Archive for September, 2008

Would You Buy a Used Car from these People

Tuesday, September 30th, 2008

Would you buy a used car from any of the following:

Speaker Pelosi

Senator Dodd

Congressman Franke

President Bush

V P Cheyney

Senator Reede

Chairman Bernanke

Treasury Sec Paulson

I wouldn’t. so why would I trust them with $700 billion  of my fellow taxpayers money?

A Convenient Little Lie, The cost of the Bailout

Tuesday, September 30th, 2008

They keep telling us that the cost to taxpayers will be much less than $700 billion, and might even turn into a profit as these distressed assets increase in value over the years.

Lets take a quick look at these so called” DISTRESSED ASSETS”. What qare they in real terms?

This bad loan crisis has been precipitated by affirmative action, forcing the banks including Fanny and Freddy to make loans to low income families, that could not really afford the payments. When property values began  to drop, and economic times became slower, they were n ot able to pay their mortgages.

The houses in low income areas were the first to default, and to fall into  reposession.

MOST OF THE DISTRESSED ASSETS ARE ABANDONED OR FORECLOSING HOUSES IN POOR NEIGHBORHOODS.

The problem is, once those neighborhoods are abandoned, the properties fall into disrepair, and might not recover…ever…

The distressed assets become DISTRESSED ASSETS,  and eventually become huge writeoffs.

Sorry Charlie, this is the truth, not a  convenient lie!!!!!!!!!!!!!!!

The bailout is just that, A Bailout

Sunday, September 28th, 2008

This $700 billion bailout is an open license to steal.

This $ 700 billion bailout  is a big bandaid, covering up some  incredible lies.

This $ 700 billion bailout is based upon a great many misconceptions and some extremely partisan posturing.

This $ 700 billion bailout is a bailout, defined as getting someone out of a problem.Why do I have to pay to get some very slick, wealthy  deliberat  thieves, get out of a tight spot.

Why do I have to prevent them from taking a loss .They knew what they were doing.

At least the Higher Ups (HU’s) knew. They knew the books were being cooked.

The Fanny and Freddy bosses  knew.

The Merrill Lynch , Bear Stearns, Goldman, et al knew.

The pretty earnings reports and optomistic  projections  were based upon faulty foundations.

Explain why they are being shielded from loss.

Why can’t we become a new bank, and make the  banks that need money  come to Our Bank to borrow money.

If necessary let them come to Our Insurance company, and purchase mortgage insurance to help guarantee their portfolios.Why do we have to give the money away. Let the guilty pay for their duplicity.

Of course, Our Insurance company would provide mortgage insurance to the homeowners who are in distress.

Of course developing domestic sources of energy, including off shore drilling, utilizing the oil shale reserves,and  developing Alaskan natural resources as well as our huge natural gas reserves.

We could utilize some of those billions we are throwing around to  fund research into wind, gasahol, solar, etc. et al.

We are fixing a problem by throwing cash at it. I say lets keep the cash and fix the problem for now, and for the future.For this type of price tag, the fix must be permanent.

  

The death knell of an economic generation,We did it to ourselves

Saturday, September 27th, 2008
An Economic Generation is About to End

by

Charlie Champion

The 1980’s were certainly “the good old days”.

Beginning inthe early 1980’s, newly elected President, Ronald Reagan, began implementing hisconservative,Kenseyan brand of economics, labeled ” Reaganomics”, as an immediate responseto the morass that was the U.S. economy,as bungled by Jimmy Carter.

Thanks to the Carter administration’s incompetent provincial leadership, theeconomy was experiencing a high rate of inflation, a high level of unemployment, and very little growth A situation known as Stagflation.

.Interest rates in the upper teens.were a stranglehold on any potential growth.

Our bungled mission in the desert of Iran was a National embarassment.

In general the U S economy and national psyche were at historic lows.

In a multipronged initiative, Reagan’s team worked to reduce taxes and restrict Government spending. This had the effect of forcing more spending into the private sector and encouraged the return of the entrepreneurial spirit.

To further nurture this renaissance spirit, he reduced government regulations, helping to make the business climate more user friendly than it had been under the Carter administration.

The two linchpins of this economic initiative were the manipulation of the money supply, and adjustment of interest rates to control Inflation.

To orchestrate this, Reagan nominated Alan Greenspan to be Chairman of the Federal Reserve.

President Reagan was forced to pull the Democrats along, kicking  andscreaming .

Lowering taxes and reduced spending were difficult concepts for “tax and spend” Liberals to grasp ..

Reaganomics proved to be a successful economic system for its time.

Under the bi partisan leadership of Federal Reserve chief ,Alan Greenspan, our economy has survived several “bubble” disasters,and sustained an upward standard of living for the American people.

 Despite these periodic spikes of excessive speculative expansion, the economy has continued to thrived for almost 25 years, due to the Federal Reserve’s increasingly excessive application of monetary manipulation.

The key to understanding the disaster which we now face , is comprehending the methodology which the Feds have employed.to manipulate the economic currents.

Historically, the free enterprise system, has involved several years of expansion, followed by a year or two of contraction. This enabled the gains can be digested, consolidated, and readied for the next economic growth.

There is a certain rhythm to this type of ebb and flow. An economic logic, which keeps speculation in some framework of caution and helps to limit too much excess.

If you go too far you can get wiped out.”If you play the tune (toon) you better be prepared to pay the piper”.

The methodology of having the Government bail out failed or flawed industries, graduated from smaller, strategically necessary actions, like saving the airlies, or the domestic automotive manufacturers, to more serious and questionable actions.

The list is extensive, and the bail outs have become more and more intrusive.

The excesses of speculation have been protected by various public bail outs. We have printed money by the ton and manipulated the interest rates to mitigate the pain of those excesses.

These government actions have made it easier for speculators to take certain risks, providing a “down side” , safety net of public money , to ease the pain of failure.

The progression of small bailouts culminated with the stock market . Com meltdownin the Spring of 2000.

To ease the pain of the Market collapse,and the subsuquent 9 11 disaster, interest rates were dropped too low (1%) and held there or too long. This low cost, plentiful money, led to the housing boom in the United States. This boom quickly grew into an enormous bubble, fueling a World Wide expansion.

 The Housing Bubble here has become a Global bubble of credit , liquidity, andmassively undercollateralized monetary lending vehicles, and funding institutions.

This has been a grave and irresponsible miscalculation of the effects of prolonged low interest rates and easy money , when used as a method of controling the economic cycle..

Easy , cheap credit, was nourished by the deregulation of the banking industry. The lowered lending standards and collateral requirements,championed by Congressional Democrats, Alan Greenspan, and the Federal Reserve encouraged excessive speculation in construction and residential real estate.

What had been a major good policy in its inception, has rolled into larger and larger bailouts.

We are paying the price, now, but the worst is still to come.The Freddy and Fanny bail outs, and the Wall Street open invitation to feed at the trough/Fed, bodes ill for the future in terms of inflation and liquidity.

Home ownership for everyone, regardless of credit or income.

No income check or income verification.

Fanny or Freddie will buy your paper.

Real Estate will only go up.

Leverage the loans.

Borrow, borrow, the sky is the limit.

Don’t be the one left holding the bag, when the ponsy scheme collapses.

Keep cooking the books, it will be years before anyone figures it out, and we’ll be long gone with our multi million dollar bonus’s and golden parachute’s.

CRASH BOOM.!!!

They all fall down,

 

Stagflation, a 2 ton gorilla in a business suit

Friday, September 26th, 2008

I know, I have been warning about stagflation for almost a year now. You can read several of my blogs concerning this serious situation.

Today , I am hearing the S word mentioned by several perceptive prognasticators. and it doesn’t make me happy .

I want to be wrong!!

High interest rates.

Zero, or negative growth.

A falling dollar, and rising prices.

Not a pretty picture.

A different option for a bailout

Wednesday, September 24th, 2008

I havn’t heard this option, but perhaps there is another genius around with the same thought process.

The purpose of this whole bailout proposal, is to help people keep their homes, and to mitigate the impact of defaulted loans on the financial markets.

I propose that the super fund, $70 Billion be used to create a new, taxpayer owned bank, run by a special bipartisan group of people with impeccable reputations and banking knowledge.

Let this new bank deal directly with homeowners who are in danger of loosing their homes.

These new bankers will have the power to negotiate new mortgages, based upon lower fixed rates and current market value of real estate.

The New Citizens bank will take precedence over the original bank, and the property will be purchased and refinanced at  current fair interest and purchase prices.

The original banks will be forced to accept the new purchase price, and payout of lower property value.  In the case of homes being worth less than the original banks mortgage investment, the bank  will have to take a loss. Then they will be able to retire the debt off their books.

The new bank will be able to act as a responsible banking institution, and based upon current interest rates and real estate prices, they will be able to turn a profit, and supply a new cash flow benefit to the entire banking system.

The Old institutions will be punished by bad debt, the public will be able to maintain their homes, and the super bank will be able to turn a profit to the Treasury.

Turn a profit for the Government ? Who ever heard about such a radical idea.!!!!

Do not bail out the thieves-Is there a conflict of interest?

Wednesday, September 24th, 2008

You couldn’t make this stuff up. The Secretary of the Treasury, a gentleman named Paulson, was employed by a company called Goldman Sachs.

 His job title at Goldman was C E O . I may be getting a little confused, but CE O used to stand for Chief Executive Officer.  The Boss.

 He left that job(some job) to become Treasury Secretary, a few years ago

Now correct me if I’m wrong, this banking crisis has been brewing for several decades, apparently overlaping some of Mr Paulsons time on the job.

Doesn’t that mean that he is somewhat complicit in what has happened?

It also strikes me as a somewhat unusual coincidence, that Goldman Sachs is the” Last Man Standing” , and is  positioned to generate  huge amounts of profits from this proposed bailout.

WHAT!!!! I’m sure that this is all just a coincidence. “Dumb luck” . as they say.

Why can’t I have that type of dumb luck??? I guess I should have stayed on The Street, instead of leaving for other opportunities. Who knows, perhaps It could have been me as recipient of a bail out, or possible and tragically I could have chosen to work at Bear Stearns or Merrill , or one of the others, and would be forced to live on lesser bailouts.

 A few hundred million would at least enable me to get by.

Do not bail out the thieves-Is there a conflict of interest?

Wednesday, September 24th, 2008

You couldn’t make this stuff up. The Secretary of the Treasury, a gentleman named Paulson, was employed by a company called Goldman Sachs. His job title at Goldman was C E O . I may be getting a little confused, but CE O used to stand for Chief Executive Officer.  The Boss. He left that job(some job) to become Treasury Secretary, a few years ago Now correct me if I’m wrong, this banking crisis has been brewing for several decades, apparently overlaping some of Mr Paulsons time on the job. Doesn’t that mean that he is somewhat complicit in what has happened? It also strikes me as a somewhat unusual coincidence, that Goldman Sachs is the” Last Man Standing” , and is  positioned to generate  huge amounts of profits from this proposed bailout. WHAT!!!! I’m sure that this is all just a coincidence. “Dumb luck” . as they say. Why can’t I have that type of dumb luck??? I guess I should have stayed on The Street, instead of leaving for other opportunities. Who knows, perhaps I could have been me as recipient of a bail out, or possible and tragically I could have chosen to work at Bear Stearns or Merrill , or one of the others, and would be forced to live on lesser bailouts. A few hundred million would at least enable me to get by.

The Bailout , wrong wrong wrong!!!

Wednesday, September 24th, 2008

Giving the Robber Barons of Wall Street 7ooBillion- 1 Trillion dollars would be the mistake of the century. Better to put your baby chickens in the Fox’s den for safekeeping.

The blame for this fiasco is widespread, and began in the late 70’s with the relaxing of investment regulations, was pushed along in the mid 90’s with the push for universal home ownership, and was shoved  over the edge with relaxation of Wall Street regulations.

Turning brokerage houses into banks with the ability to lend money and the desire to invent exotic financial instruments has fueled the conflagration.

When the government insisted that mortgages must be granted to people because of their color or ethnic background, without any care about their ability to make payments, the ice was spread on the slope.

When non income check, low interest, baloon payment, and adjustable rate mortgages are advertised and promoted regardless of any fiduciary restraint, the trumpet of danger is blasting!!!

I have some ideas .

Perhaps a different perspective.

I say do not bail these low life thieves out of trouble.

My plans and thoughts later today.

The bailout is inflationary, actually a positive

Tuesday, September 23rd, 2008

This bailout fiasco for a trillion dollars plus or minus a few hundred billion, will require the printing of more money, which is an inflationary action.

The government will own a whole country worth of real estate, which will now increase in value due to the above mentioned printing of money/ inflation.

Who will own all these houses that actually become more valuable doe to the inflation caused by the action of  the bailout, and the printing of all that money.

Makes you think

Someone is gonna clean up.

We’re talking hundreds of Billions.

WOW!!!!