Saturday, May 29, 2010

I recommend you panic...

http://www.youtube.com/watch?v=nuysYXlJ43I

A good video on bailouts vs. failure and the recoveries that follow. What are your thoughts??
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9 comments:

  1. Ashlee SteudleMay 30, 2010 at 1:41 PM

    It is interesting to watch how different the British and American views are. The American economist believes that people are being too pessimistic and banking crises should become sovereign debt crises whereas the British hedge fund manager believes that the system should be purged, restructured, and cleaned up. It appears that the Europeans are learning from American mistakes but we are not.

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  2. KelseyMay 30, 2010 at 6:57 PM

    I definitely agree with Ashlee. We are not learning from our mistakes at all, it seems as though we SAID we wanted reform but now that it's on the table we are backing away. I think that we all agree in class that reform is needed, but the people that can actually make it happen will never reach the same conclusions.

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  3. MattRMay 30, 2010 at 8:04 PM

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  4. MattRMay 30, 2010 at 8:17 PM

    Best quote was: "Let's take on a recession. It's going to be tough, people are gonna lose their jobs. They are going to lose their jobs anyway. We can spread this over 20 years, or we can get rid of it over 3 years."

    I think we've discussed this a lot in our class. Improper solutions to the crisis only drag it out (Japan anyone?). Really telling what Jeffery Sachs said at the end. Sachs calls Hendry's suggestion that banks shouldn't be able to pay dividends until they have safe capital ratios "Armageddon".

    Truth is, this sort of regulation most certainly would not be any sort of Armegeddon, unless of course you are a manager or stock owner of a large, under-capitalized bank. Shows how even the guys who don't work on wall street have been indoctrinated to argue for whatever is in wall street's best interest. Is it any coincidence that Sachs works at Columbia in NYC?

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  5. DanaMay 31, 2010 at 10:20 PM

    The way that the discussion escalated so quickly to a "face-off" of viewpoints really goes to show how nothing will ever be done in a timely manner to resolve these issues. There is too much debate about the appropriate course of action and no one can see to agree to do anything.

    The American Economist's view and attitude was quite a typical stereotype for our country. Like Kelsey said, it seems like we're just fine with sitting back and letting the markets work themselves out. Sachs and Hendry agreed on the need for regulation, but America doesn't seem to want to actively work towards it. Sometimes drastic measures could be the answer to solving the financial crisis quickly. Looks like the American attitude is to drag out a low dose of pain since it's not as much work as killing off parts of the system and getting on the road to recovery ASAP.

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  6. tcmtJune 1, 2010 at 11:55 AM

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  7. tcmtJune 1, 2010 at 11:56 AM

    I'm willing to bet (a lot of money) that Hugh Hendry holds HUGE short positions and stands to gain A LOT of money from the "panic" he is so sure will happen.

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  8. Ben MinkoffJune 1, 2010 at 12:49 PM

    I really enjoyed this video.

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  9. BryanJune 1, 2010 at 1:03 PM

    I agree with Ben

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