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    Archive for the ‘money’ Category

    our economy sucks

    Posted by K on September 30, 2008

    Surprise, surprise, Bush wants to help out big business and could give a shit about the little guys.  I liked this article I found in People, it’s exactly how everyone sees this “bailout”.  Why on earth should we bail out idiots who made bad decesions?  If you fuck up, you should have to deal with the consequences, that’s how the world works.  If these businesses are just bailed out, they have no incentive to do the right thing.

    From People:

    Let Risk-Taking Financial Institutions Fail

    — Ari J. Officer has completed his master of science degree in financial mathematics at Stanford University. Lawrence H. Officer is a professor of economics at the University of Illinois at Chicago.

    Let the poorly managed, overly risk-taking financial institutions fail! Always remember that Wall Street and the real economy are not the same thing.

    Demonstrators protest the U.S. Congress's proposed $700 billion bailout of the financial industry in New York City's Times Square, Sept. 27
    Demonstrators protest the U.S. Congress’s proposed $700 billion bailout of the financial industry in New York City’s Times Square, Sept. 27
    Keith Bedford / Reuters

    The Administration and Congress have felt compelled to do something about the “financial meltdown,” so an inefficient and inequitable “bailout plan” has been rushed through the legislature despite harsh criticism from the right and left. That’s unfortunate. Both presidential candidates were stalling by qualifying the plan. Whichever candidate had had the courage to reject outright this proposal would have had the better claim to be President.

    Do not be fooled. The $700 billion (ultimately $1 trillion or more) bailout is not predominantly for mortgages and homeowners. Instead, the bailout is for mortgage-backed securities. In fact, some versions of these instruments are imaginary derivatives. These claims overlap on the same types of mortgages. Many financial institutions wrote claims over the same mortgages, and these are the majority of claims that have “gone bad.”

    At this point, such claims have no bearing on the mortgage or housing crisis; they have bearing only on the holders of these securities themselves. These are ridiculously risky claims with little value for society. It is as if many financial institutions sold “earthquake insurance” on the same house: when the quake hits, all these claims become close to worthless — but the claims are simply bets disconnected from reality.

    Follow the money. Average Joes and Janes are not the holders of the other side of complicated, over-the-counter derivatives contracts. Rather, hedge funds are the main holders. The bailout will involve a transfer of wealth — from the American people to financial institutions engaging in reckless speculation — that will be the greatest in history.

    Rescuing financial institutions is not the best solution. Yes, banks are needed to provide capital to businesses. But it is not necessary to spend $1 trillion to maintain liquidity. If the government is to intervene, it should pick and choose which claims to purchase; claims that are directly tied to mortgages would be a good start.

    Let financial institutions fail, merge or be bought out. The faltering institutions will see their shares devalued and will be likely to be taken over by stronger institutions — as has already started happening. This consolidation of the financial sector is both efficient and inevitable; government action can only delay the adjustment.

    The government should not intervene. It should leave overleveraged financial institutions to default on their derivatives obligations and, if necessary, file for bankruptcy. Much of the crisis has arisen from miscalculating the risks involved in a large book of positions in these derivatives. It is only logical that these institutions pay for their poor management.

    Rather than bailing out Wall Street, we propose that the government should buy up the actual mortgages in question and do nothing else. The government should not touch any derivatives; that is, claims that do not directly tie into the actual mortgages. If money becomes too tight, then the Fed can certainly increase its loans to financial institutions.


    Posted in money | Leave a Comment »

    Not in the witness protection program

    Posted by K on October 12, 2007

    I am not currently in the witness protection program, I am not purposely avoiding my blog.  It’s just things have been so damn bleak for such a long time now it seems, that I didn’t want to depress my fellow bloggers.  Let’s see, my sweetie is currently out of work, and probably will be for a very long time.  We’re broker than broke, and in the past couple of months have turned off our cable and cell phones in an effort to save money.  We do have a great pair of rabbit ears to pick up our local channels so we can still watch Heroes.  I haven’t really missed the tv that much; we never watched it when we had the 300+ channels.  I did miss the cell phone, but thankfully my mil gave us one of hers that she wasn’t using (she has a personal one and one from her work).  Later this month we’re going to a wedding in Florida, so all our extra money we’ve been saving towards gas.

    See why I’ve been quiet? 🙂

    Posted in At Home, family, money | Leave a Comment »

    Mega Millions

    Posted by K on July 10, 2007

    I keep daydreaming of winning the lottery. I’m not greedy, I don’t have to have millions, just enough so that I could quit the day job and spend time enjoying being alive and not dreading the day to day. My husband is working on his first novel. He stays home, chases the kids, writes, and even remembers to cook me lovely meals. I want some of that. The home life, the spending the time with the kids and the gorgeous husband. Work sucks. It takes me away from where I want to be and doesn’t pay me well enough for the things I want. This certainly isn’t my American Dream.

    Along the same lines, why is it that to do the right thing, or the healthy thing or the good thing, you always pay 3 times more? I love organic foods, but can’t afford the price tag. I love the idea of this company, but a tank top for 50 bucks??!? I would love to have solar power and to be green, but the products (like the ones made from bamboo which is plentiful and cheap) are more costly than the polluting alternatives. It makes no sense, it’s not like this in Europe, when I was there, fresh food is cheap and readily available and the processed crap is what costs 3 times more. I don’t think we have the right idea about what’s good in this country anymore. Actually we haven’t for a long time.

    Posted in family, money | Leave a Comment »