OK, how well is this "bailout" going to work? (Bill passed today in the US Congress)

How well is the "bailout" bill passed in the US Congress, today, going to work?

  • Splendidly: the stock market will rebound and any 'recession' will be mild and transient.

    Votes: 0 0.0%
  • Very well; major damage and serious recession averted

    Votes: 0 0.0%

  • Total voters
    27
  • Poll closed .

Pure

Fiel a Verdad
Joined
Dec 20, 2001
Posts
15,135
OK, how well is this "bailout" going to work? (Bill passed today in the US Congress)

Let's say, over the next 3-6 months. I'm speaking of such factors as freeing up credit; dealing with stock market crash, 'saving' embattled institutions. Oh, and relief for those stiffed in bad mortgages, and so on; easing rate of foreclosures.

Give your reasons, and the urls for some interesting articles by commentators and experts.

Have McCain and Obama been helped, hurt, etc?
 
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Hey if you edit your post, so will I
 
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Well, the makers of wooden arrows for kids got their tax break. All the rest is filler as far as I can tell.
 
No, fuck, I have no idea. I'm not a banker or a financier. All I know is what I see on TV and read in the papers and they seem to think that that bailout will at best only keep things from getting worse. It won't fix things. We're still in for a deep, dark recession. But other recessions have come and gone and I haven't even noticed them. that's how plugged into the system I am.

On the political front, I think McCain pretty much shot himself in the foot trying to ride in as the white knight to bail out the first bail-out, then voting for this one, which is loaded with pork and earmarks. He's shown himself to be excitable, impulsive, and inconsistent, and without a lot of clout in his own party, which I guess is the other side of that maverick coin.

I just wonder how long it will take to learn whether this bill is working and how we'll know. I think the recession is already upon us.
 
I think I'm going to go with Warren Buffet on this. As he told CNN, the bill would have had more impact over two weeks ago, however, now, the needed amount to make the impact this bill is being touted as making.
The fact that all the extra "pork" had to be added to make this bill pass just disgusts me. It also goes to show you that one more institution that really needs an overhaul is Congress, too much power, not enough checks in place.
 
I can't help but feel they're just putting another band aid on a gunshot.

Economic cycle or not, it seems that the money guys are simply not learning from the mistakes of the past. It wasn't that long ago when then S&L's had to be bailed out.
The bill that passed is like 400 pages longer than the original they voted down.
All sorts of 'extras' got tacked on to a version that was rushed through. There's a mention of a wooden toy company, a provision for NASCAR, etc.
My opinion is once again, the American taxpayer has been given a choice of which shit burger we get to take a bite of.
Follow along w/ me for a moment, had the original gone through, there'd have been an outrage. It was voted down, the market took a dive, everybody got scared for their 401k plans.
Then the politicos get ahold of it, tack on their special interest items on a bill that they know will pass the 2nd time through.
Call me cynical, but I know a dog & pony show when I see one and this was a beauty.
 
interesting article

http://www.slate.com/id/2201428/

We're Down $700 Billion. Let's Go Double or Nothing!How the financial markets fell for a 400-year-old sucker bet.
By Jordan Ellenberg
Posted Thursday, Oct. 2, 2008, at 1:20 PM ET

Here's how to make money flipping a coin. Bet 100 bucks on heads. If you win, you walk away $100 richer. If you lose, no problem; on the next flip, bet $200 on heads, and if you win this time, take your $100 profit and quit. If you lose, you're down $300 on the day; so you double down again and bet $400. The coin can't come up tails forever! Eventually, you've got to win your $100 back.

This doubling game, sometimes called "the martingale," offers something for nothing—certain profits, with no risk. You can see why it's so appealing to gamblers. But five more minutes of thought reveals that the martingale can lead to disaster. The coin will come up heads eventually—but "eventually" might be too late. Most of the time, one of the first few flips will land heads and you'll come out on top. But suppose you get 11 tails in a row. Just like that, you're out $204,700.* The next step is to bet $204,800—if you've got it. If you're out of cash, the game is over, and you're going home 200 grand lighter.


But wait a minute, maybe somebody will loan you the $200,000 you need to stay in the game. After all, you've got a great track record; up until this moment, you've always ended up ahead! If people keep staking you money, you can just keep betting until, eventually, you win big time.


See where I'm going with this?

The carefully synthesized financial instruments now seeping toxically from the hulls of Lehman Bros. and Washington Mutual are vastly more complicated than the martingale. But they suffer the same fundamental flaw: They claim to create returns out of nothing, with no attendant risk. That's not just suspicious. In many cases, it's mathematically impossible.

To explain why, I need to introduce the mathematical notion that underlies every price computation in finance, from options to insurance to credit default swaps: expected value. Suppose somebody approaches you and says, "I propose a game of chance. I flip this coin, and if it comes up heads you get $100. If it comes up tails, you get nothing. How much will you pay me for the right to play this game?" In other words: What is the value of a 50 percent chance of winning $100?

If you played this game all day, you'd probably win about half of the time. Most people, then, would value the coin flip game at $50, which is just the probability of success (50 percent, or 0.5) times the value of a successful outcome ($100). In general, to compute the expected value of a game you need to add up the values of all possible outcomes multiplied by their respective probabilities.

Consider, for instance, the riskier game where you win $100 if the coin lands heads but lose $100 otherwise. Each of those outcomes happens 50 percent of the time; so the value of this game is
(0.5) x ($100) + (0.5) x (-$100) = $0

The equation just records the obvious fact that this game favors neither you nor your opponent. It's a wash.

What's the expected value of the martingale? Like the game above, it's no more than a bunch of coin flips, each one of which has a value of 0. So the whole game has a value of 0.

On the other hand, if you start with a big bankroll (or generous lenders), it's pretty unlikely you'll encounter a run of luck bad enough to knock you out of the game. It's a little messy to compute exactly how unlikely, but we don't need exact figures to make the main point. (If exact figures are your bag, though, I've worked them out in a short PDF.) To simplify matters, let's say there's a 99 percent chance you wind up $100 ahead. Then the expected value of the martingale is

(0.99) x ($100) + (0.01) x (catastrophic outcome) = 0

But we already know the expected value is 0! Simple algebra suffices to solve the resulting equation—for the bet to have a value of 0, "catastrophic outcome" must be -$9,900.

In other words, the martingale strategy doesn't eliminate risk—it just takes your risk and squeezes it all into one improbable but hideous scenario. The expected value computation is unforgiving. No matter what ultrasophisticated betting strategy you adopt, you can't expect to make money in the long run by flipping a fair coin. There's always a risk of loss—and the smaller the chance of losing, the uglier the potential loss becomes. The result is a kind of "upside-down lottery."

If you play the Powerball, you'll probably lose the cost of a ticket, but you might win big. In the martingale, you'll probably win a little, but if all six numbered balls match your ticket, then the bank comes around and takes away everything you've got.

You probably wouldn't sign up for that game. But the news of the last few weeks confirms that we've been playing it for years. And it looks like the balls just lined up. Oh, and there's one more difference between the thickly interwoven financial markets and the lottery: If one person wins the Powerball, just one person gets rich. If one massively leveraged financial firm loses while playing the martingale, it can bring the whole system down with it.

The complex derivatives behind the current financial havoc aren't literally martingales, but what's wrong with the martingale is one of the things that's wrong with the derivatives. There's no question that you can reduce risk drastically by combining different investments in a single portfolio; that's what plain-Jane instruments like index funds do.

What sounds an alarm is the claim that you can get low risk and high returns in the same happy package. "Once the limits of diversification have been reached," John Quiggin, an economist at the University of Queensland, told me, "rearranging the set of claims involved isn't going to reduce risk any further, so if all parties appear to be making risk-free profits, the risk must have been shifted to some low-probability, high-consequence event."

In other words, if it sounds too good to be true, it's probably heading toward some outcome too bad to be borne. Or, as financial skeptic Nassim Nicholas Taleb wrote last week, "It appears that financial institutions earn money on transactions (say fees on your mother-in-law's checking account) and lose everything taking risks they don't understand."
 
thanks for the refs. urls are below. i agree fwiw, 700 bil is going to turn out to be too little. no one has done the math on the true 'worth' of the investment instruments needing to be salvaged

Buffett

Sept 28

http://www.cnn.com/2008/POLITICS/09/28/bailout.deal/

Oct 2

http://money.cnn.com/2008/10/02/news/newsmakers/buffett.fortune/index.htm?postversion=2008100212

There are consulting roles, administering this money being doled out, and the same motherfuckers who lost everyone the money in the first place are lined up for those. They are narrowly focused (like the Congress). As long as they personally get a good cut, the real problem can go to hell. (That's why they sugarcoated the turd, adding the extra 150 billion in pork and taxcuts. Made the swine in Congress-- who are the very people, by the way, whose oversight was lacking and who repealed the post-1929 regs-- swallow the shit.) There has to be a way to enrich yourself, administering a cash flow of this size, and they will do that.

The whole bailout scheme is outrageous, even now. And originally, it amounted to an executive coup as it was first proposed-- just given, with no strings whatsoever, to the executive, to do whatever it liked with. Very reminiscent of the Supreme Court throwing these same yahoos the Presidency in 2000. Congress is beneath contempt.
 
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i agree, cant

paulson is former CEO of Goldman Sachs, isn't he?

the foxes are supervising the first aid, catastrophic assistance, and salvage of the chicken coop, nearly destroyed by 'mysterious forces'.

krugman is quite uneasy, for example:

http://www.nytimes.com/2008/10/03/opinion/03krugman.html?_r=1&em&oref=slogin

[excerpt]

The House will probably vote on Friday on the latest version of the $700 billion bailout plan — originally the Paulson plan, then the Paulson-Dodd-Frank plan, and now, I guess, the Paulson-Dodd-Frank-Pork plan (it’s been larded up since the House rejected it on Monday). I hope that it passes, simply because we’re in the middle of a financial panic, and another no vote would make the panic even worse. But that’s just another way of saying that the economy is now hostage to the Treasury Department’s blunders.

For the fact is that the plan on offer is a stinker — and inexcusably so. The financial system has been under severe stress for more than a year, and there should have been carefully thought-out contingency plans ready to roll out in case the markets melted down.

Obviously, there weren’t: the Paulson plan was clearly drawn up in haste and confusion. And Treasury officials have yet to offer any clear explanation of how the plan is supposed to work, probably because they themselves have no idea what they’re doing.
Despite this, as I said, I hope the plan passes, because otherwise we’ll probably see even worse panic in the markets. But at best, the plan will buy some time to seek a real solution to the crisis.

And that raises the question: Do we have that time?
A solution to our economic woes will have to start with a much better-conceived rescue of the financial system — one that will almost surely involve the U.S. government taking partial, temporary ownership of that system, the way Sweden’s government did in the early 1990s. Yet it’s hard to imagine the Bush administration taking that step.
 
otherwise we’ll probably see even worse panic in the markets. But at best, the plan will buy some time to seek a real solution to the crisis.


Buy time, my ass. Fuckin expensive time, and the people the money goes to ain't selling time in the first place. Weasels.
 
fine article:

http://thinkprogress.org/2008/09/22/paulson-goldman-bailout/
Goldman Sachs cashed in under Paulson, with earnings in 2005 of $5.6 billion; Paulson made more than $38 million that year.


===
http://www.huffingtonpost.com/howard-a-rodman/keith-richards-cockroache_b_128760.html

Keith Richards, Cockroaches, and the Firm of Goldman Sachs

by Howard Rodman

In today's New York Times, we see the headline:
Goldman to Raise Capital, With $5 Billion From Buffett

And in the accompanying story written by Ben White, we can read the following:

The billionaire Warren E. Buffett will invest $5 billion in the investment bank Goldman Sachs, as part of the bank's efforts to raise $7.5 billion in fresh capital, a Goldman spokesman, Lucas Van Praag, said Tuesday. In return, Berkshire Hathaway, the conglomerate run by Mr. Buffett, will receive perpetual preferred shares in Goldman, Mr. Praag said. The preferred stock will pay a 10 percent dividend.

[Rodman:] So here's how a real bailout works: Goldman Sachs needs money, Warren Buffet gives them money. In return, Warren Buffet gets stock that pays a ten percent dividend.

Now, for comparison, here's the shell game version. Keep your eye on the pea.

(1) Goldman Sachs gives Hank Paulson seven hundred million dollars (that's seven zero zero comma zero zero zero comma zero zero zero) in salary and bonuses.

(2) Goldman Sachs lends Hank Paulson to the Treasury (now that he can afford to be a public servant).

(3) As the Secretary of the Treasury, Paulson insists that we give Goldman Sachs a lot of money, in exchange for a lot of crap. (If not, we all die.)

(4) Except it's not Hank Paulson's money, it's ours. [and so on]
 
paulson is former CEO of Goldman Sachs, isn't he?

the foxes are supervising the first aid, catastrophic assistance, and salvage of the chicken coop, nearly destroyed by 'mysterious forces'.

krugman is quite uneasy, for example:

http://www.nytimes.com/2008/10/03/opinion/03krugman.html?_r=1&em&oref=slogin

[excerpt]


For the fact is that the plan on offer is a stinker — and inexcusably so. The financial system has been under severe stress for more than a year, and there should have been carefully thought-out contingency plans ready to roll out in case the markets melted down.

Obviously, there weren’t: the Paulson plan was clearly drawn up in haste and confusion. And Treasury officials have yet to offer any clear explanation of how the plan is supposed to work, probably because they themselves have no idea what they’re doing.
Despite this, as I said, I hope the plan passes, because otherwise we’ll probably see even worse panic in the markets. But at best, the plan will buy some time to seek a real solution to the crisis.

And that raises the question: Do we have that time?
A solution to our economic woes will have to start with a much better-conceived rescue of the financial system — one that will almost surely involve the U.S. government taking partial, temporary ownership of that system, the way Sweden’s government did in the early 1990s. Yet it’s hard to imagine the Bush administration taking that step.

As I see it, the warning signs have been in place for a very long time indeed.

1) Our dependency on foreign oil has been in place for a very long time. The first warning sign? The gas crisis back in the early 80's. Take '05 for example, with the skyrocket in price after Hurricane Katrina. It shed light on the refineries being old and out of date. We were gluttons on oil, should have taken note then, but now pay for it.

2) Take the tech bubble burst. This was really, the first bubble burst of the e-trade generation. It showed the growing pains, and nothing really changed in regulations because of it.

3) Take the schemes that were all about buying, flipping, and selling houses. By the time that those sort of DVDs are released, its something thats already becoming old hat. But the allure of quick money overshadowed many peoples common sense.

4) The irresponsible actions of many borrowers. People have a bad tendency to purchase things they cannot reasonably afford. Usually its just something like a tv...however...it became the craving for larger and larger homes and vehicles. Status symbols, helped out by the tons of shows documenting the lives of the wealthy, and creating within people...envy. Companies feed off this envy, your neighbor gets a new big screen, you get a bigger one. Your neighbor gets a Tahoe, you get an Excursion, and so on and so forth.

Of course, thats just my two cents, and really a re-interation of a lot of things.
There are two sides to blame, the wealthy executives who irresponsibly acted, as well as the average citizen who recklessly bought things.
 
I've immersed myself in economics books during the last month. I've learned a lot. Lotsa smart people have interesting ideas about what happened and whats happening.

The conventional wisdom asserts that Wall Street and the banks were hot for big paydays, so they gambled lotsa money...and lost all of it. Then all the players and government lied their asses off to conceal the problem. My state lost about $15 Bn overnite. Pooof!

What the bailout does is remove a trillion dollars from the credit pool to make good Wall Streets losses. The sound banks do not trust the gamblers and wont loan money to them. Now the sound banks have less money to loan because the Feds need it to fill the pockets of Wall Street with real dollars.

Interest rates will rise because there is less money to borrow. Unemployment will rise because people have less money to spend. Commodiy prices will fall because less is produced. Oil is already down to about $95/barrel. Deflating house prices means more people will lose their asses when they sell their homes. State/local governments will take hits on tax collections.
 
Just going with my gut reaction to all of this and not something I've necessarily given a lot of rational thought to. I think the bailout is actually going to make things worse because no one is going to change anything.

It started with the first bailout plan that demanded absolutely no control and no accountability concerning the money they were demanding. Then when the second one was shot down they decided to add lots of pork and if you read the fine print anything in there that might be remotely beneficial (the extension of $100,000 FDIC insurance to $250,000) doesn't last long enough to mattter (it expires in '09 unless congress extends it, which they won't).

The simple fact is that they gave them the fucking money, the fixed they're fucking problems, and now those God damned sons of bitches are going to do the same fucking thing they did before. Congress claims they'll start working on reforms in housing and the markets and that's BULLSHIT. It wouldn't matter if it was nothing but Democrats or nothing but Republicans running the fucking country. They will NOT change anything that is going to make a god damned bit of different in this whole fucking mess.

I'm pissed because they passed this fucking thing because they have set the precedent of "It's ok if you do things that fuck up our economy and the economy of the rest of the world, we'll be here to cushion your sorry asses when you fall. And there will be absolutely NO FUCKING CONSEQUENCES TO YOUR IRRESPONSIBILITY."

And people still think I'm crazy when I ask if a rebellion wouldn't be a better alternative.
 
We're doomed!!!

Call 911,
send out maydays,
fire off some flare guns,
scream "fireman, save my child,"
fire off a expletive filled letter to your congressperson,
ask Paris Hilton for national financial advice.

It doesn't matter what we do or think, THEY decided and we can only bend over and hold out our money. The markets will stay fucked, the recession is here and it will only get worse, unless your rich, in which case you will get richer.

McCain or Obama will inherit a fiasco, along with the blame which should go to GWB.

When they bail out Exxon/Mobile next the gas pumps will all say bend over and insert nozzle.

We're doomed!!!

:rose:
 
Money. I've spend a lot of my working life dealing with mind-numbing amounts. And even though my own mind was never numbed by the figures, I still find 700,000,000,000 to be a big number. I reckon it as about $3,000 per person in the US.

I've spoken to Henry Paulson. I called him Hank. In the New York office of Goldman Sachs, he took a piss in the next urinal to me. When he pees, Hank puts his hands high against against the wall. Talk about the original "big swinging dick"!

I was a consultant for ten years at Goldman Sachs, in "Hank"'s heyday. I worked mainly in the prime brokerage area. In prime brokerage, the bank lends money to hedge funds who want to trade on margin, and the hedge funds pledge their portfolio to the bank as collateral. Like a mortage lender, the bank has market risk, and so must continually assess the portfolio values. As the marginable value of the portfolio changes, the bank will change the amount it's willing to lend, sometimes resulting in a "margin call", which means the hedge funds need to reduce their borrowing or top up the pledged collateral with extra equity .

In order to assess the hedge funds' portfolio values, we in our role as prime broker needed to understand the so-called "riskless" strategies practiced by the more sophisticated funds. These involved complex combinations of derivatives and derivative-like trading instruments: options stratgies, credit swaps, bonds, convertible bonds, short and long stock, etc. I became pretty proficient at analysing hedge fund portfolio risk.

Basically, a "riskless" trading strategy involves some kind of short-selling to offset the ordinary, "long" positions you hold. You literally "hedge your bets" by opting for a smaller profit against a smaller downside.
The classic example for this is the "straddle" option strategy, which has a guaranteed limit both on the maximum payout and the maximum loss.

All these varied trading strategies have been the mainstay of hedge funds for the last 25 or so years, and by and large work very well.

The best thing to do as a lender (like Goldman Sachs), is to keep constant tabs on the portfolio values, and only lend money to people who can pay you back. Goldman Sachs, when I worked there, had the deserved reputation of being very fussy over to whom it would lend money, and consequently carried high kudos with hedge funds: A fund manager who used Goldman Sachs as a prime broker would be able to attract high-rolling investors.

The senior partners at Goldman Sachs (like Paulson) genuinely believed that it was the banks' patriotic duty to oil the wheels of capitalism, by maintaining the free flow of capital. The bank is capitalism's heart. It pumps society's life-blood vigourously around the world.

If you look at the Dow Jones Index over the last 80 years you'll see its steady climb. Dow Jones over the last 80 years

This is the true historical trend -- a steady increase in Western affluence across the board (with a corresponding increase in disparity between rich and poor!)

Personally I don't think that this trend has much to do with Goldman Sachs, or people like Henry Paulson, or even U.S. presidents:

Better standards of literacy and education, health, mechanisation, information technology and automation, agriculture, transportation are what matters.

Above all, I think that although money is a very important vehicle for efficient flow of goods, it's been nowhere near as significant as the improved means of aquiring and transmitting knowledge and information.
 
The pork-barrel element of the bail-out wouldn't work in the UK.

It is bribing your elected representatives with YOUR money.

It would breach the UK's parliamentary ethics system. If a UK elected representative has a personal interest in the result of a vote, they are required not to speak to the proposal nor vote on it. If they have a financial interest in the result they must not be in the chamber when the proposal is being discussed.

Og
 
No, fuck, I have no idea. I'm not a banker or a financier. All I know is what I see on TV and read in the papers and they seem to think that that bailout will at best only keep things from getting worse. It won't fix things. We're still in for a deep, dark recession. But other recessions have come and gone and I haven't even noticed them. that's how plugged into the system I am.

On the political front, I think McCain pretty much shot himself in the foot trying to ride in as the white knight to bail out the first bail-out, then voting for this one, which is loaded with pork and earmarks. He's shown himself to be excitable, impulsive, and inconsistent, and without a lot of clout in his own party, which I guess is the other side of that maverick coin.

I just wonder how long it will take to learn whether this bill is working and how we'll know. I think the recession is already upon us.

You don't have to be a banker or financier to make a mess of epic proportions, doc - but it apparently helps. This shite's here for a damn long time to come and is not, I don't believe, going to go away until the fundamental rule of banking and finance are addressed - restoring trust.
 
All this made me go read up again on Complexity Theory, the theory that attempts to deal with systems that are too complex to predict. Found this little quote on Wkipedia:

==============
....

Complexity and modeling
A way of modelling Complex Adaptive System

One of Hayek's main contributions to early complexity theory is his distinction between the human capacity to predict the behaviour of simple systems and its capacity to predict the behaviour of complex systems through modeling. He believed that economics and the sciences of complex phenomena in general, which in his view included biology, psychology, and so on, could not be modeled after the sciences that deal with essentially simple phenomena like physics [5]. Hayek would notably explain that complex phenomena, through modeling, can only allow pattern predictions, compared with the precise predictions that can be made out of non-complex phenomena [6].
===========

See? Some systems are just too complicated to ever be predicted. Unlike Chaos Theory, complexity theory starts with elements that are individually predictable but that interact in ways that rapidly surpass our ability to model or understand them. The brain is a complex system. So is the economy.

Bottom line is, the question of whether the bail-out will work might very well be literally unanswerable because we can never create an accurate model. There's no way to know but to try it and adjust it as we go along.
 
DOC

But chaotic systems remain within limits, and the influences on them are pretty simple to understand.

Wall Street is easy to understand. It serves two purposes: It provides corporations with money to do business with AND its a casino for lotsa people who believe in getting something for nothing. Its both banker and shylock. It feeds the needs of commerce and addicts.

In the current event the addicts lost their asses and ruined investors. Paulson's solution is to take a trillion dollars of money commerce needs, and give it to the addicts.
 
Yes, the stock market is like the weather -- it behaves as a mathematically chaotic system, essentially unpredictable in its microchanges. But we all know that summer is warmer than winter.

One problem which has emerged in the last twenty years is caused by the high speed and efficiency with with trades are now done. There's very little "damping" in the markets any more, so, like a rigid rather than a flexible structure, it's likely to propagate financial shock-waves more intensely tafter an economic seismic event.

The other problem (related) is that some banks have had relatively naive risk models, particularly with regard to liquidity of complex mortage-backed securities. Any bank left holding a position in a stock that has become tainted with a reputation for being illiquid will be at risk -- which is what has happened recently.

Better models, that incorporate the notions of reciprocity and social networking, will allow better risk assessments. For example, "Co VaR", where a firms' value at risk is a function of other firms value, would have allowed banks to better assess their risk -- the fact that ANY SINGLE bank holds some shitty or illiquid assets like subprime mortgages should in effect increase the risk of ALL banks -- which again has happened recently.
 
The pork-barrel element of the bail-out wouldn't work in the UK.

It is bribing your elected representatives with YOUR money.

It would breach the UK's parliamentary ethics system. If a UK elected representative has a personal interest in the result of a vote, they are required not to speak to the proposal nor vote on it. If they have a financial interest in the result they must not be in the chamber when the proposal is being discussed.

Og

Og, Parliamentary systems are not inherently more ethical . Australia's government is a parliamentaty system but is organised on a federal basis like the USA with a constitution allocating federal/state responsibilities.

However the allocation of funds to the states in Oz is thoroughly corrupted by the politicians to suit their own ends. It may not be so bad because the strength of the Whips in the UK and Australias parliaments mean the individual MP's have very limited independent say on anything. In contrast The US Congress and its members are much more independent of the executive.

Which is better or worse , seems a bit of a tossup to me.
 
All this made me go read up again on Complexity Theory, the theory that attempts to deal with systems that are too complex to predict. Found this little quote on Wkipedia:

==============
....

Complexity and modeling
A way of modelling Complex Adaptive System

One of Hayek's main contributions to early complexity theory is his distinction between the human capacity to predict the behaviour of simple systems and its capacity to predict the behaviour of complex systems through modeling. He believed that economics and the sciences of complex phenomena in general, which in his view included biology, psychology, and so on, could not be modeled after the sciences that deal with essentially simple phenomena like physics [5]. Hayek would notably explain that complex phenomena, through modeling, can only allow pattern predictions, compared with the precise predictions that can be made out of non-complex phenomena [6].
===========

See? Some systems are just too complicated to ever be predicted. Unlike Chaos Theory, complexity theory starts with elements that are individually predictable but that interact in ways that rapidly surpass our ability to model or understand them. The brain is a complex system. So is the economy.

Bottom line is, the question of whether the bail-out will work might very well be literally unanswerable because we can never create an accurate model. There's no way to know but to try it and adjust it as we go along.

So not only are you a "don't know," you know you don't know, dont ya know.:)
 
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