Wall Street will drown alone

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Monday, September 29. 2008

Wall Street will drown alone

Mulligan at Supply and Demand makes the case for the delinkage of Main Street and Wall Street economies�(h/t, Marginal Rev). One quote:

...history has shown that the non-financial sector can do well when the financial sector does poorly, and vice versa.

Posted by The Barrister in Politics at 08:48 | Comments (5) | Trackbacks (0)

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Hog wash,
He fails to site even one of the "studies" he claims show what he claims.

He uses GDP figures that include huge government gifts of fiat money that were handed out to keep the economy afloat.

When the money centers fail, eventually the entire ediface is going to fail. Money is the lubricant.

I was not impressed in the least by his theory.

#1 Habu on 2008-09-29 09:44 (Reply)

Agreed - Nonsense to believe that small and mid-sized businesses will be able to grow without access to financing and healthy capital markets.

#1.1 NJSoldier on 2008-09-29 11:13 (Reply)

I'm with you, Habu. Good line - "Money is the lubricant." I watched this morning for news about Wachovia where a third of my inheritance was in stocks. Stuart Varney blithely said, "Oh, those of you who use Wachovia as your bank are fine. Those of you who are investors are no more." (not verbatim)
Over a million dollars is 'no more'? I will be fine, but I'm not too impressed by theories anymore. In fact, I've joined the rabble who want the necks of our politicians and financial insiders - not because I've lost some money, but because our fine leaders are such f*cking idiots.
`

#2 Meta on 2008-09-29 11:24 (Reply)

Ditto to all three of you. Where did that 700 billion figure come from? No hearings, but they have time to investigate steroids in baseball. There will be more bailouts to come. At this point in the meltdown everyone is lying.

Meta; Get your scarves back from your broker,and start using some piano wire,or you won't be driving in any fast cars. You Big Madona! : )

#3 jappy on 2008-09-29 14:34 (Reply)

Tried to comment on Mulligan's site, but kept getting the little red X where I had to read to code letters - so here it is on Maggie's.
-----------
Mulligan's analysis is fair all other things being equal. However, as the normal non-financial company employs long and short leverage in its business, say in an amount equal to 50%-100% of its capital, it will find the drying up of short term credit crippling.

Recall the radio ad for a mortgage broker that says, "when banks compete, you win"? Well, that works both ways, and now we will have substantially fewer banks (less competition) and they aren't anxious to lend, even to each other.

This economist is forecasting non-fincial job losses in the hundreds of thousands unless Congress gets a bill passed.

#4 Kondratiev's Twin on 2008-09-29 17:29 (Reply)

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Monday, September 29. 2008

Wall Street will drown alone