Secretary Hank Paulson revealed on the Sunday talk shows – that “stabilizing the markets” will be the first priority in the saving of our economy. What is extremely worrisome will be opening the deep pockets of the Federal Treasury to virtually anyone that “says” what the Feds should be buying! Who will be the great oversight committee in the sky: that determines which “worthless stock” should be propped up and bought, without any fiduciary ramifications, including giving the very brokers that profited wrongly in the first place….another huge brokerage fee ….for making the transaction! This is certainly a time when a “$3 dollar trade” limit should be put in place! Freely, giving brokers upwards of 22 percent for trading fees and then letting them make those trades with added Administration fees – and from the very people who caused the debacle in the first place….is a terrible thought!
Government programs are renowned for waste! The $200 dollar hammer and the $400 dollar toilet have been around since the 1960’s! What can we the citizens expect now when the Govenment opens their Kimono to a group steeped in Greed 101? Secretary Paulson was also quick to mention that it will not just be our home grown Investment Banking entities that are to be saved ….it will also be the International types that happen to have offices in the United States. There seems to be an “inter-connectedness” that extends beyond our borders! How big might that Grizzly Bear be….in the room?
Does it really matter how much this bailout is going to cost? Does it really matter who gets how much? Does it really matter that we are beyond panic? Paulson gave us a quick peek under sheet….it was scary. Paulson began talking about the “Mortgage Market”….and how the Government will be buying up properties and then trying to sell them. Our question of course is, who is going to buy these distressed properties that the Government buys? How much will they pay and how much will they recover from what they pay?
The big kitty in the box Paulson revealed was the fact that the present “credit freeze” could cause all the 401K’s, Pensions, Retirement Funds and Credit cards from working! Now you are talking “real problems”. Can you imagine if you went to the store and your credit cards all stop working? That would probably get someone’s attention..wouldn’t it?
Getting back to the methods that will be employed in “saving our economy”: Panic should not be the number one concept! Buying worthless paper from whatever Investment Bank that wants to sell……..should not be our first reaction! Qualifying Sales….will need veracity….you would think! Accountable behavior should not be expected by those invovled….it should be demanded. Paulson is desperately afraid to ask for “Punitive action” for wrong doing in making these trades to the government. Paulson seems to be praying that enough cash will get to the right people and that the circular flow of wealth..will not all wind up in some “Off Shore Bank”! What we need to do is hire auditors like crazy….and make these people at least go through a cursory review before collecting the Government cash.
Government oversight is certainly an anathema most of the time. In this case……we need some….any kind……and someone we can later go to and say: “You didn’t do your due diligence…did you?” There is no plan to save homeowners that want to stay in their homes and there is no plan to limit how much Investment brokers can make on these forced trades.
We all can now pray…..after all…it is Sunday! The results of our prayers will be known by next Friday!
For 10% of the bailout we could have a single payer health care sytem like other advanced countries, but that would be “Socialism”. So where does the take over of the credit and investment system leave us – in the same boat as Albania? or where?
*Larry sir….
Time will tell. The talk on the street is that the brokers will be having a field day for a while….until everyone sees how much cash their are making on the backs of people with 401k’s, Pension and Retirement Plans…….then…there may be hell to pay. Let’s hope the Congress in its great wisdom cuts that stuff off at the pass ……in the beginning.
It really is a “catch 22″…..if they move too slow….we will crash……and
if we move too quick……we will pay a horrible price…..and then crash!
This should be a “segmented” rehab…….Mortgages first…..then Hedge and Derivatives…..then 401k’s, Pensions and Retirement plans….but
we will see…what we will see.
I’m gonna take me two suit cases to the federal reserve bank bail out party, Me gonna tell’em I spend all my money and got nutin to show fo it. Please fill me suit cases with money and make me happy.
Every bailed out banker should go though an IRS audit. Also the losses or missing cash should be traced to the pocket it ended up in.