Comments on: Op-ed Friday: Was whole economy a Ponzi scheme?

By: AGENT

AGENT — Sat, 03 Jan 2009 21:50:44 +0000

Looks like it to me.
Our economic model requires more people, more purchases, more replacements. More, more, more.

It invites Ponzi Schemes. Nobody’s suspicious because growth seems natural. Motion seems natural.

I think the economic model hit the wall. It had to. It could only go so far till it ran out of steam. We’ve peaked. That includes human beings.

Here we are. It happened during our lifetime.

I really think the Stock Market is going through a pump-n-dump thing right now. Those who get lured back in will lose whatever they didn’t lose before. The Stock Marketeers’ one last attempt to get more of the suckers money.

I suspect Obama’s team to try & reinflate RE, at least the desire for RE. Also, it’ll turn out to be a pump-n-dump thing where those who got out before the peak and managed to safeguard their cash, may be lured back in so as to lose their cash after all.

Being patient is a tough job.
Those who managed to escape the Stock Market and Real Estate crash, and keep their cash, will find it hard to refrain from jumping back in again.

I will probably sit on my hands through ’09 so I don’t write a check or sign a contract.

By: uuuthe

uuuthe — Sat, 03 Jan 2009 02:20:23 +0000

Yes, I believe the evidence points that way. First of all, the Feds were warned that this would happen. It really doesn’t take a genius to figure out that you cannot loan money to people who can’t afford to pay back. Top economists were warning that this would happen if the feds artifically kept rates low, so I am sure the feds knew that this would happen.

Now the gov’t and feds are pumping money into a corrupt banking system. This is merely a transfer of wealth which has little to do with what is best for the average citizen. This is a ponzi scheme.

By: twist

twist — Fri, 02 Jan 2009 19:34:35 +0000

John-

No question that this is “boiling the frog” syndrome. I’ve been surprised that there hasn’t been more resistance to a few hundred billion for a bailout here and a few billion there. I keep wondering how bad things have to be before voters start demanding more accountability.

By: Yossarian

Yossarian — Fri, 02 Jan 2009 18:07:51 +0000

Former Fed chair Volcker said, “The problem is simple. We have consumed too much, and produced too little.”

I believe the entire FIRE (finance, insurance, real estate) economy is better described by the more neutral ‘malinvestment’, or ‘post-industrial fairy tales’.

Also, the MBS / etc. bond markets didn’t necessarily depend on bringing in new suckers all the time (classic Ponzi). It involved a widespread agreement to ignore reality.

By: John M.

John M. — Fri, 02 Jan 2009 18:07:43 +0000

There are a lot of individuals, pension funds and nonprofits out there that have penciled in benchmarks for returns on assets that are probably too high for the coming cycle, irrespective of the losses of 2008, and I am talking about people thinking of a modest 8 percent.

Funny. I was chatting (over reduced rations of single malt) with a knowledgeable friend the other night, and they said exactly the same thing.