axelrod608

Wall Street Breakfast: Must-Know News

It's time to eliminate corporate taxes for manufacturing companies that produce their products in the USA. The economy will not improve until and unless we start making something more tangible than paper financial instruments and dollar bills, and paying Americans for doing the work.

Wall Street Breakfast: Must-Know News

Credit default swaps (CDS) are nothing but "insurance: without the reserve requirement to back them up ( insure them). In AIG's case, the backup is being provided by taxpayer funds. It is time for a requirement for mandated reserves for any and all financial products. And it is time that any and all "financial products" be approved before they can be sold - just as insurance products are now. And it would be wise to require banks and other financials to do as reserve insurance companies do now - prrovide the backup for any company that fails. If a reserve insurance company goes under, the other reserve insurance companies cover the products of the one that failed. Time to make the financials do the same.

If this kind of requirement had been in place, none of those idiotic MBS's would have been approved or sold, and the industry would have screamed bloody murder at AIG writing tons of CDS's without sufficient reserves.

If "too big to fail" is a reality, it's time to lump them together and make them each others' reserve. Make the financials police each other. Why have the gummint do it ? Any financial institution that KNOWS it will be held responsible for its competitors' failures will make sure its competitors don't screw up.

Wall Street Breakfast: Must-Know News

>> "Bush, Obama ask for TARP's part II." >> If there was any doubt that the "change" in DC will be nothing more than names on the doors and desks, here's the evidence.

While the vast majority of Americans are angry, no, FURIOUS about the many bailout programs, they will be ignored The government of by, and for big business and special interests will continue intact. The government of, by and for the people that the voters thought they were getting back was just an illusion.

Corporate welfare is job one in DC, just as it has been for decades. "Too big to fail" is their mantra.

It makes one wonder. If the voters can't spot the lies in a 3 year campaign, I guess they deserve the deception.

The proles will get another $5 or $10 in their paychecks and the bloated, ineptly managed megabusinesses will get $Billions each, totalling $Trillions.

Yes, letting the dinosaurs fail would be painful. Better them in bankruptcy than the entire nation.

Wall Street Breakfast: Must-Know News

ACN - 6% yield. LINE - 20% yield. I'm buying LINE. Plus, with oil dropping, the price of energy MLP's is VERY low. When oil goes back up, which it always does, you'll get big yields and big cap gains.

Oil prices fluctuate, but there's a 100% probability we'll keep using it. A LOT of it.

Wall Street Breakfast: Must-Know News

Fastcad - for the record, the national debt pre - George II was less that $5 T. It is now well over $10T and by the time we get a new Pres, it will be in the $12T range.

All you partisans out there, there is no significant difference between "tax and spend" and "borrow and spend". Both parties are bankrupting the nation. Pointing fingers is silly and futile.

Wall Street Breakfast: Must-Know News

The Sage of Omaha, Warren Buffet has said that he doesn't understand what "derivatives" are. I guess "perverted investments" might be a descriptive term. And while the P&B (Paulson and Bernanke) bailout plan intends to dispose of "toxic waste" - investments that have some tangible assets that can be sold at some reduced price - what of the derivatives ? If mortgage backed securities are "toxic waste" what do we call derivatives ? Spent nuclear waste ?
And are they salable at any price ?

The fact is that our financial companies (fincos) are holding who knows how many derivatives, all off the books. And any "plan" that seeks to rebuild the financial industry MUST address derivatives. IMHO, they should all either be banned, or carried on the books, 100% transparent.

How big is this problem ? There are $1.3 QUADRILLION of derivatives out there in the world's fincos. I never thought I would ever use the word, "quadrillion" except in a spelling bee or refering to miles in outer space. How big is it ? US GDP is around $13 trillion. So the face value of all the derivatives in the world is , at current rate, iabout 100 years - a century - of US GDP.

The problem with extending credit one finco to another is based on the recipient's ability to repay the loan. Until and unless lenders know for certain what assets the borower has hiding in the portfolio, they are going to be reluctant to lend. Sound business practice, yes ?

The P&B bailout plan does not address derivatives. They are the 800 lb gorilla in the room. The situation facing the financial industry of the WORLD, not just US, does not need a bandaid. This calls for surgery. Perhaps multiple surgeries. Lenders know this. And if the Treasury and the Fed don't, then yes, we are in serious trouble.

I wish Paulson and Bernake would come clean and tell us that their plan is only the first step in a "trip of a thousand miles". The enormity of the task is far more than most people can comprehend. Anyone who thinks that a bailout plan will turn the economy and the housing market and everything else around and we'll all be fatter, richer and happier next year is just not looking at reality.

The fincos of the world have dug an enormous pit. It's time our politicians stopped trying to fill it with air.

Wall Street Breakfast: Must-Know News

If the Dow goes back to four digits, it will be a sign of the true value of a measure that has been grossly inflated by Greenspin's sea of liquidity/debt. Anyone who thinks wealth/value is made of debt has a skewed idea of what's what on a balance sheet.

Nevertheless, these are times for statesmen, not political opportunists. I am hopeful that the GOP "plan" by Sen Shelby and his "200 economists" will be more substance and less window dressing

If the two parties cannot put aside their divisive partisan jihad to solve a national financial crisis, perhaps the parties are what should be "suspended" or "banned".

The underlying reason the TED spread is so great is due to bad debt load. Would YOU loan your money to a bank ?