Do you think bailing out Goldman, Citi, Bear Stearns and the like for putting together these garbage maortgage backed securities is the right idea? To re-inforce bad behavior with a Fed bailout only encourages more risk down the road.
What the President should do immediately is issue and executive order opening ANWR and our coastal waters to oil development,. Simultaneously he should declare Venezuela a sate sponsor or terrorism and stop importing their oil. Then he should open the Strategic Petroleum Reserve to replace the 2 mil bbls a day from Venezuela. These actions would cut the price of oil by $30 a BBL in less than a month. Venezuleans would overthrow Hugo within six months, because they have no alternate market for their heavy oil. It can only be refined in specialized refineries located in the USA.
The Fed should continue to provide liquidity, but not cut rates. We need to support the $ and like a drunk with a hangover, there is no miracle cure for the pickle easy credit and lax undewriting standards has given the economy. Cut corporate taxes immediately, encourage ALL forms of energy development but ethanol. I would rescind the ehtanol mandate immediately.
If these steps are done, the financial markets will feel lots of pain, but lowering energy prices and commodity prices will cushion the pain to consumers.
There are no easy answers folks, I am 90% in cash since November, and there are many others out there with cash to come in and buy assets and condos in florida on the cheap. Gov’t intervention in credit to loose, interest rates too low, and making us use our food to make ethanol while closing our lands to oil exploration has sent our wealth overseas, ruined the standing of the dollar as the reserve currency of the world, and threatens to undermine our economy. In short gov’t caused this problem, more gov’t intervention in the monetary market will only make things worse. Fed cuts rates but mortgage rates are rising, why do yo uthink that is?
Goldman is doing just fine, unlike those others. No Saudi, Emirate or Chinese cash needed there.
You would pay $5.00 a gallon the next morning, minimum.
We have only 11 months worth at that rate.
“garbage backed securities”, I like that