Bailout, anyone?

Here's a great article on the bailouts and how things could be made better for the long run with some simple changes to the banking system.

A chronicle of how GM got to where it is today. The company basically shot itself in the gut and has been internally bleeding to death for a long time. I really hope they sell the Saturn brand to someone that actually runs their company well as I like those cars. I was torn between Subaru, Honda, and Saturn when I was looking at cars last year.

Hilary Clinton lost the last bit of respect I had for her

In an op-ed piece in the Wall Street Journal, Hilary Clinton has decided to follow her husband's ill-conceived rhetoric of 'everyone deserves a house' whether they can afford one or not.

"I've proposed a new Home Owners' Loan Corporation (HOLC), to launch a national effort to help homeowners refinance their mortgages. The original HOLC, launched in 1933, bought mortgages from failed banks and modified the terms so families could make affordable payments while keeping their homes. The original HOLC returned a profit to the Treasury and saved one million homes. We can save roughly three times that many today. We should also put in place a temporary moratorium on foreclosures and freeze rate hikes in adjustable-rate mortgages. We've got to stem the tide of failing mortgages and give the markets time to recover."

First off, the government's purchase of the bad mortgages in 1933 helped to continue the artificially high prices in the real estate market, thus delaying the inevitable recovery of the market and lengthening the Great Depression. Prior to the depression we had the same immense credit expansion in the 'roaring 20s' that we saw in the late 90s before the tech collapse, and again in the early 2000s leading up to our current debacle. Apparently no one pays attention to history.

So Hilary wants to make sure that no one that lied about their income to get a mortgage will get kicked out of their homes, like they deserve. Instead, those people that know their limits and either didn't buy houses or bought homes they could afford must subsidize these morons. Basically we get to expand the disgusting entitlement welfare state we have. Thanks, Hilary.

Politicians in the '30s were in love with the idea that there should be a 'home on every lot' because they reaped the benefits of those policies when voters went to the polls. Of course, the average voter was too uninformed to realize that the increased demand for housing was causing home prices to rise, thus reducing the value of the subsidies that the Federal Housing Authority was handing out. So this was the same thing Bill Clinton did during his tenure.

The markets need to be allowed to recover on their own, but "free market" and "capitalism" have become dirty words in this country, so big government is supposed to come in a keep these big bad capitalists from ruining our country. Answer me this: since when did the government gain the credibility to protect our interests? Do people honestly believe that government regulation will make things better? When has the government ever regulated something for the interests of the people instead of their own?

Also remember, the Federal Reserve prints our money and is not part of any government institution, but the Constitution states that only Congress shall have the ability to coin money. Instead our money is printed by a banking cartel. But that's all a topic for another time....

Finally...

congress does something right. No bailout. That's all I have to say. Hopefully they won't just roll over on the next bailout proposal that's sure to come. At least for once I can say my politicians acted the way I wanted them to.

Another day, another bailout, another set of financiers saved from consequences at our expense

So the government (which of course means you and I) has bailed out AIG. The moral of this story is that if you or I make stupid, bonehead investments because of the potentially high yeild, we can be fucked by the market, but if you are a bank/mortgage lender/insurer/other fianancial institution, you can make all the money you want on high risk/yeild investments and never face the consequences of your risks if they go sour.

If is NOT in the public's best interest to prop up insolvent institutions, like the Fed says it is. This will just lead to another round of malinvestment in the future, more bubbles and busts, more transfer of wealth from us to the already wealthy elite. We need to move toward a monetary policy and system that is stable and protects against John Maynard Keynes' favored system of credit expansion through levereged borrowing that leads nowhere other than inflation. The elite have been manipulating the system for far too long to get the wealth out of our hands, and it's working beautifully. The sad thing is, no one seems to notice or care.