David Martin

The Bailout to End All Bailouts

How about a 95% tax on bonuses paid over the last 5 years to executives in companies which go bust due to their pyramid selling schemes on the house markets?
That includes their bundling into derivatives, of course.
That should raise a fair few billions in contributions to clearing up the mess they have made,
Hopefully they will join the homeless who suffer for their reckless endangerment of the financial system.
A little fairer than charging people who have in no way profited from these scams, I think.
Too big to fail? Then bankrupt them and split them up.
Liquidity should be injected into the system through new institutions set up for the purpose who would buy the assets of the failed institutions at their true market rate.
If anyone disagrees and thinks that taxpayers money should be used to prop up the present system, then they should be given the opportunity of leading the charge by putting up their own assets.

Some Scenarios for a Global Recession

It seems a bit weird to think that the deficit will be brought under control when neither presidential candidate has any proposals that will do anything other than worsen it, not to mention Bernanke having a free reign to bankrupt the country.
Wishful thinking aside, the US is clearly on route to a default, as the debts are beyond anything which might be payable.
In addition, the rise in oil prices is fundamentally due to production having been broadly static for the last 3 years, with rising demand not only in India and China but in the oil exporting countries leaving less surplus available for export.
It should be noted in this context that we have used more oil than has been discovered in every one of the last 30 years.
Energy supplies will become increasingly scarce and expensive over time, regardless of short term depression induced price falls.
The US stock market is overvalued by at least 2/3rds.