Horrible News: Lehman Brothers Bankrupt and Merrill Lynch bought by BAC

[Tribesman]

Indeed. Here the market reacted VERY well.

Its amazing how well a market can react when you throw a trillion dollars to it .

[KukriKhan]

Its amazing how well a market can react when you throw a trillion dollars to it .

Or 2 or 3. Hey, what's a buncha zero's among friends anyway, right?

I am stunned. When President George W. Bush said in early 2001 that he'd "looked into the eyes, and seen the soul" of Comrade Putin - I admit, I never for a nano-second imagined that he meant anything like: "...and he's right, we should collective-ize all our resources in the name of the people".

Wow. Soviets ftw.

Welcome to the USAR (Union of Soviet American Republics).

Resistence is futile.

[Mangudai]

Wow, a lot of credible people are saying we just stood at the abyss of another Great Depression. When money markets broke the buck and T bills sold at a discount, we were looking at financial armageddon. It looks like the new Fed plan might work. But, I don't believe the rally of 9/18, 9/19. I'm selling a crap load of stock first thing monday morning.

On the subject of regulation; ideology and oversimplification are not helpful. The lassiez faire, caveman capitalism view is naive. Modern markets exist in a complicated legal framework, the system requires lots of lawyers and centuries of legal case history. The assets that a share of stock represents have no analog in the caveman world.

On the socialism side; there are many criticisms I don't have time to go into all of them. My main critique is that economics involves fundamental uncertainty, subjective valuation, and lots of decision making that is arbitrary and capricious.

In a nutshell, I believe the proper approach to regulation is to regulate in the interest of preventing really bad things from happening. We should not regulate in the interest of planning a specific course of improvement. Note that Fannie and Freddie were the most highly regulated financial institutions in the US with a government defined mission to promote home ownership.

The traditional right-left distinctions are fading in importance (individual liberty-collective responsibility, equality). A new distinction is gaining in importance. Those who welcome uncertainty and unpredictability vs those who wish to plan a specific course of change.

[Husar]

Welcome to the USAR (Union of Soviet American Republics).

You mean the uhm... Historic Union of Soviet American Republics... yeah, sounds a lot better to me.

In related "news" I saw that some german bank dealing with tax money in some way sent 300 Million Euros to that Lehman bank on Monday, after the collapse of the bank was known since Saturday so they basically threw 300 million Euros taxpayer money out of the window(or so the news said anyway). Now they're looking for someone to blame of course but that could be hard, someone said such transactions have to be signed by several people.
My question is if the government helps the bank with what you call a bailout, wouldn't that mean that all those investments aren't lost after all, isn't that the whole point anyway?