I hate the very term "Black Friday," since it's one of those "traditions" of unknown origin doubtless invented by marketing weasels to encroach on Thanksgiving, which has remained resolutely non-monetized, or at least non-commercial, certainly compared to Xmas, Halloween, Valentine's Day, Mother's Day, Father's Day, Money Day.... I mean, the very idea is that right after Thanksgiving, maybe at 3 in the morning, we're supposed to line up outside the closest big box store, pushing and shoving, and consume. Duty NOW NOW NOW! It's disgusting.

Ian Welsh:

Last year myself and Stirling both noted that what would be done by banks if they were bailed out is to horde their money, not lend it out cheap, and save it to buy up competitors, make leveraged plays and so on. That is EXACTLY what has happened. Exactly.

During a downturn, if you have money, you don’t want to lend it out for low gains when you can buy up competitors, cheap. You don’t want to lend it out cheap, when you can make leveraged plays off the bottom of a stock and commodity market which is bound to go up because trillions are being poured into it by central banks. You want to take that money, and buy things while they are cheap, not lend it out for 4 or 5% returns, when you can make many many times that.

Why, exactly, governments expect banks who have better ways to make money to act like retail banks who don’t have any other way to make money but lend out at prime +3 or 4 percent is beyond me. They think they’ll do it out of gratitude for being bailed out, or some sort of sense of civic duty? Most politicians may be stupid, venal and corrupt—but it’s that very greed and venality which means they should understand that banks will do no such thing.

Banks will do it only if they are forced to do it. Remove retail banking from investment banking, insurance and brokerage services, and disallow any risky games on the markets for retail banks. Remove all special facilities from non retail banks because Goldman Sachs should not be doing highly leveraged plays with free money from the Federal Reserve. And reinstitute serious leverage limits, not just for retail banks but for everyone.

As for retail banks, if they don’t lend to the public at rates approved of by the Federal Reserve and Congress, they too should lose their access to special facilities. Banks are given the valuable right to borrow money for almost nothing, and to, in effect, print money by lending out money they don’t have. Those are privileges which are given to them in the expectation that they will use them to benefit the economy. If they refuse to do so, they should lose the privileges.

None of this is rocket science. Those of us who predicted both the crisis and what the bungling of the crisis would cause, however, are precisely the people who are not listened to by those in power. Obama is having his jobs summit, and forget nobodies like me, he isn’t even inviting somebodies like Stiglitz and Krugman.

That's because predicting a crisis correctly disqualifies you for Serious work in Versailles. But, seriously, why would it be any different?

Masthead

The Corrente Review Of Games is published on the first Saturday of the month.
Posting is done in rotation by the following contributors:

Aeryl,
BDBlue and
danps.

Please contact any of us with submission ideas or feedback.

I'm getting tired of waiting for my furnace guy. Any of you with old houses and single pipe steam systems know if this is true?

A representative of the company told me that old-house owners have reported great success with his company's product, J-B Weld on old cast-iron radiators.

Masthead
The Corrente Review Of Games is published on the first Saturday of the month.
Posting is done in rotation by the following contributors:
Aeryl, BDBlue and danps.

Contents

1. Introduction (danps)
2. Review: Fat Princess (danps)