Moral Hazards and Happy Meals for the Circle Jerk

[HowardRoark]

If FM and FM get 'bailed out' it's essentially a 'loan' from the government. All that means is that they 'make' more fiat currency with the end result being that the dollar is devalued even more. So it's like this massive hidden tax in that every goddamn dollar is worth less than it was the day before. That's the way I see it - did I miss something?

This whole thing stinks like shit. It's a frickin' snowball effect. People with bad loans default, housing in general gets devalued; they bail out Bear Stearnes, the dollar gets more devalued. Now responsible people with decent loans find that their homes are worth far less than the loans - so why keep paying? Add to that outrageous gas prices that are shooting up because there is no supply increase on the horizon and you have a 'perfect storm.' The Congress should authorize off shore and ANWR drilling and push it immediately - it's bad enough that supply is pushing prices, but futures are all out of whack too. Increase fuel costs even more, devalue currency, and lot more people are going to walk away from their homes. KABOOM!!!!

At first blush I would agree with you on the dollar thing, but did you notice the bond market today? It tanked. Rates pushed higher because of what you just mentioned….printing of money for bail outs. If rates start pushing higher, the dollar will finally strengthen too. Once the buck strengthens, we will see oil come down.

But this whole mark to market on these bonds is not good. Balance sheets are UGLY everywhere.

Barack Obama is a Pivot Man, just wait. He will triangulate in three dimensions if that's possible.

[Freak Out]

If FM and FM get 'bailed out' it's essentially a 'loan' from the government. All that means is that they 'make' more fiat currency with the end result being that the dollar is devalued even more. So it's like this massive hidden tax in that every goddamn dollar is worth less than it was the day before. That's the way I see it - did I miss something?

This whole thing stinks like shit. It's a frickin' snowball effect. People with bad loans default, housing in general gets devalued; they bail out Bear Stearnes, the dollar gets more devalued. Now responsible people with decent loans find that their homes are worth far less than the loans - so why keep paying? Add to that outrageous gas prices that are shooting up because there is no supply increase on the horizon and you have a 'perfect storm.' The Congress should authorize off shore and ANWR drilling and push it immediately - it's bad enough that supply is pushing prices, but futures are all out of whack too. Increase fuel costs even more, devalue currency, and lot more people are going to walk away from their homes. KABOOM!!!!

It could come to Congress having to do something like that. They had to do it when we built the Trans Alaska line and they can do it again. Hammer every member of congress from...Colorado? Is that where you live? They should be pro minerals extraction already but who knows.

[Freak Out]

The pivot man! Ha ha....

[mraynrand]

Barack Obama is a Pivot Man, just wait. He will triangulate in three dimensions if that's possible.

I gotta see if I can get a Rubiks cube with the same exact picture of Obama on every side - the new everyman - he's everything to everyone! (plus, he's easy to solve)

[Scott Campbell]

Is it time to make sure that you have no more than $100K at any single financial institution? Or is that overly paranoid?

[mraynrand]

Is it time to make sure that you have no more than $100K at any single financial institution? Or is that overly paranoid?

I just split up my 250 dollars in savings - I put 100 in my sock drawer, 50 in the coffee can, and the other hundred buried in the yard. I'll retrieve them in a week when I need to fill up my gas tank.

[HowardRoark]

I am doing a little list of things we no longer can do on our own, but now need the helping hand of a central government:

1. Retirement planning
2. Healthcare
3. Housing, via mortgages
4. Educating our kids

I am sure I missing some………..

From the Financial Times this AM:

http://blogs.ft.com/maverecon/2008/07/time-for-comrade-paulson-the-pull-the-plug-on-the-fannie-and-freddie-charade/

[mraynrand]

I am doing a little list of things we no longer can do on our own, but now need the helping hand of a central government:

1. Retirement planning
2. Healthcare
3. Housing, via mortgages
4. Educating our kids

I am sure I missing some………..

From the Financial Times this AM:

http://blogs.ft.com/maverecon/2008/0...eddie-charade/

Determine pay scales for all employees across all fields.

Obama wants a federal agency to assign relative worth to various jobs, so as to 'eliminate disparity in pay' between men and women. Hopefully, this will lead to the government deciding all salaries. This will have the added benefit that most businesses will save tons of money by not having to hire a payroll office. The government will figure it all out for every job in the country. Thank you Uncle Sam for lifting this terrible burden off our shoulders!

[MJZiggy]

I can agree with you on housing and education, but I've recently had to deal with supplying my own health coverage and that's not something that someone without a lot of resources can do. If I hadn't gotten my job, I likely would have had to go without and in a non-life threatening emergency would have bankrupted me to get treatment. I think healthcare is one thing that should not be dependent on money.

And the thing about retirement is that while we all know we should do it, not everyone does. Even with work sponsored 401Ks and IRAs how often are we already hearing about 50-year olds who haven't saved a thing toward retirement? So we'll have 80 year olds taking jobs that should be going to younger workers because they can't afford to retire. And the streets will be littered with little old homeless people!!

[oregonpackfan]

Is it time to make sure that you have no more than $100K at any single financial institution? Or is that overly paranoid?

I just split up my 250 dollars in savings - I put 100 in my sock drawer, 50 in the coffee can, and the other hundred buried in the yard. I'll retrieve them in a week when I need to fill up my gas tank.

Sounds like you need to hire a new financial planner!

[HowardRoark]

Cars too?

[HowardRoark]

Damn internets!!!!

That thing sure is big.

[bobblehead]

Is it time to make sure that you have no more than $100K at any single financial institution? Or is that overly paranoid?

If you don't look at the balance sheet I would say that is a good idea. Most banks doing just fine and are in no danger, but I would say it is very likely at least one moderately sized bank could fail.

[MJZiggy]

Is it time to make sure that you have no more than $100K at any single financial institution? Or is that overly paranoid?

I'd say that's a problem I don't need to worry about, and won't for quite some time...

[Scott Campbell]

Is it time to make sure that you have no more than $100K at any single financial institution? Or is that overly paranoid?

I'd say that's a problem I don't need to worry about, and won't for quite some time...

Even if not directly, it will hurt indirectly. The collapse of banking in this country would cripple us.