TARP was smart

Onceler said:
The returns from the banks so far are being called a "welcome surprise"; it's not huge by any means, but it's a very promising sign:

http://www.msnbc.msn.com/id/32623489/ns/business-the_new_york_times/

The posters on here who railed against TARP and who argued "creative destruction" for the big banks couldn't have been more wrong.

Without TARP, I don't know exactly where we'd be today, but I can guarantee it would be a much worse place.
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Doing nothing at all to resolve the issue of "too big to fail" is going to be seen in the future as one of the stupidest decisions ever made.
 
Obfuscate said:
Why did the depression of 1921 end in a year when an equally bad crash in 1929 lead to the great depression lasting 15 years? One was let run it's course, the other they did not let that happen. Letting shit banks fail would have restored confidence in the public better than what many considered Facism {Tarp}.
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Because you are talking about two different causes. First, to correct you, there was a RECESSION in 1921, not a depression.

Now, what caused the two events?

1) 1921: was caused by a sharp drop off in demand for materials at the end of WWI in conjunction with an increase in supply. The result was the market adjusting for the new demand/supply. Once that settled, the market exited the recession. There was nothing that could have been done to alter this. It was a dramatic, but necessary shift of the curve.

2) Great depression: this was a result of something similar to what we are seeing today. Credit was made to readily available in the 1920's and this resulted in people building up more debt than they could afford. When people started defaulting on debt, the banks failed in large numbers (something over 5000 banks). This is prior to the FDIC, which meant all those deposits the banks had for people... were lost. The combination of the stock market crash and the bank failures caused people to pull in spending, which led to lower levels of goods/services produced, which resulted in more people being laid off.... as you know the cycle continued down.

Bottom line, the two events are nowhere near similar.
 
"The decline in the GNP price deflator from 1920 to 1921 is the largest one-year percentage decline in the series in the more than 120 years covered."

The National Bureau of Economic Research

Many consider it the depression of 21 but the reason the never had a great depression is because they let prices stabalize. Something they are making every effort not to let happen again.

Sure they are not exactly the same but the argument that credit was made too easy therefore we need to make credit easier rather than letting prices reset is absurd.
 
Obfuscate said:
"The decline in the GNP price deflator from 1920 to 1921 is the largest one-year percentage decline in the series in the more than 120 years covered."

The National Bureau of Economic Research

Many consider it the depression of 21 but the reason the never had a great depression is because they let prices stabalize. Something they are making every effort not to let happen again.

Sure they are not exactly the same but the argument that credit was made too easy therefore we need to make credit easier rather than letting prices reset is absurd.
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That is not the argument that was made.

WHO considers the recession of 1921 a depression????

Note the policies that were put in place in the 1930's... the SEC act of 1934, Glass Steagall etc.... were designed to put barriers in place to prevent the causes of the Great Depression from occurring again.

When you have a banking crisis like the Great Depression.... WHAT prices needed to be reset? People were losing their money for simply having it in a bank. By allowing the banks to collapse and people to lose their money, the situation WORSENED.

Fastforward to today.... had they allowed the big banks to collapse, the FDIC would have been overwhelmed and we would have been right back in the scenario of the early 30's.

That said, I do not think the government has been even-handed in this and I do beleive their has been extreme manipulation on the part of the government to allow some firms to fail (like Lehman/Bear Stearns) and to outright steal others (like Indybank and WaMu) for the benefit of others. (see Goldman and JP Morgan).
 
donkeytard, pay attention, I agreed with the Fed increasing M2 and borrowing good banks with real assets at the discount window, which refutes your whole rambling nonsense you just posted. You don't need to bail out the entire banking system to keep up the money supply. When WAMU went down the next day my savings accounts were nice and secure in a Chase account. Read all my posts so you know what the hell you're arguing against.
 
Obfuscate said:
donkeytard, pay attention, I agreed with the Fed increasing M2 and borrowing good banks with real assets at the discount window, which refutes your whole rambling nonsense you just posted. You don't need to bail out the entire banking system to keep up the money supply. When WAMU went down the next day my savings accounts were nice and secure in a Chase account. Read all my posts so you know what the hell you're arguing against.
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Again, you state a good bank is one with 'good assets' but cash strapped... THAT is NOT a good bank. WaMu was in good shape financially, yet the Fed stepped in and took them over and then essentially GAVE them to JPM.

I have read your posts and nothing you have stated supports your claim that the recession would have been over by now if not for TARP. So if you want to continue discussing this, perhaps you might explain why it is you believe such nonsense.

As for your assertion that you would have pumped money into 'good banks'... great... that is what TARP was designed to do. The question became... who got to decide what a 'good bank' was?
 
Superfreak said:
As for your assertion that you would have pumped money into 'good banks'... great... that is what TARP was designed to do. The question became... who got to decide what a 'good bank' was?
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No, TARP was for the biggest banks and was given out by congress. It was across the board and they were forced to take it. That is much differant than the Federal Reserve taking case by case banks and borrowing them money. Also, who is better experts on decifering bank assets? The Federal Reserve board members or Barney Frank, Pelosi and the rest of the clowns in congress?

I do think we would be on the rebound without TARP and the recovery would be more permanent than it will be with TARP and the crap that spawned from it.
 
Superfreak said:
I dont think we have seen the bottom yet. The problems we created for ourselves run deep... two more shoes have yet to drop. Credit cards and Commercial real estate. Not to mention the ongoing increase in unemployment roles, continued rise in foreclosures etc...
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Yes, and without jobs there can be no real recovery. Remember our economy depends 70% on what consumers spend.
 
Onceler said:
The returns from the banks so far are being called a "welcome surprise"; it's not huge by any means, but it's a very promising sign:

http://www.msnbc.msn.com/id/32623489/ns/business-the_new_york_times/

The posters on here who railed against TARP and who argued "creative destruction" for the big banks couldn't have been more wrong.

Without TARP, I don't know exactly where we'd be today, but I can guarantee it would be a much worse place.
Click to expand...

:hand::hand::hand::hand::hand::hand::hand:

TARP, the only issue that unites irrational extremists on the left and the right against it.
 
Superfreak said:
Because you are talking about two different causes. First, to correct you, there was a RECESSION in 1921, not a depression.

Now, what caused the two events?

1) 1921: was caused by a sharp drop off in demand for materials at the end of WWI in conjunction with an increase in supply. The result was the market adjusting for the new demand/supply. Once that settled, the market exited the recession. There was nothing that could have been done to alter this. It was a dramatic, but necessary shift of the curve.

2) Great depression: this was a result of something similar to what we are seeing today. Credit was made to readily available in the 1920's and this resulted in people building up more debt than they could afford. When people started defaulting on debt, the banks failed in large numbers (something over 5000 banks). This is prior to the FDIC, which meant all those deposits the banks had for people... were lost. The combination of the stock market crash and the bank failures caused people to pull in spending, which led to lower levels of goods/services produced, which resulted in more people being laid off.... as you know the cycle continued down.

Bottom line, the two events are nowhere near similar.
Click to expand...

It's also worth noting that a simialar recession happened after WWII. The 1981 inflationary recession was also a completely different type of recession and bore few similarities to the current one.

No, this is a plain old deflationary recession, just like the great one, and it had the potential to kill us for a decade.
 
911America4EVER said:
It's also worth noting that a simialar recession happened after WWII. The 1981 inflationary recession was also nothing like the current one.

No, this is a plain old deflationary recession, just like the great one, and it had the potential to kill us for a decade.
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Hey stupidass.

before we had actual jobs in the nation to recover with. Now, even our misguided stimulus and bailout plans go to overseas parties.
 
I just jizzed in Watermark's idiotic face.

Why did he change his name? To disassociate himself from his previous retarded character.
 
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