Greybeard

The Family Foresight Thought Experiment

Simple! Buy politicians. But be sure to diversify. Buy them in the USA, developed markets, emerging markets and frontier markets. You'll achieve your $5B sooner than later.

Then, just to be prudent, hedge maybe 10% of your portfolio into:

(1) vice (gambling, alcohol, luxuries)
(2) entertainment (media, gaming)
(3) educaction (there's always a need to propagandize the next generation)
(4) advertising (a portfolio of services that crosses over to all industries, including Governments and NGOs)
(4) global warming offset brokerages (or inset other scams here)
(5) Bureaus of Engraving (there's always a bull market in printing fiat currency somewhere)

The Family Foresight Thought Experiment

What are the Super Seven Sovereign Wealth Funds doing?

Oppose the Treasury's Bailout Plan

Excerpted from: www.politico.com/news/...

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Treasury Secretary Henry Paulson confirmed the change on ABC's "This Week," telling George Stephanopoulos that coverage of foreign-based banks is "a distinction without a difference to the American people."

"If a financial institution has business operations in the United States, hires people in the United States, if they are clogged with illiquid assets, they have the same impact on the American people as any other institution," Paulson said.

"That's a distinction without a difference to the American people. The key here is protecting the system. ... We have a global financial system, and we are talking very aggressively with other countries around the world and encouraging them to do similar things, and I believe a number of them will. But, remember, this is about protecting the American people and protecting the taxpayers. and the American people don't care who owns the financial institution. If the financial institution in this country has problems, it'll have the same impact whether it's the U.S. or foreign."

The legislative outline that went to Capitol Hill at 1:30 a.m. Saturday had said that an eligible financial institution had to have “its headquarters in the United States.” That would exclude foreign-based institutions with big U.S. operations, such as Barclays, Credit Suisse, Deutsche Bank, HSBC, Royal Bank of Scotland and UBS.

But a Treasury “Fact Sheet” released at 7:15 Saturday night sought to give the administration more flexibility, with an expanded definition that could include all of those banks: “Participating financial institutions must have significant operations in the U.S., unless the Secretary makes a determination, in consultation with the Chairman of the Federal Reserve, that broader eligibility is necessary to effectively stabilize financial markets.”

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Editorial comment on the last paragraph...now Paulson wants unfettered ability to buy toxic debt of foreign financial institutions that "must have significant operations in the U.S." UNLESS he and the Chairman of the Fed deems it necessary to lower the bar additionally. This whole proposed Bill as written smells like unmitigated gall to bail out whomever the Secretary desires (e.g. Goldman Sachs). Call me a cynic but the newly included, and bar lowered, provision for foreign entities stinks too. If this is really to protect the American taxpayer then where are the upside protections? This is a bad Bill and poor idea...I understand the urgency and downside to the markets and industry, but we can do better for the taxpayer. If we need a Bill we need a Bill that advocates well for the taxpayer; the whole proposed reason for the bailout intervention.

Oppose the Treasury's Bailout Plan

Now Paulson is talking about adding foreign financial institutions to the bailout because it's of "no real distinction to the American taxpayer" where they might be headquartered as long as they do significant business in the U.S. Reasoning that it's a global market problem with global institutions affecting American taxpayers.

I'm not a xenophobe but I do have some problems with this:

(1) According to Section 2, Paragraph 3 of the proposed 'blank check' Bill, those financial institutions (now both U.S. and Foreign) accepting purchase of their toxic debt and cleaning up their balance sheets will become agents of the U.S. Government. The Bill says, "designating financial institutions as financial agents of the [U.S.] Government, and they shall perform all such reasonable duties related to this Act as financial agents of the [U.S.] Government as may be required of them". What are "ALL such reasonable duties" to be defined in the future? That's mighty vague and opens any recipient up to huge liability. How will that be enforced on foreign entities? What are the implications to international law? Why would a foreign financial institution accept those nebulous and potentially onerous terms and conditions? AIG is just now realizing the onerous T&C's attached to the $85B loan they just received.

(2) Where do you draw the line in offering up American taxpayers' hard earned dollars? Why can't Paulson ask foreign financial institutions to get their foreign/sovereign Government's tax dollars to buy their debt ala the proposed U.S. Bill? Or ask the foreign Government's to do the same on their taxpayer's nickel? Since we're not all that decoupled are we...?

(3) Now Paulson is proposing selecting five to ten Wall Street executives to manage the $700B bad debt on behalf of the Treasury and U.S. Government. Why is the Secretary proposing that the same folks who grossly mismanaged risk over the last 15 years can now serve as managers of the largest global credit crisis and as the responsible fiduciaries of the American taxpayer's unvoluntary $700B ABS/CDO investment fund? That sounds like giving the keys back to the habitual drunk driver...And if you were a foreign financial institution would you want an American Wall Street executive managing your T&C's...or determining your "reasonable duties"...or overseeing you as "a Financial Agent of the U.S. Government?" How would you BOD or shareholders feel about that?

The SEC's 'Sacred Cow' List: Where Are WaMu and Wachovia?

Good point, Gosailing.
The Fed's Primary Dealers list has all on the 'sacred cow' SEC list except for Allianz SE and Royal Bank and Fannie Mae/Freddie Mac. The SEC's seemingly arbitrary list may have much more with keeping open the Fed's ability to trade volumes US securities. Thereby securing the Fed's ability to execute their monetary policy (right or wrong).
www.newyorkfed.org/abo...