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Carbo
30-09-2008, 11:28
Financial Armageddon inched closer last night, chaps, as lawmakers in the US rejected Paulson’s USD700 bn ‘bad bank’ plan to buy up the toxic waste banks and financial institutions hold on their books.

This, in my view, is an extremely dangerous decision and casts certain members of congress in a poor light. Whatever the specific wording of Paulson’s plan, what was needed was bold and swift action to put a bottom on the market. Instead we got political horse trading. Bizarrely, it was the Republicans who led to the collapse by voting 2 to 1 against.

It’s a disgrace.

Of course, morally, the right thing to do would be to let the greedy narcissuses of Wall Street and The City drown in their own effluence. However, if we do that, they’ll drag us all down with them.

Unfortunately, therefore, we must temporarily forget about the ‘moral hazard’ and bail the b*stards out for the good of us all. But when people can’t get past the desire for revenge, cool heads do not prevail.

And how did those people who stand to lose money should the world economy go ‘pop’ respond? Well, the Down Jones Industrial Average (which can be seen as a rough barometer for the wider economy’s outlook) plunged and closed on it’s largest one day loss since 1987.

In other bright and upbeat news, it seems my prediction of last week is coming true, sad as it makes me to say that.

In a post ‘Say what you will about the US, but the EU is pathetic’, I wrote:


Nevertheless, [it] is correct to draw attention the ECB’s and EU’s molasses, misguided movement in response to the credit crisis.

The ECB raised interest rates – unfathomably – last time out, and they’re not planning to follow the US’s excellent example of moving heaven and earth to put a bottom on the market and start the re-building process. It’s all very much reminiscent of the Hoover administration’s hawkish inactivity before the 1929 Wall Street Crash and Great Depression.

And it seems, sickeningly, that they are waiting for the US to bail them out again.


And yesterday, what happened? Well, Glitnir, an Icelandic bank, needed a EUR600 mn equity injection from the Iceland central bank, Hypo Real Estate, a German property lender, needed a EUR35 bn bailout from a consortium of local banks, Bradford and Bingley was nationalized, and Fortis likewise.

Oh dear.

I think the Europeans made the same mistake as Transparent Theater did when he posted on the same thread mentioned above, “In all fairness, it seems abundantly clear that it was US bankers whose illegal trading prompted the crisis,” in response to my accusation that the EU was waiting for the US to bail them out again.

Well, that may be right. Perhaps the US should be made to drink the hemlock of its own making. But European banks have around three quarters of the exposure held by US banks to the toxic junk US housing debt. If they bought so much, they’re just as culpable. And that's ignoring the inter-dependency of the world economy. If the US sinks, we all get wet.

Of course, adding an accelerator to the bomb currently in the process of exploding was the ECB’s risible decision to raise rates in July – fretting about inflation while deflation was looming on the horizon like a storm being blown its way by the prevailing winds. Now their hawkish monetary policy and inaction is coming home to roost.

Hans Redeker, head of currency at BNP Paribas said yesterday:


"The interbank market has collapsed. We're now seeing a domino effect as the credit multiplier goes into reverse and forces banks to cut back lending to clients. [Apparently, banks are dumping all their spare capital with the ECB in a massive flight to safety, so] the ECB is no longer able to inject liquidity because the money is just coming back to them again. This is extremely serious. If monetary policy is no longer working, there is a risk that the whole system will blow up in days.”

The financial armageddon of global deflation is looming over our shoulders, and the above quote, as well as the news of Paulson’s bill, has sent the doomsday clock to two minutes to midnight.

Fasten your seatbelts.

EDIT: Oh, and the Russian markets shut again today after the MICEX dropped 1 percent in the first minute.

Carbo
30-09-2008, 14:32
Willem Buiter, Professor of European Political Economy at the London School of Economics and Political Science and former chief economist of the EBRD and former external member of the MPC says the following will happen unless the bill is passed soon:


The US stock market tanks. Bank shares collapse, as do the valuations of all highly leveraged financial institutions. Weaker versions of this occur in Europe, in Japan and in the emerging markets.


CDS spreads for banks explode, as will those of all highly leveraged financial institutions. Credits spreads generally take on loan-shark proportions, even for reputable borrowers. Again the rest of the world will experience a slightly milder version of this.


No US bank will lend to any other US bank or any other highly leveraged institution. The same will happen elsewhere. Remaining sources of external finance for banks, other than the facilities created by the central banks and the Treasuries, will dry up.


Banks and other highly leveraged institutions will try to unload assets at fire-sale prices in illiquid markets. Even assets not viewed as toxic before will become unsaleable at any price.


The interaction of a growing lack of funding liquidity and increasing market illiquidity will destroy the banks’ business models.


Banks will stop providing credit to households and to non-financial enterprises.


Banks will collapse, both through balance sheet insolvency and through liquidity insolvency. No bank will be safe, not even the household names for whom the crisis has thus far brought more opportunities than disasters.


Other highly leveraged financial institutions collapse on a large scale.


Households and non-financial businesses revert to financial autarky, among wide-spread defaults and insolvencies.


Consumer demand and investment demand collapse. Unemployment shoots up.


The government suspends all trading in financial stocks until further notice.


The government nationalises all US banks and other highly leveraged financial institutions. The shareholders get nothing up front and have to wait for an eventual re-privatisation or liquididation to find out whether they are left with anything at all. Holders of bank debt get a sizeable haircut ‘up front’ on the face value of the debt and have part of the remainder converted into equity that shares the fate of the old equity.


We have the Great Depression of the 2010s.

Wodin
30-09-2008, 14:41
You know...i don't get the "bail the fat cat's out" bit. Any financing by the State would mean that the shareholders would lose their entire investment and the Managers would either be "reemployed" (presumably at less attractive remuneration packs) or have to apply for benefits.

Carbo
30-09-2008, 14:55
You know...i don't get the "bail the fat cat's out" bit. Any financing by the State would mean that the shareholders would lose their entire investment and the Managers would either be "reemployed" (presumably at less attractive remuneration packs) or have to apply for benefits.
I know. That's the point. However, there is a certain amount of thruth there.

Let's consider a set of directors at a bank, all of whom have taken tens and hundreds of millions of dollars in bonusses (much in equity) by making risky bets on, say, sub-prime mortgages, which were making a fortune while the market was still going up.

Then -- POW! -- the market tanks and they're worth nothing, and you're bank is struggling, and it needs to roll over 300 million dollars a month in loans just to stay liquid, but that's becoming harder and harder as interest rates for loans rocket, and rumors circulate that your in trouble. Suddenly nobody will lend to you. You're screwed.

The bank should be punished for it's bad bets on sub-prime. That's how the free market works. Risk and reward. But, hey, it has over USD550 bn of exposure to various derivatives, with literally thousands of counterparties across the world. All of whom would lose crippling amounts of money should the bank slide.

So, punish the bank, have the fat boys at the top lose their jobs and their equity, and leave their reputation in tatters, but set off a chain reaction as the multi-trillion dollar nexus of derivatives deals collapses? Or provide short term liquidiy to the tune of several billion greenbacks, leave the fat boys in a job, or gently eased out to take a break before moving on to pastures new?

Your choice.

The House of Reps just flunked the test.

Surfsup37
30-09-2008, 15:15
A smaller deal will happen towards the end of the week. The Republicans were basically angry that no details were forthcoming, and then the leader of the Democratic house blames them right before the vote. This is her prep talk to the Republicans that are putting their jobs on the line in 5 weeks.

The American people overwhelming hate this deal, but as soon as the anger disapates some, and the local banks and companies talk to their local Reps, then the deal goes through.


http://www.youtube.com/watch?v=7KpjYreHHY0

Carbo
30-09-2008, 15:36
A smaller deal will happen towards the end of the week. The Republicans were basically angry that no details were forthcoming, and then the leader of the Democratic house blames them right before the vote. This is her prep talk to the Republicans that are putting their jobs on the line in 5 weeks.

The American people overwhelming hate this deal, but as soon as the anger disapates some, and the local banks and companies talk to their local Reps, then the deal goes through.
Too late.

There is no time for all of that. It needs to go through now, or in the next couple of days. The deteriorating market situation means that this will cost the US tax payer more the longer it goes on.

Scrat335
30-09-2008, 20:45
To hell with all of the talk, let it happen. Follow the principles of the free market, stick to them or we will not have learned anything.

American taxpayers should not have to bail out these greedy fools. The banks and investors that made good decisions will rise up in the end, the ones that did not will fade away.

Wodin
30-09-2008, 22:27
ummm.....Scrat......nobody's bailing out the bankers. The deal's about saving the banking system to avoid, maybe, a rerun of the great depression where almost everyone was unemployed and at the foodlines....Now why is doingh that a bad idea?

is4fun
30-09-2008, 23:04
To hell with all of the talk, let it happen. Follow the principles of the free market, stick to them or we will not have learned anything.

American taxpayers should not have to bail out these greedy fools. The banks and investors that made good decisions will rise up in the end, the ones that did not will fade away.

I tend to agree. Let the chips fall as they may. A good cleansing every now and then is good for all.

Scrat335
01-10-2008, 03:18
The deal's about saving the banking system to avoid, maybe, a rerun of the great depression


So we give the money to the people who created this mess? That makes less sense to me than pissing up a rope. Maybe they should just give the whole 700 billion to the citizens of the country so that they can pay off the bad debts they have freeing up a lot more spending money for them and thus the economy will get a boost.

In theory at least.

Transparent Theatre
01-10-2008, 10:48
The British magazine PRIVATE EYE points out this week that while Prime Minister Gordon Brown will only guarantee personal savings in UK banks to the level of 50,000 - he has nevertheless guaranteed the half-year personal salary bonus of the Deputy Director of the (recently-failed) Bradford & Bingley Bank - this w*nker will receive 375,000 for his utter incompetence :(

Anyone who tells you there's no alliance of politicians and bankers running the world is lying.

Len Ganley Stance
01-10-2008, 12:36
Interesting take on things from today's Daily Telegraph's 'Editor's Choice'.....

US financial crisis: The day Main Street struck back at Wall Street

Congressmen who kicked out the Hank Paulson bail-out were in tune with their constituents. Toby Harnden listens to hard-pressed Americans incensed by what they see as the villain of the financial crisis - Wall Street - being given billions more to squander

From the floor of the chamber of the House of Representatives, Congressman Jeff Miller of Florida, his spectacles perched on his nose, paused before delivering his verdict on President George W. Bush's $700 billion economic rescue plan.

Above him were marble bas relief portraits of lawgivers through the ages, from Moses to Suleiman the Magnificent to Thomas Jefferson. The "gentleman from Florida", it was announced, would be yielded to for two minutes.

As one of the most conservative members of the United States Congress, Mr Bush and the Republican leaders of the House might have expected that Mr Miller was about to give an impassioned speech in favour of the legislation they had negotiated. If they did, they could not have been more wrong.

He lambasted Mr Bush, who won overwhelmingly in Mr Miller's district in the Florida panhandle in the 2000 and 2004 elections, for approving the bill. He was scathing about Hank Paulson, the US Treasury Secretary and former Goldman Sachs chief executive, for demanding "$700 billion of taxpayer money for his friends and former colleagues on Wall Street".

Mr Bush's bill, he argued, ran counter to the founding principles of the United States. It was asking Main Street to bail out Wall Street and taxpayers to hand over cash and power to Mr Paulson and his cronies the villains whose greed was responsible for creating the economic crisis.

"The founders of this great nation set up an ingenious system of government to ensure that power was not disproportionately given to any one individual.

"The goal was to avoid tyranny at all costs. But Secretary Paulson most likely skipped class that day and was hoping that we had as well. Many wonder how such a poorly constructed piece of legislation could even come to the Congress in the first place. And I wonder how our President approved this as well."

Mr Miller closed by remarking that he was speaking for the people as well as from principle in rejecting the bill. "I can tell you that an overwhelming majority of my constituents have called, emailed and written to my office stating their outright opposition to any sort of bailout. The American taxpayer deserves better than what we are getting here today."

By the time the voting had finished, Mr Miller was one of 228 House members who said "nay" against 205 "yeas". Despite the pleas of Mr Bush and the Republican leadership on Capitol Hill, just 65 Republicans backed the bill while Mr Miller and 132 others rejected it. It was a humiliating defeat, even for a lame duck president and its unexpectedness revealed a political class in Washington dangerously out of touch with the American heartland.

Speaker after speaker denounced the bill. It was "the slippery slope to socialism," said Congressman Jeb Hensarling of Texas. "It was no mistake that, during the 1917 Bolshevik revolution, the slogan was, 'Peace, land, and bread,'' thundered Congressman Thaddeus McCotter of Michigan. "Today, you are being asked to choose between bread and freedom."

Congressman Paul Broun of Georgia declared: "Madam Speaker, this is a huge cow patty with a piece of marshmallow stuck in the middle of it, and I'm not going to eat that cow patty."

Even Congressman John Boehner, the Republican minority leader, who appeared close to tears as he begged his foot soldiers to vote "yea", had referred to the bill as a "crap sandwich".

Opinion polls reveal Congress as one of the least respected institutions in the US. Its favourability rating hovers around 20 per cent nearly 10 points below that of Mr Bush, the most consistently unpopular president since polling began.

But House members, who have to be re-elected every two years, pride themselves on representing the views of their constituents. On this occasion, they did just that.

Mr Miller's district on Florida's "Emerald Coast" is culturally part of the Deep South. It contains the port of Pensacola and its naval air base as well as the massive Eglin air force base where the "bunker buster" BLU-82 bomb used in Afghanistan was developed, along with the 21,000lb munition known as the MOAB or "Mother of All Bombs".

It is also home to Niceville the name was changed from Boggy in 1910 to attract tourists and its population of 12,370. Every year, it hosts the Boggy Bayou Mullet Festival that's mullet as in fish, not haircuts.

"The priorities of the people here are God, home and country," said Judy Boudreaux, who runs a wedding video business and is a Niceville city council member. "The air force base makes us very patriotic. It's a bedroom community surrounded by water and beautiful bayous. I'm originally from Washington DC so I know the bad and the ugly. This is utopia. It's just really, really nice."

But Niceville, like the rest of America, is hurting. "People are feeling the crunch, the tightness of money," said Mrs Boudreaux. "We are seeing home foreclosures big time. But the word I'm getting from everyone and I agree is that we do not want this bail-out.

"It's not that we don't want to address the problem but the people who lent the money need to be made accountable for what they did. Bailing them out is not good stewardship."

At Danny's Fried Chicken restaurant, Cathy Baum said that money was so tight that neither she nor her parents could get any credit. "There's so much debt around and it's just the rich getting richer and the poor getting poorer. I can't get a loan and I don't know what the future holds."

The website of the Pensacola News Journal has been deluged with comments supporting Mr Miller.

Why were those "who poisoned the meat being allowed another enormous taxpayer-financed banquet for Wall St?" asked one contributor. "Most Americans now know this is like asking the Nazis to establish a gigantic religious revival for the Jews."

Another said: "We need to be calling our people in Washington and demand that those who did this be put in the poor house also. Until we hold those accountable this will happen over and over again. Ring those phones off the hook and write till your fingers fall off. If they don't listen vote them out come election time I say."

Many called for heads to roll in Washington. "Paulson should be run out on a rail. Back room deals to save his choice of banks at the expense of the taxpayer. CORRUPTION!! I've never seen such B.S. in all my life," was a typical sentiment.

There was something for everyone to hate the government intervention into the free markets, the kowtowing to Armani-clad bankers, the suggestion that there was no alternative.

With a 37 point margin of victory when he was re-elected to his fourth term in 2006, Mr Miller has one of the safest seats in the country. But many of his colleagues feared that a "throw the bums out" mentality could doom them on November 4 if they voted for the bill.

Throughout the Capitol building, congressional staff reported an almost unprecedented wave of outrage against the bill.

Congressman Chris Van Hollen, one of 95 mainly liberal Democrats who voted no (140 voted yes), said his office had received 3,000 phone calls, 3,000 emails, with 100 people being against the bill for every one who was for it.

"We've had our first death threat and in one phone call I was called both a communist and a fascist," said one shell-shocked aide to another Democrat who eventually voted no. "There was no pressure from our leadership to vote for this we were told to follow our consciences and our constituents."

Despite being implored to support the bill by the President, two presidential candidates and the leaders of both parties in both houses of Congress, the people said no. While one New York newspaper derided the House members as the "Fools on the Hill", in many cases their actions were based on a sense of democracy.

Rather than being pushed through behind closed doors in the proverbial though now cigarette free smoke-filled rooms, as such a deal would have been done in Britain, the bailout bill was dealt with in the light of day.

What the votes of Mr Miller and his ilk will do to the global economy will be hotly debated for months and perhaps years to come.

But many Americans from coast to coast and border to border in places as nice as Niceville and in other places not so nice feel that, for once, their Congress has listened to them and done the right thing.

Judge
01-10-2008, 13:08
:shhhhhh::shhhhhh:

What you are all witnessing now is the 2nd stage of the NWO.
Before anyone says it, i'm off to watch the X Files ..:boxing::boxing:

boscoe
01-10-2008, 13:39
Following the problems in the sub-prime lending market in America and the run on HBOS in the UK, uncertainty has now hit Japan .

In the last 7 hours Origami Bank has folded, Sumo Bank has gone belly up and Bonsai Bank announced plans to cut some of its branches.

Yesterday, it was announced that Karaoke Bank is up for sale and will likely go for a song, while today shares in Kamikaze Bank were suspended after they nose-dived.

Samurai Bank is soldiering on following sharp cutbacks, Ninja Bank is reported to have taken a hit, but they remain in the black.

Furthermore, 500 staff at Karate Bank got the chop and analysts report that there is something fishy going on at Sushi Bank where it is feared that staff may get a raw deal.

Len Ganley Stance
01-10-2008, 15:05
Following the problems in the sub-prime lending market in America and the run on HBOS in the UK, uncertainty has now hit Japan .

In the last 7 hours Origami Bank has folded, Sumo Bank has gone belly up and Bonsai Bank announced plans to cut some of its branches.

Yesterday, it was announced that Karaoke Bank is up for sale and will likely go for a song, while today shares in Kamikaze Bank were suspended after they nose-dived.

Samurai Bank is soldiering on following sharp cutbacks, Ninja Bank is reported to have taken a hit, but they remain in the black.

Furthermore, 500 staff at Karate Bank got the chop and analysts report that there is something fishy going on at Sushi Bank where it is feared that staff may get a raw deal.

Genius :bowdown::bowdown::bowdown:

Best Post of the Week

MickeyTong
01-10-2008, 15:23
"...in 2006 the federal government spent $92bn subsidising business..."

Z Space Top (http://www.zmag.org/zspace/commentaries/3635)

By Monbiot, George
George Monbiot's ZSpace Page
Join ZSpace

They baled out of the bail-out, but the money will still have to come from us. It always has.


According to Senator Jim Bunning, the proposal to purchase $700bn of dodgy debt by the US government "is financial socialism, it is un-American"(1). The economics professor Nouriel Roubini calls George Bush, Henry Paulson and Ben Bernanke "a troika of Bolsheviks who turned the USA into the United Socialist State Republic of America"(2). Bill Perkins, the venture capitalist who took out an advertisement in the New York Times attacking the deal, calls it "trickle-down communism"(3).

They are wrong. The banking subsidies Congress rejected last night are as American as apple pie and obesity. The sums demanded by Bush and Paulson might be unprecedented, but there is nothing new about the principle: corporate welfare is a consistent feature of advanced capitalism. Only one thing has changed: Congress has been forced to confront its contradictions.

One of the best studies of corporate welfare in the United States is published by my old enemies at the Cato Institute. Its report, by Stephen Slivinski, estimates that in 2006 the federal government spent $92bn subsidising business(4). Much of it went to major corporations like Boeing, IBM and General Electric.

The biggest money crop - $21bn - is harvested by Big Farmer. Slivinski shows that the richest 10% of subsidised farmers took 66% of the pay-outs. Every few years Congress or the administration promises to stop this swindle, then hands even more state money to agribusiness. The Farm Bill passed by Congress in May guarantees farmers a minimum of 90% of the income they've received over the past two years, which happen to be among the most profitable they've ever had(5). The middlemen do even better, especially the companies spreading starvation by turning maize into ethanol, which are guzzling billions of dollars' worth of tax credits.

Slivinski shows how the federal government's Advanced Technology Program, which was supposed to support the development of technologies that are "pre-competitive" or "high risk" has instead been captured by big businesses flogging proven products. Since 1991, companies like IBM, General Electric, Dow Chemical, Caterpillar, Ford, DuPont, General Motors, Chevron and Monsanto have extracted hundreds of millions from this programme. Big business is also underwritten by the Export-Import Bank: in 2006, for example, Boeing alone received four and half billion in loan guarantees(6).

The government runs something called the "Foreign Military Financing Program" which gives money to other countries to purchase weaponry from US corporations. It doles out grants to airports for building new runways and to fishing companies to help them wipe out endangered stocks.

But the Cato Institute's report has exposed only part of the corporate welfare scandal. A new paper by the US Institute for Policy Studies shows that, through a series of cunning tax and accounting loopholes, the US spends $20bn a year subsidising executive pay(7). By disguising their professional fees as capital gains rather than income, for example, the managers of hedge funds and private equity companies pay lower rates of tax than the people who clean their offices. A year ago, the House of Representatives tried to close this loophole, but the bill was blocked in the Senate after a lobbying campaign by some of the richest men in America.

Another report, by a group called Good Jobs First, reveals that Wal-Mart has received at least $1bn of public money(8). Over 90% of its distribution centres and many of its retail outlets have been subsidised by county and local governments. They give the chain free land, they pay for the roads, water and sewerage required to make that land usable, and they grant it property tax breaks and subsidies (called tax increment financing) originally intended to regenerate depressed communities. Sometimes state governments give the firm straight cash as well: in Virginia, for example, Wal-Mart's distribution centres receive handouts from the Governor's Opportunity Fund.

Corporate welfare is arguably the core business of some government departments. Many of the Pentagon's programmes deliver benefits only to its contractors. Ballistic missile defence, for example, which has no obvious strategic purpose and which is unlikely ever to work, has already cost the US between $120bn and $150bn. The Department of Defense wants another $62bn for the next five years(9). The US is unique among major donors in insisting that the food it offers in aid is produced on its own soil, rather than in the regions it is meant to be helping. USAID used to boast on its website that "the principal beneficiary of America's foreign assistance programs has always been the United States. Close to 80 percent of the US Agency for International Development's contracts and grants go directly to American firms."(10) There is not and has never been a free market in the United States.

Why not? Because the Congressmen and women now railing against financial socialism depend for their re-election on the companies they subsidise. The legal bribes paid by these businesses deliver two short-term benefits. The first is that they prevent proper regulation, which allows them to make spectacular profits and to generate disasters of the kind that Congress is now confronting. The second is that public money which should be used to help the poorest and weakest is instead diverted into the pockets of the rich.

A report published last week by the advocacy group Common Cause shows how bankers and brokers stopped legislators from banning unsustainable lending(11). Over the past financial year, the big banks spent $49m on lobbying and $7m in direct campaign contributions. Fannie Mae and Freddie Mac have spent $180m in lobbying and campaign finance over the past eight years. Much of this money was thrown at members of the House Financial Services Committee and the Senate Banking Committee.

Whenever congressmen tried to rein in the banks and mortgage lenders they were blocked by the banks' money. Dick Durbin's 2005 amendment seeking to stop predatory mortgage lending, for example, was defeated in the Senate by 58 to 40. The former representative Jim Leach proposed re-regulating Fannie Mae and Freddie Mac. Their lobbyists, he recalls, managed in "less than 48 hours to orchestrate both parties' leadership" to crush his amendments(12).

The money these firms spend buys the socialisation of financial risk. The $700bn the government was looking for is just one of the public costs of its repeated failure to regulate. Even now the lobbying power of the banks is making itself felt: on Saturday the Democrats watered down their demand that the money earned by executives of the companies the government is rescuing be capped(13). Campaign finance is the best investment a corporation can make. You give a million dollars to the right man and reap a billion dollars' worth of state protection, tax breaks and subsidies. When the same thing happens in Africa we call it corruption.

European governments are no better. The free market economics they proclaim are a con: they intervene repeatedly on behalf of the rich, while leaving everyone else to fend for themselves. Just as in the United States, the bosses of farm companies, oil drillers, supermarkets and banks capture the funds extracted by government from the pockets of people much poorer than themselves. Taxpayers everywhere should be asking the same question: why the hell should we be supporting them?

Monbiot.com (http://www.monbiot.com)

References:

1. Jim Bunning, quoted by James Politi and Daniel Dombey, 24th September 2008. Republican anger at 'financial socialism'. Financial Times.

2. Nouriel Roubini, 18th September 2008. Public losses for private gain. The Guardian.

3. Andrew Clark, 24th September 2008. US trader attacks 'trickle-down communism' of markets bail-out. The Guardian.

4. Stephen Slivinski, 14th May 2007. The Corporate Welfare State: How the Federal Government Subsidizes US Businesses. Policy Analysis no. 592.
http://www.cato.org/pubs/pas/pa592.pdf

5. Subsidy Watch, June 2008. Ignoring WTO implications and a presidential veto, US Congress passes the new Farm Bill. Global Subsidies Initiative.
Ignoring WTO implications and a presidential veto, US Congress passes the new Farm Bill | Global Subsidies Initiative (http://www.globalsubsidies.org/en/subsidy-watch/news/ignoring-wto-implications-and-a-presidential-veto-us-congress-passes-new-farm-)

6. Stephen Slivinski, ibid.

7. Sarah Anderson et al, 25th August 2008. Executive Excess 2008
How Average Taxpayers Subsidize Runaway Pay. Institute for Policy Studies. Institute for Policy Studies: Reports (http://www.ips-dc.org/reports/#623)

8. Philip Mattera et al, May 2004. Shopping for Subsidies:
How Wal-Mart Uses Taxpayer Money to Finance Its Never-Ending Growth. Good Jobs First. http://www.goodjobsfirst.org/pdf/wmtstudy.pdf

9. I explain why it won't work and costs so much at Monbiot.com The Magic Pudding (http://www.monbiot.com/archives/2008/08/19/the-magic-pudding/)

10. USAID. Creating Opportunities for U.S. Small Business, viewed 5th January 2004. USAID - Redirect (http://www.usaid.gov/procurement_bus_opp/osdbu/book-information.htm)

11. Common Cause, 24th September 2008. Ask Yourself Why... They Didn't See This Coming. Ask Yourself Why... They Didn’t See This Coming - Common Cause (http://www.commoncause.org/site/pp.asp?c=dkLNK1MQIwG&b=4542875)

12. James A. Leach, 16th July 2008. Fixing Fannie and Freddie. Institute of Politics,
John F. Kennedy School Of Government, Harvard University. http://www.iop.harvard.edu/var/ezp_site/storage/fckeditor/file/Fannie%20and%20Freddie.pdf

13. James Politi and Daniel Dombey, 28th September 2008. Long and exhausting road to compromise. Financial Times.



Published in the Guardian 30th September 2008

pullar
01-10-2008, 16:16
I tend to agree. Let the chips fall as they may. A good cleansing every now and then is good for all.

Do you describe the Great Depression as a good cleansing? And is that what you are looking forward to now? For it was not good for anybody - it was a period of abject misery for the majority of the US people.

Gypsy
01-10-2008, 16:21
Do you describe the Great Depression as a good cleansing? And is that what you are looking forward to now? For it was not good for anybody - it was a period of abject misery for the majority of the US people.
But very easy if you are thousands of miles away and protected from its effects. Rather similar to Thatcher's creation of mass unemployment in the North-if it isn't hurting, it isn't working.