18 Replies to “The US Needs a Spanking”

  1. Very well put Captain. As a Canuklehead, I’ve been saying the same thing for 5 years. And don’t the rest of you Canukleheads get to smug,because where the US of A goes economically,so do we!

  2. Forgive me but I cannot help but think Captain Courageous has gone a bit off of his rocker of late. I’ve known one or two bankers and know they do not grow horns.
    To use CC’s analogy, you can also jump into cold water and have a heart attack if not properly acclimatized. You can just as easily damage yourself hitting a submerged object.
    There is a real financial crisis. Look at the way the international markets responded! And that’s the collective voices of Joe and Jane Public in country afte country voting for a rescue not a bailout and certainly not a congressional sellout.
    Fix the liquidity problem without porkbarreling!

  4. My name is Michael Anthony. I represent J. Beresford Tipton and I’m here to give you 700-billion dollars.

  6. first- CC Is making economics sexy with fantasies of spanking little girls?? Yikes.
    Second- in this ridiculous analogy, who’s the heavy handed father anyway, GW?, mom and pop Appleseed?, congress? WTF is he trying to say?
    Third- What happened to all the crap I’ve been reading on this site for years about the denial of a recession? (due to the arrogant post 911economic policies of GW and gang. (glad I’m on the side that saw this coming a mile away and bailed out of investments last March when the graphs started to seesaw, combine that with not having a penny of debt, I’m in some good shape to score some real estate bargains coming up very soon (they’re not making anymore land ya know)

  7. Market futures are gapping up marginally, an indication of a mixed opening. If the market moves up even marginally over the next number of days, the chances of this cr*p sandwich getting approval becomes slim and slimmmer. maybe there is still hope for capitalism.

  8. This is the developed world equivalent of dragging the leaders through the streets and putting their heads on pikes.

  9. Ryan:
    I’m enjoying watching them squirm.
    Ali Velshi, who used to be on the Canadian BNN network is now a commentator for CNN.
    I agree with his position that the cap on corporate bonuses and an attempt to demonize and punish Wall Street is not only misguided but irrelevant.
    What part of Wall Street was Washington Mutual? Wachovia?
    The envy of the wizards who create wealth that makes the US the greatest country in the world comes from one side of the political spectrum.
    You can trace it all back to the LBJ Great Society.
    Wall Street has always been ‘greedy.’ Ride along and you can make a ton of money if you know when to bail.
    Oversight on financial markets has always been the responsibility of Congress, which did not act on many warnings given it over the decades.
    The warning is this: If you continue to lend money to people who cannot pay it back, don’t be surprised when they can’t pay it back.
    Period.
    So now, Congress is asking the American taxpayer to pick up the tab for their lack of oversight, whether the Congress has been controlled by the Republicans or Democrats.
    All I know is there will never again be loans given out for reasons of social justice, which have trumped the laws of finance for far too long.
    Day of reckoning, great.
    There’s still plenty of money in the US economy. It’s just that the consumer society will have to take a deep breath for a while.
    Watch for one of the slowest Christmas seasons ever.

  10. there will never again be loans given out for reasons of social justice, which have trumped the laws of finance for far too long. Day of reckoning, great.
    Maybe you’re right. But that just means the politicos will go back to outright stealing it all through taxes again.

  11. Captain Capitalism is doing a bit of “moderating”, so here is the comment that I tried to leave on his site:
    Oh captain, my captain, what about frugal, honest people caught in the slipstream of the high flyers or like me, non-Americans watching their retirement nest-eggs being smashed.
    Your cheery dismisal of the probable result of doing nothing as “a year of recession and some unemployment” (not your unemployment I suppose)sounds a bit Marie Antoinettish. How about the potential for a full-blown, worldwide depression? You obviously don’t remember the great depression. Well, I was just a kid but, I remember it well. It was f–ing awful and, in the spirit of “been there, done that”, I’m not game for a second helping.
    If you want to wear sackcloth and ashes, good for you, but if the choice is between $700 billion worth of inflation or total disaster, I’ll take the inflation, thanks very much.
    (God deliver us from ivory tower ideologues. Let the silly citizens suffer and learn a lesson? Sure, Captain – good for their souls, eh?)

  12. I wouldn’t be surprised if the Dow and the TSX each drop another 6% or 7% today and small banks start to go under, just as they did in 1930-31. Yeah, I know that, unlike then, deposits are insured now but, is that really the way to go? Time to declare a bank holiday. Shut down the whole bloody country for a few days while the deep thinkers in Washington come up with another plan and get it enacted.
    This is no time for the Captain’s strong medicine. I think that the bugger has lost his marbles. (I hope it’s only temporary as, until now, he seemed to be right on top of things.)

  13. The Captain’s only mistake is viewing what’s happening as a punishment. It’s no more a punishment than if you fall: gravity and impact mean you’re gonna get hurt.
    This is no time for the Captain’s strong medicine
    OK. When else exactly would be that time?

  14. Zog:
    Don’t you ever get tired of being wrong?
    The American taxpayer has spoken and this ‘crisis’ is not as serious as is being portrayed.
    How did they arrive at the $700 billion figure?
    Simple. Take the total outstanding mortgage debt in the US (16 trillion) and assume a 5% default rate.
    I’m not sure he default rate would be that high. Canada’s is somewhere aroudn 1.2%.
    Something still stinks in this deal.
    I’m not a conspiracy theorist, but wouldn’t it be fun if Dubya did this deliberately to show clearly who’s in favour of the big-state solutions? Check the vote and you’ll see what I mean.

  15. It’s time for the meddlers to cease their meddling.
    The do not know what they are doing .. at best they are misguided at worst venal and self serving.
    None of this benefits the public at large.
    Let them be pilloried and lashed.

  16. A few things to consider, Captain,
    1) all of your economic theory doesn’t add up to an ounce of market reality. The economy is greased with money. That comes from banks. Slapping banks smashes the economy. The economy also relies on confidence. No confidence: bad economy.
    2) it isn’t the “market” which needed to be punished. It’s the politicians and bankers. neither of these groups will feel the pinch, bailout or not.
    3) without the bailout, the “people” pay. With the bailout, the “people” pay.
    4) “This is more of the “FDR” approach to the Great Depression” Are you channelling Biden? Hoover presided over the mess that was the great depression until the damage was well under way (1933.) FDR just didn’t make it any better. Hoover piled on trade barriers and market destroying lending practices. FDR just printed money (which, if not for arms sales to Churchill and Stalin, would have continued far longer than it did.)

  17. I think Zog spoke for those folks caught in the declining markets brought on by this liquidity crisis through no fault of their own. Fundamentally sound assets are being devalued by the liquidity crisis. These guys as lenders are being punished with no recourse. That is wrong, it will hurt our economy and it need not occur.
    I know of a borrower that is trying to raise capital to invest in a business and it is now facing a London Inter Bank base rate that has risen to the point of making the business case very difficult. There are plenty of other borrowers who will not be able to raise capital to make investments and this will affect employment and economic development. That is wrong, it will hurt our economy and it need not occur.
    And as I understand it, the bailout does not involve the US goverenment paying something for nothing, rather it involves paying an amount to get an asset (or now, setting aside a sum of money as an insurance pool) and the total fund(or pool available) is $700 B USD. The buyer/insurer should be able to profit from this or at least get its money back. It has happened before and can happen again.
    I accept the capitalist philosophy of creative destruction, which would suggest we let the chips fall where they may, but I suggest that the captain would also understand the concept of a well funded buyer buying greatly devalued assets and monetizing them in a controlled manner over a long period of time and making a buck at it. That is what the US government is going to do. The destruction should reside in the devaluation of the share value of the reckless banks and financial institutions that took the risks. It should not stop there though.
    I have read the captains posts about the sub prime crisis, and I understand his anger about that. The people who loaned money to borrowers with no ability (current or future)to repay and then profited (bonuses, commissions etc) while the loans were packaged and resold in derivatives without market transparency should be investigated and tried for fraud – from top to bottom. To paraphrase a common theme here:
    JAIL
    THEM
    ALL!
    There the destruction can stop.

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