More on welfare for big business and free market for the rest of us.

Pixsurguy · 09-26-2008, 06:20 PM

SECOND THOUGHTS ON WELFARE FOR WALL STREET
AND FREE MARKET FOR THE REST OF US

OK - I have to say "my bad" re the rant I put out the other day about Wall Street getting welfare while the rest of us have to accept the "free market".

I was upset at the time and while I stand by what I wrote, in truth is was mostly of no value. To paraphrase somebody or other, there was a lot of heat, but little light. It raised hell about a plan from the Bush administration, but put forward no alternative. Unhappily, I still haven't got a workable alternative.

I can offer some thoughts that might be worth considering.
Before I do that however, I confess that I am not an economist and never even got to take Econ 101 in college.

In any event, it seems to me that one factor to be considered might be where will the money come from if the government decides to buy the worthless "assets" or merely to loan money to Wall Street so they can attempt to work their way out of the mess. Unhappily, the cash is not in the treasury, so what they'll do is borrow the funds, almost certainly by selling Treasury bonds. We've been doing that for at least the last eight years to finance the deficit. Most of those T bills were bought by foreign governments or financial agencies. Now that we seem to be in such trouble, will those who have bought T bills previously think that we are sound enough to continue to loan us money?

Seems unlikely to me.

The "conservative" wing of the Repub Party torpedoed their President's bail out plan and offered an alternative which, if Wall Street and many economists can be believed, is not workable. Their plan is to create a new governmental agency to look at the suspect mortgages on a case by case basis and try to do a work out, one by one. Not only does that create yet another "govmint" bureaucracy that the Repubs have always decried, but it would take many, many months to accomplish it. As I understand it, all sides at least DID appear to agree that unless the financial market is propped up in a big way immediately, the sky will fall and we'll have a recession or even a depression.

The question that I am not sufficiently knowledgeable about is whether speed is required. Must it be before the market opens next Monday morning? Would the sky fall if they waited until Wednesday? How about the following Monday? I do not know the answer.

If, in fact, speed (whatever that means) is required, it looks like the conservative alternative is not workable.

Anyone have another alternative to offer?

Another thought relates to the the speculation that the government could come out ahead by selling the debt they buy for a profit. It has been pointed out the the Resolution Trust Company did just that on the Savings & Loan debacle of a few years ago. I suggest that there will not only be no profit from purchasing the overall bad debt of Wall Street, but the mere fact that the loans we would buy are already considered to be worthless may be an answer. In fact, even something most would consider worthless often will sell if the price is low enough. The bottom line though is that I strongly doubt that any profit will result from trying to sell bad debt.

Contrary thoughts?

Don'tLikeStinkingThinking · 09-26-2008, 06:50 PM

I maybe out there, but nearly everyone I spoke with about this says, "let's deal with the fall out...why should we allow them to be rewarded for poor performance?"

I don't have the answer or do I? I say let the chips fall where they may!

Pixsurguy · 09-26-2008, 07:22 PM

My wife is retired and has a good 401k account. I'm not, but I have some small amounts in a Keogh account. If the banks do fail by the dozens, as predicted, and we go into a financial free fall, those two retirement accounts won't be worth spit. They depend upon the solidity of the stock market and general health of the economy for their viability.

THAT is why I don't want them to just ignore it and let the chips fall where they may.

Don'tLikeStinkingThinking · 09-26-2008, 07:35 PM

I too have considerable risks, I moved as much as I could. But I will not allow (lmao ok I don't want) this to go the way of the S & L besides they are two different birds.

I had four houses some ten years back and frankly I could have bought ten more, they were so loose in the paperwork. I bought and sold in the right market, lucky me or good thinking on my part whatever the case, I knew as did any mortgage broker knew they were setting the economy up for a big fall. Now venture banks are that, they take risks, but I get better returns in Vegas then they have in the last 8 years of risk taking.

The government should take it slow, no blank checks and the more the 'balances' the better. Yep larger government but regulation would have kept 'US' out of this mess!

I am just pissed Pix, pissed off that this old guard talks one way and frankly they have acted against their platform for decades and the stupid fricken public allows to continue. This Presidential race shouldn’t' be a race, I can't believe the numbers at all...it should be fricken landslide, unless the booths are rigged yet again.

I am a country boy and nearly everything I need on a day to day basis I have right here and what I don't have 'the others' have and we barter all the time. I just got 1000 gallons of gas delivered, 1000 gallons of diesel and 1000 pounds of propane. My generator runs well, my windmill runs well and my wood furnace can heat my house and two out building for nearly nothing since I have the wood in my back yard.

So yes, I say let it fall and rebuild but then again I am ready, papa said “Jimmy never trust the government, it is a good system but people are greedy." He knew he retired from the service of this country doing something at the Whitehouse he could never disclose...

09-26-2008, 06:20 PM	#1 (permalink)
Pixsurguy Senior Member Join Date: Aug 2005 Location: Louisville, KY Posts: 14,314	More on welfare for big business and free market for the rest of us. SECOND THOUGHTS ON WELFARE FOR WALL STREET AND FREE MARKET FOR THE REST OF US OK - I have to say "my bad" re the rant I put out the other day about Wall Street getting welfare while the rest of us have to accept the "free market". I was upset at the time and while I stand by what I wrote, in truth is was mostly of no value. To paraphrase somebody or other, there was a lot of heat, but little light. It raised hell about a plan from the Bush administration, but put forward no alternative. Unhappily, I still haven't got a workable alternative. I can offer some thoughts that might be worth considering. Before I do that however, I confess that I am not an economist and never even got to take Econ 101 in college. In any event, it seems to me that one factor to be considered might be where will the money come from if the government decides to buy the worthless "assets" or merely to loan money to Wall Street so they can attempt to work their way out of the mess. Unhappily, the cash is not in the treasury, so what they'll do is borrow the funds, almost certainly by selling Treasury bonds. We've been doing that for at least the last eight years to finance the deficit. Most of those T bills were bought by foreign governments or financial agencies. Now that we seem to be in such trouble, will those who have bought T bills previously think that we are sound enough to continue to loan us money? Seems unlikely to me. The "conservative" wing of the Repub Party torpedoed their President's bail out plan and offered an alternative which, if Wall Street and many economists can be believed, is not workable. Their plan is to create a new governmental agency to look at the suspect mortgages on a case by case basis and try to do a work out, one by one. Not only does that create yet another "govmint" bureaucracy that the Repubs have always decried, but it would take many, many months to accomplish it. As I understand it, all sides at least DID appear to agree that unless the financial market is propped up in a big way immediately, the sky will fall and we'll have a recession or even a depression. The question that I am not sufficiently knowledgeable about is whether speed is required. Must it be before the market opens next Monday morning? Would the sky fall if they waited until Wednesday? How about the following Monday? I do not know the answer. If, in fact, speed (whatever that means) is required, it looks like the conservative alternative is not workable. Anyone have another alternative to offer? Another thought relates to the the speculation that the government could come out ahead by selling the debt they buy for a profit. It has been pointed out the the Resolution Trust Company did just that on the Savings & Loan debacle of a few years ago. I suggest that there will not only be no profit from purchasing the overall bad debt of Wall Street, but the mere fact that the loans we would buy are already considered to be worthless may be an answer. In fact, even something most would consider worthless often will sell if the price is low enough. The bottom line though is that I strongly doubt that any profit will result from trying to sell bad debt. Contrary thoughts? __________________ Thank you Squirtypoo Why am I in this handbasket and where am I going?

Thread Tools
Show Printable Version Email this Page
Rate This Thread
Rate This Thread:

09-26-2008, 06:50 PM	#2 (permalink)
Don'tLikeStinkingThinking Member Join Date: Jul 2008 Posts: 1,998	I maybe out there, but nearly everyone I spoke with about this says, "let's deal with the fall out...why should we allow them to be rewarded for poor performance?" I don't have the answer or do I? I say let the chips fall where they may!

09-26-2008, 07:22 PM	#3 (permalink)
Pixsurguy Senior Member Join Date: Aug 2005 Location: Louisville, KY Posts: 14,314	My wife is retired and has a good 401k account. I'm not, but I have some small amounts in a Keogh account. If the banks do fail by the dozens, as predicted, and we go into a financial free fall, those two retirement accounts won't be worth spit. They depend upon the solidity of the stock market and general health of the economy for their viability. *THAT* is why I don't want them to just ignore it and let the chips fall where they may.

09-26-2008, 07:35 PM	#4 (permalink)
Don'tLikeStinkingThinking Member Join Date: Jul 2008 Posts: 1,998	I too have considerable risks, I moved as much as I could. But I will not allow (lmao ok I don't want) this to go the way of the S & L besides they are two different birds. I had four houses some ten years back and frankly I could have bought ten more, they were so loose in the paperwork. I bought and sold in the right market, lucky me or good thinking on my part whatever the case, I knew as did any mortgage broker knew they were setting the economy up for a big fall. Now venture banks are that, they take risks, but I get better returns in Vegas then they have in the last 8 years of risk taking. The government should take it slow, no blank checks and the more the 'balances' the better. Yep larger government but regulation would have kept 'US' out of this mess! I am just pissed Pix, pissed off that this old guard talks one way and frankly they have acted against their platform for decades and the stupid fricken public allows to continue. This Presidential race shouldn’t' be a race, I can't believe the numbers at all...it should be fricken landslide, unless the booths are rigged yet again. I am a country boy and nearly everything I need on a day to day basis I have right here and what I don't have 'the others' have and we barter all the time. I just got 1000 gallons of gas delivered, 1000 gallons of diesel and 1000 pounds of propane. My generator runs well, my windmill runs well and my wood furnace can heat my house and two out building for nearly nothing since I have the wood in my back yard. So yes, I say let it fall and rebuild but then again I am ready, papa said “Jimmy never trust the government, it is a good system but people are greedy." He knew he retired from the service of this country doing something at the Whitehouse he could never disclose...