Alan Greenspan, describing the banking crisis as the worst of his career and possibly the worst in a century including the 1929 Wall Street crash, added however that companies collapsing may not be a problem. 'It depends on how it is handled and how the liquidations take place,' he said. 'And indeed we shouldn't try to protect every single institution. The ordinary course of financial change has winners and losers.' Appearing on US TV, he said: 'Let's recognize that this is a once-in- a-half-century, probably once-in-a-century type of event' - the worst 'by far' in his career, he added. 'There's no question that this is in the process of outstripping anything I've seen, and it still is not resolved and it still has a way to go. 'And indeed, it will continue to be a corrosive force until the price of homes in the United States stabilizes. 'That will induce a series of events around the globe which will stabilize the system,' he added.
'It depends on how it is handled and how the liquidations take place,' he said.
'And indeed we shouldn't try to protect every single institution. The ordinary course of financial change has winners and losers.'
Appearing on US TV, he said: 'Let's recognize that this is a once-in- a-half-century, probably once-in-a-century type of event' - the worst 'by far' in his career, he added.
'There's no question that this is in the process of outstripping anything I've seen, and it still is not resolved and it still has a way to go.
'And indeed, it will continue to be a corrosive force until the price of homes in the United States stabilizes.
'That will induce a series of events around the globe which will stabilize the system,' he added.
My question is: what do the various possible future scenarios regarding Lehman and the whole banking mess mean down the road for the US, EU, Japan, Chinese, Developing World set of parameters we call Economies, and, more importantly, for the average bloke in various countries around the world? Should I head for the countryside, buy a gun and start growing my own food :b ? Under what sort of a scenario does this crisis become a societal crash and where? Under what scenario this is just more taxes and somewhat falling wages? The road of excess leads to the palace of wisdom - William Blake
If you have bank shares you'll lose that money, or if you own bank corporate debt you'll lose that too. On top of that we have house prices still falling, and unemployment will rise.
But when push comes to shove, finance is just a way of sending numbers back and forth. Zombies won't stalk the streets because they didn't get any dividends.
People will still have food in their stomachs and diesel in their cars.
The real crisis begins when those problems hit us... ;) Peak oil is not an energy crisis. It is a liquid fuel crisis.
If the government doesn't take control of the economy early, you get a depression and then the government has to pick up the pieces. WWII got the world out of the Great Depression.
If the government takes control of the economy early... Hey, stop laughing!
When capitalism fails it's socialism or fascism. A vivid image of what should exist acts as a surrogate for reality. Pursuit of the image then prevents pursuit of the reality -- John K. Galbraith
GOOD MORNING WORLD!!! In the end, might makes right. Nothing has changed since the caveman.
Democrats' latest idea: gas stamps, 11 Sep 2008
As the U.S. economy teeters on the brink of recession, Democratic leaders are revisiting an idea born of the Great Depression: gas stamps to help Americans cope with high fuel prices. The proposal to subsidize fuel costs for lower-income families and individuals would almost certainly be popular with white, working-class voters and could boost Barack Obama's appeal with that critical voting bloc in this year's presidential election. [...] Under one version of the proposal, a person earning up to $31,200 or a family of four earning up to $63,600 could receive government payments totaling $500 for gas. [...] The idea for fuel stamps was first proposed by maverick Rep. Jim McDermott (D-Wash.), chairman of the House Income Security and Family Support subcommittee, who remembers his family using gas stamps when he was a boy during World War II.
The proposal to subsidize fuel costs for lower-income families and individuals would almost certainly be popular with white, working-class voters and could boost Barack Obama's appeal with that critical voting bloc in this year's presidential election. [...] Under one version of the proposal, a person earning up to $31,200 or a family of four earning up to $63,600 could receive government payments totaling $500 for gas. [...] The idea for fuel stamps was first proposed by maverick Rep. Jim McDermott (D-Wash.), chairman of the House Income Security and Family Support subcommittee, who remembers his family using gas stamps when he was a boy during World War II.
That story hasn't gotten any play yet, has it? Pelosi didn't, when she announced the second stimulus package. 15 July. It's as new. Again. All that campaign excitement! does tend to gloss who is calling the shots in DC.
See these stories and more at How I spent my stimulus to get a feel for how quickly that $120B disappeared. Diversity is the key to economic and political evolution.
If Greenspan, famous for his positive spin, is saying this is worse than 1929, then yes, I suspect buying a gun - or more likely a tank and small artillery - may not be inappropriate.
Then again, he just be trying to talk down the market so his neo-feudalist friends can buy everything and everyone cheap in a fire sale.
Given his background, I wouldn't put it past him.
We need a Bretton Woods II, and before too long, there will be one. "Any economic unit can emit money. The serious problem is to get it accepted" Hyman Minsky
Act of God, my ass. That's like removing the moderator from a nuclear reactor core and calling the result an Act of God A vivid image of what should exist acts as a surrogate for reality. Pursuit of the image then prevents pursuit of the reality -- John K. Galbraith
Greenspan's not stupid, but I think much of the problem, aside from his ideology, was that the finance game passed him by. Conservatives want live babies so they can raise them to be dead soldiers. - George Carlin
