Comments on: Government Intervention Adding To Uncertainty http://housingdoom.com/2008/10/14/government-intervention-adding-to-uncertainty/ Sat, 11 Feb 2012 07:12:54 +0000 hourly 1 http://wordpress.org/?v= By: surak http://housingdoom.com/2008/10/14/government-intervention-adding-to-uncertainty/#comment-14481 surak Wed, 15 Oct 2008 23:33:24 +0000 http://housingdoom.com/?p=1712#comment-14481 Twist Exactly Igors word "wipeout" Twist

Exactly

Igors word “wipeout”

]]> By: twist http://housingdoom.com/2008/10/14/government-intervention-adding-to-uncertainty/#comment-14480 twist Wed, 15 Oct 2008 04:25:38 +0000 http://housingdoom.com/?p=1712#comment-14480 Surak- I think someone tied flubber to that poor, dead cat- he's up, and he's down. Unless the PPT has some new bailout planned for tomorrow- I'll bet he's down again. Surak-

I think someone tied flubber to that poor, dead cat- he’s up, and he’s down. Unless the PPT has some new bailout planned for tomorrow- I’ll bet he’s down again.

]]> By: surak http://housingdoom.com/2008/10/14/government-intervention-adding-to-uncertainty/#comment-14479 surak Wed, 15 Oct 2008 03:40:10 +0000 http://housingdoom.com/?p=1712#comment-14479 Dead cat bounce. This is just temporary. Dead cat bounce. This is just temporary.

]]> By: toysarefun http://housingdoom.com/2008/10/14/government-intervention-adding-to-uncertainty/#comment-14478 toysarefun Tue, 14 Oct 2008 14:17:04 +0000 http://housingdoom.com/?p=1712#comment-14478 Well, when the government anounces they are going to purchase bank stocks, and then those very stocks go up big time, you've just got to be smelling a rat. I believe mostly financials went up yesterday. Well, when the government anounces they are going to purchase bank stocks, and then those very stocks go up big time, you’ve just got to be smelling a rat. I believe mostly financials went up yesterday.

]]> By: wcvarones http://housingdoom.com/2008/10/14/government-intervention-adding-to-uncertainty/#comment-14477 wcvarones Tue, 14 Oct 2008 11:59:04 +0000 http://housingdoom.com/?p=1712#comment-14477 This preferred thing blows, too. Warren Buffett got 10% perpetual preferred, plus tremendously valuable warrants, for investing in the cream of the crop, GE and Goldman Sachs. The taxpayers are getting 5% and no warrants for investing in the stinkier banks. That's a direct transfer of wealth from current and future taxpayers to Wall Street fatcats. I suggested last week that the Paulson should lock in today's ultra-low interest rates on the liability side of the balance sheet by doing a massive 30-year Treasury auction. What he's doing now is the opposite: locking in ultra-low rates on the asset side of the balance sheet. Yes, the rate purportedly rises to 9% after five years, but that still may not be enough to compensate for one or two bank failures and/or long-run inflation. And can anyone doubt that the 9% rate will be renegotiated when the banks cry poverty and donate to Chris Dodd and Barney Frank's campaigns? Locking in low rates on assets takes inflation off the table and leaves default as the only solution to unsustainable government debt. Now, $250 billion of low-rate assets isn't enough to do it, but I suspect this is only the beginning. (more <a href="http://wcvarones.blogspot.com/2008/10/careful-with-that-axe-eugene.html" rel="nofollow">here</a>) This preferred thing blows, too.

Warren Buffett got 10% perpetual preferred, plus tremendously valuable warrants, for investing in the cream of the crop, GE and Goldman Sachs. The taxpayers are getting 5% and no warrants for investing in the stinkier banks. That’s a direct transfer of wealth from current and future taxpayers to Wall Street fatcats.

I suggested last week that the Paulson should lock in today’s ultra-low interest rates on the liability side of the balance sheet by doing a massive 30-year Treasury auction. What he’s doing now is the opposite: locking in ultra-low rates on the asset side of the balance sheet. Yes, the rate purportedly rises to 9% after five years, but that still may not be enough to compensate for one or two bank failures and/or long-run inflation. And can anyone doubt that the 9% rate will be renegotiated when the banks cry poverty and donate to Chris Dodd and Barney Frank’s campaigns? Locking in low rates on assets takes inflation off the table and leaves default as the only solution to unsustainable government debt. Now, $250 billion of low-rate assets isn’t enough to do it, but I suspect this is only the beginning.

(more here)

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