Friday, September 26, 2008

Some Finance stuff due to Bailout stupidity.

All of this bailout nonsense is driving me nuts. Mostly because I have never seen such a load of crap passed around. First, the proposed plans range from totally bats$*t insane (Paulson's plan, GOP Plan) to sadly deficient. I think it is obvious to all that Paulson's original plan was nothing but a pure power and money grab, a giant theft planned before Bush's sunset. The GOP plan is just an way to show us all that Republicans have absolutely no brains. The want to deregulate their way out of this mess and reduce capital gains while doing it. I feel bad for those Republicans who have morals and a brain, the bulk of their party members are working hard to destroy that brand.

Dodd's plan, Barney's plan are all failed messes that build on the Paulson plan and try to "fix" it without fundamentally changing it. Come on, buying assets at their "book value" will not help a darn thing, it will just leak $700 billion out of our Treasury and bankrupt the country.

Look, the bond market is going wild, the interest on Treasury Bonds is very low. Everyone is trying to find a safe place to put their money. We need to issue more bonds and take this money and use it to buy these failing institutions. We need to invest into our own economy. We don't need to buy the toxic debt and leave these institutions intact making their profits for private enterprise. We need to nationalize everything we can get our hands on, we will lose out on some of this, but much of it will be valuable later. Then we can sell these institutions back to investors when they have regained their confidence and potentially make a profit.

We know we won't make a profit on toxic debt, it is completely worthless. But these companies are worth something. We need a different plan, not a bailout, but a nationalization plan.

Ref: Yglesias,

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