Bailout or Bust

I’ve gotten lots of great comments to this post, including an unusually large number of emails from liberal bloggers who think I’ve pulled a Colin Powell. As I read over their extremely angry letters, I started to have the sense that as many folks who opposed the bailout went to bed last night, they had a sudden, terrible, thought. Which went something like this:

“What if I don’t know what I’m talking about, and we just deliberately hit an iceberg for the sake of short-term political gain?” And what if people, you know, held me to my words?

This morning, such doubts happily put aside as the stock market rose on bargain hunting and the still strong odds that we’ll get some kind of bailout, the blogosphere has erupted in defensiveness. We’re not celebrating Congressional fecklessness, we just hate bush/socialism!

As I’ve written back to these many commentators, this problem increasingly strikes me as one that facts won’t help to resolve. Individuals’ views of the risks of nonaction, and the costs of action, are bound up in their priors. So, it is with no expectation that I will convince any naysayer of the magnitude of the crisis that I simply call your attention to a little number that functions as the economy’s DEFCON.

Go ahead, read the writing on the wall.

And now, you should feel free to return to your regularly scheduled diversions.

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3 Responses

  1. Frank says:

    Here’s some good info on LIBOR:

    http://www.lrb.co.uk/v30/n18/mack01_.html

    There’s a little controversy over it:

    “Much of the most vocal criticism of Libor has come from the US, and has focused on dollar Libor – especially three-month dollar Libor, the rate used more than any other in the swaps market. Some seem unhappy that the benchmark dollar interest rates are set in London just after 6 a.m. New York time, when traders are only starting to arrive at their desks, and that the US dollar Libor panel contains only three recognisably ‘American’ banks. The British Bankers’ Association – membership of which is open to any bank operating in the UK, wherever it is domiciled – counters by pointing out that all the banks on the panel are global institutions, some with a major presence on the ground in the US, and that collectively they are responsible for most London interbank dollar lending and borrowing.”

    But it does seem as objective a measure as we’re going to get in the short term.

  2. Archangel says:

    Poor sinner asks; How much water must be poured in a cup full of leaks to fill the cup ? A; one must keep adding More and more to keep the cup from going completely empty. What must be done to keep the cup full without adding more and more? A;Fix the cup. Bail out has not a word or a cent of how to fix the problem. Liquid leaks of another $850B. All the education PHDs and BS. You still think the world is flat, Well keep pouring money in. The leaks will stop them self. We should of just added more water to Katrina the levies would of fixed them self. Dumb and Dumber

  3. Futures Trader says:

    America this is just the begging of the things to come. 2 Years ago I started liquidating. Selling my last shares Nov.2007. Telling everyone when the sh-t hits you will not have a chance to get out. As the market went even higher I was told I was a fool. First Auction Rates Securities stopped, Now the Stock Market, Soon US Bond and the dollar. It take no genuss, PHD or even a college education to know the simple math . Trillions of dollars nothing of value. Like Monopoly Money. All will lose. You will not believe the truth for that is what is written. But one must try for that is what God wants us to do.