Geithner to US Senate: Bailouts may never end, no exit plans

Lil' slugger Timmy Geithner, our steady hand on the tiller of finance, squirming n' wriggling on a hook at a Senate Banking, Housing and Urban Affairs Committee meeting.

Too bad people don't pay more attention to what goes on in the Senate these days. The place is getting loonier than a three-ring circus.

Geithner to DeMint: Bailouts may never end, no exit plans

Want to know why?

Check this out:

How has that worked out folks? Japan's Nikkei was over 35,000 back before this hit them. Now we are in a race with them on the DOW - a cut of some 75% in market value. Real estate not only collapsed but has failed to recover in price. Consumer deflation became the rule and consumers in Japan did their damnedest to pay down debt, further damaging consumption.

All of this is now translating here as our government is doing the very same things that Japan's government did.

Ben Bernanke's theories on how he can halt a deflation as well as how monetary policy influences credit have proved false. We now know this - it is not the conjecture of an intrepid Internet Blogger, it is now historical fact. The monetarists were wrong, the intrepid bloggers correct. We have both Japan's and now our own economies as examples, where the neoclassical folks both tried to run their BS and both failed.

We have a real problem in this nation with the truth. We believe that government can fix all that ails us, when in fact government has never done a decent job of fixing anything. All government has managed to do is make promises they cannot keep, while bloviating and interfering in the process of markets finding equilibrium and thus clearing.

There is a price for a given house, a given MBS, a CDO. It is the price negotiated between a willing buyer and a willing seller - nothing more or less. So long as the government continues to actively interfere in these markets and try to "prop up prices" (no matter where it is) you will see spreads widen and markets remain frozen.

The longer markets remain frozen due to government interference, the worse the damage to our economy, the more people will be laid off, the more businesses will fail and the lower the stock market will sink.

Its really that simple, and that the people in Washington DC, including both McCain and Obama, are too tone-deaf to understand the basics of how markets work, is outrageous.

That we as Americans allow this claptrap to continue instead of recognizing the fundamental truth of how markets work and why interfering with them in this fashion can never succeed is even more so.

The history is that when the Japanese government started messing with it's economy in the 1990s they had to continue messing with the markets.
Guess what? They the Japanese government stopped messing with their economy and the Nikkei dropped like a stone.

Does this look familiar too you?
Nikkei
[atsimg]http://files.abovetopsecret.com/images/member/10b29e168c6e.gif[/atsimg]

Simply amazing. So, 750 BN USD are now permenantly earmarked for the screw ups of greedy robber barons? I am no economist but I think this is likely to fail!

reply to post by Tentickles


Yes, the US is making many of the same mistakes Japan did. We managed to avoide some of the high hilarity of that market: I'm particularly tickled by the 100-year-long "multigenerational mortgages" on cruddy 2DK apartments that appeared towards the end of the Japanese bubble ("sign your kids futures away literally as well as figuatively!")...wouldn't surprise me if they rolled out something like that in the US although the decay may already be too advanced for such shenanigans.

People are fond of harping on about how "Japan and the US are different," and they are...Japan must import a far higher percentage of, well, just about everything than the US merely to survive, for example, and they have a denser population, more fragile demographics, a more risk-averse and change-resistant culture, and so on...some of the differences are also on the plus side: they went into their slump as the world's largest creditor nation (and remain so 20 years later...quite a feat) while we go into it as the world's largest debtor nation. Ouch.




[edit on 6/9/09 by silent thunder]

The worst sin in all of this is that now Obama is going to "town meetings" in order to garner public support for his healthcare reform. Half the people he talks to probably couldn't tell you jack about what's happened during his presidency so far -- let alone understand the significance of his healthcare proposal.

It's criminal what's happening. I'm beginning to think that Obama has some crazy power over people when he speaks.

Didn't anyone else notice that everytime he speaks face-to-face with people they seem to do a 180? I also believe this is why he is constantly holding these meetings and having ridiculous and unprecented amounts of public addresses via network TV.

Of course Republicans are opposed to his healthcare, but there are also a HUGE number of Democrats opposing it. It'll be scary to watch them back his plan, even though they are against it.

Mark my words -- the cost to the taxpayers for healthcare if his plan gets approved will be astronomical.

No exit plan says Geitner? Isn't that why we didn't elect McCain?? AMAZING!

Geitner and Obama are the very ones who shot the hole in the bottom of the boat.

And we expect them to start bailing, or trying to plug the leak?

Not going to happen.

We're going to sink.

What this means is that our economy can not function by itself anymore, either that or now that our corporate owned government had hold on taxpayer money indefinitely we are nothing but the milking cow for them, whenever the elites are losing their money they can take hold of government fund any time to bail themselves out.

[edit on 10-6-2009 by marg6043]

Geithner is at least being honest here.....he he.while your thread topic is not really...

he said it is too early to determine when they will start thinking about that...thou he imlplied he believes they will when things get better.....now granted he is full of it...

i wish a offcial could just answer a question SIMPLY but when they don't you know it is something bad they are trying to cover up.....like the 700Billion which can be _re issued_ by treasury ? or only when the money is paid back they can redeploy it again?

....i mean what do people expect when they have no voice in washington


This is the second time i read something along these lines

finance.yahoo.com...;_ylt=ApONdoEwjquDxuvGJ830C6Vl7o t4?tickers=JPM,XLF,SKF,FAZ,FAS,C,GS?sec=topStories&pos=8&asset=&ccode=&comment_start=21#comments

until we have a voice or PERSON who can actually stand up to the BANKING LOBBY then there will be NO REFORM of the OTC derivatives (which is the last source of "alpha" profits for banks like JPM) who btw own half of the hundreds of TRILLIONS of derivatives themselves......Ya jamie dimon.....great CEO but CANCER to the USA.....and we got nobody that can stand up to him.....NOBODY! and that is Large reason why the bailouts will continue.....lots of debt needs to be "insured" ....that's what most of these trillions in bailout's are going to ........INSURING shady over leveraged DEBTS

[edit on 9-6-2009 by cpdaman]

[edit on 9-6-2009 by cpdaman]

reply to post by silent thunder


After thinking about it... wouldnt a better title to this thread be:

America on Life Support, Needs Bailouts to Survive.

Then again some people might not understand that

With the exception of God ,everthing comes to an end. These bailouts will definitly come to an end...

[edit on 9-6-2009 by eradown]