Comments on: Greenspan Predicts TARP Will Prove Insufficient, Supports Bank Nationalization http://www.nakedcapitalism.com/2009/02/greenspan-predicts-tarp-will-prove.html Sat, 20 Mar 2010 19:46:55 -0400 http://wordpress.org/?v=2.8.4 hourly 1 By: steelhead http://www.nakedcapitalism.com/2009/02/greenspan-predicts-tarp-will-prove.html#comment-37508 steelhead Thu, 19 Feb 2009 07:51:00 +0000 http://www.nakedcapitalism.com/2009/02/greenspan-predicts-tarp-will-prove-insufficient-supports-bank-nationalization/#comment-37508 I too note that Alan insists that "senior creditors must be protected," but I do not think we should jump to the conclusion that he is trying to protect his friends - or at least that may not be the entire issue here. He may be concerned about systemic risk as forced cramdowns could trigger payouts on trillions in credit default swaps. If those swaps are triggered it could be much more than a mere trillion or so of deposit insurance that would be required, in this opaque CDS market who really knows who is on the hook for how much. I keep yelling about this into the blogosphere. I know some of you out there know more about this subject than I do - perhaps you all do - but we lay observers are left to believe that either the politicos have been captured by the big bankers, certainly a possibility, or they are scared witless. The only boogy man I can see is these CDSs and the risk of systemic collapse of epic proportions. Am I afraid of my shadow? I too note that Alan insists that “senior creditors must be protected,” but I do not think we should jump to the conclusion that he is trying to protect his friends – or at least that may not be the entire issue here. He may be concerned about systemic risk as forced cramdowns could trigger payouts on trillions in credit default swaps. If those swaps are triggered it could be much more than a mere trillion or so of deposit insurance that would be required, in this opaque CDS market who really knows who is on the hook for how much. I keep yelling about this into the blogosphere. I know some of you out there know more about this subject than I do – perhaps you all do – but we lay observers are left to believe that either the politicos have been captured by the big bankers, certainly a possibility, or they are scared witless. The only boogy man I can see is these CDSs and the risk of systemic collapse of epic proportions. Am I afraid of my shadow?

]]> By: gordon http://www.nakedcapitalism.com/2009/02/greenspan-predicts-tarp-will-prove.html#comment-37442 gordon Thu, 19 Feb 2009 02:27:00 +0000 http://www.nakedcapitalism.com/2009/02/greenspan-predicts-tarp-will-prove-insufficient-supports-bank-nationalization/#comment-37442 If Greenspan wants to preserve bondholders yet avoid nationalisation, why doesn't he embrace <a HREF="http://blogs.ft.com/maverecon/2009/01/the-good-bank-solution/" REL="nofollow">the Buiter proposal</a>. It seems very bondholder-friendly to me, though not very taxpayer-friendly. But it avoids nationalisation. Who wants all those Govt. accountants running around digging up bodies? If Greenspan wants to preserve bondholders yet avoid nationalisation, why doesn’t he embrace the Buiter proposal. It seems very bondholder-friendly to me, though not very taxpayer-friendly. But it avoids nationalisation. Who wants all those Govt. accountants running around digging up bodies?

]]> By: Anonymous http://www.nakedcapitalism.com/2009/02/greenspan-predicts-tarp-will-prove.html#comment-37441 Anonymous Thu, 19 Feb 2009 02:24:00 +0000 http://www.nakedcapitalism.com/2009/02/greenspan-predicts-tarp-will-prove-insufficient-supports-bank-nationalization/#comment-37441 Yeah, sure. If Grenspan would have declared the federal government to have officially become a bubble, then I would be interested in his insights. Having failed that, though, I think tonight I’d rather to read Dick Cheney’s thoughts on foreign policy…lol<br/><br/>Vinny GOLDberg Yeah, sure. If Grenspan would have declared the federal government to have officially become a bubble, then I would be interested in his insights. Having failed that, though, I think tonight I’d rather to read Dick Cheney’s thoughts on foreign policy…lol

Vinny GOLDberg

]]> By: bg http://www.nakedcapitalism.com/2009/02/greenspan-predicts-tarp-will-prove.html#comment-37437 bg Thu, 19 Feb 2009 02:07:00 +0000 http://www.nakedcapitalism.com/2009/02/greenspan-predicts-tarp-will-prove-insufficient-supports-bank-nationalization/#comment-37437 "Please give me the examples of government controlled economies working. The Soviet Union? Cuba? Western Europe with their chronic unemployment? Why is Europe in trouble with all of its regulation? This crisis was caused by the Government and their solutions are going to make it worse. Study Hoover and FDR and tell me if you think government intervention works. It took the death of 60 million people and the desruction of most of the civilized world to get us out or that disaster."<br/><br/>Oh, please. I am a libertarian! I have studied Hoover and FDR and WW2. Lots of big regrettable mistakes were made. But it is not a choice between fascism and anarchy. Without government there can be no free market. It is a question of what government works. Minsky teaches that economies are not naturally stable. We are seeing that first hand. That should make us all rethink our positions. “Please give me the examples of government controlled economies working. The Soviet Union? Cuba? Western Europe with their chronic unemployment? Why is Europe in trouble with all of its regulation? This crisis was caused by the Government and their solutions are going to make it worse. Study Hoover and FDR and tell me if you think government intervention works. It took the death of 60 million people and the desruction of most of the civilized world to get us out or that disaster.”

Oh, please. I am a libertarian! I have studied Hoover and FDR and WW2. Lots of big regrettable mistakes were made. But it is not a choice between fascism and anarchy. Without government there can be no free market. It is a question of what government works. Minsky teaches that economies are not naturally stable. We are seeing that first hand. That should make us all rethink our positions.

]]> By: luther b. http://www.nakedcapitalism.com/2009/02/greenspan-predicts-tarp-will-prove.html#comment-37434 luther b. Thu, 19 Feb 2009 01:48:00 +0000 http://www.nakedcapitalism.com/2009/02/greenspan-predicts-tarp-will-prove-insufficient-supports-bank-nationalization/#comment-37434 funny you should mention mr. morgenthau, because i just read today that his son, still NYC DA at the ripe old age of 90, just got the city $170M from the various shenanigans of the tyco thugs & lloyds bank:<br/><br/>http://www.villagevoice.com/2009-02-18/columns/morgenthau-nails-wire-transfer-schemers-bloomberg-yawns/<br/><br/>of course, mayor mike didn't bother to even have a press conference for him. guess it didn't show up on his bloomberg screen.<br/><br/>how bout ol' Henry III for SEC chair???<br/><br/>definitely got to get him on the drug money thing (from yesterday's NC links in case you missed it):<br/><br/>http://www.reuters.com/article/marketsNews/idUSLP65079620090125 funny you should mention mr. morgenthau, because i just read today that his son, still NYC DA at the ripe old age of 90, just got the city $170M from the various shenanigans of the tyco thugs & lloyds bank:

http://www.villagevoice.com/2009-02-18/columns/morgenthau-nails-wire-transfer-schemers-bloomberg-yawns/

of course, mayor mike didn't bother to even have a press conference for him. guess it didn't show up on his bloomberg screen.

how bout ol' Henry III for SEC chair???

definitely got to get him on the drug money thing (from yesterday's NC links in case you missed it):

http://www.reuters.com/article/marketsNews/idUSLP65079620090125

]]> By: Anonymous http://www.nakedcapitalism.com/2009/02/greenspan-predicts-tarp-will-prove.html#comment-37430 Anonymous Thu, 19 Feb 2009 01:02:00 +0000 http://www.nakedcapitalism.com/2009/02/greenspan-predicts-tarp-will-prove-insufficient-supports-bank-nationalization/#comment-37430 Why does this financial mess remind me of Humpty Dumpty? Let's see how many trillions of dollars we can spend in a futile attempt to piece what's broken back together again. We should have learned from history and listened to FDR's Treasury Secretary, Henry Morgenthau, Jr. Why does this financial mess remind me of Humpty Dumpty? Let’s see how many trillions of dollars we can spend in a futile attempt to piece what’s broken back together again. We should have learned from history and listened to FDR’s Treasury Secretary, Henry Morgenthau, Jr.

]]> By: Juan http://www.nakedcapitalism.com/2009/02/greenspan-predicts-tarp-will-prove.html#comment-37427 Juan Thu, 19 Feb 2009 00:02:00 +0000 http://www.nakedcapitalism.com/2009/02/greenspan-predicts-tarp-will-prove-insufficient-supports-bank-nationalization/#comment-37427 5:20 AM,<br/><br/>"the big picture" is essentially invisible if starting from/staying within the fetishistic and in last instance always dependent level of finance -- best pay more attention to the real global/national econ and relations within/between this and the financial. In any case, the comment was specific to job creation.<br/><br/>Ken,<br/><br/>Sure there's 'middle ground' between the extremes of full blown state capitalism and supposedly pure laissez faire but, as systems evolve, the space available narrows. Read Paul Mattick's 1969 "The limits of the mixed economy", for example or from a different angle, O'Connor's "Fiscal Crisis of the State" originally published in the earlier 1970s.<br/>Those who love to say such things as 'the present crisis could not have been foreseen' have been typically selective/uncritical in their research.<br/><br/>Bilejones,<br/><br/>I would guess Libertarians are blamed since they - or at least their theoreticians - have tended to emphasize market-based solutions that pretty much always are no more than 'if only reality conformed to theory'. But then that also applies to most all other brands of neoclassical (and classical) political economy -- blame game is no more than another of the phenomena associated with attempts to avoid any fundamental questioning of the capital system. 5:20 AM,

“the big picture” is essentially invisible if starting from/staying within the fetishistic and in last instance always dependent level of finance — best pay more attention to the real global/national econ and relations within/between this and the financial. In any case, the comment was specific to job creation.

Ken,

Sure there’s ‘middle ground’ between the extremes of full blown state capitalism and supposedly pure laissez faire but, as systems evolve, the space available narrows. Read Paul Mattick’s 1969 “The limits of the mixed economy”, for example or from a different angle, O’Connor’s “Fiscal Crisis of the State” originally published in the earlier 1970s.
Those who love to say such things as ‘the present crisis could not have been foreseen’ have been typically selective/uncritical in their research.

Bilejones,

I would guess Libertarians are blamed since they – or at least their theoreticians – have tended to emphasize market-based solutions that pretty much always are no more than ‘if only reality conformed to theory’. But then that also applies to most all other brands of neoclassical (and classical) political economy — blame game is no more than another of the phenomena associated with attempts to avoid any fundamental questioning of the capital system.

]]> By: Anonymous http://www.nakedcapitalism.com/2009/02/greenspan-predicts-tarp-will-prove.html#comment-37425 Anonymous Wed, 18 Feb 2009 23:34:00 +0000 http://www.nakedcapitalism.com/2009/02/greenspan-predicts-tarp-will-prove-insufficient-supports-bank-nationalization/#comment-37425 "A group of economists at the University of Massachuessetts did a study two years ago looking at how many jobs could be created from a billion dollars of military spending versus the same amount spent on health care, mass transit, home weatherization, and education and personal tax cuts .. what they found was that military spending was the nearly worst job creator among all those categories. the only thing that worse, was cutting taxes for personal consumption."<br/>Miriam Pemberton, Military Analyst, Institute for Policy Studies<br/><br/>Sounds like we should raise taxes and use the money on mass transit projects to fight the economic downturn. That's the logical implication there. I like it. “A group of economists at the University of Massachuessetts did a study two years ago looking at how many jobs could be created from a billion dollars of military spending versus the same amount spent on health care, mass transit, home weatherization, and education and personal tax cuts .. what they found was that military spending was the nearly worst job creator among all those categories. the only thing that worse, was cutting taxes for personal consumption.”
Miriam Pemberton, Military Analyst, Institute for Policy Studies

Sounds like we should raise taxes and use the money on mass transit projects to fight the economic downturn. That’s the logical implication there. I like it.

]]> By: robert http://www.nakedcapitalism.com/2009/02/greenspan-predicts-tarp-will-prove.html#comment-37417 robert Wed, 18 Feb 2009 22:31:00 +0000 http://www.nakedcapitalism.com/2009/02/greenspan-predicts-tarp-will-prove-insufficient-supports-bank-nationalization/#comment-37417 Anonymous @ 5:46<br/><br/>Miriam Pemberton was the former editor and director of the National Commission for Economic Conversion and Disarmament. So . . . do you think she has an agenda to support her world view? Also- how does this relate to Greenspan and the banking crisis? Please find another blog that discusses this issue if you find it important. As a side note the Department of Education was established in 1980. I can't highlight any big success since their creation- it is always the lamest of arguments to say we need to spend more money on education( I mean who would argue)but what have we achieved? Where are the results so far? But I guess if we just spend more . . . Anonymous @ 5:46

Miriam Pemberton was the former editor and director of the National Commission for Economic Conversion and Disarmament. So . . . do you think she has an agenda to support her world view? Also- how does this relate to Greenspan and the banking crisis? Please find another blog that discusses this issue if you find it important. As a side note the Department of Education was established in 1980. I can’t highlight any big success since their creation- it is always the lamest of arguments to say we need to spend more money on education( I mean who would argue)but what have we achieved? Where are the results so far? But I guess if we just spend more . . .

]]> By: Bilejones http://www.nakedcapitalism.com/2009/02/greenspan-predicts-tarp-will-prove.html#comment-37408 Bilejones Wed, 18 Feb 2009 21:16:00 +0000 http://www.nakedcapitalism.com/2009/02/greenspan-predicts-tarp-will-prove-insufficient-supports-bank-nationalization/#comment-37408 I've seen a few posts now where libertarians are blamed for this disaster. I don't understand this. A fascist economic system collapses and it's the fault of Libertarians?<br/><br/>As the great Benito said: "Fascism aught more properly be called corporatism for it is the merging of the interests of corporations and the State" I’ve seen a few posts now where libertarians are blamed for this disaster. I don’t understand this. A fascist economic system collapses and it’s the fault of Libertarians?

As the great Benito said: “Fascism aught more properly be called corporatism for it is the merging of the interests of corporations and the State”

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