"Imagine yourself at the drive-thru ordering a Big Mac. At one window you order and pay, at the other – 20 feet ahead – you pick up your lunch. What if you thought that after paying at the first window, your 1000 calorie sandwich might not be waiting for you a few seconds later. You might not pay; business as usual might not take place. That is what is happening in the credit markets. They are frozen in “McFear.” After the failure of Lehman Brothers – an investment bank which took orders at one window, and promised to pay at another for trillions of dollars of those CDS, swaps, and other derivative “sandwiches” – institutional investors said that they’d prefer to stay at home and have peanut butter instead of risking their money ordering a Big Mac. And so their money goes into that figurative mattress instead of the register at McDonald’s, people are laid off, profits go down, bank loans become less available,
our economic center cannot hold." - Stanton Teters
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I thought the double drive-thru window was a great metaphor. - Stanton Teters
"In a 1999 article that now looks absolutely insane, the New York Times reported on the easing of credit terms. Fannie Mae Chairman Franklin Raines, who’s quoted in the article, was all sunshine and roses as he threw away the financial future of millions of Americans. But at least one person. Peter Wallison, had a good idea of how this would all play out:
In moving, even tentatively, into this new area of lending, Fannie Mae is taking on significantly more risk, which may not pose any difficulties during flush economic times. But the government-subsidized corporation may run into trouble in an economic downturn, prompting a government rescue similar to that of the savings and loan industry in the 1980’s.
”From the perspective of many people, including me, this is another thrift industry growing up around us,” said Peter Wallison a resident fellow at the American Enterprise Institute. ”If they fail, the government will have to step up and bail them out the way it stepped up and bailed out the thrift indus" - Stanton Teters
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"When it comes to how we think, “negative” is not the only alternative to “positive.” As the case histories of depressives show, consistent pessimism can be just as baseless and deluded as its opposite. The alternative to both is realism — seeing the risks, having the courage to bear bad news and being prepared for famine as well as plenty. We ought to give it a try." - Stanton Teters
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"Last Thursday, a bunch of chickens and a big white turkey suddenly appeared near the corner of 125th Street and Second Avenue and promptly began pecking around in traffic." - Stanton Teters
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"Mr Paulson’s record does not inspire the confidence necessary to give him discretion over $700bn. His actions last week brought on the crisis that makes rescue necessary." - Stanton Teters
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"Stiglitz Says Iraq `Surge' Not Success That Bush Claims
Sept. 15 (Bloomberg) -- Joseph Stiglitz, an economist at Columbia University, talks with Bloomberg's Tom Keene about the wars in Iraq and Afghanistan, U.S. spending on the conflicts, and the outlook for the credit crisis and financial market regulation." - Stanton Teters
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