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12:06 PM on 12/14/2009
No wonder the banks are not lending to small businesses. They want to make sure the economy
will not come back too fast to kill their carry trade. Besides, lending to small business will take
years to make a profit, but this trade can be profitable within weeks. Hopefully, the Fed and Congress
know what these behemoths are up to before it is too late.
12:19 PM on 12/14/2009
Don't put your money on Congress. The U S Senate is owned by the banks. They allowed the collapse and are more than willing to chance another one as they stuff their pockets, poke holes in reform, and insure that the public remains vulnerable.
12:45 PM on 12/14/2009
Amen! When is the electorate going to wake up and understand that both parties are corrupt. They will do and say anything to keep power.
12:02 PM on 12/14/2009
It's not like we didn't know, all along, what they were doing; the hedge funds and mergers which weakened and attenuated our larger businesses, the low interest rates, the insane housng costs, and the trillions in arcane, unregulated derivatives. And not just the financial elites, but the major industries that off shored and outsourced every major economic sector of the economy while our rotten politicians sat on their hands. No European or Asian elites have done what's being called in Europe as "the breathtaking betrayal of the American middle class." It was Americans that did it. Just like Americans are in for forefront of any decent wage increases in China. America has a lot of rotten, greedy people and the President and Congress have to take some kind of revolutionary action against this whle, filthy corporate aristocracy.
01:25 PM on 12/14/2009
So long as the defense is "we had to do it in order to be faithful to the stockholders", nothing will change.
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Dukedraven
12:00 PM on 12/14/2009
To "Traderjoe" :

There's enough blame to go around for the banking crisis. The question becomes what are we going to do to fix the problem.
11:42 AM on 12/14/2009
It looks like the Fed is locked into a low interest rate future because of the threat of a collapse in the carry trade:

As long as the interest rate stays low the carry trade can continue to be profitable.

Does keeping the interest rate at a very low level essentially cause erosion of the dollar? I am not sure but I ask the question because there is a serious danger that raising the interest rate will cause another collapse, thanks to the carry trade.

If something (Fed or market) raises the US interest rate suddenly, all those leveraged billions invested in foreign currency will be losing money and we could plunge back into a deflation or liquidity crisis, just like a year ago.
11:39 AM on 12/14/2009
Why do you Lefties insist on giving the keys to the car back to the reckless incompetents that wrecked it in the first place? The last people on earth to be given the job of fixing the economy is Congress - especially a Democrat/Progressive Congress under its' current leadership. "The blind leading the blind"!
12:00 PM on 12/14/2009
I thought the first bailout was during the Bush administration. Oh that lefty Bush (har har).
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Rooster54
12:19 PM on 12/14/2009
Quite right, winningticket. And don't forget that other "lefty", Hank Paulson, who demanded the original bailout. Cupcake65 needs to get some facts straight.
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edejan
12:01 PM on 12/14/2009
Lefties didn't allow this to happen and have you heard the saying, "closing the barn door after the horse is gone"? The Dems are having a hard time closing the door that the Repugs left open for 8 years.
08:12 PM on 12/14/2009
6 years - the Dems had both houses of Congress in 2007/2008.
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RedWhiteandBlueState
Pursuing Happiness Daily.
11:27 AM on 12/14/2009
What exactly do recommend as a course of action. A lot of us voted for Obama, an historic candidate who ran on profound change, and it seems he can or will do nothing. So if we can't elect change, how are we not powerless? What is your organization doing beside blogging? What can be done when you go to battle with a stick and the other guy has a stealth bomber. Even worse, the other guy created the rules of the game and controls access to the battlefield.

How do you convince a human, with a life span of 70 years, to give up his luxurious advantage for people he'll never know?
11:20 AM on 12/14/2009
This is the last straw. Seriously.
northstar11
-i dont buy the big lie
11:10 AM on 12/14/2009
the fed cannot just create 5 trillion out of thin air and have the new dollar worth the same as the old ----it is called dilution

when corporation issue new treasury stock the price of the stock falls----dilution makes thing weaker

do what the bankers are doing --capitalize on the inevitable
12:13 PM on 12/14/2009
What you say is true.

However, banks have the upper hand in 'cashin in' because they are BORROWING in CHEAP dollars, with low interest rates, and buying higher-interest paying currency and alos charging their customers ridiculous interest rates. It's called market arbitrage and efficient markets do not have arbitrage. The banks are making sustained profits off of arbitrage created out of market manipulation (their unfair ability to borrow from the gov at low interest rates PLUS their implied guarantee of gov backing also lowers their interest rates)

No mere mortal, aka you and me, will come even as close to being able to capitalize on this same 'opportunity' because we don't have the US gov backing us (thus lowering out interest rates) and we don't have access to cheap credit from the Fed, hence we can't leverage at a profit. This is all a scam. Robbery of the middle class and the fat middle men on wall st are the only ones profiting from this artificial market arrangement at the expense of the consumer and the government.
12:47 PM on 12/14/2009
Sure we do. Get as large a mortgage as possible at today's low fixed interest rates. Then wait for the dollar to drop faster than the value of your home. You at least get to live in your house, the bank that gave you your probably government guaranteed mortgage gets nothing back but depreciated dollars.
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sposton
right to tell what they don't want to hear
10:55 AM on 12/14/2009
I'd like to know how much of the increase in the GDP numbers is due to such casino activities! It seems to me it must be considerable since most of the business "activity" is currently happing in the financial sector. Let's see how real are all these green shoots all around us. I get a strong feeling that we are being scammed by Summers, Geithner, Banksters & Co.
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Chubbster
Partisanship is a mental illness
11:02 AM on 12/14/2009
Scammed? Lied to. The so-called green shoots you refer to have been dead for many months.
I loved it when Summers in his best "I am the Walrus" pose declared "Everyone agrees the recession is over." Give me a bleeping break....
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jf1936
11:21 AM on 12/14/2009
Thank Obama for appointing them.
11:38 AM on 12/14/2009
But not a word about Bush causing this mess?

so much for a balanced comment
12:45 PM on 12/14/2009
LBJ, NIxon, Reagan, and Bush are all to blame (the others didn't really do anything of note when it comes to economics). Obama inherited a mess. It's not his fault but it is his to fix. So far, he seems to be doing more damage than good. I'd rather hanve an economic do nothing president like Ford (wear WIN buttons) or Carter (we should all wear sweaters) than someone who just digs the hole deeper.
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Chubbster
Partisanship is a mental illness
10:55 AM on 12/14/2009
Lets be clear, the destruction of the dollar is the action of the administration and not Wall Street. If Wall Street is shorting the dollar it is because it is such an obvious thing to do, given the behavior of the Fed and Treasury. In fact shorting the dollar is so obvious that it is time for a monster, though temporary, rally.
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11:18 AM on 12/14/2009
Let's be clear, the point is not that Wall Street is unable to find profit-seeking opportunities even when they are the mother of all cynicisms. The point is that the notion that the sum of individual optima yields a collective optimum has never been more bankrupt than it is this year.

Hence my proposal: anybody who claims that individually rational decisions imply an overall optimum WITHOUT any further restrictions on the business environment (such as making sure - with the help of the rule of law, not by the market mechanism itself - that reward is linked to risk and obivous violations of incentive compatibility are tracked down and avoided) must be fired. Now. This very second. Otherwise, forget global warming, because we won't be getting there.
12:19 PM on 12/14/2009
No. they are profiting from distortions in the market cause by artificially low interest rates, a policy wall st loves because it allows them to borrow from taxpayers at a low rate and re-sell at higher rates to consumers and well as leverage their cheap borrowed money into higher yielding products. It simply is market distortion and not 'inevitable'.
10:50 AM on 12/14/2009
They aren't shorting the dollar, they are shorting this administration because it is an epic fai/ure.
northstar11
-i dont buy the big lie
11:06 AM on 12/14/2009
you of course are referring to the bushies admin.------the record has been corrected
11:34 AM on 12/14/2009
No - I pretty sure he/she is referring to the present NeoCom group under B. Hussein.
12:40 PM on 12/14/2009
Both. Neither understand that the way out of a hole isn't to keep on digging, even though digging does produce a lot of hot sweaty activity that makes the masses think you are fighting for them.
10:39 AM on 12/14/2009
As long as the US keeps interest rates at near zero, and use the printing press to churn out cheap dollars to guarantee Wall Street bonuses and to bake their books, then the Dollar will continue to fall like a rock. Bailing out the banks so they can hord money doesn't add value. To those that say that this was necessary, please come back and tell me in five years or so, when the US Dollar turns to wall paper.
10:31 AM on 12/14/2009
This is the real terrorism in the world today. Yet we are doing nothing about it.
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Chubbster
Partisanship is a mental illness
11:06 AM on 12/14/2009
Filled with heavy breathing and frankly wrong. The real terrorism is waiting to blow you, your friends and your family to smithereens, to destroy your country and your life. Which is not Wall Street's gig.
12:26 PM on 12/14/2009
yes, yes, we know. rove and cheney have warned us for years (and still are) about the bogey man terr orist hiding under our beds (but really they meant mountains in some freak n desert) and they are gonna blow us to smithereens!!! oh no, whatever shall we do--say what's the color of the threat today, chubbster? Please tell me so i can know whether it's safe or not to take a pi ss.
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RedneckDem
The top 1% stole my made in china bootstraps
12:27 PM on 12/14/2009
You're right, there is a difference. The religious/political terrorists kill you quickly and the Wall Streeters kill you much slower. Are you saying that these guys shorting the dollar for short term gain aren't destroying the financial foundation of our country, which will affect my families lives? Are you saying that sending our manufacturing over to China and India are good for G od and country?
Your chances of being financially devastated by Wall Street are about 100 times higher than your death by a true terrorist.
10:28 AM on 12/14/2009
"No, the greatest betrayal is that with the American economy as weak as it has been in years, with the dollar weakness threatening to unravel the international commitment to the role of the dollar as the reserve currency, Wall Street has shown no shame about attacking the currency of the nation that came to its aid.

If this is the path that the elite commercial banks have chosen, if they have been fully seduced by the lucre of trading, Congress needs to revisit the fundamental rules of the game, and revisit the central rationale for deposit insurance and the structure of the commercial banking system."

If you are the type that only read the headlines just take a moment and read this part.
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sharonsj
old, cranky liberal Democrat (for the time being)
10:17 AM on 12/14/2009
We don't know the whole story because the mainstream media is more interested in Tiger Woods. And then you have clueless anchors who don't know how to ask a pointed question and push for a real answer. Nor do any of them have researched facts available before they interview anyone, so they never refute even the most idiotic statements. If you want journalism, you have to go to a large newspaper that still exists, or troll the internet.