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Two Guys Who Get It

Brazilian President calls the bailout unfair to poor people…

“Why give $700 billion to the banks and no money to the poor guys who lost their houses,” Lula asked, according to local media. He referred to the troubled U.S. housing market.

I think he’s right, but for the wrong reasons. Poor people shouldn’t be given money either. But it’s the poor people who are going to have their precious few dollars devalued. It’s the poor people who are going to be taxed by allocating a larger portion of their income to pay for the mountain of regulation that will result in an increase in costs of goods and services.

Newt Gingrich is right too, well sorta…

“You have the former Chairman of Goldman Sachs asking for 700 billion dollars, and in his initial request, asking for it in such an un-American way that I think he should have resigned,” said Gingrich.

Paulson has to go. But he shouldn’t be given the opportunity to resign. I believe the correct term is “shitcanned”. Maybe Congress could investigate him on the possibility that he was in collusion with Wall Street too. That is, if they can squeeze it in between all the other important investigations.

Don’t expect either of the major party Presidential candidates to work towards anything but the status quo though.  They’re going to be busy convincing you that they are miles apart on this issue.

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Country Folks Can Survive

Who has the most to worry about if large financial institutions crash? Is it the people Washington is trying to protect–Wall Street?

Who will be hurt the least? Is it the people Washington is trying to stick with the bill–the taxpayer?

Somebody told us Wall Street fell, but we was so poor we couldn’t tell.

–Alabama

Something to consider. If you have a little piece of land, can shoot straight, and don’t mind wetting a line, there’s not much chance of you or your family starving. Bonus if are on well water, have a wood burning stove, and “spent the summertime cuttin’ up logs for the winter.”

‘Coma is talking about farming and the economy, and she mentioned on Twitter that a lot of people in Hoots are worried about what may happen with this bailout. I grew up out in the country, but I’m a little ashamed to say that my genes have softened considerably in two generations. My grandparents would have no problem fending for themselves with a garden, a fishing pole, and a shotgun (bow, if needed). In fact, they pretty much did that anyway–that’s just how they lived.  It’s very admirable.

You cain’t starve us out and you cain’t make us run, ’cause we’re them ol’ boys raised on shotguns.

–Hank Williams Jr.

I feel lucky that I was given at least a taste of that way of life growing up and could probably scrape by.  I’ve seen enough to not worry much about people in rural areas.  Make fun of them if you want, but country people are sturdy.

We are probably headed for some pain as a nation…probably have been for a long time.  The question we have to ask ourselves I think is if we’re willing to take a little bit of pain in the short term, or a lot of pain in the long term.  I say let’s take our medicine now–no bailout!

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Ron Paul on the Bailout “Debate”

“That’s why so many people in this country have come to the conclusion that there’s not a dime’s worth of difference between the two parties.”

Remember back in the debates when Ron Paul was harping on monetary policy any time he was given a chance to speak?

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China To Halt US Lending?

From Reuters:

Chinese regulators have told domestic banks to stop interbank lending to U.S. financial institutions to prevent possible losses during the financial crisis, the South China Morning Post reported on Thursday.

As a half-full guy, I’m going to read this as “US Will Stop Borrowing Money From China” and be happy. Ok, I’m not really a half-full guy. I’m more of a “you’re an idiot for using such a big glass if that’s all the water you’re going to put in it” guy.  But still.

The real question is this…what’s Congress/Bush/Obama/McCain going to do about that?

I crack me up sometimes.

HT Newscoma

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A Possible Bailout Alternative?

It’s at least worth looking at.  I was listening to Dave Ramsey this afternoon, and he mentioned the possibility of suspending the mark-to-market rules for the subprime industry temporarily.  After all, there isn’t actually a 78% default rate on mortgages is there?

In other words, mark-to-market accounting–not the reality of the economy or the actual credits–has created much of the financial turmoil that has shaken the world. Imagine if you had a $200,000 mortgage on a $300,000 house that you planned on living in for 20 years. But a neighbor, because of very special circumstances, had to sell his house for $150,000. Then, imagine if your banker said you had to mark to this “new market” and give the bank $80,000 in cash immediately (so you would have 20% down) or lose your home. Would this reflect reality? Not at all. Would this create chaos? Absolutely.

And it is happening all over Wall Street.

If you’re as disturbed as I am about having this bailout crammed down your throat based on fear, contact your representatives and mention the possible alternative of suspending mark-to-market rules temporarily.  While that may not be the ideal situation, it’s better than every man, woman, and child in the US ponying up $2,500 of debt to bail these guys out.

I’ll update this post later with a link to a podcast that explains how this would work.  Here’s the Dave Ramsey Podcast

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Real Estate Woes and An ALMOST Good Idea

We have a property that has been on the market for nearly six months now. It is sitting empty because we would really rather sell it than rent it. But we don’t want to give it away either, and in this tough market that puts us in a little bit of a rough spot. We’re not the only ones in this situation, and there are numbers to back this up.

Our contract with our realtor expires in a couple of weeks, and we’ve been discussing what to do next–rent the property until the market improves, drop the price, wait it out, try another realtor, try to sell it ourselves, etc.  We know the market is tough right now, so I think we are being pretty realistic about our options.  We’re also lucky that we have options–we don’t have to give it away.  We received a piece of mail Friday that may have helped us in this decision.

The company we have the property listed with is running a sale October 10-19. Their plan is to draw attention to the great buys available in the market with a national campaign. Sounds like a great and innovative idea! In order to participate, they’re asking homeowners to drop their price by at least 5%. And for the duration of the sale they are reducing their commission percentage by…

Zero.

I realize this is a tough market for agents as well, but this company missed a great opportunity to show their clients that “we’re all in this together”. Yeah, I know their commission would also be reduced by the same 5%, but on a $200k listing they are asking the owners to give up $10k while they are only giving up $600. Why not give up a full percentage point, you know, just to show you are REALLY serious about moving these properties? Why not show you also have a stake in making deals happen?  Why not use this as an opportunity to build relationships and a reputation with clients that will pay off for years to come?

Why not view this as an investment in your business?

In this case, they may have been better off doing nothing.  Someone at the top of this company should check out Seth Godin some time.  This really puts the agents in a bad spot as well, since they have not control over the situation.

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Ron Paul on Glenn Beck Regarding Bailouts and Monetary Policy

Key points in this interview:

  • Bailouts and continued printing of money means your currency is devalued, prices go up, and you are effectively taxed to fund these bailouts.
  • The Treasury Secretary and Federal Reserve have no powers to spend money according to the Constitution.
  • These actions only delay the inevitable.  The market will eventually correct this.  As someone pointed out on Twitter last night, it’s only a question of how high up the cliff we want to climb before we jump get thrown off.

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How AYSO Is Destroying This Country

 

Hooray!!! Everyone Loses!!!
Hooray!!! Everyone Loses!!!

Ever been to a youth soccer match and watched the cute little 5 year olds running around randomly kicking the ball towards an unattended goal?  Did you think it was great that they weren’t keeping score in the game, letting everyone come out feeling like a winner and basking in the experience of the thrill of competition exhibition?

 

Unfortunately these kids grow up to work on Wall Street, where apparently no one loses anymore.  Wall Street is loaded with winners this week, well at least in the last two days.  Meanwhile, taxpayers are gobbling up businesses as if we’re a collective Warren Buffet.  Well, except for the fact that Warren Buffet buys businesses that make money and have strong management.  All the businesses we’re buying suck.

When you and I make bad decisions, we’re forced to deal with the consequences.  The only exception is if that bad decision somehow affects Wall Street.

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Let’s Play Bank!

Now we all get to play bank. Well, it’s more like playing PayDay Lender, since the feds decided in their infinite wisdom yesterday to take over Fannie Mae and Freddie Mac. As a taxpayer, you now own pieces of bad mortgages all across the country.

When you spread the pain out over so many people it doesn’t hurt so bad, right? More socialism, more burden for tax payers, and (maybe worst of all) now the federal government has the lion’s share of the mortgage market.

Of course, this (it’s not a) bailout is only temporary. Right.

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It’s a Great Deal For a Month At Least

Amazon is offering a free trial of Amazon Prime, which lets you take advantage of FREE TWO DAY SHIPPING.  This is an awesome deal if you are planning on buying anything this month–especially something big and expensive.

After the free trial, it’s $79 a monthyear, which is still a good deal if you buy a lot of stuff even a few things a year from the big A.  If it’s not something you’d use enough to justify the cost, just make sure you opt out of the program at the end of the month and you are in good shape.  I usually get the Super Saver shipping, which means I have to wait a week to get my stuff…not this month!