I was chatting on the phone with my brother a few minutes ago about the bailout plan.
I'm sure neither of us had anything truly insightful to add but I asked one rhetorical question that had Larry laughing out loud so I thought I would share it here.
No matter what you think about the bailout, is there anyway possible the gang on the banking committee is going make it any better?
Proud Member Of
Random Roger
© 2009 | Gadget Theme Blogger Template
Original WPtheme By Blogger Template | Converted By Gadget Lover
| Distributed by eFree Blogger Help
Original WPtheme By Blogger Template | Converted By Gadget Lover
| Distributed by eFree Blogger Help
13 comments:
Answer: No.
But then, you knew that.
Or maybe just by holding hearings they'll prevent the original ad-hoc proposal from getting passed (good) and give the markets time to do some more of that "price discovery" that Helicopter Ben thinks is so vital. I'm not convinced the bailout is truly necessary, so the longer the bloviators debate it, the better. If the critical actors in the market know the gubment will always bail them out, where's their incentive to realize true values on their assets?
The way I see it. $700B bailout. 300M citizens. That's $2333 per person. Seems to me the money would be better off in our hands.
I hear the cost per person will be apprx $6000.00. By the way what does Buffett know that nobody else does. Investing billions in Goldman right now is very curious. I know he's got an option for $115.00 a share, but a few days ago GS was trading at $85.00.
BWJR
Well, you guys have it wrong. The $700B doesn't just get given to banks. It will be swapped for bonds ( mortgages ). A "bailout" is a handout. All they want to do is get these bonds off the balance sheets of the banks so they can not have to worry about having to mark to the market.
Duh.
Would you guys rather all the banks fail? Where would you cash your $2333 check?
In answer to Roger's question, it IS scary that these senators are our banking committee. They know about as much about banking and finance as my dog. No wonder it is all screwed up.
Yes, I would rather have the $2333 x 5 for each of my family members. Let the banks fail. This is supposed to be a capitalistic economy and a democracy. Seems more like socialistic fascism to me.
The fact that this $700B option is on the table simultaneously with an FBI investigation raises my eyebrow.
Well they will have the best that money can buy. A historian intellectual, a financier, a politician, a trader, a banker. Maybe they could do without one or two of the aforementioned. Make for a simpler financial environment, where we reduce the highs and the lows are also reduced. Stick to the rules a bit more firmly but still welcome suggestions from a larger second tier of advisers.
Maybe use performance-related wages responsibly, where you will be recognised for a great decision 5 years ago, even if your recent policies have been mis-judged, rather than only targeting your next 12 month assessment.
The problem is we take each other at face value, and so we always mask how we are feeling and performing in the present. We disregard how another person has been performing and returning value in the past because they've already been rewarded for that. An individual may have a great talent but be put in an untenable situation and have their performance rated downwards because they only made average of a bad situation, which they might only partially have anticipated.
And then there is the small matter of an election coming up; sure to ignite many fuses. The media has cottoned on to the fear and panic we are all feeling, in one way or another, and are using these emotions to their advantage. Which of course they will always do, regardless of the economic climate. So someone who's declaring 'it'll come good' or 'this has happened before' will be judged against this media onslaught unless you're someone like me who takes an unhealthy interest in economics (compared to my career).
My brother was asking me about buying gold and adding to his HBOS shares (via the dilution) a couple months ago. I made disproving noises on both instances, citing they've both come a long way and it's too late to sell and too early to buy. 'Hang Fire' or 'Sit on your hands' and just get along with your life, ignoring these mad markets would be my response if he'd poked a stick in my cage.
I knew this month would be a tough one, intellectually speaking. The overall 'sell' message has been striking my psyche everyday. Not a nice feeling but I knew it would come and so I'm not going to turn. This investor isn't for turning.
J.UK
here is a rhetorical question for you. Would your fire fighter buddies rather trust the economy and the $700 Billion to the Morgan Stanley's CEO or to the Senators on the committee?
Paulson's proposal had evolved, prior to the hearings, to include ALL risky assets, not just MBS, and to ANY COMPANY that does "substantial" business in the USA, not just US companies.
In other words not only would you be bailing out Morgan Stanley but the Chinese, Kuwaiti and Saudi investors that bought the toxic MBS as well.
I understand why Paulson is so eager to have Main St. bail out Wall St... i do not understand why you would be in his camp.
Hi,Roger!
My name is Caren. I have a credit card website that offers a lot of credit cards for various purposes.
I find your site http://randomroger.blogspot.com interesting and would like to have my website reviewed in one of your posts.
Please let me know if you are interested and how much you charge via email carenwilliams@gmail.com
Thank you for your time,
Regards,
Caren.
to anon 6:07
http://tinyurl.com/3znepm
Roger,
I was wondering if you could write a post about a specific theme of the bailout. Everyone says that if the plan doesn't go through then we are headed for a great depression.
I think I have a pretty good handle on things but I was hoping you could spell that theory out a bit more.
I understand that the major banks will continue to have trouble lending money. This in turn makes it harder for both big business and small business to expand and makes it harder on them to pay off existing debt as rates rise.
I also understand that business will lay off people and pensions will be reduced and the problems that those issues raise.
So the economy slows down and earnings growth slows to a crawl. But do earnings stop all together? Is that we how we get to the depression? Are we so dependent on constant growth that we can not survive stagnation and retrenching of business without going into a depression?
Like I said I am as worried as the next guy I just need help seeing the next step that leads us from an economic slow down / recession to the next Great Depression.
Peter that might be a problem for a couple of reasons.
One I'm not that bright and two I cannot sort out the extent to which we are being sold on something versus the reality of that thing. My comments have been "the markets expects it" or "regardless of what anyone thinks."
i do think that with a little more proactivity they could have got things back on the road to wellville with a little less money.
sorry.
Post a Comment