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Politics : Formerly About Advanced Micro Devices -- Ignore unavailable to you. Want to Upgrade?

To: Road Walker who wrote (465559)	3/22/2009 9:38:24 AM
From: Alighieri	2 Recommendations Read Replies (1) \| Respond to of 1573963

If you want to guarantee that America becomes a mediocre nation, then just keep vilifying every public figure struggling to find a way out of this crisis who stumbles once — like Treasury Secretary Timothy Geithner or A.I.G.’s $1-a-year fill-in C.E.O., Ed Liddy — and you’ll ensure that no capable person enlists in government. So all kinds of lesser issues and clowns have ballooned in importance and only confused people in the vacuum. Hopefully, that plan will be out by Monday, and hopefully the president will pull the country together behind it, and hopefully the lawmakers who have to approve it will remember that this is not a time for politics as usual — and that our country, alas, is not too big to fail. Hopefully ... I so completely agree with this op ed...including the point he makes about Obama failing to lead the debate... Al

To: Road Walker who wrote (465559)	3/22/2009 9:54:34 AM
From: Alighieri	Read Replies (2) \| Respond to of 1573963

Despair over financial policy The Geithner plan has now been leaked in detail. It’s exactly the plan that was widely analyzed — and found wanting — a couple of weeks ago. The zombie ideas have won. The Obama administration is now completely wedded to the idea that there’s nothing fundamentally wrong with the financial system — that what we’re facing is the equivalent of a run on an essentially sound bank. As Tim Duy put it, there are no bad assets, only misunderstood assets. And if we get investors to understand that toxic waste is really, truly worth much more than anyone is willing to pay for it, all our problems will be solved. To this end the plan proposes to create funds in which private investors put in a small amount of their own money, and in return get large, non-recourse loans from the taxpayer, with which to buy bad — I mean misunderstood — assets. This is supposed to lead to fair prices because the funds will engage in competitive bidding. But it’s immediately obvious, if you think about it, that these funds will have skewed incentives. In effect, Treasury will be creating — deliberately! — the functional equivalent of Texas S&Ls in the 1980s: financial operations with very little capital but lots of government-guaranteed liabilities. For the private investors, this is an open invitation to play heads I win, tails the taxpayers lose. So sure, these investors will be ready to pay high prices for toxic waste. After all, the stuff might be worth something; and if it isn’t, that’s someone else’s problem. Or to put it another way, Treasury has decided that what we have is nothing but a confidence problem, which it proposes to cure by creating massive moral hazard. This plan will produce big gains for banks that didn’t actually need any help; it will, however, do little to reassure the public about banks that are seriously undercapitalized. And I fear that when the plan fails, as it almost surely will, the administration will have shot its bolt: it won’t be able to come back to Congress for a plan that might actually work. What an awful mess. ============================================================ So the plan is riskless for private investors because, if it fails, the taxpayer guarantees the assets...and I suppose that if there was excessive risk to private investors, they would not participate. I am still trying to understand why he believes that the plan will fail. Wouldn't you have to have details on how these assets will be sured up to avoid having them default once more in private hands? Al

To: Road Walker who wrote (465559)	3/22/2009 2:40:31 PM
From: tejek	Read Replies (3) \| Respond to of 1573963

I ran into an Indian businessman friend last week and he said something to me that really struck a chord: “This is the first time I’ve ever visited the United States when I feel like you’re acting like an immature democracy.” That says it all. Right now we have an absence of inspirational leadership. Obama was that inspirational leadership. Apparently, he's lost his way these past few weeks.