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Rescue or Waste?
Why the bailout isn't working
Thank goodness Congress approved that bailout. Otherwise, the economy might be tanking.
Just a couple of weeks ago, Treasury Secretary Henry Paulson and Federal Reserve Chairman Ben Bernanke asked Congress to approve a $700 billion rescue of the banking industry. Without this sudden, massive infusion of federal cash, we were told, economic disaster loomed. Prompt approval, on the other hand, would assure the solvency of the financial sector, thaw frozen credit flows, and give investors a badly needed dose of confidence.
In the end, Congress approved the package—seeing as how the alternative was rising unemployment, a plunging stock market, and corporations unable to borrow to cover their short-term obligations. Now, with the bailout proceeding according to plan, Americans are confronted with...rising unemployment, a plunging stock market, and corporations unable to borrow to cover their short-term obligations.
That is not how things were supposed to go. On Sept. 25, The Washington Post endorsed the administration's effort, warning that the nation faced a replay of 1929.
"This catastrophe can be avoided," said the editorial, "and it will be if government promptly and effectively addresses the immediate cause of financial distress—the toxic build-up in unmarketable mortgage-backed securities on bank balance sheets." (My emphasis.) The Treasury plan, it said, fit the bill.
But the effort to restore confidence and stabilize markets turned out to be, pardon the expression, a bust. After the bailout was signed into law on Friday, Oct. 3, investors had all weekend to contemplate its tonic properties but found none.
On Monday, the stock market looked like it had been pushed out of an airplane. The Federal Reserve was so alarmed by the credit situation that it decided to take the radical step of lending directly to businesses.
By then the rescue package was a fading memory. Instead of being safely contained, the turmoil intensified and spread far beyond Wall Street—to financial markets in Europe, Asia, and South America. Said a Tuesday news story in The New York Times, "Three days after the plan was approved, it looks like a pebble tossed into a churning sea."
The feds had decided to fill the markets with enough cash to burn a wet mule—only to see it have no apparent impact whatsoever. But we could have had no impact whatsoever for a lot less money.
You may remember that when the House of Representatives voted against the original rescue plan, it was blamed for the subsequent 778-point drop in the Dow Jones Industrial Average. This stomach-turning development was clear proof of the urgent need for the bailout.
But if a stock market's performance is the test of a policy, this one has failed. At best, the passage of the measure did no evident good. At worst, it backfired.
Harvard economist Jeffrey Miron suspects the latter. "The bailout approach will generate uncertainty about what's going to happen," he told me. "It's quite plausible that it has not calmed markets because no one knows what it means."
Instead of stimulating productive activity by removing doubt, it has impeded it by multiplying doubt. It has also encouraged lenders to hold off dealing with their bad debt in hopes of getting a better deal from the Treasury than they can dream of getting from anyone else. But postponing the banks' rendezvous with reality will not speed recovery.
The sheer size and unprecedented nature of the intervention generates a different kind of uncertainty—about how extensively the federal government will immerse itself in the economy from now on. The spectacle of Washington nationalizing private assets is bound to dishearten millions of investors who think that generally, the most helpful economic role for government is staying out of the way.
The rescue surrenders an important principle: that private sector mistakes should be borne by the people who make them. If the bailout means we may all get the bill anytime a company implodes, it will undermine the critical incentives of the market. In the long run, that will not strengthen the economy but weaken it.
Ditto if it means we are resolved to do the impossible—namely, live indefinitely even further and further beyond our means. Which, by the way, it does.
But none of this will deter our policymakers from sticking to
their approach. Waist deep in the Big Muddy, and the big fool says
to push on.
COPYRIGHT 2008 CREATORS SYNDICATE, INC.
|10.9.08 @ 12:17PM|#
Stooooooop
please please
I can't take it anymore
just stop
stop running Steve Chapman
*whimpers*
Elemenope|10.9.08 @ 12:20PM|#
Harvard economist Jeffrey Miron suspects the latter. "The
bailout approach will generate uncertainty about what's going to
happen," he told me. "It's quite plausible that it has not calmed
markets because no one knows what it means."
Instead of stimulating productive activity by removing doubt, it
has impeded it by multiplying doubt. It has also encouraged lenders
to hold off dealing with their bad debt in hopes of getting a
better deal from the Treasury than they can dream of getting from
anyone else. But postponing the banks' rendezvous with reality will
not speed recovery.
That actually makes a lot of sense. And Steve Chapman wrote it.
Egads!
|10.9.08 @ 12:26PM|#
When did the market begin really tanking, and when did consumer
confidence really begin to take a nose dive? Why, could it have
been when the administration started telling us to
panic?
The bailout proposal may have precipitated events that wouldn't
have happened, otherwise. The market had anticipated more failures
of financial services companies and was really just watching to see
who would buy whom and to wait for the fallout to stop raining
down. Now it's all exploding gas tanks and leather outfits.
robc|10.9.08 @ 12:31PM|#
After the bailout passed I commented on one of the threads that the market would "rally" to 9k by the end of 2009. Im thinking I was off by 14 months. with some work, it can get there today.
Technomist|10.9.08 @ 12:36PM|#
I have made money in equities on the London Stock Exchange in the last two days, no short selling required.
|10.9.08 @ 12:40PM|#
When did the market begin really tanking, and when did
consumer confidence really begin to take a nose dive? Why, could it
have been when the administration started telling us to
panic?
This is the perfect time to panic!
Woody
|10.9.08 @ 12:43PM|#
My take on why the bailout has failed, so far:
(1) We were told it was a huge panicky deal we had to do NOW NOW
NOW. So how much of the $700B has been injected into the capital
markets? Not a fucking cent. Treasury has decided it has months to
write rules on how to spend it, and the bill is now so toxic to
senior management only a fool of a CEO would take the massive
haircut required to access the bailout.
(2) To the very great extent that the markets price uncertainty,
the bailout only increased their unease by showcasing the
incompetence and venality of our political class.
(3) Like uncertainty, inflation is a drag on the market, and the
bailout increased fear of inflation.
|10.9.08 @ 12:50PM|#
I "plan" to be a millionaire.
Why isn't there a million bucks in my checking account?
if government promptly and effectively addresses the immediate
cause of financial distress
In other news, my pig still has to walk to work.
Mike M.|10.9.08 @ 12:51PM|#
When did the market begin really tanking, and when did
consumer confidence really begin to take a nose dive? Why, could it
have been when the administration started telling us to
panic?
A couple of things: first of all, hard as it is to believe,
consumer confidence actually went UP a month ago (it's certain to
nosedive when they take the polls for this month).
Secondly, the stock market doesn't lose almost a third of its value
in five months because of something the President says, especially
not a President with as little credibility as this one. Something
like this only happens because there's a bubble, or because there
are massive systemic problems going on.
|10.9.08 @ 12:54PM|#
I think Congress should pass an unbailout, and the president
should sign it, saying, "Changed our minds. Good luck with that
free market thingee." Then we freak out for a few weeks, then
things start to stabilize. Maybe we'd go into a deeper recession,
but it won't be the disaster the government is determined
to create for us.
Mike M.,
When massive government intervention in markets is proposed (and
bills supporting it are enacted), with only vague statements about
what the intervention will entail, uncertainty about the future
will abound. That kind of uncertainty means volatile markets. We
were trending down due to the financial services sector problems,
but these nosedives are all thanks to the government's actions, in
my opinion.
|10.9.08 @ 1:05PM|#
Stagflation is coming. With $700 billion in liquidity that
shouldn't exist flooding finance over the next three months, either
the economy grows in physical capacity and wealth to accurately
price that money, or....
There isn't an increase in the size of the physical economy to
absorb all that cash, so the cash itself gets cheaper...i.e.
inflates. So, now the government puts us in more debt to
essentially do nothing more than make our money worth less. The
crimes that brought down Enron are misdemeanors compared to the
crimes at work here, and the body count when all is said and done
will also make Enron look rather quaint.
Perversely, the government will be rewarded for doing this to us
with hundreds of billions in stocks and tons more power.
We're fucked.
Kramer|10.9.08 @ 1:24PM|#
Well, that didn't work. ... What would you say to ketchup and mustard in the same bottle?
|10.9.08 @ 1:24PM|#
"We're Fucked" is what I say on a hourly basis.
This will either blow over in six months and we'll have another
trillion in debt and loads of bad regulations and laws -- or the
loads of new $ and a tanking dollar will cause hyper-inflation and
a new depression.
President Hopey will be fucked.
I'm buying another sack of beans this weekend.
cunnivore|10.9.08 @ 1:25PM|#
I think Congress should pass an unbailout
I believe the technical term is "bail-in". Though if you ask me,
this economy is a severe flight risk so it shouldn't be getting
bail at all.
cunnivore|10.9.08 @ 1:26PM|#
Well, that didn't work. ... What would you say to ketchup
and mustard in the same bottle?
You can take my Goober Grape from my cold, dead, sticky hands.
|10.9.08 @ 1:28PM|#
I knew it was time to panic when I saw this headline: "Americans
Should Remain Confident in U.S. Financial System".
That was September 15.
|10.9.08 @ 1:29PM|#
What would you say to ketchup and mustard in the same
bottle?
Oh, that sounds interesting, sir.
|10.9.08 @ 1:36PM|#
"There isn't an increase in the size of the physical economy to
absorb all that cash, so the cash itself gets cheaper...i.e.
inflates."
I don't know about that. Isn't it also true that we are having
enormous asset deflation? Yes, we are injecting 700 billion worth
of cash, but most of that cash is going to cover losses. The end
result seems to be the same amount of wealth chasing the same
amount of goods.
|10.9.08 @ 1:37PM|#
President Hopey will be fucked.
While I would like to agree with this, I have a sinking feeling
just the opposite will happen. Hopey can just blame the last
administration in the same way Clinton was blamed for 9/11. And
then demand sweeping new powers to fix the "out of control"
markets, or whatever buzz word is in at the moment. Which he will
get with many questions asked but few heard.
That's when I just stop thinking about it because it just gets
depressing after that.
|10.9.08 @ 1:41PM|#
SNL should do a skit this Saturday on "Congressmen who
should be shot."
Nahh...if you could just confine Barneys activities to molesting
members (heh.heh..you said member) of the House Page staff....he
would have less time for more damaging activities....like
legislation.
Do you think SNL would be interested in a parody of that?
Paul|10.9.08 @ 1:44PM|#
Stagflation is coming. With $700 billion in liquidity that
shouldn't exist flooding finance over the next three months, either
the economy grows in physical capacity and wealth to accurately
price that money, or....
Stagflation is here... arguably.
And the Paul I'm quoting is not the Paul you all know [and
love].
|10.9.08 @ 1:45PM|#
"Your boss is a woman? This is a strange bank."
"You can't pull the wildcard when I already have my shirt off. Can
that be a rule?"
|10.9.08 @ 1:45PM|#
It is both funny and depressing to think that Frank used to be roommates with a pimp and now, considering that his current boyfriend ripped of Freddie and Fannie for untold millions, it looks like the pimp was the more trustworty and moral roommate.
Don the libertarian Democrat|10.9.08 @ 1:46PM|#
"Instead of stimulating productive activity by removing doubt,
it has impeded it by multiplying doubt. It has also encouraged
lenders to hold off dealing with their bad debt in hopes of getting
a better deal from the Treasury than they can dream of getting from
anyone else. But postponing the banks' rendezvous with reality will
not speed recovery."
I know that you're not going to like hearing this, but the
uncertainty was caused by the government not bailing out Lehman.
The reaction of the credit markets showed that people were
expecting a bailout, and when they didn't get one, they started to
panic. believing that they might be on their own. I'm not defending
this belief or the bailout here, but simply calling attention to
the real conditions under which the market and investors were
operating. Sadly, a lot of people, including you, it seems, didn't
realize how far we've already gone done the road of government
guaranteeing bailouts such as this one in a crisis. I've always
been in this for the long run, so, although I agree we're going to
have to answer some hard questions about government intervention in
the future, maybe this time will begin with a realistic
assessment.
Daniel Reeves|10.9.08 @ 1:49PM|#
Sorry for turning into a fucking socialist, but the reason why
the bailout failed is because banks don't have any capital and the
whole system is really in the can. Simple as that. So a better plan
would have been to-- gasp-- inject capital.
Although I really do like
Greg Mankiw's approach. Very creative. I definitely support it,
for it has a nice market twist.
Elemenope|10.9.08 @ 1:53PM|#
Though if you ask me, this economy is a severe flight risk
so it shouldn't be getting bail at all.
That got me to chuckle.
Fluffy|10.9.08 @ 1:56PM|#
One of the few pieces of good news this week was a spike in
pending home sales last month. The drop in prices combined with a
drop in interest rates drew in lots of buyers to start cleaning out
all that foreclosure inventory.
But wave that good news good-bye, because it won't be duplicated
any time soon. Yesterday the Treasury department decided to sucker
punch the rally in Treasuries that had produced lower mortgage
rates by launching a "surprise" refunding auction, and announcing
that they would continue to launch "surprise" auctions until the
"unnatural" rally in Treasury prices ended.
This was a pretty transparent attempt to punish investors who had
fled to Treasuries, and an attempt to flush them back into stocks
by making it clear that the Treasury department would shit on any
gains they might realize if Treasury prices continued to
rise.
In 24 hours the 10 year bond fell so badly that the yield rose
almost half a percent in rate. Mortgage rates followed them up,
going from the 5.500% range to the 6.000% range in a single
day.
So that Fed rate cut you heard about? It means nothing to the
housing crisis. Mortgage rates went exactly the opposite way.
Paul|10.9.08 @ 2:00PM|#
One of the few pieces of good news this week was a spike in
pending home sales last month.
Noticed. In my area home prices are still sinking, but purchasing
has seen a recent spike. There's a sign we're near the bottom of
the housing situation.
ed|10.9.08 @ 2:01PM|#
To be fair, the desired effects of the "rescue bill" will not be noticed for months or years, if ever. To be unfair but not inaccurate, Barney Frank is a cocksucker. I have spoken.
|10.9.08 @ 2:01PM|#
Gee fluffy you would almost think that the fed is more interested in saving wall-street's ass than they are in ordinary individuals. The lower interest rates and people buying homes again is exactly what we want to happen. But if that happens and people in vest in bonds, the stock market suffers and Paulson and Bernake's buddies in wall street might have settle for a bonus that is in the 10s of millions rather than 100s of millions. We can't have that.
Paul|10.9.08 @ 2:02PM|#
I know that you're not going to like hearing this, but the
uncertainty was caused by the government not bailing out Lehman.
The reaction of the credit markets showed that people were
expecting a bailout, and when they didn't get one, they started to
panic.
Precisely why bailouts are bad. It sets up impossible expectations.
The government can't bailout everyone, and the the more
arbitrary its bailout strategy, the more uncertain the market. So
bailouts must not, under any circumstances be allowed to proceed.
My guess is you don't like hearing that.
|10.9.08 @ 2:10PM|#
Mac: You're about to experience the hard knocks of a free
market, bitch. Get ready to feel it where it hurts.
Charlie: Your dick!
Mac: No, not his dick. His--his wallet.
|10.9.08 @ 2:14PM|#
"You can't pull the wildcard when I already have my shirt
off. Can that be a rule?"
"Which one of us do you want to take you in the back and bang
you?"
Michael Ejercito|10.9.08 @ 2:20PM|#
Ditto if it means we are resolved to do the impossible-namely, live indefinitely even further and further beyond our means. Which, by the way, it does.
No politician in a hitly-contested election can afford to tell
people that we need to live within our means.
Paul|10.9.08 @ 2:31PM|#
But on a serious note, Michael, you're correct. Traditionally, politicians telling us to turn down the thermostat and put on a sweater are doomed.
|10.9.08 @ 2:37PM|#
The bailout was recently signed into law. I've read it would
take about 3 months to implement. Being the bailout has yet to be
implemented why are we already trying to discuss it's failure. It's
not in effect! That's similar to claiming the surge in Iraq failed
before the surge troops entered Iraq.
If you really though that the solution would happen in a week, you
should spank yourself. Assuming you believe this is the solution,
which I don't.
Neu Mejican|10.9.08 @ 2:39PM|#
Let's see if there are words of wisdom out there for how to move
forward...
http://www.npr.org/templates/story/story.php?storyId=95517447
"If you don't fully understand an instrument, don't buy it,"
Botin said. "If you will not buy for yourself a specific product,
don't try to sell it. If you don't know very well your customers,
don't lend them any money. If you do all these three things, you
will be a better banker, my son."
Neu Mejican|10.9.08 @ 2:44PM|#
Maybe there outta be a law...
Clause one:
You must be able to explain a financial instrument's workings
before purchasing said instrument.
Clause two:
Any product sold by a bank must have been previously purchased by
the members of the board and the CEO.
Clause Three:
No one will lend money to anyone that they don't know well.
Some tweaking to make the language impenetrable legalese is
required, of course.
|10.9.08 @ 2:44PM|#
"""No politician in a hitly-contested election can afford to
tell people that we need to live within our means."""
It's not just politicians. Our economy is based on credit. If we
cut off people's credit, they can't spend. If they can't spend,
stores lose revenue. If stores lose revenue, they fire employees.
Fired employees often can't cover their debt payments and could
default on their credit, ect ect. So the prevention of US economic
collapse is to keep the credit flowing. That keeps the spending up,
stores busy, people employed, ect ect.
We should have known we were screwed when Bush advice to people
after 9/11 was to keep spending.
kinnath|10.9.08 @ 2:44PM|#
This is the perfect time to panic!
Woody
More than any other time in history, mankind faces a crossroads.
One path leads to despair and utter hopelessness. The other - to
total extinction. Let us pray we have the wisdom to choose
correctly.
- Nobel Prize-winning economist Woody Allen
Neu Mejican|10.9.08 @ 2:47PM|#
We should have known we were screwed when Bush advice to
people after 9/11 was to keep spending.
[sigh]
We should have known we were going to be screwed long
before that.
Paul|10.9.08 @ 2:47PM|#
Neu:
Ahh, good, old-school, stuffy conservative banking. It will ever
have a place in the world...
Paul|10.9.08 @ 2:49PM|#
We should have known we were screwed when Bush advice to
people after 9/11 was to keep spending.
I never stopped spending. Did anyone stop spending? I have a house
payment, gotta put gas in my car, I need a new shirt on occasion. I
even buy an adult beverage from time to time.
.
.
.
Oh, you took it to mean spending beyond our means... never
mind.
Paul|10.9.08 @ 2:50PM|#
The USA economy is so bad, now Mexico is building a
fence.
And they're using Mexican labor!!!
|10.9.08 @ 2:52PM|#
Neu,
You must be able to explain a financial instrument's workings
before purchasing said instrument.
How about a comparable rule for renters and home buyers? They have
to be able to explain to a judge they know what they are getting
into before signing a contract. "I didn't know whut a balloon
mort-gage wuz!"
Paul|10.9.08 @ 2:53PM|#
Sugarfree:
Those are 'regular folks' having one of life's rainy days. Read:
protected class.
They don't count.
union steward|10.9.08 @ 2:57PM|#
|10.9.08 @ 3:01PM|#
Neu Mejican,
How's this for advice?
When you want to get a mortgage, go to a bank. A real bank, not
something somebody set up on the internet. A bank with a building
you can drive to from your house.
If that bank says that they don't want to give you a mortgage that
large, they probably have a good reason. Don't rip the phone number
off of that flier on the utility pole next to the check cashing
place; rather, find a less expensive property to buy, then go back
to the bank.
I still hear ads on the radio: "When your bank says no, we say
yes!" Oh, yay! Nice work there, a-holes.
|10.9.08 @ 3:01PM|#
How about a comparable rule for renters and home
buyers?
Do you guys really want to go down this path? How about a
comparable rule for computers? Most of you could get the fuck off
the intarwebz right now if that were the requirement.
|10.9.08 @ 3:05PM|#
Here, here, joe. The bank turned you down for a reason. Maybe
this is not the time to buy a house.
My wife pointed out during the news the other day: "Did you notice
that all the failing lenders are the ones that used to run
commercials non-stop?"
|10.9.08 @ 3:07PM|#
"Did you notice that all the failing lenders are the ones that
used to run commercials non-stop?"
Lost another 3 points of GDP growth to Ditech!
|10.9.08 @ 3:08PM|#
Oh, hush Epi. You know I'm just going after all the people how signed on for a loan with reading or understanding it, or are lying about understanding it now. I'd love to kill the fine print excuse, if for nothing else to shut up the people around here who think ignorance is a defense for signing a dumb contract.
Fluffy|10.9.08 @ 3:08PM|#
By the way, I'd like to point out that as a result of the
Treasury's action, today is the second day in a row both stocks and
bonds are down at the same time.
That is a recipe for an even bigger disaster.
|10.9.08 @ 3:14PM|#
You know, even evil lenders had to disclose ARMs (and their
consequences) as well as the high rates and fees associated with
subprime loans. Even the monthly payments for the latter were
known. All of the other nonsense aside, how could someone not
understand that they were getting into a mortgage that they
couldn't afford? For the ARMs, they may have gambled on an increase
in equity and the ability to refinance, but I'm not sure about how
flat-rate subprime loans could seem affordable--lender lies or no
lender lies.
joe,
I strongly oppose the idea of giving out credit to people who can't
afford it. However, the consequence of that is that many people
will not be able to buy a house. Ever. If our government can learn
to accept that fact and reduce its meddlesome ways, then we may end
up with a more rational lending system. Even unusual credit
products are okay if their use is limited. Incidentally, I don't
think banks have much cleaner hands than non-bank mortgage lenders.
Brokers are another story.
Mike Laursen|10.9.08 @ 3:18PM|#
Being the bailout has yet to be implemented why are we
already trying to discuss it's failure.
Some of its proponents (maybe not all) claimed that it would have
an immediate calming effect on market panic.
Mike Laursen|10.9.08 @ 3:22PM|#
Harvard economist Jeffrey Miron suspects the latter. "The
bailout approach will generate uncertainty about what's going to
happen," he told me. "It's quite plausible that it has not calmed
markets because no one knows what it means."
Smart dude. What real value has our economy lost in the last couple
of weeks? It wasn't MBSs; we already know those had no real value.
The real value we've lost is long-term stability, confidence that
you can make an investment with a multi-year time horizon and not
have the government fuck with it.
|10.9.08 @ 3:25PM|#
Pro Libertate,
Based on foreclosure rates and breakdowns of different loan types,
banks have much, much cleaner hands than non-federally-insured
deposit insitutions.
They gave out a lot fewer stupid loans, and sold a lot fewer of
their loans. Of course, that varies from bank to bank, but by
category, banks are by far the most trustworthy.
The ones you can drive to from your house and have been there for a
while are the best of all.
Also, very little of meltdown is a result of people buying at the
lowest price point in the market. The loans that killed the
financial sector are a lot more likely to be loans for $300,000 or
$600,000 that bought big houses, or loans on properties that were
refied out the wazoo.
Of course the usual suspects are going to blame poor people and
minorities, but the CRA-covered banks have managed to come through
a lot better than their competitors, so that story doesn't
wash.
My bank has never given out a subprime loan, and has an Outstanding
CRA rating.
Tightening standards would have a much bigger effect on lenders who
seek out middle class people looking for bigger McMansions than on
poorer people.
Peter K.|10.9.08 @ 3:30PM|#
Chapman:
The spectacle of Washington nationalizing private assets is
bound to dishearten millions of investors who think that generally,
the most helpful economic role for government is staying out of the
way.
Oh cry me a river. The reason we're in this mess is because of
these greedy, short-sighted "investors." Who cares what they
think?
And b/c of the incompetence of the banks, many are about to get
bent over and partially-nationalized in order to stave off another
Great Depression.
Excuse me while I enjoy my schadenfreude.
|10.9.08 @ 3:35PM|#
Uh, yeah, nobody's blaming lending to minorities and poor people
for the meltdown. I just totally made that up.
Still sore from that whooping, I see.
|10.9.08 @ 3:35PM|#
Oh cry me a river. The reason we're in this mess is because
of these greedy, short-sighted "investors." Who cares what they
think?
I hope, for the sake of preserving your purity, that you don't own
any investments (bonds, stocks, interests in mutual funds), else
that'd make you a raging hypocrite.
|10.9.08 @ 3:35PM|#
Agreeing with joe @3:01.
Although what he says comes perilously close to holding borrowers
responsible for the decision to take out a mortgage.
I would point out, as well, that I have my mortgage with a bank
that has no (that's zip, zero, nada) buildings that anyone can
drive to from their house to do their banking business. They are
strictly an on-line operation, though they don't run ads.
|10.9.08 @ 3:36PM|#
Still sore from that whooping, I see.
yeah....a "whooping" on an internet board. mein gott...how can I
look at myself in the morning? After that "beatdown"?
|10.9.08 @ 3:36PM|#
joe,
I agree with all of your points about local banks. But that's not
say that local banks don't try to do stupid things as well. We paid
20% down on our house. At the closing the bank offered us the
"opportunity" to immediately open a 50% credit line on our equity.
Literally a debit card that would draw on the down payment. I
recoiled like they were trying to hand me a snake.
Imagine how solvent a bank would be if they offered the equity debt
card right before closing and tear up the mortgage if you accepted.
Sort of a fail-safe financial IQ test.
|10.9.08 @ 3:36PM|#
The reason we're in this mess is because of these greedy,
short-sighted "investors."
Yeah, nothing says "short-sighted" like investing. The real
far-sighted, selfless types are the ones who finance their
lifestyles with credit cards.
|10.9.08 @ 3:40PM|#
Here's one particular strawman I made up from the very thread
that still has TAO so steamed:
J sub D | September 29, 2008, 6:12pm | #
I recall Thomas Sowell writing about this years ago. I can't find
the piece after cursory googling but the gist of it was if lenders
are discriminating against minority applicants you would see lower
default rates for minority mortgage customers and at that time you
didn't.
Fannie Mae to invest $700 billion in minority housing
Jet, Oct 28, 2002
Fannie Mae, the nation's largest source for financing home
mortgages, plans to invest at least $700 billion through 2009 to
provide financing to 4.6 million minority households.
Only a fool would say this whole fuck story can be laid at the feet
of increasing lending to minorities.
Only another fool would claim that government attempts to increase
mortgage approval for minority applicants had no part in
it.
|10.9.08 @ 3:41PM|#
Uh, yeah, nobody's blaming lending to minorities and poor
people for the meltdown.
So, when you say "blaming", do you mean:
A) That individuals are blaiming the entire mess on pressure to
lend to people who were not credit-worthy? OR
B) That the pressure to do just that led to some undesirable
consequences (such as certain securities being sold to FNM and
FRM), definitely fueled by greed, caused the meltdown?
|10.9.08 @ 3:42PM|#
Here's one particular strawman I made up from the very
thread that still has TAO so steamed
yeah, I'm so pissed that joe-the-blind-hack refuses to see anybody
else's viewpoint.
that'd really be foolish of me, to have that much faith in you at
this point.
|10.9.08 @ 3:43PM|#
Good instincts, SugarFree.
RC (Harvard Law, right?),
I'd say people at different levels of knowledge and sophistication
can be more or less likely to have been manipulated or mislead.
Different people in different situations have different levels of
responsibility.
robc|10.9.08 @ 3:43PM|#
The ones you can drive to from your house and have been
there for a while are the best of all.
Or as I called it last night, Small Town Middle America Sanity Bank
(STMASB).
|10.9.08 @ 3:45PM|#
Yeah, nothing says "short-sighted" like
investing.
Between house flippers and MBS bundlers, I'd say "short-sighted" is
a pretty good term for certain investors.
|10.9.08 @ 3:46PM|#
Your point was bullshit, TAO, and I put up the numbers to refute it. I'm not going to go out of my way to see somebody's else's point when it's nonsense, just because they like the way the nonsense fits in with their political ideology.
|10.9.08 @ 3:49PM|#
So, when you say "blaming", do you mean:
A) That individuals are blaiming the entire mess on pressure to
lend to people who were not credit-worthy? OR
B) That the pressure to do just that led to some undesirable
consequences (such as certain securities being sold to FNM and
FRM), definitely fueled by greed, caused the meltdown?
So "poor" and "minority" are now synonymns for
"credit-worthy?"
There was a great deal of pressure to lend to people at lower
credit standards, but this was a problem across the income
spectrum. However much thre usual suspects turn their gaze to
(surprise!) lower-income people and minorities.
Neu Mejican|10.9.08 @ 3:55PM|#
SugarFree | October 9, 2008, 2:52pm | #
Neu,
You must be able to explain a financial instrument's workings
before purchasing said instrument.
How about a comparable rule for renters and home buyers? They have
to be able to explain to a judge they know what they are getting
into before signing a contract. "I didn't know whut a balloon
mort-gage wuz!"
Sugarfree fails?
Mortgage = Loan = financial instrument.
I would argue that an IOU and a Lease are also financial
instruments, so they would also be covered.
Episiarch | October 9, 2008, 3:01pm | #
How about a comparable rule for renters and home buyers?
Do you guys really want to go down this path? How about a
comparable rule for computers? Most of you could get the fuck off
the intarwebz right now if that were the requirement.
The knowledge needs to be knowledge at the appropriate level.
Everyone (?) posting here, for instance, understands how to turn on
computer, open browser, type comment, click on "submit comment."
Some even understand that "preview" button...
Those people that got into ARM thinking that they would never see
an "A" in the "R" or their "M," and didn't understand that "A" may
have meant their payments went up should not have been allowed into
said ARM. They would be the people that try to push the "submit
comment" button with their finger and try to feed the mouse
cheese.
|10.9.08 @ 4:00PM|#
"There was a great deal of pressure to lend to people at lower
credit standards, but this was a problem across the income
spectrum. "
I think it got turned into a problem accross the income spectrum.
You don't make a lot of money lending to the ghetto. If only this
were a problem of loaning to a bunch of deadbeats in the inner
city.
I think a couple of things happened. The CRM folks were pushing to
loan to more people and increase home ownership. The banks took
that as a license to loan to everyone with bad credit and start
making stupid loans to people of all incomes. As I have pointed out
in another thread, the more people are able to pay for housing with
irresponsible loans, the more honest people will be priced out of
the market and tempted to guy irresponsible loans. It becomes a
vicious cycle.
The problem was once the cycle started everyone started getting
rich. The builders got rich because more and more people were
buying homes. Home owners made money because the houses were worth
more. Realators got really rich since their commissions went up. Of
course the banks got rich because they were able to borrow cheap
money from the fed at 2% and loan it out on exotic mortgages at 6
or 7 percent. Even better, they could package those loans into MBS
and sell them and make a bundle right now. Who cares if they were
ever paid off?
What the CRA people did as much as anything was give topcover for
the banks to go nuts. Everyone time someone stood up and said "hey
this is getting out of hand" the CRA advoctates in Congress would
call them a racist and talk about the American Dream of home
ownership.
Neu Mejican|10.9.08 @ 4:03PM|#
John,
I concur for the most part.
I remember thinking along the same lines when the term "starter
home" started showing up.
Neu Mejican|10.9.08 @ 4:05PM|#
John,
except for this part...
Everyone time someone stood up and said "hey this is getting
out of hand" the CRA advoctates in Congress would call them a
racist and talk about the American Dream of home
ownership.
WTF?
|10.9.08 @ 4:08PM|#
gee, joe, do you see John's post up there? That's been MY point
all along...but you keep "whooping" on me on the internet.
Make sure you call your mom too: "Mom, someone was wrong on the
internet today and I THINK I beat him!"
|10.9.08 @ 4:09PM|#
It all comes down to who should you trust? Not anyone selling
you something, especially something expensive. If a car dealer
deceives me, well, that's to be expected. If a mortgage broker
deceives me, he's violated a sacred trust. And, incidentally, usury
is a sin, but a 3,000% markup on jewelry is okay.
I've always been sympathetic with the idea of getting more
information into buyers'/borrowers' hands, but I don't know how
good government disclosure regulations are in that regard. A lot of
the seemingly pointless disclosures and paperwork in closing
documents came from state and federal regulators. I think consumer
advocates would do a lot better bypassing government and just
publishing information about loans and other dangerous products
(and perhaps providing a certification process for good
sellers/lenders).
Neu Mejican|10.9.08 @ 4:09PM|#
Yippee! someone noticed me.
[said in best zoidberg voice]
Gasp, I'm acting astonished.
"look at me everyone I'm a homeowner"
|10.9.08 @ 4:10PM|#
"except for this part...
Everyone time someone stood up and said "hey this is getting out of
hand" the CRA advoctates in Congress would call them a racist and
talk about the American Dream of home ownership.
WTF?"
People were warning that Freddie and Fannie were going to go under
for years. Everytime someone said something, the CRA people would
come out and say that we couldn't pull in their lending practices
because that would be racist and deprive minorities of the
opportunities of home ownership. It was an alliance from hell
between do gooder liberals who thought that credit was a civil
right and corrupt wall street types who were making money off the
subprime loans and didn't care about the consiquences.
Neu Mejican|10.9.08 @ 4:12PM|#
John
Everytime someone said something, the CRA people would come out
and say that we couldn't pull in their lending practices because
that would be racist and deprive minorities of the opportunities of
home ownership.
You don't say.
Hmmm....
I am skeptical of this scenario.
|10.9.08 @ 4:17PM|#
Neu Mejican
Go on Youtube and watch Barney Franks performance in 2003 during
the hearings on Freddie and Fannie. Home ownership and access to
credit became a "civil rights issue" in the late 1990s. Now, that
doesn't mean that this whole thing is the result of poor people not
paying their loans. But what it did do is make it very difficult to
have an intelligent conversation about the issue. If in say 2000,
Bush had come out and said "we have to stop irresponsible home
lending", I gaurentee you he would have been tagged as a racist
trying to keep black people from owning homes. Like I said, the
whole CRA issue gave the bankers cover to do all sorts of crazy
shit.
|10.9.08 @ 4:18PM|#
John, there are a couple of problems with this theory.
The CR(A) folks were pushing to loan to more people and
increase home ownership. The banks took that as a license to loan
to everyone with bad credit and start making stupid loans to people
of all incomes.
First, the CRA only covers federally insured banks, which have much
LOWER rates of bad mortgages and unaffordable mortgages and
crazy-assed "no payments for a year and then we feed you to a
tiger" mortgages.
Second, the looser credit standards, whether we're talking about
Fannie and Freddie or mortgage originators, were applied across the
board from the beginning. It wasn't a case of the purse strings
being opened only for smaller mortgages, and then spreading. The
CRA didn't loosen credit standards - which is why CRA-covered banks
have lower default rates in CRA-covered neighborhoods than do their
non-bank competitors.
"The American Dream for Everyone" was the slogan, but it was a "get
rich off the bubble" plan from the beginning. Ditech and
Countrywide weren't basing their business model on poor
people.
TAO, you see how I discussed the issue with him politely? Take a
look at his post, asswipe, and see if you can figure out why.
robc|10.9.08 @ 4:19PM|#
NM,
I remember thinking along the same lines when the term "starter
home" started showing up.
I heard this term decades ago. A starter home was a small home in a
crappy neighborhood. You know, for the guy just out of college
making 20k a year, so he buys the 50k house. He will move up to the
100k house when hes making 40k and the 200k house at 80k.
|10.9.08 @ 4:22PM|#
John,
Please stop using "CRA" as a generic term for all finance-related
efforts to extend home ownership. It's not. It's a specific act
with specific provisions. Not only did it have absolutely nothing
to do with the meltdown or with Fannie and Freddie (they weren't
covered by the CRA, and banks can't sell their CRA loans to them or
they lose their CRA credits), but by encouraging banks to squeeze
the predatory lenders and silly-assed mortgage companies' market
share in those neighborhoods, it reduced the number of
nonperforming loans and foreclosures.
|10.9.08 @ 4:22PM|#
"The American Dream for Everyone" was the slogan, but it was a
"get rich off the bubble" plan from the beginning. Ditech and
Countrywide weren't basing their business model on poor
people."
Exactly Joe. But if anyone had said "stop", it would have turned
into a civil rights issue. My God, we can't have people not getting
home loans. The CRA issue gave the crooks wonderful moral cover to
do what they did. Worse yet, people like Frank and Dodds who if
they had been honest would have been all over the crooks, played
right along.
|10.9.08 @ 4:24PM|#
You know, once the new market perversions are in place, there
will be new bubble opportunities for sure to take advantage of
whatever that bubble will be. I call environmental "green energy"
as the new bubble.
I was thinking about this carbon-tax-credit-mess currently in the
gate for ram-through. Undoubtedly there will be a provision for
"making" carbon credits by actively sequestering carbon out of the
atmosphere somehow. It wouldn't apply to something common-sense
like planting a tree, it would have to be a "hip" way to do
it.
So, use the Sabatier process to make natural gas. Basically, you
place hydrogen and carbon dioxide together in the presence of an
iron catalyst. When you do that, natural gas comes out (along with
a little water and a lot of oxygen). So....
Get a bunch of tax credits to throw up some windmills (maybe a
solar panel too!). Then, use the electricity to crack water into
hydrogen (there's gotta be a tax-credit in there somewhere). Run
the hydrogen through your big Sabatier reactor, getting natural gas
out. Every ton of NG you make should account for a good couple
hundred pounds of "carbon credit." Then, sell the natural gas on
the market, but all your costs are covered when you sell the carbon
credit.
Essentially, you sell the natural gas at market price and every
dime you get for it is pure gravy - you covered all your costs by
selling the carbon credit to some hapless coal plant that had no
choice but to buy your crappy credit. Sweet! I can't wait! There's
gotta be a hundred schemes out there just waiting for that
bandwagon to get going.
Anyone got any other ways to get on the Bubbles of the Future?
|10.9.08 @ 4:25PM|#
TAO, you see how I discussed the issue with him politely?
Take a look at his post, asswipe, and see if you can figure out
why.
Boy, yeah...must be one of those easy days at "work" for you.
(they weren't covered by the CRA, and banks can't sell their
CRA loans to them or they lose their CRA credits
That isn't even true, joe. It's just not.
Neu Mejican|10.9.08 @ 4:26PM|#
robc,
Let's call it when the meme spread from what you are referencing to
the idea that you bootstrap up to the McMansion.
I am enough older than you that I remember the concept of buying a
home and investing labor and capital into it to make it a better
place to live over time, bit by bit, within your means.
Back when I walked to school uphill both ways in NM dust
storms.
|10.9.08 @ 4:26PM|#
C'mon, John.
You're saying that the investors and brokerage houses who lost vast
fortunes in these investments honestly thought they were solvent
and safe, but Democratic Congressmen knew years ago that this was
going to happen?
Because Barney Frank and Chris Dodd have so much more expertise
dealing with real estate derivatives, or what?
People actually thought this system was safe. All across the board
- that's how it got so big.
rhywun|10.9.08 @ 4:28PM|#
After the bailout passed I commented on one of the threads that the market would "rally" to 9k by the end of 2009. Im thinking I was off by 14 months. with some work, it can get there today.
Down almost 700 to 8579.
|10.9.08 @ 4:28PM|#
Neu,
That's it. A lump of coal for you. And high-sulfur coal at that.
That bituminous crap.
|10.9.08 @ 4:30PM|#
Oh, ok, Optimist. It's "just not" true that banks lose their CRA
credits if they sell the mortgages they originate in low-income
neighborhoods. Because you say so?
Lemme guess - because the Wingnut Weekly whose argument you
half-remember used weasel words to imply that they could, and you
didn't bother to find anything out from credible sources.
I'll bet you million dollars that banks lose their CRA credits for
mortgages they originate if they sell them. Ten million.
Neu Mejican|10.9.08 @ 4:33PM|#
John,
access to credit became a "civil rights issue"
Access to credit opportunities is a civil right, in a very narrow
and specific sense.
It does not include a right to actual credit, just the right to be
considered for credit on equal footing...
It is covered under that "life, liberty and pursuit of
happiness thing.
Neu Mejican|10.9.08 @ 4:34PM|#
Sugarfree,
You don't scare me I'm going to shove coal so far up your stocking
you'll be coughing up diamonds.
Neu Mejican|10.9.08 @ 4:38PM|#
Has Santa-bot been reading at Mises?
Santa-Bot:
Mobsters beating up a shopkeeper for protection money: very
naughty.
Shopkeepers not paying their protection money: exactly as
naughty.
|10.9.08 @ 4:43PM|#
Yes, CRA isn't to blame. The everyone-must-have-
affordable-housing push may very well be, though even it is just a
factor (albeit a substantial one) in the overall mess. CRA is a
relatively minor part of that push, in my view. Fannie and Freddie
were the principal movers and shakers.
Access to credit for any group, minority or otherwise, hasn't been
a problem for decades. Someone, somewhere, would make anyone a
loan. That's kind of how we got here in the first place. We used to
laugh at the idea that a lender would discriminate on any
prohibited basis, because all of the mortgage people we knew would
make a loan to undead zombie Hitler, let alone blacks or other
minorities. There was likely some discrimination around marginal
credit decisions, but a good FICO score and income history gets you
a prime loan every time.
Neu Mejican|10.9.08 @ 4:54PM|#
Wasn't the Freddie/Fannie problem mainly (at least in part) that
under Bush et al. the rules were loosened so that they could buy
sub-prime backed MSB's... a practice that was previously not
allowed.
Right?
Neu Mejican|10.9.08 @ 4:56PM|#
In other words, creative accounting to make it look like they were meeting affordable housing goals by carrying all those sub-prime mortgages on their books...or something?
|10.9.08 @ 5:04PM|#
Buying sub-prime backed MSB's has never been against the law.
It's just a function of reporting requirements where the
regulations were "loosened."
Biggest reason sub-prime backed MSB's were sold so thoroughly was
because there were enough suckers out there to buy them. Everything
is a good investment so long as the price keeps going up. This is
no different than the dot-bomb of ~2000 in the herd-off-the-cliff
source of the problem here. If housing prices were still managing
their "irrational exuberance" act, we would still be adding to the
problem right now...unaware it would seem of the calamity. Of
course, any rational observer two years ago could tell you that
housing party couldn't last, not at those appreciations.
What makes this different is it's mortgages, so there are all kinds
of affected parties, not just buyer and seller. Also, mortgages are
pretty much kicked down by banks. Banks of course do not play with
their money, they play with your money in the hopes you don't want
it back to soon. When that hope doesn't pan out, the bank folds
like a house of cards, because it is ultimately an illusion. That
is a weakness in fractional banking that has no cure.
Peter K.|10.9.08 @ 5:05PM|#
Angry Optimist
I hope, for the sake of preserving your purity, that you don't own
any investments (bonds, stocks, interests in mutual funds), else
that'd make you a raging hypocrite.
I do own some and not all investors are bad. But Chapman is full of
it.
It's sort of like you paying taxes. It dilutes the purity of your
hatred of big bad government, but you need police, firemen,
etc.
To me, the hypocrisy is mostly on the rightwing, glibertarian
side.
http://www.washingtonpost.com/wp-srv/opinions/cartoonsandvideos/toles_main.html?name=Toles&date=09182008
|10.9.08 @ 5:06PM|#
Neu Mejican,
Blame for all of this can be distributed so widely that it may very
well be my fault as well. I worked for WaMu, after all.
I'd say that while there was a distinctively liberal flavor to the
initial motives that enabled this problem, the GOP can't make hay
of that, because they've played along all the while. Even the brief
anti-GSE moment wasn't really about reining in anything
significant.
|10.9.08 @ 5:08PM|#
Biggest reason sub-prime backed MSB's were sold so
thoroughly was because there were enough suckers out there to buy
them.
A situation that got worse when the stock market dropped after the
dot-com bubble popped.
And also, too, the rating companies, many of which had one division
rating MBSs and another selling them.
|10.9.08 @ 5:11PM|#
Here's a question: Is there an industry that is doing great right now, mocking other industries' pain? I'd like to invest there, please.
|10.9.08 @ 5:22PM|#
Fact is, the mortgage meltdown is pretty much a bi-partisan
effort in so much as Uncle Scam's culpability (which is
considerable) is concerned.
The political ideology cooking up the gov-programs leading to these
disasters is not the problem. It is that there are gov-programs
manipulating these markets.
Paul|10.9.08 @ 5:43PM|#
I would point out, as well, that I have my mortgage with a
bank that has no (that's zip, zero, nada) buildings that anyone can
drive to from their house
Holy crap, I was just about to take joe to task by saying "who does
that?!!"
Neu Mejican|10.9.08 @ 6:19PM|#
Ah, mining. Mining of what?
I predict that data mining in the financial industry will boom as
people try to figure how to detangle good from bad mortgages in
these "complex bundles."
But, I would go with things needed to make batteries...lithium,
perhaps (I don't even know who does this these days, so don't
listen to me...that would be like feeding the mouse cheese).
Neu Mejican|10.9.08 @ 6:49PM|#
Paul,
Buying sub-prime backed MSB's has never been against the law.
It's just a function of reporting requirements where the
regulations were "loosened."
What I meant was that Fannie/Freddie were "allowed" to buy them as
a way to fulfill affordable housing goals. Previously the number of
sub-primes they carried did not count towards those goals.
Correct?
|10.9.08 @ 7:39PM|#
Pro Lib,
Videoconferencing. Big companies spend on videoconferencing
equipment during slowdowns, so they can cut their travel
budgets.
Paul|10.9.08 @ 7:51PM|#
Videoconferencing. Big companies spend on videoconferencing
equipment during slowdowns, so they can cut their travel
budgets.
Then, after weeks of fiddling with the equipment, trying to make it
work, I.T. people scratching their heads, and general
dissatisfaction with performance, they bag it and go back to
travel.
Geotpf|10.9.08 @ 7:55PM|#
Prove that the Dow wouldn't be at 7000 right now, instead of
8500, if the bailout hadn't occurred? Clearly, the bailout alone
didn't fix things, but it quite possibly meant they aren't quite as
bad.
Or not. Maybe it didn't change things at all, or made it worse
even. It's impossible to tell one way or the other.
Michael Ejercito|10.9.08 @ 8:30PM|#
Traditionally, politicians telling us to turn down the thermostat and put on a sweater are doomed.
Only heating bills tell us that- and even then, many refuse to
listen.
|10.10.08 @ 12:22AM|#
BOB BARR! LESS GOVERNMENT! BOB BARR! LESS TAXES!! BOB BARR! MORE
FREEDOM!!! BOB BARR... THE LIBERTARIAN PARTY'S 'NEW'
LEADER!!!
America's solution... Libertarian Presidential candidate Bob Barr
'actually' believes in 'reducing' federal government spending!!!
The National Taxpayers Union released a report on September 25th.
It analyzes each of the three leading Presidential candidates in
their 'first year' federal budget spending proposals as President.
Barack Obama would 'add' $292,954,000,000 to annual spending! John
McCain would 'add' $92,437,000,000 to annual spending! Bob Barr
would 'cut' $200,928,000,000 from annual spending!!!
You can read the cover letter of the report at
http://www.ntu.org/main/press.php?PressID=1048&org_name=NTUF
and the report at http://www.ntu.org/main/page.php?PageID=141
.
You can read more about Bob Barr in general at
http://www.bobbarr2008.com/ which is his campaign's website. Here
is one of his videos http://www.youtube.com/watch?v=t5waL8brexY and
one of his articles
http://www.huffingtonpost.com/bob-barr/economic-chaos-increases_b_132195.html
each on the current economic 'bailout' problem.
Help the Third Party Political System 'grow' in America by voting
for Bob Barr for President of the United States!!!
RAISE THE BARR FOR PRESIDENT! RAISE THE BARR FOR THE LIBERTARIAN
PARTY!! RAISE THE BARR FOR AMERICA!!! VOTE FOR 'THE BIGGEST CHANGE'
ON NOVEMBER 4TH!!!!!!
Mike Laursen|10.10.08 @ 3:01AM|#
Or not. Maybe it didn't change things at all, or made it
worse even. It's impossible to tell one way or the
other.
The Motley Fool had an interesting article today about the
stabilizing, yes stabilizing, effect off short selling on the
market. Once a seller has sold short, he has an obligation to buy,
which tends to counteract free falls like we've seen
recently.
The author laid the blame for recent losses on the ban. His
hypothesis can be tested somewhat, since the ban is no longer in
effect starting tomorrow.
VM|10.10.08 @ 8:30AM|#
ProGLib: plastics.
or a factory in chicago that makes miniature models of
factories.
|10.10.08 @ 9:31AM|#
I heard this term decades ago. A starter home was a small home in a crappy neighborhood. You know, for the guy just out of college making 20k a year, so he buys the 50k house. He will move up to the 100k house when hes making 40k and the 200k house at 80k.
Ah, yes, the old 2.5X one's annual income rule.
Living witin one's means is so quaint and oldfashioned.
|10.10.08 @ 9:52AM|#
Then, after weeks of fiddling with the equipment, trying to
make it work, I.T. people scratching their heads, and general
dissatisfaction with performance, they bag it and go back to
travel.
Videoconferencing, and IT consultants. Sounds like a plan.
|10.10.08 @ 10:33AM|#
Geotpf,
"Or not. Maybe it didn't change things at all, or made it worse
even. It's impossible to tell one way or the other."
it is impossible to PROVE one way or another. However, there are a
lot of good reasons to believe that free-markets and the incentive
structures of private property rights are the fundamental reasons
for the increasing stadnards of living over the last 300
years.
When you destroy these fundamental pillars, it makes sense that the
stock market might go down.
|10.10.08 @ 10:46AM|#
I may have a solution for anyone wanting to get out of the market. I have moved my investors money into a company called Prosidian (new concept in medical malpractice ins.-not market sensitive) that is in the final stages of getting hedge funding. The payout is 14%. I am so confident in it that I am kicking in a 2% referral for any investor referred. They have a program where if you have an SEC registered stock selling for at least $10, you can trade it into Prosidian units and really minimize your losses. For more information, contact me at capital@nobankreqd.com.
|10.10.08 @ 10:53AM|#
It is impossible to PROVE one way or another. However, there
are a lot of good reasons to believe that free-markets and the
incentive structures of private property rights are the fundamental
reasons for the increasing stadnards of living over the last 300
years.
And this is relevant to the question of whther the bailout made
things worse, how, exactly? Because there was a "free market" in
place before the bailout?
Mike Laursen|10.10.08 @ 11:59AM|#
And because it is based in Nigeria, Prosidian has very low expenses.
Leave a Comment
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- Financial Market Reform, Jeffrey A. Miron, October 27, 2009
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