This is the real Shock Doctrine – Disaster Socialism. Backed by the most spurious of economic pseudo-reasoning

We can simply set up a a govt-owned bank to do all the lending a society or economy requires. It has been done before with the RFC in the 1930’s.

a) no one will be allowed to receive interest on deposits

b) loans will be made direct from a compulsory allocation of taxpayer funds as ordered and approved by the Slimman

c) Risk regulated according to SLIMCARLOS II principle what I don’t see ain’t there.

The people are dying for this sort of financial innovation.

I, for one, would not invest 10c.

vlade over @ bsetser's blog shared this one a while back–
https://us.zopa.com/

they seem to practice MT that an austrian might even appreciate, plus they're federally insured.

also, http://www.kiva.org/community

cool thing is you can create a team and lend as a group, thus lowering your individual risk to 1 borrower.

and grameen just expanded to queens:

http://www.grameenamerica.com/

but right now, they can only accept donations not deposits.

and if you wanna see something really wacky, watch muhammed yunus & michael milken together on charlie rose:

http://tinyurl.com/5w5cep

and using river’s transformation in another post, perhaps the citizenry only now has power as a consumer…a nonconsuming consumer.

in this case, the thing being consumed is that whopping 0.5% interest the big banks are giving the deposits of the citizen consumer.

i/o/w if the citizenry wishes to take action, they can, but only now as consumers, by taking their deposits out of bancos TBTF and into smaller ones with adequate stability.

…starve them on both ends…

this is not advocating withdrawing from the banking system, but only from those who have ‘defined themselves as a clique opposed to the interests of the citizenry’.

this is the legal right of the citizen/consumer.

Commentary: Why there's a crisis — and how to stop it
http://www.cnn.com/2008/POLITICS/10/09/smick.crisis/index.html

"I like to use a salad analogy. Before the last decade, bankers simply lent in the form of syndicated loans. But with the huge expansion of the global economy in the 1990s, which produced an ocean of new capital, the bankers came up with an idea called securitization. Instead of making simple loans and holding them until maturity, a bank collected all its loans together, then diced and sliced them up into a big, beautiful tossed salad.

The idea was to sell (for huge fees) individual servings of diversified financial salad around the world. The only problem: under an occasional piece of lettuce was a speck of toxic waste in the form of a defaulting subprime mortgage. Eat that piece of salad, and you're dead. The overall salad looked delicious, but suddenly global investors were no longer ordering salad. No one knew the location of the toxic waste. This distrust heightened when global interest rates began to rise.

So what does this salad boycott mean for the future and why have financial markets collapsed so brutally"

>> That was a little stale, but the metaphor is very good with ABS, because corporations and banks will have less future value, because things like auto sales will decline and the ability to package "salads" will be like selling tainted spinach to a market that wants to stay away from toxicity. Hence, lowering rates and taxes to instill confidence, is like offering bags of spinach at 30% off and hoping that there will be investors out there willing to eat potentially tainted mixes of re-packed waste products that should be in the dump rotting.

The death of ABS/derivatives will crash wall street and force the re-invention of capitalization, which I assume will be linked and backed in the future, by more homegrown-like investments that are easily understood and tangible.

>> The UK chancellor needs to talk to investors to accept a lower payment for taking risks.

Those who deposit money in banks are hardly "investing", especially if the banks in turn refuse to lend the money out for productive purposes. And what risks does the poster refer to? Every bank now has now been implicitly backstopped by taxpayers. It is galling to be asked for a return while we foot the risk.

A more apt term to describe this phenomenon is "hoarding" and that is the problem we're having right now — folks are hoarding their cash to the benefit of no one and the detriment of many.

By cutting rates the gov'ts are trying to discourage hoarding but as is pointed out here, this ain't working. The stiff prod of monetary policy is in fact a wet noodle. Stronger action is needed.

Devaluation. More. Faster. Please.

In the meantime, I’ve turned my focus to preparing for the huge wave of unemployment that’s headed our way. See http://www.de-grid.com/blog/ and start preparing now. Things are likely to get as bad, if not worse than they were in 1980-82 over the next year or so.