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Pre$ident Obama = President George W. Bu$h Part Too

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February 08, 2009 – Comments (11)

When the stock market crashed in 2008, I was quite skeptical of the then current President’s efforts to do anything useful about it. The point man was Paulson: a past CEO of GS. Surely, if there is one who understood CDO’s and CDS’ and credit markets, it is the past CEO of the premier ‘Wall Street’ firm. It was famously reported that even the ‘Sage of Omaha’ did not understand CDS, and passed on the deal. If there is one person on the face of this planet who could have explained it coherently, it surely was Paulson or Corazine.

Yet, the efforts of Paulson & Co, IMHO, was not unlike an old Keystone Kops reel. Did they really have any idea of what they were doing? Answer: usually not.

The current team: Summers, Volker, and Geithner. Forgive me for doubting that the intellectual horsepower of the current team is a notch or two below the team that they replaced (sigh…).

OK, big mouth: what would YOU do?

So, here, permit a Monday-Morning-Arm-Chair-Quarterback to give you a couple of ideas just to get you started:

1) S&P, MOODYS, FINRA, SEC, CEB ALL NEED TO DISAPPEAR. Investors and the markets need a single, comprehensive source of reliable, unimpeachable of information. This should also be the referee and law enforcer. No more politics, turf wars, or customer-desired influences. We need a resource where we will be glared at by a dude with green eye shades, wrinkles, a deep frown, a bald and graying pate, who will pierce through us with laser-eyes when we ask a question as to whether a “new” financial practice is permissible.

2) OWNING A HOME IS NO LONGER THE AMERICAN DREAM OR A RIGHT FOR LAW-ABIDING CITIZENS. Do you wish to buy a home and fulfill the great American dream? OK: have enough dough to put down a 20% down payment, and have a golden credit rating-simple, but not easy. You will need to work hard, be successful, and save a whole lota cash to buy a home. This is your goal to work towards. You do not deserve to buy and own a home and a half acre of property just because you are honest, a nice person, and need space to raise your children.

3) FNM, FRE, FHA, GNMA NEED TO DISAPPEAR. There is no earthly reason why taxpayer dollars should be squandered to financially help a small % of beneficiaries to buy a home. Want to buy a home? Make Lots of $$$!!!!, and you ain’t gonna git a taxpayer-financed discount on your home purchase transaction.

4) CREDIT DEFAULT SWAPS NEED TO DISAPPEAR. If you are one of the 2 main parties to a financial transaction that involves debt and a promise to pay, CDS makes sense. It does NOT make sense to make a bet on the transaction, just because you wish to make a bet as to who or whom will default.

5) HEDGE FUNDS AND LEVERAGE NEED TO DISAPPEAR. These are merely classy, high-falutin’ ways to gamble on equity markets, not unlike putting down your 401K on a single roll of the dice, and then come crying to gov’t, taxpayers, and lobbyists that you have been cheated and need preferential treatment.

FINAL OPINION

I would rather that the top 100 CAPS players run our financial system than the current team of financial ‘experts’ drafted by the current administration.

 

11 Comments – Post Your Own

#1) On February 08, 2009 at 3:03 PM, AntiRonChapmanJr (99.79) wrote:

top 100 CAPS players running the system sounds like fun.  where do i sign up and what position do i get?  :)

good post.  

peace,

ron

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#2) On February 08, 2009 at 4:31 PM, garyc27 (< 20) wrote:

Great post.....too bad we can't make it happen

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#3) On February 08, 2009 at 4:44 PM, SuperPicks (28.98) wrote:

how about taking the monopoly of currency issuance away from the world central banks?  central banks should exist only as a clearinghouse.  this move would increase monetary transparency and would be a huge help to the poor & middleclass.

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#4) On February 08, 2009 at 6:39 PM, russiangambit (29.17) wrote:

What needs to disappear is 401Ks, not hedge funds. Rich can gamble their money on the hedge funds, if they feel like it.

Middle class has no business putting their retirement money in the stock market especially in severely disadvantaged 401Ks.

Credit defaults need to go on an exchange.

I agree with other points.

 

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#5) On February 08, 2009 at 7:24 PM, rd80 (98.47) wrote:

Middle class has no business putting their retirement money in the stock market especially in severely disadvantaged 401Ks.

If you don't want your 401k in the stock market, don't put it in the stock market.  Nearly every plan has money market or bond fund options. 

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#6) On February 08, 2009 at 11:23 PM, Imperial1964 (97.76) wrote:

Obama = Bush?  I thought we voted for change.

(Forgive my sarcastic cynacism)

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#7) On February 09, 2009 at 6:05 AM, TMFDeej (99.40) wrote:

Amen jerryguru.  I couldn't agree more.  Great post.

Deej

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#8) On February 09, 2009 at 8:19 AM, russiangambit (29.17) wrote:

> Middle class has no business putting their retirement money in the stock market especially in severely disadvantaged 401Ks.

If you don't want your 401k in the stock market, don't put it in the stock market.  Nearly every plan has money market or bond fund options. 

-----------------------------------------------------------

Thanks, that much is clear to anyone. But what are the alternatives?

 We got this 401K which is supposed to be the solution for retirement. But it is not working, it is just an excuse not to have a viable solution for a retirement plan in this county.

And good luck putting your money in money market fund when it is your own govenrment who is pushing interest rates into negative teritory.

So, tell me, please, where are you puting your retirement money? Or you don't have any?

 

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#9) On February 09, 2009 at 11:17 AM, blake303 (29.15) wrote:

Great post.

I would also add that any company that is "too big to fail" needs to be dismantled into more manageable units that will not bring the entire economy down with them should they fail.

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#10) On February 09, 2009 at 12:19 PM, Schmacko (66.03) wrote:

"2) OWNING A HOME IS NO LONGER THE AMERICAN DREAM OR A RIGHT FOR LAW-ABIDING CITIZENS. Do you wish to buy a home and fulfill the great American dream? OK: have enough dough to put down a 20% down payment, and have a golden credit rating-simple, but not easy. You will need to work hard, be successful, and save a whole lota cash to buy a home. This is your goal to work towards. You do not deserve to buy and own a home and a half acre of property just because you are honest, a nice person, and need space to raise your children.

3) FNM, FRE, FHA, GNMA NEED TO DISAPPEAR. There is no earthly reason why taxpayer dollars should be squandered to financially help a small % of beneficiaries to buy a home. Want to buy a home? Make Lots of $$$!!!!, and you ain’t gonna git a taxpayer-financed discount on your home purchase transaction. "

O I C the solution is to make lots of money... how come no one else thought of this easy answer to all of their problems?  I'd be real interested to know how old you are and whether or not you're a home owner already.  There's a big generational divide here where things just aren't the same as they used to be.  Back in the 70s and even early 80s it seemed like people in their early 20s were able to graduate form college get a job and buy a house almost right away.  This isn't the reality on the ground anymore for a lot of 20-30somethings. 

Everyone seems to agree there is an oversupply of houses and I personally know quite a large number of people that would like to own a home but can't.  Apparently it's our fault though for not making enough money.  Also apparently we're not allowed to have the same dreams our parents had, cause some internet guru decided all of america moved on.  I'll let my friends know.  Thanks for the wisdom.

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#11) On February 09, 2009 at 1:46 PM, outoffocus (22.81) wrote:

Suggestion number 6: The government needs to get out of the business of doing business and stick to regulating.  If you want socialism, go to China.

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