A world without bailouts & stimulus

O

Onceler

New member
It's a given that there is a segment of the population that will not give Obama credit when the economy rebounds.

For the present moment, things are looking better than they were 1-2 months ago. Not only is the market enjoying what looks like it could be a 4th straight week of gains, but other indicators such has housing sales, consumer confidence and retail have levelled off, a promising sign.

Is there anyone who really thinks that we'd see optimistic signs this early if 3-4 more major banks (or more), and both Chrysler & GM had been allowed to fail over the past few months?
 
SmarterThanYou said:
740,000+ jobs lost in the month of March. what a positive for the economy.
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That's not a very well-reasoned response. No one is saying that the economy is "back." However, the levelling off of some of the indicators is a positive thing, and is certainly being interpreted that way by Wall Street & some economists. Just the fact that we may have hit bottom is a positive sign for many.
 
We really will never know. I don't know if we would have started a recovery yet without the bailout and stimulus, but it still could have been a better long term option to do nothing.
 
Onceler said:
It's a given that there is a segment of the population that will not give Obama credit when the economy rebounds.

For the present moment, things are looking better than they were 1-2 months ago. Not only is the market enjoying what looks like it could be a 4th straight week of gains, but other indicators such has housing sales, consumer confidence and retail have levelled off, a promising sign.

Is there anyone who really thinks that we'd see optimistic signs this early if 3-4 more major banks (or more), and both Chrysler & GM had been allowed to fail over the past few months?
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1) I will certainly give him credit.... IF they actually follow through with the plans he has proposed. Thus far it is predominantly all talk. Just like we saw 6 months ago when a very similar plan was laid out. I am optimistic that we will see the follow through this time.

2) The technicals for the market look bullish short term, but long term indicators are still very bearish.

3) Consumer confidence is a lagging indicator. If the market bounces the next survery bounces. Vice versa on a fall.

4) No, had any more banks gone down, the panic would have been hard to suppress. That said, had they implemented this plan back in October like they said they would, we likely would not have had to take this big of a hit.

5) GM and Chrysler will likely go through quick Chapter 11's. They seem to be toast at this point. The government looks to prop the supply chain and guarantee warranties as they go through Chapter 11.

6) to a degree things look better compared to a month or two ago... predominantly in terms of outlook (which translates to hype at this point... I want the substance). Though the markets are still down about 10% on average since Jan 20th.
 
Epicurus said:
We really will never know. I don't know if we would have started a recovery yet without the bailout and stimulus, but it still could have been a better long term option to do nothing.
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If we were basing the discussion purely on economics and data, then you might be right. That said, I think due to the psychology of investing, Lorax's point that it likely would have been worse is probably more valid.
 
Superfreak said:
1) I will certainly give him credit.... IF they actually follow through with the plans he has proposed. Thus far it is predominantly all talk. Just like we saw 6 months ago when a very similar plan was laid out. I am optimistic that we will see the follow through this time.

2) The technicals for the market look bullish short term, but long term indicators are still very bearish.

3) Consumer confidence is a lagging indicator. If the market bounces the next survery bounces. Vice versa on a fall.

4) No, had any more banks gone down, the panic would have been hard to suppress. That said, had they implemented this plan back in October like they said they would, we likely would not have had to take this big of a hit.

5) GM and Chrysler will likely go through quick Chapter 11's. They seem to be toast at this point. The government looks to prop the supply chain and guarantee warranties as they go through Chapter 11.

6) to a degree things look better compared to a month or two ago... predominantly in terms of outlook (which translates to hype at this point... I want the substance). Though the markets are still down about 10% on average since Jan 20th.
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I can find a lot of common ground there.

Re: the big 3, I was sympathetic to the arguments back in December/Jan. that we should just let them fail, but just thought that it would be too much to handle for the economy at that time. If all we've done is carry them a few more rounds for the inevitable knockout this summer, I still think it was worth it. That said, I have a little more hope for Chrysler w/ their Fiat merger.

I understand that much of it is hype right now, but in a way, hype = confidence, and confidence is just a huge part of our economy overall: confidence for investors to get back into the market, confidence for consumers to start spending again, confidence for businesses to start hiring. It builds on itself, and some of the more "real" aspects in regards to fundamentals can follow that confidence (instead of vice versa), imo...
 
Onceler said:
I can find a lot of common ground there.

Re: the big 3, I was sympathetic to the arguments back in December/Jan. that we should just let them fail, but just thought that it would be too much to handle for the economy at that time. If all we've done is carry them a few more rounds for the inevitable knockout this summer, I still think it was worth it. That said, I have a little more hope for Chrysler w/ their Fiat merger.

I understand that much of it is hype right now, but in a way, hype = confidence, and confidence is just a huge part of our economy overall: confidence for investors to get back into the market, confidence for consumers to start spending again, confidence for businesses to start hiring. It builds on itself, and some of the more "real" aspects in regards to fundamentals can follow that confidence (instead of vice versa), imo...
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I agree, it would have been detrimental to the psyche had GM and Chrysler filed Chapter 11 back in Nov or Dec. The Fiat alliance (not a merger) might indeed save Chrysler from Chapter 11... though I am still highly skeptical on that. Again, I agree that it was a necessary evil to give the two a lifeline.

I also agree with your take on the effects of confidence on the market and economy. However, when that confidence is based largely upon the TALK of a plan, it is by nature short lived..... The implementation of the plan will allow that confidence to develop into a long term drive.
 
For what really matters, JOBS, he is unwilling to do anything to stop the insidiousness of globalization, which is designed to destroy america.
 
I hope he gets slowed down by some blue dogs on the Cap and Scam scheme. That would be a torpedo to the recovery.
 
Epicurus said:
We really will never know. I don't know if we would have started a recovery yet without the bailout and stimulus, but it still could have been a better long term option to do nothing.
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Same shit the partisans now say about the New Deal.

It worked then and is working now.

You dont like it so you dream up some rosey picture about what it would look like IF it wasnt done and then pretend its fact.
 
Obfuscate said:
We'll see how happy everyone is when we get stagflation in a year or 2.
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Pick your poison. How much deeper & longer would the recession (probably depression be) if more big banks and 2 out of the big 3 failed over the past few months? How low would the market have gone? How many more millions would have lost their jobs?

If stagflation does happen, it wouldn't be nearly as painful as the alternative, imo. And there are economists who still don't think it's that much of a risk, given the state of oil & food prices...
 
I've said it before over and over, the best plan would have been for the Federal Reserve to continue to set up deals where companies like Bear Sterns and WAMU are sold to banks like Barrclays and JP Morgan for the finacial institutions and banckruptcy for the car dealers. We have deposit insurance and that would stop the bank runs that is why it was set up in the first place. Stagflation, when we have 10% unemployment and 10% inflation is much much worse than what we have now. Just think of being unemployed and having prices for basic goods skyrocketing.

I hope I'm wrong but don't see how.
 
Onceler said:
Pick your poison. How much deeper & longer would the recession (probably depression be) if more big banks and 2 out of the big 3 failed over the past few months? How low would the market have gone? How many more millions would have lost their jobs?
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The market would have hit an all time low, millions more jobs would have been lost, and amid all the scramble of the world market would have risen newer and stronger companies that would have sent the jobs market, stock market, and the economy higher than it was last time....and it might actually have been real growth instead of artificial growth.
 
Onceler said:
Pick your poison. How much deeper & longer would the recession (probably depression be) if more big banks and 2 out of the big 3 failed over the past few months? How low would the market have gone? How many more millions would have lost their jobs?

If stagflation does happen, it wouldn't be nearly as painful as the alternative, imo. And there are economists who still don't think it's that much of a risk, given the state of oil & food prices...
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Way too much has been given to banks. Why are they a single point of failure in our society? It's easy to give out money.

Too much has been sacrificed saving these losers. Allowing banks to fail would have been a positive in the long run. Giving out loans is something the government could actually do. Normally im not for nationalization, but giving these same losers unilimited funds is a bad idea.
 
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