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

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

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.

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.