae and would increase his bet if it were to rally. Short sellers borrow stock and then sell it in an effort to profit by repurchasing the securities later at a lower price and returning them to the holder.

    The U.S. economy is in a recession, possibly the worst since World War II, Rogers said.

    “They’re ruining what has been one of the greatest economies in the world,” Rogers said. Bernanke and Paulson “are bailing out their friends on Wall Street but there are 300 million Americans that are going to have to pay for this.”

  49. Ok, like I said, I have no honest (or honest sounding) explanations. I think it’s safe to assume manipulation. One thing I’ve found is that those who think I’m unclear on the internet tend to be unclear themselves. Today’s obviously no exception. Anyway, if you think there’s an honest explanation for the size/growth of that “market,” please enlighten me and prevent me from “rambling” further. I’ll be forever in your debt.
    JMR

  50. No, you didn’t “tell me so” 20 years ago, unless you can provide proof. Accept it. I am now warning that in the future, I’m likely to be saying (excuse me, “rambling”) I told you so. Best policy is to deal with it.
    JMR

  51. JMR,

    I explained it above. The swaps were originally underpriced, due to a mismeasurement of risk. They have shot up in price as

    a: conditions worsened
    b: the real risk level was determined

    I have no idea if they are currently priced properly. They may be too low in value, for all I know. I dont think there is any overt manipulation going on, other than that manipulation that led to the banking issues in the first place (and there was plenty of that).

  52. robc

    Trouble was that as sarcasm or satire it didn’t quite work.

    Good satire in a H&R thread needs the over-the-top hysteria of a Juanita. Reinmoose’s post could have been copied verbatim from any one of a dozen mainline Democrat sources.

    It fooled me to. MP showed that his sarcasmometer was working at 10:40am. Mine isn’t set as low as his apparently.

  53. In other headline-scanning news: the fucking Peso is at or near a five year high.

    But everything’s okay; we’ve got it all under control.

  54. I go for accuracy with just a hint of hysteria (which, sometimes, represents an even more accurate sentiment).
    If you only knew some of the company I keep, you’d understand why I’m so good at this

  55. P Brooks: Ouch. Welcome to Zimbabwe.

  56. Here is a bit from an article on John Paulson

    One Wall Street specialty during the boom was repackaging mortgage securities into instruments called collateralized debt obligations, or CDOs, then selling slices of these with varying levels of risk.

    For buyers of the slices who wanted to insure against the debt going bad, Wall Street offered another instrument, called credit-default swaps.

    Naturally, the riskier the debt that such a swap “insured,” the more the swap would cost. And this price would go up if default risk appeared to be increasing. This meant an investor of a bearish bent could buy the swaps as a way to bet on bad news happening.

    During the boom, however, many were so blind to housing risk that this “default insurance” was priced very cheaply. Analyzing reams of data late at night in his office, Mr. Paulson became convinced investors were far underestimating the risk in the mortgage market. In betting on it to crumble, “I’ve never been involved in a trade that had such unlimited upside with a very limited downside,” he says.

  57. Another bit:

    One concern was that even if Mr. Paulson bet right, he would find it hard to cash out his bets because many were in markets with limited trading. This hasn’t been a problem, however, thanks to the wrong bet of some big banks and Wall Street firms. To hedge their holdings of mortgage securities, they’ve scrambled to buy debt protection, which sometimes means buying what Mr. Paulson already held.

  58. How many average American citizens do you guys think have even a rudimentary understanding of what is happening here?

    < 1 million.

  59. How many average American citizens do you guys think have even a rudimentary understanding of what is happening here?

    Economists don’t agree on everything, and you don’t have a monopoly on economic understanding. I think Americans understand enough to know that if the government doesn’t do something here to fix the mistakes of the free market, they’re all screwed. If you were really concerned about the market, you would support making reasonable safeguards against corporations, speculators, and investors screwing up our economy. There are smart things that we can do to fix market failures that will make sure these things never happen again. You just want free reign by the rich, which is alright if you are Ok with slavery.

  60. Economists don’t agree on everything, and you don’t have a monopoly on economic understanding. I think Americans understand enough to know that if the government doesn’t do something here to fix the mistakes of the free market, they’re all screwed. If you were really concerned about the market, you would support making reasonable safeguards against corporations, speculators, and investors screwing up our economy. There are smart things that we can do to fix market failures that will make sure these things never happen again. You just want free reign by the rich, which is alright if you are Ok with slavery.

    Dude, I go to a liberal Northeastern university nine months out of the year. Do you really have to post that drivel when I’m working in Houston?

  61. Also, I’m amused at how the markets’ reaction to this has been “Meh”. They know it won’t do a thing.

  62. Dude, I go to a liberal Northeastern university nine months out of the year. Do you really have to post that drivel when I’m working in Houston?

    Sorry, Bro. I’m just trying to fill in for those who aren’t in attendence today.

  63. I go to a liberal Northeastern university nine months out of the year.

    I went to an engineering school in the south.

    Pro: no* leftists
    Con: no* chicks

    *they both existed, just not in numbers worth mentioning

  64. If you were really concerned about the market, you would support making reasonable safeguards against corporations, speculators, and investors screwing up our economy.

    AHA! That’s why Obama changed his mind and voted for the new FISA. So the SEC can wiretap the rumor-mongers on the floor of the exchanges.

    Excellent!

  65. Dude, I go to a liberal Northeastern university nine months out of the year. Do you really have to post that drivel when I’m working in Houston?

    Yuck, I don’t know which is worse. But I do live in Austin, so it’s like both of those at the same time.*

    *Without the high degree of education many Northeastern colleges have to offer…scoff.

  66. How many average American citizens do you guys think have even a rudimentary understanding of what is happening here?

    < 1 million.

    I think, btw, that if you convert that to a percentage you can figure out what percentage of H&R posters have the same understanding.

    I think the more important question is this…
    How many of the people working to solve this problem have a detailed enough understanding of the complexities to propose an effective solution?

    My guess: 0

  67. I’ll be honest here. I’d have to hit the books pretty hard to have an educated opinion on this.

  68. How many of the people working to solve this problem have a detailed enough understanding of the complexities to propose an effective solution?

    My guess: 0

    I think you are off by (at least) 1. I have an effective solution, let the problem take care of itself. No bailouts, end government support of Fannie/Freddie. Blow up the federal reserve buildings.

    Problem solved.

  69. Did you ever notice how dogs can’t understand what you’re actually saying, but can recognize different people’s voices?

    So, when you speak to a dog, it will react exactly the same way, regardless of what you are actually saying, because it only recognizes the voice, and responds to what its little doggy brain has learned about the speaker.

    That’s because dogs, while fiercely loyal to whichever pack they adopt, just don’t have much brain volume up agove eye level.

    Hi, Reinmoose.

  70. Did you ever notice how dogs can’t understand what you’re actually saying, but can recognize different people’s voices?

    No. If I say “Want to go for a walk?” he will run towards the closet where his leash is kept. If I say “Want to go for a ride?” he will run towards the garage.

  71. Hi joe! *waves*

    Although it’s a little disappointing to see that you’ve stopped ignoring me.

    I wasn’t necessarily referring to you in my 11:50 comment, but if the shoe fits…

  72. Libertarians need to vigorously oppose any further bailout of the mortgage industry, specifically any bailout of Fannie May or Freddie Mac. Bailouts are a moral hazard of the most dangerous kind, not only to the financial industry, but to the country. They set a horrible moral example for our young people and exposes America to charges of hypocrisy as a capitalist nation where all men are created equal. That equality must include the equality to fail, for wealthy bankers just as for everyone else. Admittedly it will be hard times for a while, but these institutions, and the people responsible for them, must be allowed to fail and to be held accountable for their mistakes. In the end, it will make the nation stronger, and that strengthening is something we desperately need at this moment in our country’s history.

    You can easily contact Congress to register your oppositions to these bailouts by visiting their home pages on the Internet or by dialing the U.S. Capitol switchboard. To locate and e-mail your Representative, simply enter your zip code in the “Find Your Representative” form at the top of the House of Representative’s website at http://www.house.gov or dial them at (202) 224-3121. To contact your Senators, simply select your state from the “Find Your Senators” menu at the top of the Senate’s website at http://www.senate.gov or dial them at (202) 224-3121. Letters do not need to be long or even well written. A simple statement of support or objection is sufficient. Please make your position known.

    —–

    Letter to the Editor Links…

    letters@mercurynews.com — San Jose
    letters@sfchronicle.com — San Francisco
    letters@latimes.com — Los Angeles
    letters@venturacountystar.com — Los Angeles
    letters@starbulletin.com — Honolulu
    letters@honoluluadvertiser.com — Honolulu
    letters@news-gazette.com — Champaign
    talktous@rockymountainnews.com — Denver
    openforum@denverpost.com — Denver

  73. Steve,
    Your ideas are intriguing and I wish to subscribe to your newsletter.

  74. You’re right, Nigel. Even dogs demonstrate more intelligence than that in certain circumstances.

  75. I think JMR’s graph is showing the liability held under insurance.

    ie 45 trillion $ of the worlds economy is insured.

    Would JMR feel more comfortable if it weren’t insured?

  76. I’m not one of those “< 1 million”, but I do know what Joe says about dogs is more or less incorrect.

    Dogs *can* understand what you say, when its something they’ve been trained to understand. Their ability to keep track of language makes it so they can’t understand much more than single syllable commands, but once you teach a dog “sit”,etc. they will respond to that command from anyone they see as part of their “pack”. For instance, all my housemates can give most of our dogs commands and be listened to, and a few of my friends whom our dog spends much time with are able to as well.

    Of course, if you don’t train the dog then all the dog has to go by is what it can infer from the persons tone of voice and their physical mannerisms (facial expression and body language).

    But we digress… I knew I should have taken more Econ courses while at a “respected Northeastern engineering school”….

  77. Did any one else notice that on JMR’s graph the value of the US stock market doubled from 2003-2008?

  78. JsD,

    A more generous number than I would have thrown out, but you’re probably correct.

    Neu,

    Yeah, probably, and it fucking sucks.

  79. I guess I should have felt UNcomfortable before this new form of insurance was invented in the late ’90s? Again, no honest sounding — much less honest — explanation has emerged despite all the griping.
    JMR

  80. Also, I presume the NYT’s graph does not take inflation into account. Lots of dollars out there…
    JMR

  81. Did any one else notice that on JMR’s graph the value of the US stock market doubled from 2003-2008?

    Or it stayed roughly the same, as the value of the US Dollar halved.

    I imagine (assuming the graph is correct in the first place) that the real situation is somewhere between those two extremes.

  82. Their ability to keep track of language makes it so they can’t understand much more than single syllable commands,

    Much like politicians. Tax! Spend! Regulate! Yea! Nay! Abstain! Good politician! Here’s a nice reelection for the boy.

  83. I think, btw, that if you convert that to a percentage you can figure out what percentage of H&R posters have the same understanding.

    I think the more important question is this…
    How many of the people working to solve this problem have a detailed enough understanding of the complexities to propose an effective solution?

    Assume, for a moment, you are in a casino, betting somebody else’s money.

    Would you bet as conservatively as with your own?

  84. JMR,

    Again, no honest sounding — much less honest — explanation has emerged despite all the griping.

    Ive explained it like three times, including quotes from another source. Whats so hard to understand?

    I really dont understand what is so hard. I imagine free market New Orleans levee break insurance would have been damn expensive in the middle of Katrina too.

  85. You market worshipers are hilarious!
    As long as it’s the market doing it I guess it’s ok then! You support bailouts of large corporations but the second it comes time to bail out the normal tax payer you cry foul.
    Do you want our economy to go into a worse depression than we’ve ever had? Meanwhile people are losing their homes, losing their jobs, and trying to make ends meet and all you want to do is worry about investors!

    It’s the lack of all-out hysteria in this that makes it particularly terrifying. These are the kinds of opinions that aren’t only tolerated, but regarded as measured and reasonable. Well-played, Reinmoose.

    (However, tossing in a “think-of-teh-children” bromide never hurts.)

  86. No bailouts, end government support of Fannie/Freddie. Blow up the federal reserve buildings.

    Problem solved.

    robc,

    But if politicians and bureaucrats didn’t meddle and micromanage, what would they do all day? Don’t you care about job security? Or would you rather see someone in Bangladesh steal those jobs instead?!?

  87. We’re heading to the greatest financial calamity since the 1930s, precisely because of the deregulatory dogma you people here cling to religiously, despite ample evidence that it produces no good for anybody. If the government didn’t bail out Fannie and Freddie the entire world economy would collapse. “Oh well, that’s just the market,” I hear you thinking. So what possible reason does anyone have to believe in your hokum, since it does nobody any good and brings civilization to near collapse when applied as it has in the US since Ronnie Reagan hoodwinked the whole country into thinking he was doing them good by helping add to the profits of corporations (which are the biggest beneficiaries of socialism around). The last 20 years prove, if nothing else, that regulation is necessary and prudent. The more the better, I say. All regulation means is the little guy gets a fair shot in a world run by corporations. Now we’ve run out the grand Reagan/Bush free market experiment, and corporations are tanking all around us, not a damn thing is being done to clean the world of CO2 and nobody is happy. Your philosophy is dangerous and has been proven wrong. “Blow up the federal buildings.” Right. You’re all anarchists. I presume none of you use tax-funded services either. It’s clear you want us all living in self-built cabins feeding on local rodentia. Do it if that’s what you want, but I prefer a world in which the greater good is actively sought rather than passively ignored merely for the sake of a long-discredited economic philosophy.

  88. Reinmoose,

    Trying to fool us with a changed email? Okay, if not the moose, who is suckpuppeting Tony? I might buy that but its overplayed. Too much in one post.

  89. Again, no honest sounding — much less honest — explanation has emerged despite all the griping.

    huh?

    OK, does this sound honest?

    We are all DOOMED!!!

    Anyway you have your explanation so instead of calling everyone who does write it for you dishonest why don’t you tell us what this all means.

  90. …the greater good is actively sought…

    Drink?

    robc,

    Nauseatingly, I fear Tony could be for real. At least in his own mind.

    However, if someones IS faux-trolling, “…feeding on local rodentia” was an especially nice touch.

  91. “Tony” cannot be real, there is not a person on Earth, beyond an angry teenager who discovered some old issues of MOTHER JONES (and I think they’re not in the REASON demo), who would use such hysterically funny tropes except as a joke, or perhaps some type of ironic “text art” piece. I vote for the art piece theory…”the grand Reagan/Bush free market experiment”…haahaha, “Tony”, love your work babe.

  92. All regulation means is the little guy gets a fair shot in a world run by corporations.

    Now, that is funny.

  93. on the graph that JMR provided, and some of the follow-ups

    On a craps table you can have people playing both the pass and don’t pass line. Say you have about the same number of people playing on both sides, and the point hasn’t hit for a while. You will have a lot of money accumulated around the table. So, when the point hits (or the shooter craps out), half the players win, half lose – who is who depends on what was rolled – but the net payout is actually a much smaller amount than the money on the table. (and to stress again, the table needs to be more or less evenly divided)

Please to post comments

Comments are closed.