http://www.creditwritedowns.com/2009/12/the-year-in-review-at-credit-writedowns-crisis-solutions.html Finance, Economics and Markets Fri, 10 Feb 2012 00:37:00 +0000 hourly 1 http://www.creditwritedowns.com/2009/12/the-year-in-review-at-credit-writedowns-crisis-solutions.html#comment-57885 Anonymous Mon, 28 Dec 2009 19:18:00 +0000 http://www.creditwritedowns.com/2009/12/the-year-in-review-at-credit-writedowns-crisis-solutions.html#comment-57885 Government has to stop spending. Stop borrowing to allow foreign creditors to lend to the private sector so it can create productive jobs. When government borrows it, it's usually wastes the money on things like Cash For Clunkers, or similar stimulus programs which isn't very productive at all. Another one Cash for Caulkers. Government has to stop spending. Stop borrowing to allow foreign creditors to lend to the private sector so it can create productive jobs. When government borrows it, it’s usually wastes the money on things like Cash For Clunkers, or similar stimulus programs which isn’t very productive at all. Another one Cash for Caulkers.

]]> http://www.creditwritedowns.com/2009/12/the-year-in-review-at-credit-writedowns-crisis-solutions.html#comment-57884 Edward Harrison Mon, 28 Dec 2009 19:07:00 +0000 http://www.creditwritedowns.com/2009/12/the-year-in-review-at-credit-writedowns-crisis-solutions.html#comment-57884 See the post: "Yves Smith: Nationalization is what the FDIC is doing every week." I agree that bankrupting insolvent organizations is the correct approach. The ONLY difference between the pre-privatization option and bankruptcy is contagion and systemic risk and whether or not to mitigate it. See the post: “Yves Smith: Nationalization is what the FDIC is doing every week.” I agree that bankrupting insolvent organizations is the correct approach. The ONLY difference between the pre-privatization option and bankruptcy is contagion and systemic risk and whether or not to mitigate it.

]]> http://www.creditwritedowns.com/2009/12/the-year-in-review-at-credit-writedowns-crisis-solutions.html#comment-57883 Anonymous Mon, 28 Dec 2009 19:00:00 +0000 http://www.creditwritedowns.com/2009/12/the-year-in-review-at-credit-writedowns-crisis-solutions.html#comment-57883 I don't see what is so horrible about bankruptcy. In bankruptcy, assets are liquidated to another party with less debt. Liquidation has to occur to reflect the current economic environment. Despite the stimulus, business still has done down this. They trimmed down on staff to maintain profits. Low interest rates, or spending has not effected this market mechanism of liquidation, and the firms that were bailed out are merely postponing a recovery from happening such as the banks. Their portfolios are still horrible. The auto industry is another example. Bankruptcy is inevitable without some kind of liquidation. Even if the company was liquidated, a third party would acquire the capital. Which means that industry would not stay idle unless something more insidious is at play. Interest rates have to be much higher, and stable to promote manufacturing from savings. Trim down government to enable tax cuts, and deregulate the markets. Is a credit crunch really deflationary? My view is credit is inflationary much like the housing bubble. The more isolated you are from the financial mess, the least effected you are. If you have no exposure to it, more likely you are doing just fine. Frankly, I think the credit deflation is an overreaction. The Fed in particular overreacts to deflation fears (technically liquidation) and then inflates to stop the deflation. The stimulus to soften blow of the NASDAQ bubble busting to create a bigger boom in housing, and consumer credit, as a result, an even bigger bust of historical proportions. Money has to stable, or sound money as some would call it. Credit is inflationary as recent history proves. Now it is a major economic contraction, that I would agree, but it's necessary to correct the drunkeness of the US economy. I don’t see what is so horrible about bankruptcy. In bankruptcy, assets are liquidated to another party with less debt. Liquidation has to occur to reflect the current economic environment. Despite the stimulus, business still has done down this. They trimmed down on staff to maintain profits. Low interest rates, or spending has not effected this market mechanism of liquidation, and the firms that were bailed out are merely postponing a recovery from happening such as the banks. Their portfolios are still horrible. The auto industry is another example. Bankruptcy is inevitable without some kind of liquidation. Even if the company was liquidated, a third party would acquire the capital. Which means that industry would not stay idle unless something more insidious is at play. Interest rates have to be much higher, and stable to promote manufacturing from savings. Trim down government to enable tax cuts, and deregulate the markets. Is a credit crunch really deflationary? My view is credit is inflationary much like the housing bubble. The more isolated you are from the financial mess, the least effected you are. If you have no exposure to it, more likely you are doing just fine. Frankly, I think the credit deflation is an overreaction. The Fed in particular overreacts to deflation fears (technically liquidation) and then inflates to stop the deflation. The stimulus to soften blow of the NASDAQ bubble busting to create a bigger boom in housing, and consumer credit, as a result, an even bigger bust of historical proportions. Money has to stable, or sound money as some would call it. Credit is inflationary as recent history proves. Now it is a major economic contraction, that I would agree, but it’s necessary to correct the drunkeness of the US economy.

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