patrick.net

Apparently not ours.....

destruction of US sovereign currency? Not true, right now USD is on steroid reinforced Viagra, you can't blame Paulson can you? Look, the strong dollar is working, what is your problem?

Well. let me count the ways the treasury loves the banks more than the people:

1. We get 5% dividend on preferred stock in Morgan Stanley, but Mitsubishi gets 10%.

2. We get 15% warrants in Morgan Stanley, but Mitsubishi gets 100% convertible stock.

3. We do not know what price we are paying for preferred stock, but Mitsubishi just re-negotiated its conversion price from 30+ to $25.25.

4. We get 5% divident on Goldman Sachs preferred stock, Warren Buffett gets 10%.

And so it goes, on and on and on. The gang-of-9 bank CEOs just signed 1-page contracts with Henry Paulson and the Treasury on Sunday. The terms have not been disclosed to the public, which is already and, but how on earth can a single page contract possibly protect the public taxpayer??

Paulson is batting for his cronies, and should be fired.

OT:

I passed two Tesla Roadster electric cars with dealer plates on freeway 101 south at about Sunnyvale or Santa Clara last night after dark. One car was silver and the other was white, I think, and the cars had dealer (DLR) plates. One man and one woman were driving.

This morning Tesla Motors announced the CEO was leaving and also layoffs of workers.

--which is already and
++which is already BAD

To play devil's advocate; they may actually know what they are doing.

If we let the market sort this out its going to be an almost total economic collapse. Every business thats dependent on short-term credit will go under and lay off all their employees. This in turn will bankrupt every local municipality, S&L and ultimately the federal government.

Essentially; whomever out there that has cash reserves and is self-sufficient would be able to essentially buy America for pennies on dollar. This could be a consortium of wealthy Americans or, more likely, a SWF composed of not-very-nice people. Or we could end up with martial law as the government seizes the banking system, as there would be riots in the streets once ATM cards stopped working.

If we can manage an orderly deflation of real-estate, while keeping the dollar strong and unemployment low, then disaster may be averted.

What I do think the Fed needs to do is stop robbing the taxpayers, take over a big national bank and start lending directly to citizens and businesses. Give the commercial banks some competition and incentive to start lending again.

OO Says:
October 15th, 2008 at 11:55 pm
"destruction of US sovereign currency? Not true, right now USD is on steroid reinforced Viagra, you can’t blame Paulson can you? Look, the strong dollar is working, what is your problem?"

OO, you're kidding right? The scary thing, some of my logic is mixed in there.

OO:
Isn't it always "strong dollar compared to what?" Compared to other world currencies the Buck has spiked up strongly, but isn't that because they're in worse shape than we are? (By the way, while GBP and Euro holders have been running to the exits, the yen sits there quietly at about 100 to the Dollar. Japs learned their lesson 15 years ago?)

Also, looking at commodities, stocks, etc., it looks to me like these things are simply returning to par, and what is getting "destroyed" is the inflationary easy capital that had bubbled first dotcoms, then RE, then Commodities, and all the while Stocks. This "return to par" is deflationary only in the sense that yes, prices were high, and now they are returning to a more normal position on historic average curves. Par means Median Housing = 3.5 X Median Household Inc. Stocks with not much more than a P/E of 15. Commodities holding relative values in keeping with historic values.

No doubt, lots of folks are getting their fingers pinched for having assumed that prices never come down. Call it the Ytivarg theory.

We're having a reality reset. The more fiat TPTB shovel at it, the longer it'll take to get there. Just yank out the frickin' tooth already!

Tesla is not a auspicious name. Look what happen to poor Nikolas?

Yep. He died a POOR man.

I don't care about the merits of AC versus DC, Thomas Edison was highly successful.

Kewp, I can agree that to an extent they "know what they are doing". It certainly helped that the Bush/Paulson Treasury changed direction from buying bad assets to buying preferred stock.

In my view, the problem now is that they are getting bad or at the very least subpar deals for the tax-paying public. This is a real problem.

Peter:

While Tesla died poor, he sold his patents to George Westinghouse who died rather un-poor. Whose patents made more money, Edison's or Tesla's? Dunno. Probably Edison as he was much more diversified.

True, but Tesla did die poor. His work did not get him anything. Sad, but this is the real world. :(

I think this is the best idea I've read so far...

http://faculty.chicagogsb.edu/luigi.zingales/research/PSpapers/plan_b.pdf

It barely puts the taxpayer at risk, and everyone gets what they want. Homeowners get help, the people on the sidelines get affordable housing literally overnight, and most importantly, it stops the problem in it's tracks.

Instead, our government has stolen our money, increased moral hazard, and has literally brought this country to the brink of social unrest. Many people are disillusioned, and close to just bucking the whole system altogether. In a capitalist society, you need to have fairness.

In a capitalist society, you need to have fairness.

But true capitalism is as rare as true communism.

In any system, wealth and influence always go from weak hands to strong hands.

In a capitalist society, you need to have fairness.

How do you define 'fairness"? Same result for everyone or same rules for everyone? Equality of condition, or equality before the law?

The first is socia!ism, the second is classic liberalism (as in 19th C.)

RE: fairness

The world is never fair to losers. Therefore, the only way to be fair is to win.