Posted on 09/24/2008 8:56:33 PM PDT by zeppenwolf
Like many of you, (I think), I have the deepest respect for Dubya.
I don't just think, I know that history will treat him very kindly, (what the heck ELSE were we going to do with the middle east, just ignore it?!?). I know that he is a very deeply religious and decent man. (Being religious isn't a requiremnt-- I'm not, in any conventional sense, but it's indicative and explanatory, in his case).
Anyway, as much as I support him, he made me want to put my foot through the radio today:
"But these are not normal circumstances. The market is not functioning properly."
Excuse me?!? WHY exactly would the market not be "functioning properly" ? Would that be, just maybe, because GOVERNMENT, (hat tips to Carter and Clinton), were goofing around with the market, trying to engineer "social justice" by pretending that ineluctable market forces like the cost-of-risk can just be legislated away?!?
I mean... JUST MAYBE?!?!?
AAAARGHGHGHG!!!!
The big boys want this bailout to get their stocks up to what they were before the "crisis", so they can cash out at the top, leaving the little people holding the bag again.
The problem is not a few mortgages here and there sprinkled around for affirmative action's sake, it is the Ponzi scheme of derivatives that they've been skimming off the top for years. It's also the fact that American business has lived like government--off of credit, rather than earnings, like responsible American families have. We have ways to deal with an economic downturn now that we did not have in the Great Depression days. We will go back to bartering where possible, and we will rebuild our economy on solid fundamentals, rather than on fairy dust.
Even if this bailout worked as perfectly as Paulson and Bernanke are hallucinating it will, it just puts off the day of reckoning until the Medicare system goes broke, or when the Social Security funny-money securities have to be paid.
Well, I have a couple of paid news services like DOW Jones newswire. I get real time data 24/7. I can't link that for you, but you could use Yahoo Finance, which is quite good, just a bit delayed. Delay is costly for me so I don't use it, but I have in the past.
The investment you noted is not credit market related, it is bond sales to private investors, like Buffet.
Private capital is sitting on the sidelines now, but dipping a toe in here and there when the profit is good.
This has nothing to do with credit markets and bank solvency and lending.
The market is working just fine. The people whose oxes are about to get gored are just crying to be spared from - the normal functions of the market.
The market just needs to find the prices where things (including debt) will clear.
Those prices are lower than today’s prices.
We can rack up a lot of debt just to put off the inevitable price clearing function for a short while.
Not worth it.
You should be getting the picture. This is as bad as I have ever seem it, and I have been around for a while.
Here is the problem with your theory. The current price of the assets in question is ZERO!
They will not trade at that and everyone knows they are worth more.
This is why the market will not work, and the Fed's plan is to go in and buy up a bunch of it, thereby setting a price and restarting the system.
I should have been clearer. The underlying properties are what need to be priced lower.
And if the price is zero, I'm willing to buy a few of those thinngs at one penny on the dollar.
Heck, I'd take a 1000 of them at a dollar a piece. Someone want to sell me some?
Many firms will fail, with the Fed intervention. Of the ones affected, 90% of them will fail without it.
When that works it's way down to you and it will, and is now, everyone will share in the pain.
With all the bruhahaha, one has to note that only 5% of the underlying mortgages have failed. Should the financial crisis spread to the streets, the number will skyrocket.
This is financial Armageddon. It is what it is and there are two choices. Let it happen or try to mitigate it as best as we can.
So deny me a deal of a life time and put me on the hook for more national debt?
Many firms will fail, with the Fed intervention. Of the ones affected, 90% of them will fail without it.
Freedom includes the freedom to fail
When that works it's way down to you and it will, and is now, everyone will share in the pain.
Market clearing hurts sometimes. We've been trying to inflate our way out of this problem since 2002 with ridiculously low interest rates.
In short I'd rather take the pain now than defer it.
This is financial armageddon. There are two choices:
A) let it happen
B) or make it worse, put it off, and let some scoundrels off the hook
One of the first things the Main street will see, is no paycheck on Friday. It takes lines of credit for most medium to large companies to meet obligations.
Credit cards will cease to be, student loans are already beginning to seize up as lenders quit. As the dollar devalues, the prices of food and necessities will jump like a frog, and that will cause more mortgage defaults. Forget buying a car, unless you have a downpayment.
If you want that, then have at it.
My house is paid in full. XCars are paid off, and I am good to go.
you forgot the part where dogs and cats start living together.
When the tide goes out, some get caught swimming naked.
Yeah, I will try to visualize that one.:-)
The reason I put that link up is because I see civil unrest as another shoe to drop.
Thanks for the investment tip.
How long do we keep our AAA rating as Paulson loads us up with debt while helping out his friends?
Governments can tax, and print money, and they have the entire country as a asset in a sense.
We will retain the AAA rating even into a bad recession, but a depression and civil problems would change that.
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