More Booze for the Drunk!

It's not what WE want that matters, it's what THEY want. - Ed.

Excerpt:

As a direct consequence the financial system is now chock full of bad loans. And as I have repeatedly pointed out, and as any honest financial and banking analyst will tell you, a bad loan's loss occurs when the loan is made.

That is, the loss has occurred at that time and cannot be prevented. We can only choose who "eats" that loss, not whether it will occur, beyond the point where the bad loan has been made.

The government has not only proposed but ratified that these losses, which were created as a consequence of bad decisions by the bankers, are to be borne by the taxpayers, even though the profits were made and have been retained by the bankers.

The truth is that these losses are larger than the government can absorb and pass to the taxpayer. The banking system and economy cannot return to growth until the bad debt is cleared, and since it cannot be absorbed it must be defaulted.

We are therefore faced with two alternatives:

1. Force the banks to eat their own losses, in which case they will go under.
2. Attempt to force the taxpayers to eat the losses while the banks keep the profits, in which case the government will go under.

The longer we wait to do the right thing (#1), the greater the odds that outcome #2 happens whether we want it to or not.

Read more @ Market Ticker