Most Popular
1. It’s a New Macro, the Gold Market Knows It, But Dead Men Walking Do Not (yet)- Gary_Tanashian
2.Stock Market Presidential Election Cycle Seasonal Trend Analysis - Nadeem_Walayat
3. Bitcoin S&P Pattern - Nadeem_Walayat
4.Nvidia Blow Off Top - Flying High like the Phoenix too Close to the Sun - Nadeem_Walayat
4.U.S. financial market’s “Weimar phase” impact to your fiat and digital assets - Raymond_Matison
5. How to Profit from the Global Warming ClImate Change Mega Death Trend - Part1 - Nadeem_Walayat
7.Bitcoin Gravy Train Trend Forecast 2024 - - Nadeem_Walayat
8.The Bond Trade and Interest Rates - Nadeem_Walayat
9.It’s Easy to Scream Stocks Bubble! - Stephen_McBride
10.Fed’s Next Intertest Rate Move might not align with popular consensus - Richard_Mills
Last 7 days
Friday Stock Market CRASH Following Israel Attack on Iranian Nuclear Facilities - 19th Apr 24
All Measures to Combat Global Warming Are Smoke and Mirrors! - 18th Apr 24
Cisco Then vs. Nvidia Now - 18th Apr 24
Is the Biden Administration Trying To Destroy the Dollar? - 18th Apr 24
S&P Stock Market Trend Forecast to Dec 2024 - 16th Apr 24
No Deposit Bonuses: Boost Your Finances - 16th Apr 24
Global Warming ClImate Change Mega Death Trend - 8th Apr 24
Gold Is Rallying Again, But Silver Could Get REALLY Interesting - 8th Apr 24
Media Elite Belittle Inflation Struggles of Ordinary Americans - 8th Apr 24
Profit from the Roaring AI 2020's Tech Stocks Economic Boom - 8th Apr 24
Stock Market Election Year Five Nights at Freddy's - 7th Apr 24
It’s a New Macro, the Gold Market Knows It, But Dead Men Walking Do Not (yet)- 7th Apr 24
AI Revolution and NVDA: Why Tough Going May Be Ahead - 7th Apr 24
Hidden cost of US homeownership just saw its biggest spike in 5 years - 7th Apr 24
What Happens To Gold Price If The Fed Doesn’t Cut Rates? - 7th Apr 24
The Fed is becoming increasingly divided on interest rates - 7th Apr 24
The Evils of Paper Money Have no End - 7th Apr 24
Stock Market Presidential Election Cycle Seasonal Trend Analysis - 3rd Apr 24
Stock Market Presidential Election Cycle Seasonal Trend - 2nd Apr 24
Dow Stock Market Annual Percent Change Analysis 2024 - 2nd Apr 24
Bitcoin S&P Pattern - 31st Mar 24
S&P Stock Market Correlating Seasonal Swings - 31st Mar 24
Here's a Dirty Little Secret: Federal Reserve Monetary Policy Is Still Loose - 31st Mar 24
Tandem Chairman Paul Pester on Fintech, AI, and the Future of Banking in the UK - 31st Mar 24
Stock Market Volatility (VIX) - 25th Mar 24
Stock Market Investor Sentiment - 25th Mar 24
The Federal Reserve Didn't Do Anything But It Had Plenty to Say - 25th Mar 24

Market Oracle FREE Newsletter

How to Protect your Wealth by Investing in AI Tech Stocks

$700 Billion Bailout Package a Necessary Evil

Politics / Credit Crisis 2008 Oct 03, 2008 - 09:58 AM GMT

By: Brady_Willett

Politics Best Financial Markets Analysis ArticleYears from now conspiracy theorists will no doubt contend that the historic $700 billion 2008 bailout package came about because the Federal Reserve and U.S. Treasury wanted to further cement their control over the U.S. economy and government.  Focusing on Bernanke and Paulson's apocalyptic words leading up to the bailout vote, not to mention some anti-Fed writings from Thomas Jefferson, conspiracy theorists will note how powerful men scared Congressmen into adopting their plan, how the rules of the financial game were changed to help Wall Street, and how the American public, once again, saw their hard earned dollars stolen from them. Needless to say, what the conspiracy theorists will be doing is giving Bernanke and Paulson far more credit than they deserve.

The reality is that over the last 13-months Bernanke and Paulson have been bumbling around throwing every conceivable bailout weapon in their arsenal at the financial crisis, and each attack has proven to be a larger failure than the one before. Exhausted and privy to information that no doubt foretold of an unfolding meltdown in the financial system, Paulson released a 3-page bailout idea he desperately hoped would help calm things down. Little did Paulson realize the melee that would ensue…

As imperfect as the revised bailout package is (how in the world can anyone conclude that tax cuts a prudent course of action for America?), it is nonetheless required.  The global financial markets are at risk of complete seizure, complete collapse, and the U.S. will be completely to blame if this occurs.  And while the bailout package itself doesn't guarantee averting seizure and collapse, it is nonetheless the only weapon currently armed and aimed at a marketplace in dire need of immediate assistance. Scrap the bailout now and attempt to start over and the defaults piling up by Monday morning may make deciphering what or whom to bailout next to impossible.

All unbacked fiat money eventually fails, the Austrians were/are right, and if Ron Paul was in charge things would be very different.  No disagreement here. But this doesn't mean that decades of malinvestments need to be corrected in a matter of hours.

By Brady Willett was launched in January of 2000 with the mandate of providing an alternative opinion on the U.S. equity markets.  In the context of an uncritical herd euphoria that characterizes the mainstream media, Fallstreet strives to provide investors with the information they need to make informed investment decisions. To that end, we provide a clearinghouse for bearish and value-oriented investment information, independent research, and an investment newsletter containing specific company selections.

Brady Willett Archive

© 2005-2022 - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.

Post Comment

Only logged in users are allowed to post comments. Register/ Log in