John Pitera's Market Laboratory Message Board

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Strategies & Market Trends : John Pitera's Market Laboratory

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To: MulhollandDrive who wrote (8170)	8/26/2007 6:29:13 PM
From: Augustus Gloop	Read Replies (1) of 33421

I don't envision millions of homeless people. I do think its plausible that if the event got severe enough that it could negatively impact the entire country. If that potential becomes apparent I guess I'd rather do something proactive than live through a period of protracted economic downside. I'm not sure I'm buying into the 'moral hazard' way of thinking as much as you may believe. Think about it like this - I think you and I agree that lowering general rates could be real bad for a variety of reasons. If we're going to do it anyway, wouldn't it make more sense to do something like I suggest in an effort to avoid general inflation as well as property inflation? I guess I'd rather do something like that, have an element of control in not allowing increased debt and try and keep control of what I think is an environment ripe for inflation (if we lower general rates). I'm not suggesting I have the answers - I don't. I have lots of questions and damn few answers. I'm also not one of the people in a bad debt/mortgage situation so my thought process is in no way self serving. What really bothers me - and I think you'll agree - is that banks have failed to do thier due diligence. They've played a huge role in creating this debt bubble and consumers were willing participants. When I think about it solely in those terms it makes me think that whatever happens they'll get was they deserve. When I think beyond the 'get what you deserve' mindset I see things a little differently. I'm trying to avoid the thought process of I've got mine so screw you. In this case that way of thinking could create a situation that none of us want to endure. In the back of my mind I guess I'm also thinking that we've bailed out companies and other things so if needed why not our own people? I don't know how bad this is going to get. Maybe it will be nothing other than a blip. OTOH a bailout could be in everyone's best interest and quite self serving to our economy. I'm not bright enough to claim I have all the answers but I think I have some valid questions Thats pretty much all I'm saying when I talk of possibly doing a bailout.

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