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October 14, 2008 – Comments (10)

I figured interest rates would go up in this mess, and they are, but this just isn't anything like how I expected to see it unfold...  I figured rates would have to go up as people realised there was enormous risk in the markets and interest rates are supposed to compensate for risk.  This doesn't look like that mechanism is happening...  But rather now that central banks are lending with complete guarantees, what's the point of having anything in the free market?

10 Comments – Post Your Own

#1) On October 14, 2008 at 10:21 AM, dwot (44.44) wrote:

Read this, short summary, the push for "re-regulation"...

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#2) On October 14, 2008 at 11:09 AM, Rep07 (28.44) wrote:

>what's the point of having anything in the free market?

"Free market" is over.  It turned out to be a euphemism for uncontrolled fraud, fiduciary negligence, and crime. Socialism has arrived, and it's a good thing.  Everything that's been said in the last 100 years about how great free-market laissez-faire capitalism is, has been soundly disproved in the last 18 months.

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#3) On October 14, 2008 at 11:17 AM, Option1307 (29.70) wrote:

Your joking right Rep...? This crisis the US/world is experiencing/entering has nothing to do with free-market capitalism failure. This has to do with massive stupidity/ignorance and a huge government intervention. The rules that were in place we constantly ignored and now government is trying to "patch up and fix" this debacle. But, failure of capitalism, not even close.

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#4) On October 14, 2008 at 11:30 AM, alstry (35.40) wrote:

As I stated before....if GS and GE are paying Buffett over 10 1/2%......you think interest rates are going to stay at these levels for much longer??????

The only govt guarantees apply to bank debt.....nothing else....I wish I was a bank.

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#5) On October 14, 2008 at 1:22 PM, StKitt (29.81) wrote:

Option, massive stupidity and ignorance are also free market forces. So while capitalism may not have failed entirely, it certainly has sustained a major black eye here.

One can certainly argue, as Rep does, that free market capitalism now can only be kept from utter failure by direct government intervention to slowly restore the massive loss of confidence our financial system has wrought for us.

Many cry socialism, but the only other choice is depression and misery for most people. Socialism refers to society and its dynamic instruments. In this instance, the needed dynamic instrument is our federal government (and those of the other G7 nations) to arrest a free-falling collapse and liquidation of our economy.

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#6) On October 14, 2008 at 2:42 PM, nuf2bdangrus (< 20) wrote:

Here's my take.  YOu have a 2 tiered market, government subsidized low rates, and private market high rates.  The subsidized lenders may take higher risk (does this story sound familiar?) and thus be bad money after good.  The end game is when the cost of government borrowing increases, as it inevitably will.

 

PS   Do you wear the santa hat?

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#7) On October 14, 2008 at 2:44 PM, jcrash (99.65) wrote:

Yeah, option, I'd have to agree with St.Kitt.  Stupidity and Ignorance go hand-in-hand with free markets.  We are better off with some controls over no controls.

You can't just say "let them eat cake."

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#8) On October 14, 2008 at 5:59 PM, DoomsdayBull (< 20) wrote:

This is ridiculous!? "better some controls over no controls" I don't know what country you live in, This country is so weighted down with red tape and regulations that honest companies can barely operate.  Think socialism is the answer? Why would we give the government more responcibility when it can't even handle what it has!? With people like Ben Bernanke at the wheel, it sounds more like insanity....

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#9) On October 14, 2008 at 10:29 PM, Option1307 (29.70) wrote:

Crash/Kitt/Rep:

    You consider the government forcing banks to to make extra risky loans to people with little or no income "capitalism"? The simplest example is how FNM/FRE were pressured/forced into these risky loans by politicians of both parties, starting back in the 90's.

   Yes, stupidity/ignorance are market forces. I agree 100%. What I'm arguing is that capitalism didn't fail. What failed is our suedo government control/capitalism/socialism market we've been living in for some time now. I believe its a huge, and invalid, strecth to say that capitalism failed because the US has not been living in that kind of a society for some time now.

 Sorry fot the ramblings, this is way off topic from the original post...

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#10) On October 14, 2008 at 10:54 PM, dwot (44.44) wrote:

I'm staying outta this one...

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