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Must-Read Article From John Hussman

By JLP | October 10, 2011

Reading assignment: Talking Points for the “Occupy Walk Street” Protesters

“…there is a cost to any financial crisis, which is “contagion” where the failure of one institution or government calls others into question. The main way to contain this is to follow the century-old “Bagehot’s Rule” – lend freely, at high rates of interest, but only to institutions that are solvent and able to provide collateral for the loans. When policy makers behave as if every institution, solvent or not, is within the ring-fence, or that some institutions are simply “too big to fail,” saving these institutions comes at enormous costs, because true economic losses that should properly be taken by private investors are instead forced upon the public.”

To the protesters, I would like to add that sleeping in filth and defecating on police cars only makes you look like immature losers. GROW UP!

Topics: Links of the Day | 9 Comments »


9 Responses to “Must-Read Article From John Hussman”

  1. Veritroth Says:
    October 10th, 2011 at 11:40 am

    Sadly, the fate of OWS will become exactly that of the Tea Party if people like yourself continue to ignore the important messages in favor of the trivial actions of a few.

    Stop focusing on those actions and instead focus on the message of financial reform and jailing those that are responsible for this mess.

  2. RA Says:
    October 10th, 2011 at 12:55 pm

    I think you better re-read that Hussman article. He is supporting the protestors. He’s just providing them with ammunition.

  3. JLP Says:
    October 10th, 2011 at 1:03 pm

    I don’t care whether Hussman is pro-”occupy” or not. My thoughts after the quote were my thoughts.

  4. Veritroth Says:
    October 10th, 2011 at 1:13 pm

    I understand. I just wanted to point out the fact that while you may not agree with everything they say/do, it doesn’t invalidate all of their efforts.

    Frankly, there are some things I very strongly disagree with OWS on. For example, forgiveness of student loans. However, that point is only one of many and just because I disagree with them on one issue does not mean that all of their other issues must also be wrong.

    It’s human nature to pigeon-hole people and it’s quite unfortunate as it prevents a lot of positive reform. Either way, I have a lot of respect for anyone that gets out there and takes some action.

  5. RA Says:
    October 10th, 2011 at 1:22 pm

    I guess you think they ought to be sleeping at the Ritz or at the very least a Holiday Inn? I’d say the NYPD had a turdbomb coming their way after pepperspraying and macing defenseless women.

  6. BG Says:
    October 10th, 2011 at 1:30 pm

    You want the protesters to steal a garbage truck and haul the piles of trash away or what?

    They’ve piled the stuff up, and I’m sure they will help load a garbage truck if a crew asked for help.

    The bigger question is why has the city shut-down garbage pickup services for the area? Who made that call?

  7. The Biz of LIfe Says:
    October 10th, 2011 at 3:01 pm

    The OWS crowd has no clue what their grievances are or remedies for those grievances other than they want their fair share of economic spoils. Hussman raises a lot of good points that I think would be lost on the OWS folks. Most of his point center around governmental and governance failures. I don’t see much hope of any of those improving unless we get a completely different mind-set in Washington, and send a clear, unambiguous signal that financial institutions will fail if they take on undue risk. Going back to Glass-Stegal to split out taxpayer guaranteed deposits might not be a bad start.

  8. kitty Says:
    October 11th, 2011 at 4:33 pm

    “Stop focusing on those actions and instead focus on the message of financial reform and jailing those that are responsible for this mess.”

    Jailing who? I understand the wish to “punish the guilty”, but really would you care name them?

    Let me start:
    – politicians who got rid of Glass-Stegal
    – politicians who pushed for more liberal lending policies
    – those who came up with idea of mortgage-back securities, CDOs, Credit Default Swaps
    – loan corporations – both banks and small-time lending agencies – who gave bad loans
    – large firms who were buying and packaging these loans
    – people who bought houses they can’t afford
    – students who took loans to finance degrees that don’t lead to a job
    – people who invested into housing – both mortgages and house flipping
    – people who used their houses for money

    I could probably add other stuff here.

    A lot of people are guilty likely including some of those who protest. There are also a lot of innocent people who work for the banks and corporations and who haven’t been involved in any of the decisions – tellers at banks, secretaries, IT stuff, cleaning people. There are also a lot of innocent investors including you, me, and likely anybody here who owns an index fund.

    As to “bailouts” – without them we’d likely would’ve had the next Great Depression. At least this is what most economists believed at the time.

    Additionally, I’ve no idea what these protesters want. I don’t see or hear a clear message or a clear plan. It seems to me like a collection of people who are unhappy but who have different grievances, different thoughts and no concrete proposals. Their goal seems to be disruption of everyday work of those who happen to work in Manhattan.

  9. Michael Says:
    October 23rd, 2011 at 10:50 am

    I’m a big Hussman fan — read his articles every week. His insistent point that what *should* be private losses are more and more being shifted to the public wallet is SPOT ON.

    But hey, who cares. Dancing With The Stars has a new season going.

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