To me it seems like a 700B *investment*, either I’m high or a lot of people don’t seem to understand. The 700B doesn’t just vanish right, it buys assets, of unknown value.
its not 700B, it is max of 700B outstanding at a given time. it is the current proposed cap on possible losses. here’s what will happen, i think: buy 2T of toxic crap from all and sundry that lobbied their way in, in tranches sell it for 1.5T realize 500B of losses go back to sipping daquiris at cabo san lucas w mack and lloyd.
budfox427 Wrote: ------------------------------------------------------- > JoeyDVivre Wrote: > -------------------------------------------------- > ----- > > ^ That is just a moronic statement that comes > from > > listening to the Sarah Palin supporters of the > > world. I absolutely positively assure you that > is > > wrong and you need to think about it more. > > > that statement may be strong, but faced with the > choice of $5k or “the unknown”, gimme the $5k. So you think that someone can scare you about the unknown, let you pay $5000, and you will be done with this? Does it ever work that way? a) This bailout/restructuring has broken so many rules about how things are supposed to work in this country that it makes my head spin. We have massive sums of money taken from taxpayers without legislative approval, the gov’t owning equity of private companies, forced restructurings of companies without shareholder approval, legislation introduced that pre-empts judicial review, extraordinary powers given to the Treasury secretary that would make Alexander Hamilton blush, etc, etc. What is the historical track record of the gov’t granting itself extraordinary powers because they can get people scared? (Ans: Really scary) b) There are huge issues of fairness here that we haven’t even touched. Why should I care that your 401-K invested in stocks is pillaged? More than that, why should I pay taxes to make sure that it isn’t? I’ve been posting on AF for quite a long time that the situation was dire and I allocated my own funds accordingly. I think I have like $30K in stock positions and the rest in much less risky investments. I wasn’t getting any upside if I was wrong, but I guess I still get plenty of downside because I was right. I guess my 90-year old mother-in-law (completely invested in money markets/treasuries/GNMA’s) ought to pay for your 401-K. Is that fair? c) Stock market crashes don’t lead to Depressions Contrary to folk wisdom, stock market crashes don’t cause depressions, monetary problems (or other structural problems like war reparations) do. If the US is steaming toward a Depression, this isn’t going to solve anything. d) By circumventing normal procedures, we have thrown everything up for grabs. Today alone, I find that we have govt thinking of somehow putting hedge funds under the control of the Federal Reserve (huh?) and limiting the compensation that can be paid to the executives of private corporations. Since when are these the proper role of gov’t? This is grand-standing of the worst kind. e) The goal of deleveraging America is not necessarily a good thing. As risk manager of a derivatives-based hedge fund for years, the #1 question I answered from clients was “What is the leverage?” The most problematic place to ansewr that question was in Eurodollar futures options of which we had positions in tens of thousands. We could have options that were literally worth $6 but someone would demand to know what the leverage on the position was. I would say “Well, uh, the underlier is $1M. so I guess we have 1000 contracts with an investment of $6000 of which your margin requirement is $800 betting on $1,000,000,000. So, uh, $1B/$800 is uh…” It’s a stupid answer, but people actually want to hear it and do something with it. Risk matters, leverage doesn’t. Deleveraging America destroys the liquidity of low-vol securities. There are all kinds of interesting consequences of that, but one possible consequence is that we just made equity more appealing if the company is more highly leveraged. That means that by controlling leverage we can de-stabilize corporate America by encouraging unregulated corporations to become highly leveraged because investors can’t create leverage themselves. That makes bankruptcy much more likely, makes companies concentrate on stable cash-flow projects instead of long-term earnings, etc… Will that help anything? f) Moral hazard There is more moral hazard being created here than you can shake a stick at. It’s not even worth listing.
> that statement may be strong, but faced with the choice of $5k or “the unknown”, gimme the $5k. If you dont give ME 5K, something EVIL and Unknown WILL happen to you. FIVE THOUSAND DOLLARS PLEASE … (Extends hand in Colbert’esq fashion)
"I guess my 90-year old mother-in-law (completely invested in money markets/treasuries/GNMA’s) ought to pay for your 401-K. Is that fair? " Is it fair that I have to pay in 15% of my gross income to support Medicare and Social Security benefits that I will never receive?
JoeyDVivre Wrote: ------------------------------------------------------- > budfox427 Wrote: > -------------------------------------------------- > ----- > > JoeyDVivre Wrote: > > > -------------------------------------------------- > > > ----- > > > ^ That is just a moronic statement that comes > > from > > > listening to the Sarah Palin supporters of > the > > > world. I absolutely positively assure you > that > > is > > > wrong and you need to think about it more. > > > > > > that statement may be strong, but faced with > the > > choice of $5k or “the unknown”, gimme the $5k. > > So you think that someone can scare you about the > unknown, let you pay $5000, and you will be done > with this? Does it ever work that way? > > a) This bailout/restructuring has broken so many > rules about how things are supposed to work in > this country that it makes my head spin. > > We have massive sums of money taken from taxpayers > without legislative approval, the gov’t owning > equity of private companies, forced restructurings > of companies without shareholder approval, > legislation introduced that pre-empts judicial > review, extraordinary powers given to the Treasury > secretary that would make Alexander Hamilton > blush, etc, etc. What is the historical track > record of the gov’t granting itself extraordinary > powers because they can get people scared? (Ans: > Really scary) > > b) There are huge issues of fairness here that we > haven’t even touched. > > Why should I care that your 401-K invested in > stocks is pillaged? More than that, why should I > pay taxes to make sure that it isn’t? I’ve been > posting on AF for quite a long time that the > situation was dire and I allocated my own funds > accordingly. I think I have like $30K in stock > positions and the rest in much less risky > investments. I wasn’t getting any upside if I was > wrong, but I guess I still get plenty of downside > because I was right. I guess my 90-year old > mother-in-law (completely invested in money > markets/treasuries/GNMA’s) ought to pay for your > 401-K. Is that fair? > > c) Stock market crashes don’t lead to Depressions > > Contrary to folk wisdom, stock market crashes > don’t cause depressions, monetary problems (or > other structural problems like war reparations) > do. If the US is steaming toward a Depression, > this isn’t going to solve anything. > > d) By circumventing normal procedures, we have > thrown everything up for grabs. > > Today alone, I find that we have govt thinking of > somehow putting hedge funds under the control of > the Federal Reserve (huh?) and limiting the > compensation that can be paid to the executives of > private corporations. Since when are these the > proper role of gov’t? This is grand-standing of > the worst kind. > > e) The goal of deleveraging America is not > necessarily a good thing. > > As risk manager of a derivatives-based hedge fund > for years, the #1 question I answered from clients > was “What is the leverage?” The most problematic > place to ansewr that question was in Eurodollar > futures options of which we had positions in tens > of thousands. We could have options that were > literally worth $6 but someone would demand to > know what the leverage on the position was. I > would say “Well, uh, the underlier is $1M. so I > guess we have 1000 contracts with an investment of > $6000 of which your margin requirement is $800 > betting on $1,000,000,000. So, uh, $1B/$800 is > uh…” It’s a stupid answer, but people actually > want to hear it and do something with it. Risk > matters, leverage doesn’t. Deleveraging America > destroys the liquidity of low-vol securities. > There are all kinds of interesting consequences of > that, but one possible consequence is that we just > made equity more appealing if the company is more > highly leveraged. That means that by controlling > leverage we can de-stabilize corporate America by > encouraging unregulated corporations to become > highly leveraged because investors can’t create > leverage themselves. That makes bankruptcy much > more likely, makes companies concentrate on stable > cash-flow projects instead of long-term earnings, > etc… Will that help anything? > > f) Moral hazard > > There is more moral hazard being created here than > you can shake a stick at. It’s not even worth > listing. Interesting. Agree
artvandalay Wrote: ------------------------------------------------------- > "I guess my 90-year old mother-in-law (completely > invested in money markets/treasuries/GNMA’s) ought > to pay for your 401-K. Is that fair? " > > > Is it fair that I have to pay in 15% of my gross > income to support Medicare and Social Security > benefits that I will never receive? good point art.
^^^^^but wholly factually incorrect.
joekinde Wrote: ------------------------------------------------------- > ^^^^^but wholly factually incorrect. what is incorrect about his post? That’s he’s paying money for grandma’s benefits?
Was has JDV not ran for office? Or atleast an advisory role? Clearly if he can spell it out so easily and so much of it is true. Have these issues actually been presented to US congress, or is Paulson the only one allowed to speak with them?
IronMan Wrote: ------------------------------------------------------- > joekinde Wrote: > -------------------------------------------------- > ----- > > ^^^^^but wholly factually incorrect. > > > what is incorrect about his post? That’s he’s > paying money for grandma’s benefits? Yes please tell me what is incorrect about my post? Even the government knows that these programs are going to bust, so it’s beyond me why they haven’t been reformed — Oh wait now I remember — There’s a large voting population that would never let someone be elected who wanted to possibly reduce their benefits so that generations to come aren’t left to fend for themselves while at the same time supporting the most self-indulgent generation in history.
IronMan Wrote: ------------------------------------------------------- > joekinde Wrote: > -------------------------------------------------- > ----- > > ^^^^^but wholly factually incorrect. > > > what is incorrect about his post? That’s he’s > paying money for grandma’s benefits? More importantly, it’s irrelevant to the current conversation except to the extent it highlights JD’s point about fairness being largely in the eye of the beholder.
adehbone Wrote: ------------------------------------------------------- > Was has JDV not ran for office? Or atleast an > advisory role? Clearly if he can spell it out so > easily and so much of it is true. Have these > issues actually been presented to US congress, or > is Paulson the only one allowed to speak with > them? Who needs JDV (an established financial expert with years of experience in the financial services industry specializing in risk management) when we got Sarah Palin – she gonna do some “shaking up and some fixing up”
… maybe we can all just send the evil doers big moose antlers and send Sarah Palin hunting 
kkent Wrote: ------------------------------------------------------- --step back, take a breath, > and realize that people who view the role of > government differently than you don’t worship > Satan and drink blood. I like that one! lol
TJR Wrote: ------------------------------------------------------- > Who needs JDV (an established financial expert > with years of experience in the financial services > industry specializing in risk management) when we > got Sarah Palin – she gonna do some “shaking up > and some fixing up” *Edit: I don’t have a real affinity for Palin or Biden but I couldn’t resist adding this… Who needs JDV (an established financial expert with years of experience in the financial services industry specializing in risk management) when we got Barrack Obama – he gonna get political fundraiser Antoin Rezkodo to pay the banks their asking price for assets so Obama can buy ‘adjacent’ assets at a 20% discount. Now that is the kind of outside the box thinking and “shaking up” that would help us taxpayers out in the long run. Well, that and increasing the rates we pay on income, dividends and capital gains.
joekinde Wrote: ------------------------------------------------------- > ^^^^^but wholly factually incorrect. Yeah, well, tell me what’s incorrect and we’ll straighten it out.
> kkent Wrote: > -------------------------------------------------- > --step back, take a breath, > > and realize that people who view the role of > > government differently than you don’t worship > > Satan and drink blood. I on the other hand do not have any views on the role of the govies one way or the other, who really cares, yet I do worship Satan and drink blood for fun on a regular basis.
IronMan Wrote: ------------------------------------------------------- > artvandalay Wrote: > -------------------------------------------------- > ----- > > "I guess my 90-year old mother-in-law > (completely > > invested in money markets/treasuries/GNMA’s) > ought > > to pay for your 401-K. Is that fair? " > > > > > > Is it fair that I have to pay in 15% of my > gross > > income to support Medicare and Social Security > > benefits that I will never receive? > > good point art. No it is not fair that you have to pay so much for social security and medicare. I think that both need to be reformed in the worst kind of way. But what is the relevance of that to the current problem? Does the inequity of FICA taxes somehow justify an inequity on a completely different group? Does one inequity in society mean that we should abandon the idea of equity altogether? Are you just singling out my mother-in-law who collects $432/month from social security and receives Medicare benefits as a villain who is deserving of inequity because she lived to be 90? I have all kinds of idea for Medicare and social security reform that I would be happy to discuss, but there is just not a rational argument that says that anything happening with those programs justifies the bailout.
Ouch…I struck a nerve. I shouldn’t have signaled out Palin. There are probably less than 10 people in the house and senate combined that have as deep of an understanding of the “bailout” as someone like JDV.