Neil Barofsky delivers his verdict: "Treasury’s mismanagement of TARP and its disregard for TARP’s Main Street goals... may have so damaged the credibility of the government as a whole that future policy makers may be politically unable to take the necessary steps to save the system the next time a crisis arises. This avoidable political reality might just be TARP’s most lasting, and unfortunate, legacy." [View news story]
I disagree Hubert. If we agree not to hold anyone responsible until we hold everyone responsible nothing is ever done.
In a capitalist system those who make the decisions should bear the consequences of their failures. In particular, the equity holders should be wiped out BEFORE any bailout is even considered.
To Recover, Japan Must Ignore the Economic Fallacies [View article]
1) ---"However, as the debt continues to increase, so does the interest expense"
---No matter how often it's repeated, there's simply no evidence to support this assertion.
Unless you think interest rates are going down (there are zero or close to zero in Japan depending on maturity), the statement is self-evident.
2) Issuing debt to pay interest is equivalent to a Ponzi scheme
3) Although there is no magical threshold of debt to GDP (Argentina went bankrupt at 55%). There is also no magical "non threshold. If countries could finance themselves entirely with non bearing notes, why pay interest at all?
The fact is that nobody knows when the public begins to ask for higher rates to compensate for unspecified higher risk. In other words, the public may decide that 1.25% is no longer enough to justify a 10 year loan to Japan in Yen and may demand 2,3 or even 10%. At that point Japan will be in the situation I described. Arguing that it won't happen because it never has or because they can financed themselves by printing more Yen is, in my opinion, very dishonest.
Neil Barofsky delivers his verdict: "Treasury’s mismanagement of TARP and its disregard for TARP’s Main Street goals... may have so damaged the credibility of the government as a whole that future policy makers may be politically unable to take the necessary steps to save the system the next time a crisis arises. This avoidable political reality might just be TARP’s most lasting, and unfortunate, legacy." [View news story]
They didn't need to "go belly up". Just wipe out the equity they amassed by taking on the risk and fire the managers responsible.
Neil Barofsky delivers his verdict: "Treasury’s mismanagement of TARP and its disregard for TARP’s Main Street goals... may have so damaged the credibility of the government as a whole that future policy makers may be politically unable to take the necessary steps to save the system the next time a crisis arises. This avoidable political reality might just be TARP’s most lasting, and unfortunate, legacy." [View news story]
MG,
If anyone had told me in 2006 that the American people would not even QUESTION the obvious conflict of interest of Paulson bailing out GS I would have said they were crazy. Any decent judge would have recused him/herself from such a case.
Neil Barofsky delivers his verdict: "Treasury’s mismanagement of TARP and its disregard for TARP’s Main Street goals... may have so damaged the credibility of the government as a whole that future policy makers may be politically unable to take the necessary steps to save the system the next time a crisis arises. This avoidable political reality might just be TARP’s most lasting, and unfortunate, legacy." [View news story]
Tack:
TARP may have prevented worldwide financial collapse by rewarding those who drove the system into the brink of worldwide financial collapse. The result? A system that rewards risk taking with government guarantees. May the best lobbying effort win!
Neil Barofsky delivers his verdict: "Treasury’s mismanagement of TARP and its disregard for TARP’s Main Street goals... may have so damaged the credibility of the government as a whole that future policy makers may be politically unable to take the necessary steps to save the system the next time a crisis arises. This avoidable political reality might just be TARP’s most lasting, and unfortunate, legacy." [View news story]
Neil Barofsky delivers his verdict: "Treasury’s mismanagement of TARP and its disregard for TARP’s Main Street goals... may have so damaged the credibility of the government as a whole that future policy makers may be politically unable to take the necessary steps to save the system the next time a crisis arises. This avoidable political reality might just be TARP’s most lasting, and unfortunate, legacy." [View news story]
TARP was designed by Wall Street bankers to save the equity THEY owned in THEIR firms. All the talk about the helping home values was just a sales point in the powerpoint presentation.
Argentina's debt to GDP was about 55% in 2001. The Icelandic option may also look appealing to the Irish and the Portuguese who are also unlikely to repay their debt with the current structure.
Increasingly, in all these countries, the public is beginning to realize that the generous bailout packages are really for the benefit of German and French banks.
Item #1: The U.S. will allow oil sales from rebel-held territory in Libya. Item #2: Elements of al Qaeda and Hezbollah are known to be parts of the Libyan opposition. Add the items together and it sounds like the U.S. has gone from funding Gaddafi to helping fund the notorious terrorist groups? [View news story]
I am shocked! shocked that we are turning a blind eye for the sake of oil.
S&P 500: Poised to Reach 1,500 Before Year's End [View article]
BCMC,
That doesn't tell me whether I should buy or sell. In fact, if the stock market itself leads the economy all I can say is that the economy will be improving from where it is now for the next 5-6 months, but if the market has already discounted that, where is the upside?
Unless, of course, you can predict the economy (not the market) 10-12 months ahead. However, if you can do that, we do not need to use the market itself as a leading indicator.
S&P 500: Poised to Reach 1,500 Before Year's End [View article]
Thumbs up. The stock market is the weighted average of the BELIEFS of a bunch of people who make more money from keeping their clients in believing in the stock market than they do from having even mildly accurate predictions.
German inflation rises 0.5% in March, the Y/Y rate holding steady at 2.1%. Economists expect the number to breach 3.0% by this summer. “Inflationary pressure has been mounting and should translate into a broad upward trend in underlying inflation in the course of this year." [View news story]
These German's don't know how to deal with inflation. You have to ignore food, energy and everything else that makes the number higher. If you manage to deflate a few of the other items on account of quality improvement or product substitutions you have no problem at all.
Neil Barofsky delivers his verdict: "Treasury’s mismanagement of TARP and its disregard for TARP’s Main Street goals... may have so damaged the credibility of the government as a whole that future policy makers may be politically unable to take the necessary steps to save the system the next time a crisis arises. This avoidable political reality might just be TARP’s most lasting, and unfortunate, legacy." [View news story]
In a capitalist system those who make the decisions should bear the consequences of their failures. In particular, the equity holders should be wiped out BEFORE any bailout is even considered.
To Recover, Japan Must Ignore the Economic Fallacies [View article]
---No matter how often it's repeated, there's simply no evidence to support this assertion.
Unless you think interest rates are going down (there are zero or close to zero in Japan depending on maturity), the statement is self-evident.
2) Issuing debt to pay interest is equivalent to a Ponzi scheme
3) Although there is no magical threshold of debt to GDP (Argentina went bankrupt at 55%). There is also no magical "non threshold. If countries could finance themselves entirely with non bearing notes, why pay interest at all?
The fact is that nobody knows when the public begins to ask for higher rates to compensate for unspecified higher risk. In other words, the public may decide that 1.25% is no longer enough to justify a 10 year loan to Japan in Yen and may demand 2,3 or even 10%. At that point Japan will be in the situation I described. Arguing that it won't happen because it never has or because they can financed themselves by printing more Yen is, in my opinion, very dishonest.
Neil Barofsky delivers his verdict: "Treasury’s mismanagement of TARP and its disregard for TARP’s Main Street goals... may have so damaged the credibility of the government as a whole that future policy makers may be politically unable to take the necessary steps to save the system the next time a crisis arises. This avoidable political reality might just be TARP’s most lasting, and unfortunate, legacy." [View news story]
Neil Barofsky delivers his verdict: "Treasury’s mismanagement of TARP and its disregard for TARP’s Main Street goals... may have so damaged the credibility of the government as a whole that future policy makers may be politically unable to take the necessary steps to save the system the next time a crisis arises. This avoidable political reality might just be TARP’s most lasting, and unfortunate, legacy." [View news story]
If anyone had told me in 2006 that the American people would not even QUESTION the obvious conflict of interest of Paulson bailing out GS I would have said they were crazy. Any decent judge would have recused him/herself from such a case.
Neil Barofsky delivers his verdict: "Treasury’s mismanagement of TARP and its disregard for TARP’s Main Street goals... may have so damaged the credibility of the government as a whole that future policy makers may be politically unable to take the necessary steps to save the system the next time a crisis arises. This avoidable political reality might just be TARP’s most lasting, and unfortunate, legacy." [View news story]
TARP may have prevented worldwide financial collapse by rewarding those who drove the system into the brink of worldwide financial collapse. The result? A system that rewards risk taking with government guarantees. May the best lobbying effort win!
(Capitalism RIP)
Neil Barofsky delivers his verdict: "Treasury’s mismanagement of TARP and its disregard for TARP’s Main Street goals... may have so damaged the credibility of the government as a whole that future policy makers may be politically unable to take the necessary steps to save the system the next time a crisis arises. This avoidable political reality might just be TARP’s most lasting, and unfortunate, legacy." [View news story]
Neil Barofsky delivers his verdict: "Treasury’s mismanagement of TARP and its disregard for TARP’s Main Street goals... may have so damaged the credibility of the government as a whole that future policy makers may be politically unable to take the necessary steps to save the system the next time a crisis arises. This avoidable political reality might just be TARP’s most lasting, and unfortunate, legacy." [View news story]
www.bearishnews.com/po...
We may or may not like it, but that is what happened.
Greece: This Decade's Argentina? [View article]
Increasingly, in all these countries, the public is beginning to realize that the generous bailout packages are really for the benefit of German and French banks.
Item #1: The U.S. will allow oil sales from rebel-held territory in Libya. Item #2: Elements of al Qaeda and Hezbollah are known to be parts of the Libyan opposition. Add the items together and it sounds like the U.S. has gone from funding Gaddafi to helping fund the notorious terrorist groups? [View news story]
S&P 500: Poised to Reach 1,500 Before Year's End [View article]
S&P 500: Poised to Reach 1,500 Before Year's End [View article]
That doesn't tell me whether I should buy or sell. In fact, if the stock market itself leads the economy all I can say is that the economy will be improving from where it is now for the next 5-6 months, but if the market has already discounted that, where is the upside?
Unless, of course, you can predict the economy (not the market) 10-12 months ahead. However, if you can do that, we do not need to use the market itself as a leading indicator.
Thanks for the response.
S&P 500: Poised to Reach 1,500 Before Year's End [View article]
S&P 500: Poised to Reach 1,500 Before Year's End [View article]
I'd like to see proof of the this:
"It needs to be remembered that the stock market is a leading indicator of the economy"
For instance, what was the stock market predicting in 1999 or in 2007? How about in early 2009?
Amazon Beats Apple and Google to Cloud-Based Music [View article]
German inflation rises 0.5% in March, the Y/Y rate holding steady at 2.1%. Economists expect the number to breach 3.0% by this summer. “Inflationary pressure has been mounting and should translate into a broad upward trend in underlying inflation in the course of this year." [View news story]