Original entry posted: Thu Oct 2 02:54:46 2008
@ Thu Oct 2 04:47:53 2008 EST
The Subprime Primer is a 45-slide presentation that uses stick figures to explain the present economic meltdown as the world slides into depression fuelled by $500 trillion worth of toxic derivatives.
The sad choice is either economic depression or hyperinflation. Enact the wrong policies and we'll get both. In times of panic, legislation like the Patriot Act gets passed because people are too afraid to read the fine print for the sake of expediency and America dies a little more for short-term comfort. The bailout will good for a few months but it does not eliminate the structural flaws of our financial system and rewards poor behavior. The last thing I need is to be unemployed AND spend 12.00 for a loaf of bread.
Top 5 Reasons to Vote Against Wall Street's $700 Billion Bailout
@ Thu Oct 2 04:49:04 2008 EST
“If the root of this problem is people not being able to pay off their mortgages, and those defaults then devaluing banks' mortgage-backed assets, then simply helping people pay their mortgages would preserve the value of the mortgage-backed assets and recharge the market with liquidity.”
Bingo! While I am against a bailout (which raises the specter of hyperinflation due to excessive growth of the money supply and rewards poor behavior), this is a far better alternative than what was on the table if Congress continues to pursue this course of action. Derivatives such as Collateralized Debt Obligations (CDOs) are garbage if the underlying stream of cash flow from the assets is interrupted. It would make these financial instruments more secure and help stem the flow of excess housing inventory. In addition, a few regulator reforms - especially in the area of Credit Default Swaps (CDS), which is largely unregulated - would be nice.
@ Sat Oct 4 16:51:28 2008 EST
Hey, sorry I'm so late commenting. Let's hope it turns out okay now that they've passed the bailout measure.