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View Diary: Euthanize Wall Street to save the economy (34 comments)

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  •  Great Read, Excellent info (2+ / 0-)
    Recommended by:
    gatorcog, bfitzinAR

    regarding the state of our economy and some of the history as to how we got there. I have long said that there is no basis for the supposed value of Wall Street and the banking industry. Back around 1997 I argued with my economics professor about the prospects of the Dow reaching 10,000, arguing that real growth is flat or shrinking, therefore only smoke and mirrors or financial gaming would have to take place to increase the money supply in order to reach that ceiling. As you point out, thats exactly what has happened.

    As the New Rules Project explains: In 1970 more than 95 percent of currency trades were for activities linked to what many call the "real economy" -- investment, tourism, foreign aid, trade. Today only two percent are.

    Its all fake money. Pretend. And as you point out any hint of regulation will start a power play by the banks to convert this fake money into the "real economy", like taking land and industry. Of course, there isn't enough "real value" in America to cover all the monopoly money being played. How we correct this will decide what our personal asset value is.

    I do believe in the 'free market' economy with regulations in place to prevent overreaching by the financial institutions. Bear Stearns should not have been bailed out. Banks should not be receiving bailouts. Lenders should not be receiving bailouts. The collateral damage should be limited to those players involved in the derivatives or 'credit games' they were playing. My home (real value) has already taken a 20% hit and I'm sure it will be more. How far will it go? IRA's? 401K's? Pensions? I'm willing to take a hit in return for letting the players in the game evaporate and returning our financial structure to a 'real economy' model. Heck, if we can pretend there is money out there why cant we pretend all our debts are paid? Funny thoughts...

    And: Who authorized the Federal Reserve to impose additional taxes on me?

    •  In 1929 a meer-schmeer $6 billion (1+ / 0-)
      Recommended by:
      terabytes

      "disappeared" and folks were totally up in arms to find out who "stole" it - One side of my family never did accept that nobody stole it, it never existed in the first place.  Funny money created by kiting checks is the closest analogy I've ever gotten from the more savvy side of the family.

      Thank heaven's I bought my house 10 years ago (last refinance was 3 years ago) - although the "bubble" ran the "value" of my home up to $150K, the drop is not likely to get below what I most recently refinanced it for (and I just did the refinance to get a better rate, NOT to get money to blow).  My few mutual funds (Cref from work and Pax personally) are both down about 5% for the 1st quarter, but I'm not really depending on them for retirement anyway (I mean, come on, I've less than $10K between the 2 of them.)  Now I'll be out for blood if those g.d. neocons actually get their hands on my social security!  (There was a reason why social security was kept out of the stock market and we are seeing that reason again today.)

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