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Pugwash
03-14-2009, 08:21 AM
If the recipients of TARP and bail-out money are "too big to fail" should the government break them up into smaller entities?
Or should there be financial regulations that limit the size and scope of any one institution?

What is small enough to fail?

Dan McCosh
03-14-2009, 08:27 AM
If the recipients of TARP and bail-out money are "too big to fail" should the government break them up into smaller entities?
Or should there be financial regulations that limit the size and scope of any one institution?

What is small enough to fail?

Worked for Teddy Roosevelt.

John of Phoenix
03-14-2009, 10:07 AM
What is small enough to fail?

Lehman's failure was catastrophic. Even the moron who let it happen said so.

peb
03-14-2009, 11:17 AM
If the recipients of TARP and bail-out money are "too big to fail" should the government break them up into smaller entities?
Or should there be financial regulations that limit the size and scope of any one institution?

What is small enough to fail?

IMO, yes. If an financial institution is "too big to fail", it should be considered too big to exist. THey can be broken up along lines of business and then instituting regulations with prohit banks from being brokerages, brokerages from being mortgage companies, insurance companies from being investment bankers, etc.

Cuyahoga Chuck
03-14-2009, 12:17 PM
If the recipients of TARP and bail-out money are "too big to fail" should the government break them up into smaller entities?
Or should there be financial regulations that limit the size and scope of any one institution?

What is small enough to fail?

The scope of you topic is too vast and too complicated for any of us to get a grasp on. If would take someone with economist credentials, like Paul Krugman, to do justice to your question. And you might get an answer that is too cerebral to understand.
But do not worry. We have a falanx of bright boys and girls in the new administration who are cognicent of the danger to the continuance of America's place in the world's economy and their boss's historic legacy. They know that getting a horsecollar on "the money lords" is of paramont importance. It may not come off the way they want but they will certainly try.
The government has bought a controlling interest in a lot of failed institutions and can demand answers and perusal of the books anytime it wants. The government also has it's own police force that can legally scrutinize anyone who doesn't come up with the right answers.
Nobody can say how this will all settle out but it certainly will be a different playing field in future decades if appropriate rules are legislated.
One of the things the Bushies never seemed to understand is a country that falls by having it's economy destroyed internally is just as dead as one that is conquered by foreign hordes.

2MeterTroll
03-14-2009, 01:15 PM
to much to address.

if we had the much touted "free" market none of them would be to big to fail. This is the market fallacy.
Some moronic jerkwad stupid dink president/congress gave business the rights of citizens. that makes things like regulations and making informed choices and lots of other stuff really difficult for the government and the public.

at one time if a company that was important to a community was tipping a little (laying off 1,000) the local government could go in and look at the books figure out how the place could be saved or sold or what not. now the government not only cant do this but is almost powerless to do anything other than let these things go till to late.

so to me the root cause of all of this is the stupid idea that a business has the rights of citizens.

so how do we fix this got me if you let them die every one crashes; if you bail them out you are spending money thats not yours to spend and giving it to a private enterprise &c.

I think take the global hit; take the rights of citizenship away, nationalize and put into law a 55% rule (a buisness doing anything in the us has to use 55% goods made in the us and must have 55% of its work force in the us). stop paying other countries to be our friends. pull in our military and use them to fix the infrastructure and install the clean energy generation that is on the boards (we are spending trillions on a stupid war).

but then prefer to take the bitter pill and cure the problem rather than find the easy to swallow less effective medicine and be sick forever.

SailorBob
03-14-2009, 04:43 PM
. . . a country that falls by having it's economy destroyed internally is just as dead as one that is conquered by foreign hordes.

There's an absolute truth that cannot be denied.

neal debonte
03-14-2009, 05:13 PM
Also agreed...

what scares me.... can we apply "too big to fail" to our biggest debt issuer? what happens when indirect demand falls at the auctions? recent refundings have gone well, but the Chinese are now asking for debt guarantees... the deficit is our biggest export.

* disclaimer: post not meant to offend dems, repubs, Obama, Bush, Wizard of Oz, Fred Flintstone, Churchill or anyone else. Just an economic concern.

seanz
03-14-2009, 05:45 PM
Don't mention Churchill...........:)

If the Chinese are asking for guarantees on debt (let's hope that's new debt) and the worlds largest debt insurer has wobbly legs, what's the chance of getting a guarantee?

Cuyahoga Chuck
03-14-2009, 07:36 PM
Also agreed...

what scares me.... can we apply "too big to fail" to our biggest debt issuer? what happens when indirect demand falls at the auctions? recent refundings have gone well, but the Chinese are now asking for debt guarantees... the deficit is our biggest export.

* disclaimer: post not meant to offend dems, repubs, Obama, Bush, Wizard of Oz, Fred Flintstone, Churchill or anyone else. Just an economic concern.

The Chinese president/dictator is just playing to the cameras. China's overinflated economy is going to the dogs and a half billion hungry peasants make China much more unstabile than the US.
And, it's entirely possible that a total collapse of the US economy would take China down with it even if we didn't owe them all those bucks.

neal debonte
03-14-2009, 08:09 PM
Agreed, but they are the largest buyer. They move markets on idle chat of cutting back purchases--- what if they were to stop, or sell:eek:
Full faith and credit goes so far until inflation spins up and away....

to fund the bailout and new initiatives, we will have to issue more debt: an interesting study would be how each 50bp move in ten ylds effects the funding of the bailout. We are at historical lows...

2MeterTroll
03-14-2009, 08:16 PM
see this is the thing; at this point if we fall the world falls. i would rather crash the whole knowing that its all gonna crash and the first up wins then limp along like the walking wounded. bush should have done it before he left, greenspan saw it coming and got himself out of the way, and ill bet you that there are a whole bunch of folks who jumped in the fox holes well before this hit the fan.

I have not been hearing the old money crying just the new.

neal debonte
03-14-2009, 09:52 PM
Yes sir- not only jumped in a foxhole, but hid under ones who had already fallen!

The Bigfella
03-14-2009, 10:09 PM
I think take the global hit; take the rights of citizenship away, nationalize and put into law a 55% rule (a buisness doing anything in the us has to use 55% goods made in the us and must have 55% of its work force in the us). stop paying other countries to be our friends. pull in our military and use them to fix the infrastructure and install the clean energy generation that is on the boards (we are spending trillions on a stupid war).

Then you will REALLY have an economic crisis. Every country that you export to would retaliate - and the $800+ billion of exports you currently enjoy would evaporate - along with millions of jobs.

2MeterTroll
03-14-2009, 10:51 PM
other countries have nationalized and put in safe guards for jobs. the US has not, in fact it has done the reverse.
the folks in the trenches have not seen a real increase in pay since the 70's, our unions are pretty well dead, we have no real health care system, the American worker is in the top three in productivity with pretty rampant unemployment. we already pay tariff in most countries we export to and we are giving aid to about 160 different countries. we in active war on two fronts. currently domestic sales of us manufactured goods is in the ****ter. I dont see much of a down side.

oznabrag
03-15-2009, 12:08 AM
other countries have nationalized and put in safe guards for jobs. the US has not, in fact it has done the reverse.
the folks in the trenches have not seen a real increase in pay since the 70's, our unions are pretty well dead, we have no real health care system, the American worker is in the top three in productivity with pretty rampant unemployment. we already pay tariff in most countries we export to and we are giving aid to about 160 different countries. we in active war on two fronts. currently domestic sales of us manufactured goods is in the ****ter. I dont see much of a down side.

Man, I don't know where to start. I feel that all your observations are reasonably accurate, but I believe that isolationism is not the answer.

It seems certain to me that the US needs to figure out what it is that it is going to make.

Making loans doesn't count.

My sense of the US is that, in terms of maturity, we are on the cusp of young adulthood. I believe that we must learn to trust the world, and to teach the world to trust us. We must be extrovert under an entirely new set of rules. No longer can we be the profligate bully. Our place among Nations is as equal. Now, we must decide what it is we are going to make. I agree that, if we do not produce tangible goods, we will not survive.

It is true that protectionist tarriffs have been useful in the past. One has only to look at the US steel industry, and it's nurture on building the railroads on this Continent. Without prohibitive taxation on English railroad products, the railroads would have been built, but the growth of the steel industry would have been hampered woefully.

I'm saying that the US needs to invent a new industry (which is what we foukn do, by the way). Or several.

Antigrav? Hyper-light speed?

What? There's a box?

John T

Kaa
03-15-2009, 12:35 AM
I'm saying that the US needs to invent a new industry (which is what we foukn do, by the way). Or several.

The US did.

Software.

Kaa

2MeterTroll
03-15-2009, 01:00 AM
Man, I don't know where to start. I feel that all your observations are reasonably accurate, but I believe that isolationism is not the answer.

It seems certain to me that the US needs to figure out what it is that it is going to make.

Making loans doesn't count.

My sense of the US is that, in terms of maturity, we are on the cusp of young adulthood. I believe that we must learn to trust the world, and to teach the world to trust us. We must be extrovert under an entirely new set of rules. No longer can we be the profligate bully. Our place among Nations is as equal. Now, we must decide what it is we are going to make. I agree that, if we do not produce tangible goods, we will not survive.

It is true that protectionist tarriffs have been useful in the past. One has only to look at the US steel industry, and it's nurture on building the railroads on this Continent. Without prohibitive taxation on English railroad products, the railroads would have been built, but the growth of the steel industry would have been hampered woefully.

I'm saying that the US needs to invent a new industry (which is what we foukn do, by the way). Or several.

Antigrav? Hyper-light speed?

What? There's a box?

John T


John i didn't say isolationism i said nationalism there is a world of diffrence.

i agree that we are getting mature but we are also supporting and that has to change if we are to be shoulder to shoulder with our peers. We cant be the 900lb gorilla that every tom dick and harry comes to for a hand out.
our military sends the wrong message it takes along tanks rather than bulldozers and hammers.

I pointed out 55% workers and goods. that is not a tariff on imports though i think some of that would be good if it was kept reasonable.

the problem with new industry is as soon as we invent it it gets out sourced. you cant have a manufacturing base if you have nothing to manufacture.

the removal of citizenship from companies would be to the best effect because in order for countries to work you cannot have immortals. there no way to stop an immortal entity with citizen rights from abusing power. mortals don't have long enough memories.

LeeG
03-15-2009, 05:02 AM
One of the things the Bushies never seemed to understand is a country that falls by having it's economy destroyed internally is just as dead as one that is conquered by foreign hordes.


gotta get them terrists

Cuyahoga Chuck
03-15-2009, 08:55 AM
Agreed, but they are the largest buyer. They move markets on idle chat of cutting back purchases--- what if they were to stop, or sell:eek:
Full faith and credit goes so far until inflation spins up and away....

to fund the bailout and new initiatives, we will have to issue more debt: an interesting study would be how each 50bp move in ten ylds effects the funding of the bailout. We are at historical lows...

We are the goose that laid the golden egg for China. They cannot afford to roast us. We are stuck with them and they us. If the Chinese bail it would be another form of mutually assured destruction. Fifty billion Chinese peasants know where the trinkets they make go. No more US market means an empty rice bowl for them. The top commie in China knows his army is not big enough to fight off half a billion unhappy peasants.

oznabrag
03-15-2009, 11:04 AM
John i didn't say isolationism i said nationalism there is a world of diffrence.

i agree that we are getting mature but we are also supporting and that has to change if we are to be shoulder to shoulder with our peers. We cant be the 900lb gorilla that every tom dick and harry comes to for a hand out.
our military sends the wrong message it takes along tanks rather than bulldozers and hammers.

I pointed out 55% workers and goods. that is not a tariff on imports though i think some of that would be good if it was kept reasonable.

the problem with new industry is as soon as we invent it it gets out sourced. you cant have a manufacturing base if you have nothing to manufacture.

the removal of citizenship from companies would be to the best effect because in order for countries to work you cannot have immortals. there no way to stop an immortal entity with citizen rights from abusing power. mortals don't have long enough memories.

As I say, I agree with you about a lot of this, though I am a little confused about the military hammers, etc. In my opinion, our military is rightfully employed only as a tool to destroy our enemies. Nevertheless, I think that we made the right move in rebuilding much of the damage from WWII around the globe. As I say it's confusing.

As to the 55% rule... I think 55% may be too generous to our competition. Maybe not. In this global economy, such a law would be nearly impossible to regulate. That is to say 55% may be the figure to shoot for, but I don't think we can visualize yet just how that would work, day to day. Certainly there is some optimum ratio, but the larger problem, to me, is that we are a long way from regulating our economy to such a fine degree.

You said 'the problem with new industry is as soon as we invent it it gets out sourced. you cant have a manufacturing base if you have nothing to manufacture', and I couldn't agree with you more.

Lastly, as I recall, Thomas Jefferson was staunchly against giving companies the rights of citizens. Corporate power, by necessity, moves a society toward Fascism.

The world is facing any number of crises right now, and each of them is an opportunity. We simply need be the ones who solve a few of them, and we'll be back on our feet.

John T

John T

oznabrag
03-15-2009, 11:15 AM
The US did.

Software.

Kaa

We pretty much invented the distribution of the electricity software runs on.

We even invented the light bulb!

We invented the industrial assembly line.

The list is so vast that 'software' is almost insignificant.

Someone is going to invent a super-efficient, cheap solar cell. Someone is going to figure out how to make biodiesel out of garbage. Someone is going to figure out how to juggle the 23-odd physical constants of the universe, and come up with anti-gravity (among many other miracles).

While software is almost certainly a 'threshold' technology, the things that lie beyond it's door are mind-blowing.

John T

The Bigfella
03-15-2009, 06:21 PM
We pretty much invented the distribution of the electricity software runs on.

We even invented the light bulb!

We invented the industrial assembly line.

The list is so vast that 'software' is almost insignificant.

Someone is going to invent a super-efficient, cheap solar cell. Someone is going to figure out how to make biodiesel out of garbage. Someone is going to figure out how to juggle the 23-odd physical constants of the universe, and come up with anti-gravity (among many other miracles).

While software is almost certainly a 'threshold' technology, the things that lie beyond it's door are mind-blowing.

John T

Actually, I'd say you Americans have been better at commercialising things than inventing them.

There were plenty involved in electricity development, but moving on to the light bulb, it was invented by a Pom 75 years before Edison.

The industrial assembly line was being used by the Chinese in 215BC - The Terracotta Army, for example, was commissioned by the first Chinese Emperor Qin Shi Huangdi - it is a collection of about 8000 life-sized clay soldiers and horses buried with the emperor. The figures had their separate body parts manufactured by different workshops that were later assembled to completion. Notably, each workshop inscribed its name on the part they manufactured to add traceability for quality control.

oznabrag
03-16-2009, 06:10 AM
Actually, I'd say you Americans have been better at commercialising things than inventing them.

There were plenty involved in electricity development, but moving on to the light bulb, it was invented by a Pom 75 years before Edison.

The industrial assembly line was being used by the Chinese in 215BC - The Terracotta Army, for example, was commissioned by the first Chinese Emperor Qin Shi Huangdi - it is a collection of about 8000 life-sized clay soldiers and horses buried with the emperor. The figures had their separate body parts manufactured by different workshops that were later assembled to completion. Notably, each workshop inscribed its name on the part they manufactured to add traceability for quality control.

Interesting historical tidbit about the Chinese 'Industrial Assembly Line', though I doubt they were doing anything approaching the tolerances necessary to producing machinery. They invented the horror of gunpowder too, unless of course you have some way of blaming that on the US.

I most certainly did not say that the US invented electricity. I said that we (Nikola Tesla) invented a way to distribute electricity effectively.

As to the light bulb, maybe a Prisoner Of Mother England did invent it, I don't know. Maybe you can find fault with this statement: "Edison invented the Tungsten light bulb filament, thereby making electric light bulbs a practical reality." Edison was also a ruthless, cut-throat business man and, in my opinion, was most likely responsible for the death of Tesla.

Do you have some underlying antipathy toward the US in general?

It is almost as if you believe we have contributed nothing whatsoever to the world.

It gets rather tiresome.

The Bigfella
03-16-2009, 06:27 AM
Do you have some underlying antipathy toward the US in general?

It is almost as if you believe we have contributed nothing whatsoever to the world.

It gets rather tiresome.

Not in the slightest mate... I just react to the type of statements that some people like to make... Americans more so than people from other countries as it turns out, but I like to think that I'd push back at any Aussies that do the same thing - in fact, I do (check out the Oz Politics thread).

I find it tiresome when people make bogus claims. Typical examples .....

"We saved your arses in WW1 and WW2"

"GM won WW2"

"we invented this, that and everything"

Try getting your facts right if you want people to throw rose petals at your posts.

Wiki took a nanosecond to show that ...



In 1802, Humphry Davy had what was then the most powerful electrical battery in the world at the Royal Institution of Great Britain. In that year, he created the first incandescent light by passing the current through a thin strip of platinum, chosen because the metal had an extremely high melting point. It was not bright enough nor did it last long enough to be practical, but it was the precedent behind the efforts of scores of experimenters over the next 75 years until Thomas Edison's creation of the first commercially practical incandescent lamp in 1879


Edison did a good job making it work better - but he didn't invent it. Plenty of others were ionvolved over the 75 years from Davy to Edison getting it into the household.

So - no, not anti-American, not in the slightest.

oznabrag
03-16-2009, 06:47 AM
Not in the slightest mate...snip...

So - no, not anti-American, not in the slightest.

That's cool.

I'm glad it wasn't rose petals.

John T

The Bigfella
03-16-2009, 06:57 AM
In fact, I quite enjoyed working for an American company for 10 years too... and their products were the best around...

oznabrag
03-16-2009, 09:26 AM
In fact, I quite enjoyed working for an American company for 10 years too... and their products were the best around...

US and Australia have been trading partners for some time, now.

The fact of the matter is that US manufacturing has not been doing well, and it's my opinion that we need to get a new industry going, as that seems to be what we do best. Build industries. This is not to say that Australia, or anyone else, is some sort of slouch.

While it is virtually impossible to write policy that has no unintended consequences, I think a policy limiting foreign trade should have the intent of making a little breathing space so one can get one's house in order. There may be other ways to go about this but, it is clear that it must be done.

Sadly, our condition in the US is exacerbated by the woeful inattention to education in this country. We are going to miss a large portion of a generation (or more) of new scientists. This is only one of many challenges we face, among them a worn-out power grid and too many year's deferred maintenance on our highways. The list is long.

I am firmly of the conviction that a nation cannot survive on retail sales and loan-sharking. We have to make something. As far as what to begin making, we have a large array of possibilities being presented, most of them related to alternatives to petroleum.

I believe that, if we can focus and be open to the rich opportunities before us, we can find solutions that will benefit us both.

I hope you won't lump me in with the mindless flag-wavers. I could learn to resent it.

John T

LeeG
03-16-2009, 09:34 AM
JohnT,,that is pleasing to read.

Kaa
03-16-2009, 12:12 PM
We pretty much invented the distribution of the electricity software runs on.

We even invented the light bulb!

We invented the industrial assembly line.

The list is so vast that 'software' is almost insignificant.

You're looking backwards. Try looking forwards :-)

Kaa

Kaa
03-16-2009, 12:13 PM
Oh, and this was written more than 17 years ago:


This is America. People do whatever the fuck they feel like
doing, you got a problem with that? Because they have a right to. And
because they have guns and no one can fucking stop them. As a result, this
country has one of the worst economies in the world. When it gets down to it
- talking trade balances here - once we've brain-drained all our technology
into other countries, once things have evened out, they're making cars in
Bolivia and microwave ovens in Tadzhikistan and selling them here - once our
edge in natural resources has been made irrelevant by giant Hong Kong ships
and dirigibles that can ship North Dakota all the way to New Zealand for a
nickel - once the Invisible Hand has taken all those historical inequities
and smeared them out into a broad global layer of what a Pakistani
brickmaker would consider to be prosperity - y'know what? There's only four
things we do better than anyone else
music
movies
microcode (software)
high-speed pizza delivery


:D

Kaa

Kaa
03-16-2009, 12:19 PM
See my post above.

Generalizations on that scale are pretty meaningless. Some manufacturing left the US and will never come back. Some stayed and is likely to stay here.

In any case, manufacturing plays a smaller and smaller role in the global economy. That trend doesn't look likely to reverse anytime soon.

Kaa

2MeterTroll
03-16-2009, 12:33 PM
Oh, and this was written more than 17 years ago:



:D

Kaa

ah Hiro protagonist would be proud ;)

seanz
03-16-2009, 12:45 PM
Oh, and this was written more than 17 years ago:

:D

Kaa


ah Hiro protagonist would be proud ;)

Thought it sounded familiar.
Is that really 17 years ago?

oznabrag
03-16-2009, 01:11 PM
You're looking backwards. Try looking forwards :-)

Kaa

Do try to keep up.