[SDH]

Question of the day?

Why hasn't the stimulus package moved the market (besides down)?

 

[$tinkle]

b/c the gov't isn't a publicly traded commodity?

 

[ridiculous]

fear & speculation.

 

[SDH]

b/c the gov't isn't a publicly traded commodity?

In many instances today it is..............owning a portion of 'public companies" j/king

 

[SDH]

fear & speculation.

fusing money into the economy by a popular president would seem to be a good thing and move the market accordingly?

 

[Toshi]

Question of the day?

Why hasn't the stimulus package moved the market (besides down)?

because the banks are _still_ insolvent.

 

[jimmydean]

Yeah, where's all that change? It's been like a month already and I don't see any difference.

 

[ohio]

If banks won't lend money, then pumping them with cash does nothing. The government either needs to compell them to start lending, OR needs to start lending money directly. Watching the market respond to news of money that promised but not delivered yet is NOT the correct judge of the stimulus.

 

[Toshi]

If banks won't lend money, then pumping them with cash does nothing. The government either needs to compell them to start lending, OR needs to start lending money directly. Watching the market respond to news of money that promised but not delivered yet is NOT the correct judge of the stimulus.

the money injected has just gone to (partially) nullify all their massive paper losses. they are prudent to not lend, as they're still in no position to do so.

http://www.forbes.com/2009/02/11/geithner-banks-nationalization-opinions-columnists_0212_nouriel_roubini.html

By now, write-downs by U.S. banks have already passed the $1 trillion mark (my floor estimate of losses), and institutions such as the International Monetary Fund and Goldman Sachs predict losses over $2 trillion (close to my original expected ceiling for such losses).

But if you think $2 trillion is already huge, our latest estimates at RGE Monitor (available in a paper for our clients) suggest that total losses on loans made by U.S. financial firms and the fall in the market value of the assets they are holding will be, at their peak, about $3.6 trillion. The U.S. banks and broker-dealers are exposed to half of this much, or $1.8 trillion; the rest is borne by other financial institutions in the U.S. and abroad.

The capital backing the banks' assets was just $1.4 trillion (last fall), leaving the U.S. banking system some $400 billion in the hole, or close to zero even after the government and private-sector recapitalization of such banks. Thus, another $1.4 trillion will be needed to bring back the capital of banks to the level it had before the crisis, and such massive additional recapitalization is needed to resolve the credit crunch and restore lending to the private sector.

These figures suggests the U.S. banking system is effectively insolvent in the aggregate; most of the U.K. banking system looks insolvent, too, and many other banks in continental Europe are also insolvent.

 

[IH8Rice]

because the $13 in each paycheck that we are getting cant even get a decent lap dance

 

[jonKranked]

the stimulus plan that just passed? because many of the big ticket measures in it don't take effect until 2010.

 

[ohio]

the money injected has just gone to (partially) nullify all their massive paper losses. they are prudent to not lend, as they're still in no position to do so.

Agreed. So the government either has to compell them against their will to lend (against negative balance sheets), or has to lend directly to create a credit market.

 

[$tinkle]

toshi, do something about this: State sending $1 checks to Washington's needy

OLYMPIA, Wash. – The state is sending out hundreds of thousands of $1 checks to the state’s neediest residents. It’s a plan that’s supposed to bring millions of dollars worth of food stamps to the state by March.

When you add printing and postage, it seems like a waste, but the state says the economy has them pulling out all the stops to find money wherever they can.

$1 isn’t the kind of help Wendy Nelson expected when she signed up for welfare last month. Nelson is one of 250,000 Washington residents on food stamps.

"It's just a huge waste of taxpayer money,” said Nelson.

But Leo Ribas, head of community services at the Department of Social and Health Services, says there’s a method to the state’s madness.

"We're trying to do this at a time when people need assistance the most,” said Ribas.

He says if the state’s food stamp recipients receive just $1 for energy bill assistance, that qualifies them for extra federal assistance. That means someone like Nelson could receive about $30 more per month in food stamps.

Sending out $1 checks cost the state $250,000. DSHS says that could bring the state and additional $43 million in federal funding.

i guess this is an application of teh keynsian multiplier?

this is by far the best example of bureaucracy "in action"

Since Nelson doesn’t have a checking account, cashing that $1 check would cost her $5 in fees. The state says, luckily, recipients don’t have to cash or deposit the checks to receive the additional benefits.

 

[Defenestrated]

Obama is a failure if the economy isn't fixed by the end of the week.

@ Stinkle's article, it seems like the state is just working the system to the advantage of those in need? I don't see anything wrong with pimping the system so long as those benefiting are living from hand to mouth and need all the help they can get.