Monday, September 29, 2008

I went down, down, down and the flames went higher

Today there is finally some positive economic news. Defeating the $700,000,000,000 bailout means that the greedy investment firm which still exist will be bought out by more liquid firms at fire sale prices and the world goes on. The alternative was borrowing nearly a trillion dollars from the Chinese to pay the bills, which would mean that we would be even less sovereign than our current state suggests. Hopefully the market realizes that the gravy train is not pulling into the station and money begins to flow to solid companies again. Either way Henry Paulsen should be fired.

Thursday, September 25, 2008

Socialism for the Rich, Capitalism for the Poor

If you have no been living in a cave for the past two weeks you have probably heard about how the fundamentals of the economy are not so strong, no matter how many times John McCain told us otherwise last week. The situation, minus double talk, is that greedy companies were given the authority by the Clinton and Bush administrations to lend to anyone with a pulse to encourage a society of homeowners. Naturally this drove demand for housing far above the market level, so prices rose at astronomic rates, which made investment in mortgages seem like a sure bet(which does not exist in this world).

Homeowners, meanwhile, borrowed against their homes on the belief that the value of the homes would continue rising like Michael Jackson at a pre school, so at the end of the day you could have a person with a mortgage for a home with a line of credit on the home based on a higher value than the house is worth, resulting on owing much more than the house is going to be worth for a long time.

Finally, the government has been largely responsible for the problem by keeping interest rates low, which allowed easy lending and less scrutiny for the creditworthiness of borrowers. One question nobody asks is, why is the former CEO of Goldman Sachs asking for nearly a trillion dollars to bail out his company?

Tuesday, September 9, 2008

Needing a rest from economics to get a good post

I am taking this week off as much as possible to detoxify after classes such as "Theory of Price" and Managerial economics where I mathematically compute economic theorems. I cannot find joy in economics at times due to the amount of studying required.

Monday, September 8, 2008

The Robber Baron is Riding High

Today is the day when any pretense of fiscal conservatism can officially be kissed goodbye. Today the US Taxpayer is made to pay for the incompetence of the Fannie Mae and Freddie Mac management to the tune of hundreds of billion of dollars. This paragraph sums the situation up best:

"But even after the government seized the mortgage finance companies on Sunday and dismissed their chief executives, the companies’ outgoing leaders could see big paydays — a prospect that angers many investors, particularly because ordinary stockholders could be virtually wiped out."

We are paying for golden parachutes with our tax money. Welcome to slavery

Mourning the death of capitalism

Just research the bailout of the mortgage giants to see why this nation is now a socialist nation for the wealthy