A wonderful thing in Ken Silverstein’s Washington Babylon at Harpers. He quotes John Kenneth Galbraith in his 1954 book The Great Crash:
In the autumn of 1929 the mightiest of Americans were, for a brief time, revealed as human beings. Like most humans, most of the time, they did some very foolish things. On the whole, the greater the earlier reputation for omniscience, the more serene the previous idiocy, the greater the foolishness now exposed. Things that in other times were concealed by a heavy façade of dignity now stood exposed, for the panic suddenly, almost obscenely, snatched this façade away. We are seldom vouchsafed a glance behind this barrier; in our society the counterpart of the Kremlin walls is the thickly stuffed shirt.
Ah Galbraith. Panic has run amok on the world’s markets just now restrained only by the donation of federal money and the intervention of various statutory agencies. It makes you wonder how it is that the market can be so free and unfettered in the uptimes, then so socialised on the way down.
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The Country/National party have made an art form of it in Australia.
Indeed! Will pork for votes is, I believe, the party moto.
Swans in to test new user icon…
While noticing, one hopes, the brilliance of one’s own froggy device.
I remember reading about a “yesterday’s squillionaire” in the 1929 crash. His name escapes me. Anyway, he walked into his sharebroker’s office, and was told he owed US$25,000,000. He wrote out a cheque for the full amount and passed it over with the following comment, “Well you win some, and you lose some”. To this Aussie who is probably heading for the guillotine! This is total class!
I note that some are already railing against regulation on the market even before they get their trillion dollar rescue package. One UK commentator said just because a few financiers get knocked over it doesnt mean a failure of the system. No doubt he has his money nice and safe somewhere and is not in retirement living off his superannuation. These types of people are living in denial even as the quick sand swallows them up.
I don’t agree th markets ar “socialised on the way down’ Market collapse in past hav not socialised assistance on way down whereas this one did require Central Bank intervention only because initial virus of sub prime loans was so imbeded losses were astronomical and downstream normative levels of liquidity & asset values disappated leaving whole market vunerable
What I would argue , although hav done unsuccessfully elsewhere is part of problem started because 2 major Partys in USA weakened regulation controls in 1999 with typical USA blind faith in free unregulated economy but in a new World of electronic globalised economy and at same & subsequent time those 2 politcal Partys with this ‘faith’ though lack of governance & regulation initially allowed Fannie Mac & Freddie Mae to adopt uncredit worthy decsion making via sub prime loans & th llike over which they had some responsibility and consequently through same deficiencys allowed those ‘products’ to be ‘traded’ in ‘virus bundles’ without reglatroy controls & further allowed this Capital Market inadequate governance , accounting and reporting standards
US culltural psche of unfettered free enterprise has also played a part , and been reinforced by its stark contrast to th Communist controlled economy model creatinfg a false sense of its perfection , somethin in ‘oz’ particulaly on ‘left’ via regulation , ACCC etc this Country has been more conscious of
I found it particularley ironic that a senior US politcan John McCain whose politcs I don’t support & whose economic credentials by his own admission ar not super , should from th “right” make a speech in support of a ‘regulation’ Bill on 6th May 2006 in Senate very accurately forcasting these impending Fannie Mac & Freddie Mae disasterous consequences on one hand (although not th Capital Market effects) and YET still US law makers , US markets & US financial Media believed there unfettered market economy was indestructable & didn’t lack basic regulatory & governance flaws
Pity that with an election due in 8 weeks , reel lessons may still not get learned and ironicly a form of ’socialism’ of some of th Markets losses will occur In meantime many people will pay a personal price
“It makes you wonder how it is that the market can be so free and unfettered in the uptimes” Perhaps unfettered but clever greed , for which a responsible Government role as a counter ‘balance’ is alway needed…despite politcans other Agenda’s
Just popping by to give thanks for the dusting I got by the Icon Sparkle Fairy while I was visiting your friend, firstdog, that’s if the Icon Sparkle Fairy comes by here.
As to the point of your post, it makes me think: if we’re moving from un-fettered to fettered times, it’s probably a seller’s market for fetters, and whoever has been buying fetters up during the un-fettering, will be in position to make a killing.
How and where do you trade fetter futures?
I must say, Girt, that I would, on balance rather be fettered than fetta’d. I think.