tag:blogger.com,1999:blog-8243351006478134285.post3037351300837963394..comments2024-03-20T12:34:55.100-05:00Comments on Stonekettle Station: A Proposal Regarding Nationalization of the US Financial SectorJim Wrighthttp://www.blogger.com/profile/11259550121437562338noreply@blogger.comBlogger12125tag:blogger.com,1999:blog-8243351006478134285.post-43089269138162683452009-03-23T15:40:00.000-05:002009-03-23T15:40:00.000-05:00Mr. Wright,I think I need a couple of clarificatio...Mr. Wright,<BR/>I think I need a couple of clarifications, before I say, "Hell yeah!" First, if we are to bail out the banking system, where these toxic assets are concerned, have you considered that a typical 30 year mortgage yields a profit of approximately three times the original selling price? This means the problem is three times as big as most think it is and will take a logarithmically longer time to even break even with the initial expenditure of federal funds. I am only going to mention that, during this time of hoping to break even, we are paying on the interest and principle of the loan from the Chinese that makes this even remotely possible. All of this is based on the assumption of another, steady, long-term increase in housing values, as well as having to combat massive inflation at home and a massive devaluing of our currency worldwide.<BR/>Sorry man; I have a long history of chewing up and spitting out "idea men". Way too many years in a quality control job....Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-8243351006478134285.post-39005001940667476512009-01-13T12:08:00.000-06:002009-01-13T12:08:00.000-06:00Yeah, protection of the fund would be a critical f...Yeah, protection of the fund would be a critical factor. Without constitutional protection, it would be pillaged in short order - if it was actually funded at all in the first place. <BR/><BR/>Politicians cannot keep their hands off the money. That's a fundamental law of the universe.Jim Wrighthttps://www.blogger.com/profile/11259550121437562338noreply@blogger.comtag:blogger.com,1999:blog-8243351006478134285.post-84433003624668481622009-01-13T11:02:00.000-06:002009-01-13T11:02:00.000-06:00I think number 3 is the biggie. Wasn't Social Secu...I think number 3 is the biggie. Wasn't Social Security something like that until it was decided that all the money that was carefully set aside to pay for future generations of retirees needed to be raided..err, I mean joined into the general fund?Markhttps://www.blogger.com/profile/12341711121542863377noreply@blogger.comtag:blogger.com,1999:blog-8243351006478134285.post-33964434697833013212008-10-02T23:27:00.000-05:002008-10-02T23:27:00.000-05:00Jim,Do send it too Sarah "Barracuda". After list...Jim,<BR/><BR/>Do send it too Sarah "Barracuda". After listening to her tonight, I suspect she would be open. Especially since the VP debate went so well.<BR/><BR/>RickAnonymousnoreply@blogger.comtag:blogger.com,1999:blog-8243351006478134285.post-79046540032607826272008-10-02T11:27:00.000-05:002008-10-02T11:27:00.000-05:00Ilya. Agreed.As I said in the post, while there ar...Ilya. Agreed.<BR/><BR/>As I said in the post, while there are a number of significant advantages, there are a number of pitfalls to this idea.<BR/><BR/>The biggest being the principal, which is the key to the whole thing. It would take a Constitutional amendment to make it untouchable - and that simply won't happen, it'll never get out of Congress, let alone get to the states for a vote. Never happen.<BR/><BR/>The politicians simply will not give up a pile of money that big. Ever. Oh, they'd all say why everybody <I>else</I> should leave it alone, but at the same want to reserve the right to plunder it for their own, very important, projects.<BR/><BR/>It only worked here in Alaska because our state government is small and more directly answerable to the people than elsewhere. And, nobody thought that pile of money would grow to $40 <I>billion</I> plus. Now that it has, it makes the politicians in Juneau nearly <I>insane</I> with lust - every year somebody in the state house floats an idea for getting their hands on it. Problem is that it can't be touched without a referendum by the people, and the people aren't willing to give it to the politicians. Stalemate. And that's a good thing for us.<BR/><BR/>But frankly, on the large federal scale I just don't see the politicians making the same decision.<BR/><BR/>I think this is a viable way to turn this disaster to our advantage, but I'm absolutely convinced that even if everybody in D.C. was onboard with it, it still wouldn't happen. <BR/><BR/>But I also think that the bailout as currently envisioned won't work either. It's a patch at best, not a true fix, or a long-term solution. And it sets a large number of very bad precedents. Borrowing money got Wall Street into this, borrowing more money to fix it simply moves the problem to the Fed. Those toxic mortgages aren't going to be any less toxic just because the Fed took them over. I see no real detox in the bailout, no real recovery for the people who need it most (i.e. the average home buyer who defaulted on his loan and now has shit for credit and will for the foreseeable future). How will the Fed unload those houses? How will we recover the $700B (and probably more like $1.5T when it's done)? And in addition to the properties the Fed picks up, there are a least another million homes either under construction or available that can't be sold either, and those were never foreclosed on, they've always been empty, and unlike the repossessed properties they have to go for full market value, else the construction companies will go bankrupt. <BR/><BR/>I can understand the need to do something <I>now</I>, i.e. bailout. But what comes after that?Jim Wrighthttps://www.blogger.com/profile/11259550121437562338noreply@blogger.comtag:blogger.com,1999:blog-8243351006478134285.post-53570619562032585512008-10-02T04:56:00.000-05:002008-10-02T04:56:00.000-05:00A grass-roots movement, maybe?Jim, there is absolu...A grass-roots movement, maybe?<BR/><BR/>Jim, there is absolutely <EM>nothing</EM> in this plan that I do not love! Starting with the realization that the government has no choice but to buy toxic mortgages, and then proceeding with figuring out ways to make it equitable for an average taxpayer - I think your ideas are brilliant! I wish I could claim partial credit here :)<BR/><BR/>Just one note: I'm afraid #3 in your program will never be adopted, leaving the door wide open for politicians to loot the principal for whatever causes. Not the reason to discard the entire plan, of course, but a bit of a reality check. <BR/><BR/>One other thought: Much of success of this plan relies on positive investment returns. As we have seen in the last year, even the most stable long-term instruments take a nosedive with the rest of the market. We are in need of a massive investment to stabilize the market, which will ensure positive returns even in intermediate-term. Which gets us back to the fact that the federal cash infusion - heretofore derogatorily known as a "bailout" - is absolutely central to any successful recovery. <BR/><BR/>Despite outward pretenses, I lack formal economics training to further comment on the feasibility of each of your points and the program in its entirety. My financial-industry experience does not trigger any red flags with your proposal. As a taxpayer and an investor, I'd vote for it with a great hope.<BR/><BR/>Thank you!Ilyahttps://www.blogger.com/profile/05379167075203188111noreply@blogger.comtag:blogger.com,1999:blog-8243351006478134285.post-6116178121722728562008-10-02T00:26:00.000-05:002008-10-02T00:26:00.000-05:00Well, I could mail it to my senior Senator, I supp...Well, I could mail it to my senior Senator, I suppose, except he's busy being indicted. <BR/><BR/>I could mail it to my junior Senator, but I'm not sure she's actually still alive since I've heard exactly nothing from her in the last year.<BR/><BR/>I could mail it to my governor, but she's busy, uh, <I>debating</I> Joe Biden and making pit bull jokes.<BR/><BR/>I could mail to my representative, but it's probably best that we just not mention him, ever. Besides he's way too busy naming shit after himself.<BR/><BR/>So, who does that leave?Jim Wrighthttps://www.blogger.com/profile/11259550121437562338noreply@blogger.comtag:blogger.com,1999:blog-8243351006478134285.post-79472269166162690192008-10-01T23:08:00.000-05:002008-10-01T23:08:00.000-05:00I like when you explain stuff. It makes sense even...I like when you explain stuff. It makes sense even to me. ;) Are you going to mail it to Congress?MWThttps://www.blogger.com/profile/09446603415730525882noreply@blogger.comtag:blogger.com,1999:blog-8243351006478134285.post-24932689148230541952008-10-01T20:53:00.000-05:002008-10-01T20:53:00.000-05:00Eh, I didn't even notice that - must be something ...Eh, I didn't even notice that - must be something in the air todayJim Wrighthttps://www.blogger.com/profile/11259550121437562338noreply@blogger.comtag:blogger.com,1999:blog-8243351006478134285.post-85429492845306863412008-10-01T20:46:00.000-05:002008-10-01T20:46:00.000-05:00Since I commented "got us hear in the first place,...Since I commented "got us <EM>hear</EM> in the first place," I'm in position to throw stones.Janiecehttps://www.blogger.com/profile/14190655869710465713noreply@blogger.comtag:blogger.com,1999:blog-8243351006478134285.post-661874481264233132008-10-01T16:51:00.000-05:002008-10-01T16:51:00.000-05:00I'm more of an idea man, I'll leave management to ...I'm more of an idea man, I'll leave management to the Chiefs.<BR/><BR/>And just a technical note: I think this post surpassed the highest ever recorded number of typos in a blog post, ever, in the history of the internet. I think I've fixed most of them, but frankly I'm tired of rereading this thing. <BR/><BR/>If you note a typo, keep it to yourself. I'll fix it sooner or later. Probably later.Jim Wrighthttps://www.blogger.com/profile/11259550121437562338noreply@blogger.comtag:blogger.com,1999:blog-8243351006478134285.post-70718098198314897402008-10-01T16:42:00.000-05:002008-10-01T16:42:00.000-05:00I vote for Jim to head such agency - and to have f...I vote for Jim to head such agency - and to have full authority to <EM>keelhaul</EM> anyone who tries to engage in the type of chicanery that got us hear in the first place.Janiecehttps://www.blogger.com/profile/14190655869710465713noreply@blogger.com