Scylla: But PEs are actually fairly high – and they’re “reasonable but not especially low” when you take into account the earnings collapse.
Besides, we should be focusing on the credit markets, not equity. That’s where the trouble lies. According to the TED spread, we live in interesting times.
Ok, but NY Times columnist and Princeton Economist Paul Krugman is saying No deal, pending some clarification.
Okay, now that we’ve seen a plan, I’d like to go back to one of my OP’s questions (or at least a variant thereof): what effect will this particular proposal have, good and/or bad? Will it pass, no matter what its merits? Will the feared economic collapse happen if it does/doesn’t pass? What will the consequences be if Congress, for practical or political reasons, denies it or spends significant time arguing about it? After all, a lot of people, even Newt Gingrich, are looking at it in askance. How much time do we have?
It can not go higher without going in front of congress again.
Krugman:
Thinking the Bailout Through
Authorization for the use of financial force
and as referenced earlier, No deal.
Are the facts outlined in this LJ entry accurate? What about the speculation in the comment directly below? How likely is it?
Like I said in another thread, Paulson wants to be able to handover money to any financial institution without limitation.
He also wants any decisions he makes to be unreviewable by any courts or administration agency. What is he planning that requires those provisions. He was a big time financial pro who made a killing in the financial markets. Now he has a concience and is for the public good. then he should not be afraid to do it in the light of day and to do it legally. What is he afraid of, getting caught?
…
I think I’m missing what that has to do with the link I just posted, but okay…
(BTW, I’m an idiot: I should clarify that the thing you first see on clicking my link is the reply… Which I mention second. The main LJ entry is the first, and it’s “hidden” the way the linking works; you’ll have to scroll up to see it. I just made a direct link to that particular comment because I thought the speculation was the most detailed and interesting, and I wanted to draw attention to it, since it was in the middle of a large number of comments and there was no better way to single it out.)
:rolleyes: If we elect Obama POTUS and he puts through every single thing on his agenda successfully, we still will not have “embraced socialism,” not even by West-European social-democratic standards.
As long as there’s no danger of zombies.
We’ll have embraces socialism by the beginning of October, several Milton Friedman Units later…
And, certainly, the next time we can rely on Congress to have some restraint…
Ugh, now oil gained $16+ a barrel.
I really don’t know how to time gas purchases. I made sure to do it before Gustav, because I didn’t want to be caught in rising prices. I did it again before Ike, for the same reason. Both times were epic fails, as far as making prices rocket.
Now when it actually DOES happen, now that I have 3/4 to 1/2 a tank left because of the previously mentioned Ike business, now they really DO skyrocket.
Perhaps I’ve been coming across as more panicked in this thread than I intend. But things like this really do make me wonder, about my judgment in these matters if nothing else. Which is why I turn to the Dope.
If the bailout is needed ,why do they have to have Paulson with single Authority. He wants authority to handover money to any financial institution without limit. He also wants it outside the jurisdiction of any court and not re-viewable by any government agency.
If he is not planning on looting it or giving it to his rich friends, there is no need for these provisions. Especially when lack of regulation was a big part of causing the problem. I would have thought he would want to act in the bright light of day to give confidence to the public. This worries me big time.
Wiki says Paulson is worth 700 million. He was at Goldman Sachs and made a fortune with market shenanigans. Now he is to be trusted as a man of conscience and for the people.
At what point are we supposed to assemble ourselves into outlaw motorcycle gangs to ride the wastelands in search of fuel? Because I need to start putting my team together.
But seriously, what would “total collapse” mean exactly? Let’s game this thing out.
From the text of the draft bill:
The $700 billion is not an absolute ceiling, it’s just the maximum that can be on the books at any moment in time. So, technically, there’s nothing in the bill that prevents e.g. buying $700 billion in near-worthless mortgage securities, selling them below market value, then buying more.
It’s also a little troubling that:
During the Great Depression, unemployment peaked at ~25% in 1933 and didn’t drop below 10% until World War II.
When I said, “We’ll be fine”, I meant, “That won’t happen again.” US unemployment will not average over 20% in 2008, 2009 or 2010.
The Dow could drop below 10,000 and keep falling. That’s not the same thing.
The guy linked in post #25 gives his definition. But I don’t know him from Adam, so I can’t attest to whether anyone else’s definition comes even close. I just toss it out to offer at least somewhat of an answer.
Measure for Measure: Does your answer also mean that you don’t think that anything you don’t mention that could CAUSE that kind of unemployment will happen either? Just making sure.