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To: GraceZ who wrote (150982)	9/26/2008 5:19:03 PM
From: patron_anejo_por_favor	Read Replies (2) \| Respond to of 306849

No, I do believe a financial meltdown IS here. I think we're in a recession, probably one comparable to '73-'74. And I think government intervention of the type proposed is likely to make it much, much worse, and that we can muddle through it if we let the markets do their thing. Not that it will be painless, oh no, we've gone far too far for that. But it can be shorter and LESS painful than if we keep shooting ourselves in the feet. As long as we don't destroy the dollar, I think there's hope. I'm really a pretty optimistic guy (don't you think?<G>)

To: GraceZ who wrote (150982)	9/26/2008 6:13:59 PM
From: MulhollandDrive	Respond to of 306849

What I don't get from you (not you personally, but all those bearish on the US here on SI) is that after years and years of discussing and arguing how it is that the US was headed for financial meltdown, that now that the time is nigh, the almost universal reaction is to disbelieve that the situation is as dire as everyone is saying it is. you're making the same mistake that the talking heads on cnbs and other outlets are making... opposition to the paulson plan doesn't mean that there isn't a consensus that something should be done....asserting that position makes it too easy to ignore the opposition as uninformed and unwilling to do ANYTHING, and quite frankly that's why it's being done...i do find it amusing that the same dem critics that were so vociferous against bush's previous tactics as 'my way or the highway' are suddenly extolling the paulson/bush plan as the only way to go (with minor populist tweaks) there are other plans that do not put the taxpayer at risk, i've posted denninger's plan on this thread: We can and must fix it but spending taxpayer money will not do so. The Democrats claim they have the votes to pass the original bill. Then pass it Democrats. Bush will sign it. The Democrats will NOT pass it without The Republicans because they are afraid that the plan won't work (and in this they are correct) and refuse to put their heads on the chopping block if they spend $700 billion or more and the economy collapses anyway. They demand that Republicans march into the furnace with them. Republicans are wise to say NO. The solution is simple, it is elegant, and it will work. 1. Force all off-balance sheet "assets" back onto the balance sheet, and force the valuation models and identification of individual assets out of Level 3 and into 10Qs and 10Ks. Do it now. 2. Force all OTC derivatives onto a regulated exchange similar to that used by listed options in the equity markets. This permanently defuses the derivatives time bomb. Give market participants 90 days; any that are not listed in 90 days are declared void; let the participants sue each other if they can't prove capital adequacy. 3. Force leverage by all institutions to no more than 12:1. The SEC intentionally dropped broker/dealer leverage limits in 2004; prior to that date 12:1 was the limit. Every firm that has failed had double or more the leverage of that former 12:1 limit. Enact this with a six month time limit and require 1/6th of the excess taken down monthly. Once 1-3 are put in place then send in the OTS and OCC examiners and look at every financial institution in the United States. All who are insolvent and unable to raise private capital immediately are forced through receivership where the debt is converted to equity and existing equity is wiped out. With the CDS monster caged the systemic risk is removed, the bondholders provide the cushion for recapitalization (as it should be) and the restructured firm emerges with no debt while the former bondholders are now the owners (of the equity) in the resulting firm. With a clean balance sheet the restructured firms remain in business and open the next morning able to raise and attract capital. For the few firms that have an insufficient debtholder capital cushion to successfully complete this process, they are liquidated instead. There will be few of these and in fact each of those firms is a regulatory failure, as we should have never permitted a firm to become so far "underwater" that the bondholder's capital is insufficient to capitalize a restructuring. Finally, drop the silly shorting restrictions. Liquidity in the market right now stinks and this is a big part of why. Start prosecuting aggressively the rumors and other manipulation that leads to stocks both rising and falling. This plan will work, it will instantaneously stabilize the credit markets as balance sheets will be transparent, the CDS monster will be permanently de-fanged, leverage will be returned to reasonable levels and the forcibly restructured firms will have no debt on their balance sheets and be able to immediately access the capital markets. Best of all, it will require exactly zero taxpayer dollars. ********* but even with a workable plan, there's going to be some pain as we slog through the debt overhang, we can make provisions to keep the credit markets functioning, but that doesn't mean we'll end up in the extreme levered position that brought us to the drunken orgy in the first place....so no i don't buy the amageddon scenario....those using financial meltdown as a weapon to extract a blank check from the taxpayer are financial terrorists, imo

To: GraceZ who wrote (150982)	9/26/2008 6:14:49 PM
From: Joe S Pack	Respond to of 306849

We all understand the situation and we have been predicting this for years. But we have not reached the climax yet. Just because these media and Wallstreet crooks make unrelenting headlines and fear mongering that does not mean we are there yet. There have been several solutions proposed on this thread and elsewhere in SI. But definitely not the one that consummate liar Hank, always bend-over Ben and several sold out politicians like Frank, Dodd, Pelosy, Bush etc want. WallStreet crooks have to share their pain as does everyone else who enjoyed this unearned credit orgy for the past several years at the expense of prudent savers and conservative home owners. It is part of natural free market cycle. Of course we are now a socialist state and there are people who want to live on government handouts whenever they see an opportunity. All politics aside as to whose plan is best and whose plan is political posturing or involved in some sort of subversive effort to boost their own positions....all that crap aside. What I don't get from you (not you personally, but all those bearish on the US here on SI) is that after years and years of discussing and arguing how it is that the US was headed for financial meltdown, that now that the time is nigh, the almost universal reaction is to disbelieve that the situation is as dire as everyone is saying it is.