Charlie Rose

all the suit that you wear  09/25/2008 10:41 PM Report

wow, that guys shirt is electric!

all the suit that you wear  09/25/2008 10:40 PM Report

wow, that guys shirt is electric!

sock puppet  09/25/2008 06:30 PM Report

Read her book and agree. Kevin's worth his salt as well. Bring em on!!!

spoite  09/24/2008 09:11 PM Report

Yes, absolutely, Charlie should have Naomi Klein and Kevin Phillips. Let's start a campaign (post this request if you care), and see if the show managers and Charlie really care who their faithful viewers want to see.

sock puppet  09/24/2008 04:21 PM Report

Marilyn - You're a mess. That's coming from an expert as I am as well. As proof I agree with your pathetic statement. We're a nation of avarice, greedy, covetous, murderers (Iraq for oil) - all for the bottom line. Cheers?!

sock puppet  09/24/2008 04:02 PM Report

Mr Paulson, "I share the outrage that people have," ... "It's embarrassing to look at this. I think it's embarrassing to the United States of America. There is a lot of blame to go around." Fine, now lets (preemptively) throw him in jail. He is premeditarily setting up a system where he is the despotic king of all he surveys. Given our unbridled venality as proven by our permitted K-street lobbyists (who will get or control the lions share of the $700 billion), M-I complex, preemptive wars for oil hegemony, Halliburton and Black Water dishonoring our system that is singularly held in contempt by Cheney himself, the inherent CORRUPTION that will accompany this bailout will double the cost to $1.4 trillion. Inherent disrespect for gov't operations, contracts so imbued by this administration will carry the precedent into the administration of the bailout. Lord knows we've got enough surfeit of egregious greed (still) to abuse a bottomless purse with no strings attached right into a doubling or more(?). The inflationary affect of this bailout (money printing) alone could put it over the initial amount.

Marilyn  09/24/2008 02:30 PM Report

Stop having babies, for real! Why bother. Flush the human race down the historic epic toilet for future insects to ponder, if so inclined. We suck.

RMW  09/24/2008 12:23 AM Report

$700 billion divided by 8.9 million = $78 651.6854

The bailout divided by the number of American millionaires. $80k. A paltry sum. Big Woop.

stickershock  09/24/2008 12:10 AM Report

This is the biggest bunch of crap we have heard. The Bush administration has long hoped for an end to so-called Big governernment. How convenient that 9/11 AND the current market melt down has happened under his watch!

The unconvenient truth is that THIS administration has hoped for a collapse of our way of life so that SMALL govenment emerges.

Ring a bell you analysts? Look at the goal you professors... look at the GOAL....the GOAL is to ruin the country to "save" it.

Holy smokes... get it?

Seattle Investor  09/23/2008 11:26 PM Report

Sweden in 1990 essentially had their banking system implode after years of lax oversights, a housing bubble and many of the same problems we face.

Unlike the Paulson plan the government came up with a bi-partisan solution that gave them an equity position (just like we took inFannie and Freddie and AIG). There was a great article on in in the New York Times yesterday. http://www.nytimes.com/2008/09/23/business/worldbusiness/23krona.html?em

A few American commentators have proposed that the United States government extract equity from banks as a price for their rescue. But it does not seem to be under serious consideration yet in the Bush administration or Congress.

This isn't an unforseen crisis and there are great solutions out that that won't require us to pay for.

Michael Lang   09/23/2008 10:52 PM Report

I love to hear sycophants like Steven Pearlstein claim that the cause of this problem is shared by everybody and this of course means that no one in particular can be held responsible. Well let me tell you Steve, I go out on Main street and I see people working 3 jobs and driving 10 year old cars. I don't see them throwing 10 million dollar birthday parties for themselves or awarding themselves bonuses of 40 million dollars for phantom profits where they produced no value. Main street didn't destroy underwriting rules and loan irresponsibly and than securitize those loans to pass on that risk. Main street did not invent new unregulated financial instruments like Credit Default Swaps, total return swaps other cute derivative time bombs which allowed a CEO to take obscene bonuses while they added no value and destroyed the economy. I want the government for the good of the country to bail these institutions out but not by buying their junk. I want our government to do what the Swedes did which was to take over the financial sector of the economy and sell it back later and I want to see a windfall profits tax imposed on every CEO who was responsible so that we all end up owning their yachts, their mansions, and their fancy cars.

Greg  09/23/2008 09:06 PM Report

Perhaps it is time to have Naomi Klein back on again. And this time to let her speak. I would love to have her on for an hour with you and an economist or two. It would be a great conversation.

JAY  09/23/2008 06:52 PM Report

Good show Mr.rose

BUT YOUR GUEST ARE ABSOLUTY WRONG WHEN THEY SAY NO ONE SAW IT COMMING. Millions of voter that voted DEMOCRATIC saw it comming. we remember the REPUBLICAN S&L BAIL-OUT OF THE 1980'S .A 40 YR. DEBT we are still paying on. NOW HERE WE ARE AGAIN WITH A REPUBLICAN ADMINSTRATION 60 YR BAIL-OUT.

WhEre dose the money go.

patrick  09/23/2008 05:45 PM Report

Every commentator - including the the Fed Chairman - seems to assume that these complex securities will have a market in the future, and that if only the goverment creates a market today for them, they will then rise in value, and the American people will not be on the hook for the 700 billion plus. But why should we assume this market will ever come back? It is at least possible that the market for many of these securities is now gone. If that is so, then all this talk about the government buying "assets" to solve a "liquity" problem is just not being honest with the American people - I almost cannot stand to hear one more self-intested party say that it's not a solvency problem, but a liquity problem. It is quite obviously a solvency problem. One can only hope that our politicians and elites stop constantly treating the American people like children - about the war, and now about this financial crises - and explain to them the real situation we face as a nation. We still, for instance, have no idea what the treasury sec. and the fed chairman said to congressional leaders in their meeting last week. Lying - untruthful, or simply not forthright politians should not surprise anyone I guess... But taken too far, and the legitimacy, and self-respect of a nation can be damaged for generations... (by the by, I am sure our treasury sec. intentions are good - but how in god's name can you have the ex-ceo of goldmansaks in charge of such an operation? The average person out there is going to see this as nothing but a bailout for the rich and powerful - sad to say, but a Teddy Roosevelt sort of politians, who extracts a pound of flesh from some wall st types is problemly necessary to re-instil the confidence of the public...)

Dave Levy  09/23/2008 05:40 PM Report

We should be asking what happened to all that money that was borrowed, or refinanced by irresponsible purchasers of property? Why does the IRS give sellers of homes that 250,000 and 500,000 exemption on gains, but no relief on losses? Why are people who walk away from loans not be persued by the tax collectors?

Why, why, why? Isn't it time we put a general (like the income tax) on people when they loan money, and it's insured by the FDIC? That lien, like in California, should be indefinite..and pass to the estate. Then I would support the gov't bailout using my hard earned money. People who cannot pay loans are lower than a rattlesnake belly..and should be prosecuted for fraud, like tax cheats who abuse the system.

Alan  09/23/2008 05:31 PM Report

Charlie, why don't you have Warren Buffet on your show to get some objective information on this latest economic fiasco.

He would at least be non biased and forthright in his answers,

TABS  09/23/2008 04:38 PM Report

Dear Alan: Your time horizon is a bit short sighted as to when this "budgetary deficit" started. Go back 40 years to when LBJ transferred the Social Security Trust Fund into the General Account as a way of hiding the true budget short fall. For 40 years the USA has been burning the candle at both ends. The US and world economy may dodge a bullet this time around and be able to stabilize the financial situation. However that still leaves the Federal, State and Trade deficit questions unresolved. It is only a matter of time before the world tells America that they have had enough of our financial irresponsibility.

TABS  09/23/2008 04:14 PM Report

There are neither BRILLIANT minds on Wall Street nor in DC. The Boyz on Wall Street are and were motivated by Greed to make large sums of money. They finagled different ways to make that money, all the while thinking how smart they were. What they forgot was the risk, NONE of them ever thought that they were building a house of cards. NONE of them had EVER seen the downside that would have tempered their steps. Now not only have they taken down themselves but are in the process of taking down the prudent as well.

bayravin  09/23/2008 04:07 PM Report

I stayed away from all the temptations of buying a house that I could not afford. Folks all around me went in to this mania and made a good amount of fortune. Now, I am stuck paying for those mistakes, and I still cannot afford to buy a house that is so overpriced.

Alan  09/23/2008 03:45 PM Report

It seems very strange that in all your talks on the economy nobody speaks to the real problem and and resolves to do anything about it.

The real problem of course is years of budgetary and trade deficits under the Bush43 presidency.

Spend a trillion on Iraq, a trillion on hurricanes, a trillion on oil imports, a trillion on consumer imports, a trillion on tax cuts, a trillion on 911 and now a trillion on a bail out.

Pretty soon it all adds up to real funny money!

MotherLodeBeth  09/23/2008 03:25 PM Report

I am LIVID!!! These men and women are supposed to be brighter than the rest of us common folk and look at the mess ALL of them have gotten us in. Good God people, we common folk know that greed is bad and that we need to live within our means even if it means cutting back BIG time, and making sacrifices. -------

Yet the NYC money people and the politicians in Washington DC seem to think OUR money is theirs to do damn well what they want with.-------

If they were in China they would be facing a firing squad by weeks end!!! Instead ALL of them will only get richer off this mess and we common folk will be left to clean up their manure!!--------

I personally think the CEO's and others who allowed this to happen should be arrested and put on trial where the common man/woman makes up the jury.---------

And now we will hear Obama and McCain tell us all the goodies they will give us if elected and what I want to hear is what CUTS will they make? What sacrifices will be made in this horrid period? There is NO way this country can afford a national health care program and other goodies.

stephen wise  09/23/2008 09:28 AM Report

Re: Alan Blinder

Perhaps it can be said that the blind'er leading the blind, especially among the elites.

The best hope for America, as always, rests in "the people" being better than the elites.

Maria A  09/23/2008 08:01 AM Report

Dear Mr. Rose:

I was quite upset at the comments of your guess, Mr. Pearlstein's and his analysis of the situation yesterday, and seems to suggest that all of us live above our means. He fails to mention that many people who did not buy houses in this crazy economy, and were prudent and responsible with their money, are also going to be hit with this 700 billion bail-out. He never mentions the extremely low- (artificially low) interest rates set by the FEDS to continue fueling the liquidity in the housing market that caused many savers to have a terrible rate of return. All people in fixed income or savers were almost compelled to put their money in the market because of the FEDS monetary policy.

In Miami, where I live, housing prices were going up on a weekly basis, while salaries where coming down. Unless we were living in the Weimar Republic, this is indeed a very odd situation, and I don't understand how all the risk management analysis of these companies could not pick-up on it. Perhaps they did, and did not care. The implicit government back-up of Fannie-Mae and Freddie Mac that made many investor and especially foreign investors buy the MBS is also totally immoral. It is great that we socialized Fannie and Freddie so the Chinese do not loose their investments, and they can continue poisoning or dogs.

Meanwhile our retirees were getting 2 percent in a CD, and the middle-class, who many do try to live within their means were getting hit with housing, college, and high medical expenses, while their wages were going down. I know many people who had hours reduced at their job, and later the company was sold to a private equity company for a exuberant price. I wonder who brokered that deal. Maybe Merrill Lynch?

Also, it is very easy indeed to live within your means for the upper management of these companies who are receiving hefty compensation plans regardless of the conditions of their companies, as we pay for their lavish lifestyles. What kind of moral hazard is that? In Florida, a right to work state, even if you are fired, for no fault of your own, you get two weeks and a pat on the back. Meanwhile, in Wall Street and Fannie Mac they get to negotiate severance packages. Also, I agree with your viewer who posted comments that I have yet to hear any Austrian economist on your program about the situation. Mr. Rose, I would like to hear the Austrians speak too.

Thank you for your informative program. An avid viewer-Maria

Geo Mason  09/23/2008 07:57 AM Report

Most of us ARE NOT economists, we have some vague idea that the concept of "money" as legal tender changed in 1919 from an intrinsically valued metallic standard to a designated fluctuating-market value, based almost exclusively on a form of "mutual consent" between trading partners. Surely a great deal of the current anxiety on Main Street has been created by the inadequate explanations we have been given, and the overwhelming impression NO ONE who is advocating for us understands it well enough themselves to explain to us. In that confusion, there is NO WAY for the American people to judge, let alone fall in line with agreement, about what is the "best" course of action here, what is over-reaction, what is being under-considered or not considered at all. We seem to have "just jumped-in" with everything we've got in hopes "something" in the mix will work. Surely, some more thought-out intermediary stays can be put in place to give us time to fully think and reason a careful path. That in itself would provide for needed perspective and a well-reasoned plan of action, weighing all consequences. Decisions made by sleep-deprived, over-wrought minds focused too tightly on only one aspect of this are more than apt to leave out something of great, and possibly greater, importance. My questions are:

1. Has the current definitions and models for establishing and stabilizing monetary values outpaced the real economies' abilities to translate into those definitions and models, or in plainer language, has the finance world in effect separated itself from being able to reflect the real actions in the actual marketplace?

2. Where is the "money" that was "lost'? Did it ever actually exist or was it all based in a "fictionalized (however soundly reasoned) futures market?"

3. Where is the "money" the Feds pumped into Fannie Mae and Freddie Mac and AGI, does it yet exist or is it, "in effect," a credit transaction, a promise to pay in the future?

Who holds the "line of credit" for these transactions?

4. If we give Secretary Paulson the ability to hand out $700 billion dollars in order to pump more capital into the banking system, where is that money now? Does that mean the Federal government will print out that amount and simply "add it" to the system? Doesn't that dilute the "value" of the money already in the system, creating un-estimateable inflation to ripple around the world? Doesn't that tip more people into the group whose personal finances, already shakily maintaining, into "the unable to pay" group, and create more failed mortgages and more personal bankruptcies on Main Street?

5. What are the short-term, mid-term, and long-term effects of doing this?

6. Why can't those banks or lending institutions in trouble (A) renegotiate their own "bad mortgages" with the homeowners involved and not involve taxpayers money at all? (B) apply for Federal assistance under existing laws already on the books, being thoroughly reviewed and granted "needed" monies as "termed agreements for re-payment with interest," putting the responsibility firmly on them to restructure and account for disbursement as any one of us individual borrowers would need to do?

7. What are the questions of Constitutionality here? How can anything but an Amendment provide for this huge power to the Executive Branch? Secretary Paulson may be a good, knowledgeable man, but with all due respect he is also the "appointee" of the President, and I might add a President with about 100 days left in his term and who is grossly unpopular with the American people.

8. What is the true urgency vs. the created fervor? Bankrupting our Treasury and all that depends on it, in order to soothe the nerves of Wall Street, which seems lately rife with hysterics and histrionics over every small change in the wind, seems totally counterproductive. How is this move to instill public confidence when it is breeding growing distrust all around? We expect our elected officials to deal with problems FOR us, not DEAL US into problems. We who do not gamble with our futures certainly don;t want others gambling them FOR us, especially when they are keeping us blind here.

TABS  09/23/2008 04:38 AM Report

Sometimes Boyz to keep analyzing a situation is a way of avoiding fear in the gut! When fear or anger in paticular, is the over riding emotion the analysis suffers and is often askew by degree.

TABS  09/23/2008 03:27 AM Report

This author has recently postulated on this Board that Chinese "Beneficiant Authoritarianism" is going to supplant Western Democracy as being too inefficient, thus placing Democracy on the scrap heap of history. With Hank Paulson's proposed sweeping powers for the Secretary of the Treasury during this economic crisis have we not accomplished the same end. One has to remember that it is during times of extreme distress that Democracies fall to the one who promises to make everything better again. This is not to say that the American government has time to dither about, they do have to get on the stick and hammer out a solution to this economic crisis. To fail to do so not only jeopardizes the economy but the Republic itself.

Philip Berg  09/23/2008 03:24 AM Report

When everybody is thinking the same thing, no one is thinking.

Mr. rose has never ,to my knowledge ,had a solid austrian economist on the show to give a solid repudiation of the keynsian and monetarist ideas that brought us to this juncture.

It is encumbent upon Mr. Rose and PBS to take this seriously and expose the american public and it's lawmakers to Austrian theory, which warned of tthe fundamental outlines of this crisis with clear thinking and philosophy.

May I suggest having Representative Ron Paul, ranking minority member of the House Banking Committee on to counter Mr. Binder's drivel, or someone of Mr. Paul's choosing. Dr. Paul has been making specific warnings for decades, in public, for all to see on C Span or CNBC at House Banking committee meetings. Statements that no one saw this coming are patently false and self serving excuses for those who led us into mess

This is more than a failure of regulation. the market isthe best regulator. But the banking system was removed from market discipline in stages since 1864. the establishment of the Federal Reserve in 1913 put the full might of the US government in the enforcement of a private cartel centered around the New York Federal Reserve. All physical restraint on the grreed of the Federally sponsored cartel was removed when Nixon defaulted on the promise of gold dollar backing in 1971. Inflation immediatly accelerated and never looked back.

The backdrop of the housing crisis was the assumption by both lenders and borrowers that housing always goes up. And if housing didn't go up, then the Fed would print enough to make it go up. And if that didn't work then we are all going down ,so I might as well get my loan commisions, or get my house now, because we all will go down together.

Thus is not a failure of the markets, it is a failure to even have a free market in the issuence of money. this is why the founders specifically prohibited the present monetary system in two clauses of the Constitution. The prohibition against the States emiting Bills of Credit, and the requirement that only payments of gold and silver coin may be accepted by the States.

The Fed is the third National Bank. The First waas established By Hamilton, as he understood that inflation was necessary to pay for the war he so desperately wanted. Jefferson bridled the first National Bank. The Second National Bank so incensed the people that it brought the first victory of the Democratic party, sweeping Jackson into the Whitehouse.

The Third NationalBank, aka ,the federal reserve System, was in fact written by Paul Warburg, a prominent New York banker, and ratified in a secret meeting at Jeckyl Island that was attended by all the major New York Banking interests a few years before it's final enactment. Wilson would later admit tthat signing the Federal Reserve was the greatest error of his administration.

Google Jeckyl Island.

Mr. Rose, please do your duty, and get some real alternative views heard.

The danger of the present course is hyperinflation. Hyperinflation literally starves the population. It destroys society completely. It laid waste to the German middle class in the early 1920s during the Second Reich aka Weimer Republic, and was a major factor in laying the groundwork for the rise of National Socialism.

Hyperinflation is starving the population of Zimbabway now. Zimbabway lays bare the keynesian philosophy of Mr. Binder. If inflation cured unemployment, zimbabway would paradise , not suffering 80 percent unemployment.

then there is Argentina, and the France of John Law, and then post Revelotion France,Every fiat paper monetary system in the history of the world has eventually failed, bringing ruin, or at least deep deprivation to it;s issuer.

Please interview Ron Paul, or folks of his choosing, and pit them against Mr. Binder,or any other Keynesian, or Monetarist for the Federal Reserve.

Philip Berg

Libertarian Candidate for Congress

California District 8

San francisco

vs. Nancy Pelosi

www.choosepeacenow.us

Noans  09/23/2008 03:14 AM Report

Although I agree with some of what Mr. Pearlstein ( especially about too much debt) and Mr. Blinder ( too much absolute power for Paulson), I found both blatantly avoiding the real disease (causes) of our current economic crisis. I would like see Naomi Klein and Kevin Phillips on your show to discuss this crisis. I recently saw Mr. Phillips on Moyers Journal and his candidness was refreshing, albeit disturbing. I truly believe we are in the throes of Milton Friedman's, Shock Economics. I hope you will consider having Mr. Phillips and Naomi Klein as your guests, as soon as possible, to present their views on the current crisis. Most taxpayers, including myself, are being stunned by a 700 billion bailout, without any understanding and consideration for the use of OUR tax dollars, with restrictions to avoid a repeat, in order to bail out private investment firms, bent on greed and manipulation of a completely deregulated marketplace. I know I am dating myself but as in the film, Network, "I'm mad as hell and I'm not taking it anymore."

TABS  09/23/2008 02:56 AM Report

Sometimes events take on a life of their own and all the kings men and all the kings horses could not put Humpty Dumpty back together again. It is always an illusion that men are in control of events let alone their destiny. Now the fear that is almost unutterable, is that no matter what the American government does or does not do, it will not change the course of events. The world is headed lickity split towards chaos and an economic meltdown the likes of which we have not seen before. That said we can always hope and work for the best outcome.

Douglass Montrose-Graem  09/23/2008 02:19 AM Report

[Dear Editors - I posted a comment to-night but apparently not in the right place. Please correct. Thank you\

bp  09/23/2008 02:12 AM Report

Alan Binder was relatively optimistic that the United States would come out on top. However, he did not proffer a solution other than further debt expansion. Loss of confidence of the markets is the symptom, not the disease. The disease is too much credit over the past 25 years that Steven Pearlstein noted. The cure, further debt, should not be a panacea as this is blatant inflation if not monetization and we are on the brink of hyperinflation and I see this legislation as the fork in the road. Hyperinflation has never worked for any country in history and I would have hope for questioning along this thought line. Steven Pearlstein noted that there were proposals on the table to deal with this problem 12 months ago. In fact, numerous amateur economists and fund managers were well aware of this financial crisis 4-5 years ago at least while Ben Bernanke and Alan Greenspan were squawking that bubbles could not be recognized. Ben Bernanke is no expert on the Great Depression as he is purported to be. A Phd is a very narrow investigation and he completely misses the cause of the Great Depression and the consequences of the printing press which is the only solution he grasps. This is a major concern as he is now a primary architect for the "solution" to this mess. Most mainstream economists miss the link between the interest rate which is an expectation of future economic growth and energy which provides the fuel for that growth. These two are intimately linked and this was expounded by M. King Hubbert in testimony before Congress in the mid 1970's. There should be no doubt that the policies started 25 years ago as noted by Pearlstein roughly coincided with US peak oil production in the early 1970's. The world has ridden the steep slope in world oil production, partially due to increased rates of production from technology, over the past 25 years and has enabled this economic blowoff. Now world oil has peaked and unless viable alternatives are found future growth and supremacy of the United States will not be possible without implementing the war machine which is an inefficient means to gain resources and will expedite the decay. Now discussing RE Mant's comments: I would postulate that productivity is a false God. Technology enables us to use natural resources more efficiently and allows increases in productivity. In regards to natural resource production then over the last 2 or 3 decades natural resources were able to be produced with fewer and fewer personnel which is great. However, geometric world population growth and consequent economic demand has recently outstripped current natural resource capital investment. This combined with inflation by central banks is the reason for increased commodity prices. Empirically, there is a lag between these prices spikes and implementation of capital to increase production. However, on this go around in the cycle resources are limited. In oil by the smaller discrete deposits of lower quality and in minerals by inability to find economic concentrated deposits. Thus commodity prices this time face a 3 fold base: 1) increased demand, 2) inflation by central banks, and 3) limited access. Now back to productivity - as productivity increases less labor is required to produce a given output. Therefore, for a person to be employed their skills must shift to a new field of demanded endeavor. Except now - where do these people apply themselves? To be sure, there are opportunities in technology, but not all labor is capable or desires employment in those fields. So where are these people to be employed except in low paying service sector positions which are non-exportable? And this is where my postulation that productivity increases may be a falsed god is derived. I have seen this subject broached in 1 or 2 places so I'm curious to see discussion on this.

NewsnutMI  09/23/2008 01:00 AM Report

If a person goes to a casino and loses everything does the government offer to bail them out? The stock market is nothing more than a legal casino. You invest (play blackjack or the slots) in the hopes that you will get a return on your investment. There has NEVER been any guarantees associated with either the stock market or a casino. So why now does the government feel it's taxpayers duty to bailout the losers in the market? As for the "freeing up of funds" I ask FOR WHO? With unemployment at almost double digits there can't be many people wanting loans or looking to buy consumer products. If Wall Street wants "bailouts" it should do what commercial banks do. They pay into the FDIC to limit the amount of funds an investor can lose. This request by Paulson is very questionable to say the least. In fact it is totally laughable. To give one person the ability to dispurse government funds at his whim without any checks or balances is totally absurd. The auto industry is knocking at the governments door looking for handouts now. GM should be able to shift funds from their China branch, Ford from the Korean branch or beg Toyota for loans since they don't seem to be having money problems. If the government wants to bailout something, replace the billions that have been taken out of Social Security over the years. Than at least when people retire they will have some kind of income they can count on.

Ricardo C. Amaral  09/23/2008 12:54 AM Report

The end of the line for an international monetary system based on the “US dollar”

http://www.elitetrader.com/vb/showthread.php?s=&threadid=137804

________________________________________________________________________

I wrote a number of times in the last few years that we were approaching the end of the line for an international monetary system based on the US dollar. I said a number of times: “I don’t know when the stampede out of the US dollar will start – but there many things that can trigger the spark, and that can turn very fast into a major international monetary crisis – something not seen for a long time.”

Finally we have reached that trigger point and I am in the process of writing an article explaining why the US dollar has reached the end of the line and the end of its useful life, and why the stampede out of the US dollar can start at any time now – at this point the world is going to demand the creation of a new international monetary system designed for the world of the 21st Century.

________________________________________________________________________

The credibility of Standard & Poor', Moody's, and Fitch Ratings are on the line

http://www.elitetrader.com/vb/showthread.php?s=&threadid=137262

________________________________________________________________________

Let’s see if these 3 world leading financial credit rating organizations - Standard & Poor's, Moody's, and Fitch Ratings will be doing their job in the near future when they start reviewing the real credit rating of the United States government because very soon the credit rating of the US government will achieve the status of just junk.

________________________________________________________________________

Chris Baker  09/23/2008 12:24 AM Report

Charlie failed to ask the most pressing questions about this proposed financial bailout. What I wanted to hear about was the Resolution Trust Company, which was founded by Congressional legislation in 1989 in response to that financial crisis which eventually saw real estate prices decline by 25%. That is far less that the average decline in real estate prices so far this cycle, which is about 15%.

The Resolution Trust Company was a government entity and seemed to function after banks had collapsed. They merged bank operations, sold the better-quality assets, and then held the lowest-quality assets for eventual resale. The eventually handled so many bank failures it became almost routine. Most important under the Resolution Trust Company, the market still functioned in its primary function of determining the winners and losing banks.

However this current bailout legislation has the Treasury Secretary selecting the winners and losers in the market, and as such appears to represent a major distortion of the markets. Also instead of buying troubled assets at bankruptcy prices, the Treasury Secretary would pay far higher "going concern" prices. Therefore the degree of impact of the federal resources in this financial "bailout" seems far less than with the legislation creating the Resolution Trust Company.

RE Mant  09/23/2008 12:18 AM Report

The mkts did not take "solace" over last wks news, they took an arbitrage profit. This plan is not just a legal outrage, it is an economic outrage. It will almost certainly fail, sooner or later, and if we are lucky it will spell the end of monetarism or Keynesian, whichever you call it, at least for a while. Most commentators flew to the assumption that the mkts today were responding to the possibility that it would fail, but as Blinder said (finally) the mkts could also have been responding to the plan's inflationary effects instead, as I predicted they would Friday in the Moyer's blog. This plan should be shelved in favor of higher interest rates, higher taxes, and mortgage restructuring. THAT will create a safer environment as Blinder says and encourage productive investment. McCain wisely said the same thing Friday urging the Fed to get out of bailouts and back into controlling inflation, and support a strong dollar. This is the traditional monetary understanding of Locke, Hume, Smith and Thornton; no need for Austrians here. At the time Locke wrote, 300 yrs ago, the productivity of the kingdom having dropped, i.e., they were not exporting the value of goods they were importing, either because they were unwanted or too highly priced (productivity = benefit/cost = value = economic efficiency,) some ppl wanted to "increase" the value of their money, by either clipping the coins to remove some of the metal, debasing the metal alloy, or stamping them with a higher value, and some ppl wanted to have the govt lower the interest rate below the natural rate of return. Locke's arguments <http://oll.libertyfund.org/files/763/0128-04_Bk.pdf> showing the futility of this are just as applicable today as they were then, metal or paper. Hume repeated the arguments in his Essays <http://files.libertyfund.org/files/704/Hume_0059.pdf> in the mid-18th c, and Smith in the last chapter of The Wealth of Nations <http://files.libertyfund.org/files/119/0206-02_Bk.pdf>, but just a few yrs later, the British govt fighting the Napoleonic wars, did the same thing despite the same demonstration by Henry Thornton <http://files.libertyfund.org/files/2041/Thornton_1410_Bk.pdf>. At the end of the 19th c, William Jennings Bryan, once again made the same argument for increasing the money supply in the face of a depression caused by too much money. The Great Depression was not caused by a monetary contraction as claimed by the monetarists, but by the movement of money from Europe here during WWI, not only fueling bubbles, but leaving us without ppl to buy our goods. The inflation of the Vietnam War caused the two "oil shocks" and an almost hyper-inflation, which only the monetary tightening of Paul Volcker cured. The inflation caused by the Reagan budgets was similarly squelched by Greenspan and Clinton. It may look to some like we have too little money now, but, believe me, we have way too much. What we lack, as Pearlstein said, is the productivity to give it value. Thus everyone is looking to ride the wave of higher stock or commodity prices in the hope of protecting them from loss in an inevitable cataclysm.