Posted by
Mike Rulle on Saturday, March 07, 2009 12:00:00 AM
Instapundit links to a pretty damning link as to the cause of this crisis MELTDOWN.
(posted at 10:23 am by MIke Rulle)
Another "Mr. Jones" comes clean Obama’s Left Turn.
(posted at 10:15 am by Mike Rulle)
I think it is important to restate my views on what should be done
to end this crisis. The objective is to get consumers and investors
involved again. The proposed Obama plan is so opposite of what needs to
be done, that you can virtually take what he is doing and simply
reverse it. I accept we have to have stimulus and a larger temporary
deficit. Cut business marginal tax rates. Cut individual marginal tax
rates, including social security taxes. Relax or eliminate certain
environmental rules regarding energy production across the spectrum.
Cap and Trade is an abomination. Declare a 2 year moratorium on any
investment tax. For any investor who makes a new investment
in the next 2 years, no capital gains taxes will be paid on those
investments for, say, 5-10 years. It can be part deferral and part
elimination.
We need to recognize and announce the true cause of this bank
problem. It originated and is in fact concentrated in just a few areas
of the country as I have stated repeatedly since September. This study
describes the actual nature of the crisis New U.Va. Study Sheds Light on Foreclosures. We
need more sunlight on this whole affair in order to demystify it. This
will help the market separate the wheat from the chaff in the mortgage
market. The Fed, for example, refuses to reveal AIG's counterparties.
Yet everyone knows the bailout money to them is just flow thru
collateral or margin calls to other financial entities. Finally, we
need to have some bank recapitalization plan that incorporates and
recognizes that market prices matter (see Krugman comment below). This
plan by Woodward and Hall is one among many that are sensible. The right way to create a good bank and a bad bank
(posted at 9:33 am by Mike Rulle).
In the The Big Dither,
Obama supporter, Paul Krugman, criticizes the Administration on its
Bank policies, or lack thereof. He states there is a growing sense of
panic and rhetorically asks "Why do officials keep offering plans that
nobody else finds credible?" As mentioned in this blog many times
before, it is because Geithner cannot get his mind wrapped around the
difference between a market price and his perceived sense of value.
Since the latter is higher than the former, he seeks for ways to
provide price supports until the market comes around to his point of
view. He insists on keeping these Zombie banks alive. Ironically, it is
good news that he and Bernanke believe in these values. It means if
they permitted the market open access to these securities there likely
would be buyers and new found liquidity. Many banks would have to go
under and/or be recapitalized. But the problem would be solved or on
the path to being solved. Krugman supports temporary nationalization.
So do I, as long as the endgame is to recapitalize and liquefy.
(posted at 9:02 am by Mike Rulle)
"Geithner has been criticized for staffing his department too slowly
as it grapples with a banking crisis that has crippled the economy.
Uncertainty about Treasury staff also has unnerved financial markets.
Five weeks into his tenure, he has yet to name a single top deputy or
assistant secretary. This has left Treasury with too few people
authorized to make decisions or represent the department in meetings
with stakeholders".(Daniel Wagner, AP Business Wire). Geithner has only
been working on this since the Summer. He certainly had some idea
by the end of November he was the lead choice for Treasury
Secretary. He really does look as if he is overwhelmed.
(posted at 8:44 am by Mike Rulle)
Ones first reaction to this story is its untrue Wrong red button. First
of all, the whole premise is childish and beyond stupid. We are trying
to be like a clever 5th grader with our "reset button". Secondly,
doesn't it remind you of the "nuke" button? Third, does anyone in the
State Department read Russian? Almost $1 billion to Hamas controlled
territory and embarrassing "reset" buttons to Putin, yeah, that's the
ticket.
(posted at 8:38 am by Mike Rulle)