Wednesday, October 15, 2008

Twirling Towards Freedom!

"We must move forward, not backward, upward not forward, and always twirling, twirling, twirling towards freedom." - Kang as Bill Clin-ton.

This is about as cromulent a statement as what's been coming out of the Fed and Treasury of late.

One day, I'll talk about poker again, I promise. But nobody's interested in how much I hate Full Tilt these days.

Dow's down 340 points right now, TSX down 316. Wow, that upswing lasted an even shorter time than I expected. Oh wait, I never thought it was an upswing, I thought it was pure volatility and knee-jerk reactionism. Not that the stock markets are any real indication of the economy as a whole.

Here's the breakdown for the bailouts that have been proposed... well, everywhere (except maybe Canada, which, incidentally, now has the strongest banking system in the world and is best-positioned to weather this storm). There's the e-mail about monkeys, and the Sinfest comic with transforming ATMs (can't view Sinfest at work... grrr). Basically, the taxpayers are being forced to bail out private corporations in the HOPE that these banks will then LOAN the money back to the taxpayers. Yes, if performance improves, then these bailouts will actually make money for the government, but do you really think that will be returned in the form of a tax credits? $10 TRILLION national debt? I don't think so.

What really bugs me though is the manner this latest bailout of $250 billion worked. Paulson brought in 9 big bank heads and FORCED them to sign an agreement that sold the government preferred shares with defined terms. No choice. The head of Wells Fargo (Richard Kovacevich) apparently protested, saying his bank didn't need the help... but in the end, they all signed. There was no option to say no. It took 3 hours, but in the end, Paulson got what he wanted.

They claim it's "voluntary", but that's just not the case. Maybe if you're a small bank, but not a big one apparently.

How can this not sit terribly with anyone? On top of that, it doesn't force anyone to LEND a dime. So they're forced to take money, but not forced to give it back. Honestly? They shouldn't be lending anything... leverage, credit, loans, and government interference is what caused this mess, how does more of the same fix it?

The rhetoric about helping the housing market, increasing liquidity, restarting credit flow, economic expansion.... it makes me sick. I'd have never thought any administration could do this much damage at the VERY end of a Presidential term.

Bernanke is blabbering now... and everything about him screams "I don't know a damned thing right now, here's what I've been told to say." He's tired, haggard, and full of shit.

1 comment:

Julius_Goat said...

When I was a boy, I wanted to be a baseball.