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Strategies & Market Trends : John Pitera's Market Laboratory -- Ignore unavailable to you. Want to Upgrade?

To: Jorj X Mckie who wrote (10363)	10/22/2008 3:29:45 PM
From: Hawkmoon	1 Recommendation Read Replies (1) \| Respond to of 33421

Let the chips fall where they may. Any bailout package and any economic stimulus package is just being funded by you and me. Hmm.. so when there is private market failure (such as these complex mortgage backed securities and CDS's) we should let them collapse? I sure as hell don't want to be under that pile of chips when they fall, especially when I played no role in building up that pile in the first place (I rent, don't own). If my neighbor foolishly sets his house on fire, I'm damned well going to help him out of fear that it will spread throughout the neighborhood (or should I say brushfire?) Tough love is one approach, but it's unecessarily punitive to one and all, especially when the perpetrators have taken their ill-gotten gains and have prospered at the expense of society. People who purchased homes over the past 2 years, with full capability of paying the mortgage, now are sitting on homes that are deflating in value because the consequences of excess demand and predatory lending have fallen upon us all. But they don't get "mark 2 market" accounting priviledges for the purpose of lowering their property tax burden. Bailouts are one thing, but using public funds to invest in long-term assets that are being unfairly marked down in the course of a bubble are another. I have a friend who's home had depreciate by 20%, yet she still makes the mortgage payments because she loves her home. She gets no relief except, as I reminded her, that the US population is expected to increase by 33% over the course of the next 30 years. That's a 33% increase in potential demand, if only there is capital available to lend to responsible and credit-worthy home buyers. So I'm not particularly opposed to the Government using public funds, so long as there is a greater yield being received than would be available from Treasury Bill yields. It's not a preferable solution, but in times such as these, one does what one has to do to in order to prevent financial contagion from spreading throughout the economy. And ultimately, any "bailout" represents the taxpayer investing in that society. Hawk

To: Jorj X Mckie who wrote (10363)	10/22/2008 4:12:51 PM
From: Condor	Respond to of 33421

which case is that? That capitalism needs a degree of responsible policing as opposed to a wanton plundering free for all. Socialism appears to be the tag that some want to pin on that arrangement. As in all things there are shades of grey between black and white. We are probably not that far apart in thinking in the larger picture and with the rhetoric removed on both parts. I'm sure no one here condones usery and injury to innocents. I enjoyed the robust exchange of thoughts here, thank you and wish you all well. Cheers C