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Thread: Why Not Let The Consumers Decide?

  1. #1
    Cyburbian ofos's avatar
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    Why Not Let The Consumers Decide?

    It's clear that the economic stimulus plan has devolved into an economic bail-out plan. All that can accomplish is to let the vested interests, both business and political, fight to preserve themselves regardless of what the consumers want.

    Would it really be that difficult to let the consumers have access to the money and let the market sort itself out? Put that money into debit cards for the taxpayers and watch where the $800B goes. No need to create more bureacracies to track and report on the funds. It will all be there on the debit reports. Don't like where it's going because it doesn't fit your political, economic, or moral paradigm? Your industry went under because no one bought your product? Tough s%&t! It actually went where "the people" wanted it to go.
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  2. #2
    Unfrozen Caveman Planner mendelman's avatar
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    You know, my wife and I were discussing this issue just last week.

    Instead of the convoluted distribution of the money - simply split the total $ amount evenly across each adult (and halved for each child) in each tax filing household. That would be something like $13,000 per adult and $6,500 (for instance my household would get about $39,000 dollars).

    If that kind of money was given to the citizens, I firmly believe that would seriously stimulate the economy (especially for the consumer portion of the economy).

    People would surely buy homes, cars, pay of outstanding debt (thereby giving more liquid money to the hurting banks), pay for education, do significant house improvements, etc. Even if some people simply put it into a saving account, that would give alot of money to the banks for lending (provided the Feds created regulations requiring lending to people that are able to pay the debt(s), and not allow the banks to simply horde the money, as is their want. )

    I know that if my household suddenly got $39,000, we would certainly go buy a house and pay off as much of our school debt as possible, and put the kids' money in college savings accounts.

    Though, you'd have to move quickly, because that kind of money coming to every almost household could cause serious consumer price inflation.
    Last edited by mendelman; 16 Feb 2009 at 12:54 PM.
    I'm sorry. Is my bias showing?

    The ends can justify the means.

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    Super Moderator kjel's avatar
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    As I already said in another thread, I would happily accept my 1/300,000,000 part of the fail out to stimulate my own micro-economy. Student loan debt repaid, outstanding credit card bill repaid, some invested, some saved. Liquidity and capital increased on every side of the equation.
    "He defended the cause of the poor and needy, and so all went well. Is that not what it means to know me?" Jeremiah 22:16

  4. #4
    Cyburbian Raf's avatar
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    Quote Originally posted by kjelsadek View post
    As I already said in another thread, I would happily accept my 1/300,000,000 part of the fail out to stimulate my own micro-economy. Student loan debt repaid, outstanding credit card bill repaid, some invested, some saved. Liquidity and capital increased on every side of the equation.
    I am with kim, and would do the exact same thing. But seriously, how would the help the economy again if it is now built behind the back of the service/retail sector? As i was listening to NPR this weekend and reading the economist just one thing will get our economy going again:

    fix the housing market, by fixing the banks.

    We can stimulate this and that, but until we figure out a way to clean up all the toxic debt from bad mortgages and CDS' we will continue with a stagnant and down economy that the econmist predicts will be worse than the forgotten decade that Japan experience in the 90's. http://www.economist.com/finance/dis...ry_id=13110352

    Many of us don't want to nationalize certain banks because heaven help us, it is not the "american" way, but personally i don't think president Obama has the balls to do something so drastic, that would really bring much needed "change and hope" that many americans, including myself, need right now.
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    Cyburbian zman's avatar
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    As much as I decry the consumer economy, this is the best way to get things done.

    I would certainly use this dough to refinance my house, pay off my wife's student loans, and maybe the car. Debt reduction would be key for us.

    Of course, there will be plenty of people who will spend it frivoluously.


    This just goes to show that YOUR government is trusts major multi-nationals more than the people themselves. It is time for this to stop. Take a stand people.

    My elected officials have alreayd recieved 5 pieces of correspondence from me. Their votes are at stake.
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  6. #6
    Cyburbian btrage's avatar
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    Nope. I don't trust the guy next door to do the rational thing, whether that be paying down debt or purchasing goods if they have no significant debt.
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  7. #7
    Cyburbian Planit's avatar
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    With that kind of stimlulus we would basically be debt-free, the house would be paid off and a few improvements would be done. I'd take about 8% and put into savings, but the rest would be spent.

    I do understand what btrage says and would trust several people about doing the 'right' thing. They might spend it on booze or whatever, but that what some of these businesses are doing right?

    I have to agree though that if you run your business into the ground, it should be toughsh!tskis y'all.
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  8. #8
    Cyburbian WSU MUP Student's avatar
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    Quote Originally posted by btrage View post
    Nope. I don't trust the guy next door to do the rational thing, whether that be paying down debt or purchasing goods if they have no significant debt.
    Agreed.

    Besides, if one has no significant debt to pay down and decides to spend their share on iPods and flat-screen TVs, besides a boost for the state in sales tax revenue and helping out the local electronics store, Target, Wal-Mart or whatever, I don't think this will have anywhere near the long-term positive stimulative effects that using the money to invest in some much needed repairs to infrastructure (or even building some new, well-planned infrastructure... light rail dare I dream?), or investing in education (at any level) or health care.

    These types of investments are generally needs... not like an iPod and will have much better positive externalities like increased productivity, potentially lower costs to health care, increased levels of education (and hopefully lower student loan debt for exiting graduates) which would lead to more innovation. Plus, these types of investments will lead to jobs with higher income and better benefits for the workers than would be found in the retail sector. And I doubt a bunch of one-time payments to consumers would produce enough sustained stimulation that would lead to much more than maybe providing a small bump to retail employment numbers.

    All that being said, I wouldn't turn down a nice big check from my Uncle Sam.
    "Where free unions and collective bargaining are forbidden, freedom is lost." - 1980 Republican presidential candidate Ronald Reagan

  9. #9
    Cyburbian illinoisplanner's avatar
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    You know, this spending bill would be great if everybody worked for the government or relied on the government for everything. Look at all the spending: money for people who work in law enforcement and homeland security, money for people on welfare, money for energy, and money for people who build highways for the government. But alas, that is only a small fraction of the people. The majority of people work in the private sector and wish to be independent and provide for themselves. They just want regular jobs and just want to be able to keep their homes and provide for their families. These laid-off white collar workers and union laborers don't want to build highways and a new energy grid for the government for two years and then go back to being unemployed. They want their real jobs back. And who's the government to tell them what to do or decide for them? At the end of the day, the American people are the boss of the government, not the other way around.

    As far as the tax plan...what a joke. Yeah, so we're going to get a couple extra bucks in our paychecks. Wow...enough to go buy a stiff drink and drown our sorrows.

    What the government needs to do is send a massive trillion-dollar tax rebate to Americans and small businesses and rescue the banks and buy up the bad mortgages, but have massive oversight and regulation so they don't spend it on private jets. I might actually be up for federalizing the banks for now and making them private again (but with heftier regulations and oversight) once things get better. The Democrats have botched this thing so bad, it's not even funny. Also, I'm tired of people blaming Bush (and Clinton) for everything. The Obama administration and Democrat-controlled Congress (which has been controlled by the Democrats since 2006) needs to start looking forward and start being held accountable for their actions now.
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  10. #10
    Cyburbian Raf's avatar
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    Interesting thought

    Ok, if you take the current stimulus at 795 billion and divided it out to every tax filing American (based on 2008 files) it would only amount to around $5,000 for each person/couple that filed (if i did my simple math right). Doesn't sound like much does it?
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  11. #11
    Cyburbian CJC's avatar
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    Fix the banks. Nothing gets better until that happens. Everything will continue to get worse until that happens. Neither the current stimulus nor a handout to everyone does this. At least the stimulus will get a little bit of infrastructure built, so my vote is with that. Trying to reflate the housing bubble may give a little bit of life to some of the banks, but why would we want to do that? Reflating a bubble just moves the popping a few more years down the road. Are we going to give people another $13,000 in two years?

    Either through nationalization of some of the banks, or something else similar, the government is still going to burn through another trillion or so just getting the banking system healthy again, so any other money that we spend should be investments for the future (I understand the Obama administration's desire for bipartisanship being the reason for some tax breaks being in the bill, and I'm ok with the business related ones, but the AMT tax break? The payroll tax break? Unnecessary and a complete waste of money). No one from the administration has yet to comment publicly on the CDS 800 pound gorrilla in the room.

    The export-driven countries are imploding - Japan's GDP down the most since '74, South Korea is a mess, China is a mess but won't admit it, Germany is starting to fall apart but is hidden within the Eurozone so not much has been made of it, etc, etc. Switzerland is showing cracks now (Switzerland!), and with their banks being several times larger than the country's GDP, a bailout from the rest of the world (Eurozone? US? IMF?) is likely in the cards, unless we want another Iceland. Several other European nations are like this as well (Ireland for one). The old saying "When America sneezes everyone gets a cold" sounds quaint. The rest of the world is in too bad of shape now for any kind of simple consumer-driven recovery in America, unless it's several times larger than $800 billion.

    Prediction: Diplomacy is going to be very important over the next few years to prevent some bad things from happening. Hillary is going to have her hands full.
    Last edited by CJC; 16 Feb 2009 at 2:11 PM.
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    Super Moderator kjel's avatar
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    This is an interesting op-ed by Nick Kristof in the NY Times as he recounted living in Japan during their "lost decade" and their failure to address the issue of banking while trying to invest if infrastructure and other projects. LINK

    There is also another great article called "Japan's Big-Works Stimulus Is Lesson" detailing what happened with their stimulus spending during the 90's (aka "lost decade"). Ironically Timothy Geithner was a financial attache in Japan at the time.
    "He defended the cause of the poor and needy, and so all went well. Is that not what it means to know me?" Jeremiah 22:16

  13. #13
    I am very angry with the banks, like everyone else. And I would love the government to give me a couple of thousand dollars, like everyone else.

    But as others have said, the banks have to be fixed, stimulus checks to consumers wont get spent and tax cuts are just the Republicans unable to accept responsibility for the mess they created.

    We are beginning to think about buying a new car, but the tax break in teh stimulus bill is laughable. We would get the Mass sales tax 5%, say we splurg for a 25,000 car. That would be a $1250 deduction or a net tax break of $412 in the 25% tax break. Woo hoo! Who is going to run out and buy a car for that much savings?

  14. #14
    Cyburbian michaelskis's avatar
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    I contacted my congressional representative and two state senators expressing opposition to this bill. One voted the way I hoped, the two senators did not.

    I would have rather seen a two year suspension of the capital gains tax and a significant lowering of the corporate tax.

    There is a bigger part of this bill that scares me. It is more than 1400 pages and I don’t think anyone actually knows everything that is involved. Several members of the Senate and Congress who voted to approve it have admitted that they did not read it. Is this the type of representation that we want in DC?
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  15. #15
    Unfrozen Caveman Planner mendelman's avatar
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    After some of the arguments in this thread, I am beginning to see it a different way (I guess the prospect of free money is enticing, no matter who you are ).

    Fixing the banks appear to be the best idea. They are really the linchpin of the economy (one that needs "credit"). They need to start lending again, but in a much more responsible manner.

    And the "toxic" mortgages need to be dealt with immediately. The Federal government has the economies of scale to absorb the toxicity of the notes. We did this to ourselves and as a nation be probably just need to take it in the gut for the next 5 years or so and try to overcome this.
    I'm sorry. Is my bias showing?

    The ends can justify the means.

  16. #16
    Gunfighter Mastiff's avatar
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    Quote Originally posted by illinoisplanner View post
    You know, this spending bill would be great if everybody worked for the government or relied on the government for everything. Look at all the spending: money for people who work in law enforcement and homeland security, money for people on welfare, money for energy, and money for people who build highways for the government. But alas, that is only a small fraction of the people. The majority of people work in the private sector and wish to be independent and provide for themselves. They just want regular jobs and just want to be able to keep their homes and provide for their families. These laid-off white collar workers and union laborers don't want to build highways and a new energy grid for the government for two years and then go back to being unemployed. They want their real jobs back. And who's the government to tell them what to do or decide for them? At the end of the day, the American people are the boss of the government, not the other way around.
    First, law enforcement and emergency services are lacking. Big time. Just putting it out there, be cause we all rely on them.

    Second, the bill should be aimed at local work for local people. If they want to stick with unrealistic union demands, fine... they can lose out. But many of the CCC and WPA projects still exist, and are monuments today. Yet, I don't believe we have the same mentality as they had then. So yes, just government programs won't work, but private sector takes the money and runs... We've all seen it. How about we work out a new formula? Something fair?

    Quote Originally posted by illinoisplanner View post
    As far as the tax plan...what a joke. Yeah, so we're going to get a couple extra bucks in our paychecks. Wow...enough to go buy a stiff drink and drown our sorrows.
    And you thought we'd never agree on anything!

    Quote Originally posted by illinoisplanner View post
    What the government needs to do is send a massive trillion-dollar tax rebate to Americans and small businesses and rescue the banks and buy up the bad mortgages, but have massive oversight and regulation so they don't spend it on private jets.
    No way. I'm a mortgage holder. Either you go across the board, or not at all. I didn't loan myself money when the housing bubble was way up, and I always pay my bills. Why give my money to the foolish? And speaking of foolish, why give money to financial institutions who aren't smart enough to make good financial choices?! Screw them... if any money goes to them, it should be for invested accounts for retirement plans.

    Quote Originally posted by illinoisplanner View post
    I might actually be up for federalizing the banks for now and making them private again (but with heftier regulations and oversight) once things get better.
    That's a risky move... and you'd be surprised how much federal oversight can be had if the government wants to use it. Some real oversight regs could fix plenty.

    Quote Originally posted by illinoisplanner View post
    The Democrats have botched this thing so bad, it's not even funny. Also, I'm tired of people blaming Bush (and Clinton) for everything. The Obama administration and Democrat-controlled Congress (which has been controlled by the Democrats since 2006) needs to start looking forward and start being held accountable for their actions now.
    Really? Have you lost you mind? You are seriously going to judge this administration after a few weeks in comparison to the one in power the last eight years?! Be serious... And by the way, you aren't them. If you really are doing planning, you have a slim chance at being mildly wealthy. Most likely, you'll be well below the Republic Give-A-Crap Line --------------. Six figures is a minimum, but seven gets you a seat at a few of the finest tables.

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  17. #17
    Cyburbian DetroitPlanner's avatar
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    I was thinking about this this morning. I would have wanted them to offset some of the infrastructure costs as well as fix the hole in the Highway Trust Fund by increasing the gas tax about a nickle. This could have knocked about $50 billion off the stimulus packages eventual cost but have the same effect. The only issue would be how the states would match future projects, as if they are like road and transit agencies in Michigan seriously tapped out. This was we could also address the issue which will come up as fleet fuel economy begins to increase. (Fuel economy and gas tax revenues have an inverse relationship) This should buy us time as we affix more big brother devices to cars so the state/feds can charge everyone a flat per mile fee for using road infrastructure. As it is hybrid vehicles don't pay their fair share towards infrastructure and this will worsen in the future unless we change how we pay for transit and highways.
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  18. #18
    Cyburbian WSU MUP Student's avatar
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    Quote Originally posted by illinoisplanner View post
    As far as the tax plan...what a joke. Yeah, so we're going to get a couple extra bucks in our paychecks. Wow...enough to go buy a stiff drink and drown our sorrows.
    Quote Originally posted by Mastiff View post
    And you thought we'd never agree on anything!

    Regards,
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    While I am not saying that the payroll tax cut is the best...

    I know $13 a week doesn't really sound like much but over the course of the year, that will come out to $676 which is a bit more than what the Bush stimulus plan was last spring. And I think by receiving that money in their paycheck drawn out over the course of the year, folks will be much more likely to spend it than if they got a lump-sum payment. And this type of consumer spending is going to be somewhat more sustained than the one time payment; this will allow for a few more groceries, or a lunch out during the week, or a half a tank of gasoline, a few trips to Starbucks... types of spending that are indeed small but I still think this is better than what the lump-sum payments generally bought (or didn't buy).

    If the payroll tax cut were too large, I think that it would run into the same problems as the lump sum payment in that it would just go to pay off some debt or get invested for your retirement (not that these are bad things, but it doesn't produce much immediate stimulation).
    "Where free unions and collective bargaining are forbidden, freedom is lost." - 1980 Republican presidential candidate Ronald Reagan

  19. #19
    Cyburbian cellophane's avatar
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    i am certainly not an economist and did rather poorly in econ when i took it in high school - but how will all these tax-cuts that are constantly proposed fix anything? what i do know (and learned the hard way by accumulating too much debt) is that in order to have a balanced budget of any sort you have to take in more than you spend - and constantly cutting income is no way to do that, especially when the outgoing payments measure in the trillions this doesnt even get into the 5% raid congress gives itself every 2 years... is the average consumer so stupid that they cant see that? not to mention that the first thing to be cut across the board is education - which is a horribly slippery slope...

  20. #20
    The party pushing tax cuts pushes them when the economy is good and when it it is bad.

    The party opposing the stimulus is the party that responded to Hurricane Katrina by doing nothing. The election was pretty clear about how the country feels about this philosophy.

  21. #21
    Cyburbian Plus PlannerGirl's avatar
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    On first blush sure sending the money to individuals sounds great but just as many responsible folks here have said we would pay off debt or put it in the bank.

    Contrary to popular though this does NOT help our economic situation one bit. Our economy is built on consumerism and that means folks have to buy crap they don't need like TVs, Ipods, Computers, Cars etc. Folks have to spend money on vacations, home furnishings *big ticket stuff* and general going out on the town to support out service industry. Folks are too afraid even if they HAVE money to spend it.

    Giving folks cash will not save their homes, many (not all) of the folks who are in jeopardy of loosing their homes can't make enough to afford them so cash is just a stop gap, prolonging the pain and downward spiral. Unfortunately many (not all) of the folks who would get the money to save their homes would spend it on "stuff" and not their homes.

    We are a quick fix "give me my feel good kick NOW!" society and cash in hand only feeds that but wont fix crap.

    We need to stop playing the "moratorium on foreclosure" game and accept as a nation not everyone can own a home (me being one of them). the housing market needs to hit bottom and sooner rather than later, all this crap just draws it out making consumer sentiment that much worse. This is going to kick folks in the teeth http://www.washingtonpost.com/wp-dyn...021204259.html

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  22. #22
    Cyburbian ofos's avatar
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    Enough Already!

    O.k., the usual suspects have jumped in and turned a thread on letting the consumer decide with his/her wallet into rants on Rep. vs Dem. or Liberal vs. Conservative. Give it a break! This one isn't about political philosophy or fixing the blame. If you don't trust the individuals to spend money where it needs to go to stimulate the economy, that's fine. But don't get into another p*ssing contest about the other party, make some suggestions. Banking needs to be fixed? How? Force them to lend? Who to? Who is going monitor them and what standards are needed? Is the commercial banks or the Fed that needs to be fixed? Why will that be better or worse?
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  23. #23
    Cyburbian CJC's avatar
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    Quote Originally posted by ofos View post
    Banking needs to be fixed? How? Force them to lend? Who to? Who is going monitor them and what standards are needed? Is the commercial banks or the Fed that needs to be fixed? Why will that be better or worse?
    Here is the best plan to fix banking that I've seen:

    http://market-ticker.denninger.net/a...The-Abyss.html

    Here is the banking part pulled out of the main article:

    We desperately need a real solution to this banking issue. In my opinion there simply is no "market friendly" answer. There are only solutions that respect the market, and then there are those that attempt to transfer the bad debt - of which there is a lot, to the taxpayer.

    The latter cannot be done. Schumer (and Goldman) have it about right in terms of the capital required to pull that off, and the impossibility of funding such an exercise.

    Therefore, the only rational answer to this mess is to:

    1. Defang the CDS monster. This must be done now. CDS provide a limited-risk and near-unlimited reward for shorting a firm's credit; this is exactly backwards from the equity markets where shorting is limited-reward but unlimited risk. Short-selling is essential to a balanced market but allowing CDS to be abused to invert the long/short risk profile is outrageous and must be stopped. The proper approach to doing this is to:

    A. Force capital adequacy to be proved for all outstanding contracts. If you can't prove the ability to cover the contract, it is declared void.

    B. Bar the writing of new CDS on any TARP recipient. The government has said it will not allow these firms to fail. The bets have been made; existing ones that can be covered by the writer are ok, but no new positions can be opened until the government's interest is extinguished in that name.

    C. Require that all new CDS be written against a public exchange and direct the ISDA to produce, immediately and nightly until that has taken place, bid/ask/OI on an accessible public interface.

    D. Consider barring all CDS that are written "naked" - that is, not against a deliverable bond. There are already-existing means to short a firm you believe is in trouble in the equity, options and futures markets. The inversion of the risk:reward profile in the CDS market is a big part of the problem and we must consider putting a stop to it.

    E. Do this all right here, right now. Give market participants a very short term (two weeks, maybe four) to get their act together or face having their contracts rendered noncollectable.

    2. Send in the bank auditors and examiners, suspending all bank share trading for two weeks. Mark everything to the market. Anyone who is insolvent under Tier Capital rules gets crammed down ala-The Genesis Plan. All firms that are crammed down have their boards and management removed; the new equity holders (former bondholders) get to elect new management to run the firms they own without prejudice (if they want the old management back, they're welcome to have 'em, but there is no ability to manipulate the vote by entrenched management!) All firms then re-open for trading at the same time - but existing shareholders (including preferreds) of the "crammed down" are wiped out.

    3.For those firms that cannot survive even when crammed down they are instead seized by the FDIC and RTC'd. This works exactly as it did in the RTC days; the FDIC gets the assets in exchange for guaranteeing deposits, and disposes of them in its self-funded "bad bank." That is a "bad bank" model that can and will work and has no "asset valuation" issues.

    4.Be prepared to use the second half of the TARP funds to either internally capitalize new banks which will then be spun off to the public or add capitalization to existing good banks. The cramdown and receivership of the bad banks will undoubtedly lead to lots of guaranteed deposits and good assets needing a home. There are hundreds of perfectly solid existing banks that should be permitted to grow their asset and deposit base by feasting on the carrion of the deposed.

    5.Start investigating the fraud, and be vigorous about it. The public is not going to sit for their 401ks being destroyed as they have already (and will be as this plays out) without blood. There are lots of bad actors out there, starting with the officers and boards of failed institutions. These were not just "bad bets" that caused our banking system and economic problems - I'm willing to wager that it can be proven that they were knowingly-unsound bets and the mismarking of "asset values" was not accidental either. Down this road should lie plenty of securities fraud charges and maybe more than a bit of Racketeering. Go for disgorgement of the ill-gotten gains to at least provide the people with something to refill the treasury and assuage the anger, along with prison sentences.

    There is no "market-friendly" solution to this mess folks. There are, however, disastrous decisions that can be taken, and continuing to hide losses - and the truth - will lead directly to that disaster.

    We must deal with the bad debt by forcing it into the open. Transferring it from one pocket to another fixes nothing and if we're not careful we will wind up precipitating a bond market collapse coincident with the stock market melting down to a degree that is several times worse than what we saw in September and October.

    Unless President Obama wants to be known as our second Herbert Hoover, he must not allow the game-playing to continue any longer.

    Neither you or I want to see the S&P 500 collapse down into the 200s with 75% of the listed firms in this country going under. Nor do we want to see 20 or even 30% unemployment. I'm sure you're not interested in seeing not a 30 or 40% loss in your 401k as you had last year, but an 80% loss. And I'm very, very certain that having the government - both state and federal - unable to raise operating funds and being forced to cut off social services and entitlements is not on your "desirable" outcome list. Yet all of this can and will happen if the bond market dislocates and starts a cascade. The price action in the market over the last couple of weeks is a strong warning that "borrow and spend" will not work and the market is getting rather upset with papering over ever-expanding losses.

    It would be nice if President Obama had several weeks or even months to coordinate a strategy. Unfortunately the market doesn't work this way, and it appears that he is being forced to either crap or get off the pot essentially now, lest the market decide for him.
    Anything else besides fixing the banking system first will fail at turning the economy around, IMO. "Forcing" the banks to lend is ridiculous and incredibly irresponsible because it just perpetuates the problem. Complete deleveraging of the system - both here and abroad - is really only still in the beginning stages.

    The government spending parts of the economic stimulus package are fine with me - they'll either create jobs or put money into already existing entities. To me, the bill just passed is simply the first part of keeping the suffering under control, but will have no effect on turning the economy around - which is fine. We need to ease the suffering, so we might as well spend it on stuff that we can use later on (not much different from New Deal programs). We'll need another bill like this later for probably at least as much, but maybe quite a bit more.

    Private growth won't resume until there is enough trust in the banking system - which will only come through greater transparency. Greater transparency can't happen while we still allow things like current CDS, off-balance sheet entities, etc. I don't think we're yet doomed to a depression, but this is definitely a banking panic. Banking panics are not like other recessions - and are solved by restoring confidence in the system by making changes to the system, not by just pumping more money in. We had a lot of banking panics in the 19th century and early 20th century, and made changes each time. The start of the GD was also a banking panic, and while it morphed into a depression, we avoided another banking panic for nearly 80 years by making significant changes in the system, some of which were abandoned over the last decade or two (and probably need to be reinstated), plus we allowed some other stuff to creep in which now needs to be fixed. I don't think there's any inherent problem with the Fed that needs to be fixed.
    Last edited by CJC; 18 Feb 2009 at 11:39 AM.
    Two wrongs don't necessarily make a right, but three lefts do.

  24. #24
    Cyburbian Plus PlannerGirl's avatar
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    Very very well said CJC

    You might find this intresting as well "At banks, money easier to find than borrowers"
    http://washington.bizjournals.com/wa...02/story3.html
    "They who can give up essential liberty to obtain a little temporary safety, deserve neither liberty nor safety." Ben Franklin

    Remember this motto to live by: "Life should NOT be a journey to the grave with the intention of arriving safely in an attractive well preserved body, but rather to skid in sideways, chocolate in one hand, martini in the other, body thoroughly used up, totally worn out and screaming 'WOO- HOO what a ride!'"

  25. #25
    Cyburbian ofos's avatar
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    CJC, thanks for the well-reasoned input, both yours and the writer of the article. I'm not sure I understand all of it since I did nod off frequently in my Econ class a long time ago but I don't think that Congress does either. What I like about it is that it is a business/economic solution and not an inherently political one. It's also across the board as proposed so it doesn't inherently favor any institution as I read it. We all need to educate ourselves and do what we can individually to protect our own positions because this isn't going to sort itself out for quite a while.
    “Death comes when memories of the past exceed the vision for the future.”

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