eCache |
An explanation of the credit crisis doesn’t get much clearer than this. It’s a little long, but it is compelling. Seriously.
Big kudos to Jonathan Jarvis.
The Crisis of Credit Visualized from Jonathan Jarvis on Vimeo.
Oh, this is not a good idea. Not at all.
Surely you have heard of toxic assets. Those are the mortgages and other risky loans that banks have made to folks who had no business receiving those funds. Not unexpectedly, those loans are bad/toxic. They “caused” the meltdown of our financial system.
Back in September when all this hit the fan, Henry Paulson proposed taking $850 billion of taxpayer money and buying these “assets”. The money was commandeered, but the toxic stuff wasn’t purchased. Rather, the money was dispersed so AIG, Merrill Lynch, and other financial institutions could pay their bonuses, among other things.
More recently, Tim “Turbo Tax” Geithner pitched to spend another $1 trillion to purchase those same toxic assets. It appears that is actually going to happen.
The Record reported yesterday that New Jersey’s pension fund is scheduled to purchase a lot of these toxic assets.
New Jersey’s beleaguered pension fund would buy troubled loans and securities – so-called “toxic assets” – as part of a Wall Street recovery plan discussed Friday with the head of the Federal Deposit Insurance Fund.
The pension fund is beleagured because of poor investments ($187 million in Lehman Brothers last summer) and being severely underfunded. Once again Governor Corzine has signed off on not making contributions to the public employee pension fund. Doing so would have admitted that the budget hole was much deeper than it already is.
So, how will New Jersey prop up this fund? By purchasing bad debt.
The intent is to reduce the bad assets on the balance sheets of banks, and free them to lend more.
Note, that’s the intent of the federal government. New Jersey state government is just the dupe that will be complicit in this scheme.
My tax dollars will be spent to purchase bad debt to invest in my retirement.
This makes absolutely no sense whatsoever.
It is clear that government has run amok. Only corrupt, insincere, incompetent folks could devise a system like this.
I will state once again the solution to the financial mess: bankruptcy. Let the companies fail. Lord knows it would be far less costly than propping up these businesses every two months.
Does no one else see the stupidity in this plan?
Let it be known who is to blame for New Jersey’s participation:
“At the governor’s suggestion, New Jersey organized the participation of other public funds,” Kramer said. “The fact that a number of major public funds across the country are getting together to explore this, is because of the governor’s initiative.”
The financial wizard is seeking re-election. Hold him accountable for his incompetency.
Last weekend Phil Mickleson won $1,134,000 at the Northern Trust Open in California. The tournament purse wasn’t the only bailout money that taxpayers footed.
Northern Trust accepted $1.6 billion of our tax dollars. With it the bank hired Cheryl Crow and Chicago to play at a couple parties for Northern Trust guests at the golf tournament. These guests were put up at the Beverly Wilshire, Ritz Carlton, as well as other swanky places. At one of the parties, Tiffany provided the goodie bags.
Check out TMZ for some video of the fun.
It’s good to know that Northern Trust is not feeling inhibited now that it is on the public dole.
This folks, is what the government is trying to protect. Yet, it seems to me that it is exactly this mentality that created the mess to begin with.
Have a happy Fat Tuesday. Lord knows everyone else is because they know we’ll pick up the tab.
Remember about a month before the election when the economy tanked? Then right before we voted, both the President-elect and the undistinguishable candidate voted in favor of $850 billion of taxpayer money to bailout the banking industry? Of course, that morphed to about $1.5 trillion.
If you hadn’t been paying attention, lots more taxpayer money has been doled out to various private businesses since. AIG has gotten its third installment of our money. I guess the lavish spa treatment wasn’t enough for them. And we all saw GM, Ford, and Chrysler beg for money last week.
In a late-night Sunday deal, which seems to be the modus operandi of late, regulators agreed last evening to prop up CitiGroup to the tune of $306 billion plus $20 billion from the $850 billion pot that has already been commandeered from us.
U.S. government regulators were nearing approval of a radical plan to stabilize Citigroup on Sunday in which the government would soak up tens of billions of dollars in losses at the struggling bank, according to people briefed on the discussions.
When does this end? Rumor has it that home builders will be on the Hill asking for taxpayer money to stabilize home prices so the industry doesn’t tank. Who will line up after them?
This is a bad deal for everyone. The government is eating up bad debt. The consequence for building a poor business model is . . . ? Well, I haven’t figured that out yet as there is no consequence. At least not for the companies. The American taxpayer is being forced to pay though.
My father worked three jobs from a wheelchair to provide for his family. He taught me to work hard, keep my mouth shut, and that good work ethic would pay off. Sadly, Dad was completely wrong. That is not how the workplace operates these days.
Gert and I are astounded when we look around. Folks are living in mansions all around us and we don’t understand how they afford it. We make decent money, but have no idea how these 4500 sq. ft. homes are built by our peers. Usually, these same folks have new cars in the driveway, take fancy vacations, and lead a life foreign to us. It baffles us.
We don’t normally have any idea of these folks’ finances. I certainly hope, however, they are not going to be bailed out by the government.
Personal responsibility means paying one’s own way. If one is in a mortgage he cannot afford, the government should not be his safety net. Remember, the government’s money comes from you and me.
This is not the Great Depression. I can foresee a time when it would be appropriate for the government to help out. This is not that time. What has happened here is that folks signed up for mortgages they could not afford; they overbought. This is akin to folks who run up their credit cards.
The system works when left alone. Because they overbought, they will default on their loans. Because of that, the banks will foreclose to recoup some of their losses. That process will have a negative impact upon the borrower and the lender. The lender will have to write off the loss and shareholders will lose. The borrower will find it difficult to borrow money because of the risk involved.
Why should taxpayers bail out those who made poor investments? Are you willing to pay the vig on my credit cards so I can run up some debt this holiday season?
If you can’t pay your mortgage, you can’t afford your house . . . plain and simple.
Welcome to eCache @ RDOwens.net. This blog represents my ramblings about politics, GPS games, New Jersey, education, cooking, and other topics.
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My politics are conservative, but I am an independent. I like reasoned discourse. More
