Lex Luz

Banks Are Yet Again Under Pressure

Seems to me that before we direct more blame and ire at the UAW, their contracts, and the workers they represent, we ought to consider the possibility that the executives and managers across these failed instituions MAY have had slightly more influence in setting "strategy" (in quotes for a reason) than did the swing shift frame assembly team at plant 413 or whatever.

The fact is that all three of these companies have been failing for 35 years; their failure to anticipate and understand the first Honda Civic put the big three out of business as surely as did last year's gas-price bubble and the ongoing credit unwind.

Of course the union contracts are a burden that can no longer be borne. No question that the UAW and its leadership have had a hand in driving this industry into the turf. The final responsibility, though, belongs with executives and management whose hubris through four decades of mind-bending decline now extends to going begging to Congress for a massive handout. The fact that they can't even be bothered to figure out how they would use that money realistically to transform their businesses is a clear indication of their incompetence first, and their arrogance more importantly.

The unions are nothing more than a rat feasting on the hindquarters of this dead, rotting elephant.

What's Wrong with the Trickle-Down Bailout?

A well-written article that points to some of the flaws with the current plan, which is clearly tailor-made to punish taxpayers to the greatest extent possible. Frank's demands for bankruptcy cramdowns and for CEO pay reductions are idiotic window dressing designed expressly to distract taxpayers from the theft that is this bailout package.

The fact that the bailout is designed expressly to grossly overpay for the weakest of the toxic bonds cannot be stressed enough. Taxpayers have a hard time understanding that this program won't cost $700 Billion, it will cost well into the trillions, and it is positively guaranteed to enrich the very banks who have made this mess. There are no provisions in this bailout to increase transparency or to facilitate the creation of a marketplace for these assets that would force some meaningful price discovery.

The bailout as constructed is theft, pure and simple. You can bet that Dodd, Frank, and the rest of the Congresspiggies who vote for this trash will profit handsomely from it.

Freddie and Fannie: Living in the Past

Interestingly, the American middle class did pretty well before the securitization miracle took hold. Back when banking was a relatively simple endeavor (hey, I said "relatively," right?) and the watchword was "know thy customer," people had to do more than fog up a mirror to borrow a half-million dollars... and yet somehow, we managed to hold up. Fannie and Freddie fulfilled an important mission. The problem, to my way of thinking, wasn't the mission or even the implied government intervention in capital markets. The problem was runaway greed and the foolish belief that the party would never, ever, EVER end. It's a problem shared by virtually everyone, from the treasonous monsters currently occupying every federal government office, to the foul cretins in the executive suites (and formerly in the executive suites - yes, you, Uncle Angelo, and you too, Dave, you foul, soulless slime), right down to the cash-out-equity-tappin... hummer-driving, sybaritic suburbanites who couldn't bear the thought of setting aside a few bucks a month and waiting a year to "upgrade" your media rooms.

The only thing that's missing from America today is the courage to face ourselves and get to work solving the ONLY national security issue in front of us: debt and the necessity to take the pain of the great unwind. Unfortunately, because that courage is missing, we are all but unquestionably finished as a "superpower." This, by the way, is exactly how every other empire came crashing to the ground, and so in the final analysis it is really true what they say:

The only thing we learn from history is that we never learn anything from history.

The Twin I-Beams of Investment Success

The institutions that have invested most heavily in Congress don't see a short-term benefit from investments in infrastructure. Further, Federal investments in infrastructure drive money into local economies, small businesses, and into the hands of individuals, bolstering the middle class. Congress is owned by institutions who have profited largely from the destruction of the middle class. It's not in their interest to promote any efforts that threaten to restore American prosperity, and so it will not happen. Your analysis is wise in many respects but it overlooks the entrenched power of the 535 treasonous monsters who sit in Congress today, as well as the hundreds of even more powerfully treasonous monsters who reside in the Executive Branch. These people have, consciously or not, conspired to destroy the country and to count on them to take actions in America's national interest strikes me as bizarre.