This is a remote blog post. I'm using Adobe's Buzzword for a lot of writing now and then post results to Adobe's Share (in Beta) will probably be posting more lengthy essays through that medium. And it will encourage viral adoption of Buzzword. And that's a good thing for me, because I work in the division at Adobe that is responsible for this fine, fine product.
Read about my latest computer upgrade here.
Monday, March 24, 2008
I agree with the Fool: stop the Wall Street madness
The Motley Fool is absolutely right.
Ben Bernanke: put the pen down and step away from the desk.
Its a tough pill to swallow, and there are some dominoes to fall, but at the risk of sounding like a cold-hearted republican, I'm aligned with this view.
I do think there needs to be a safety net of some kind for those folk who were sold sub-prime loans even when they would have qualified for fixed--yes, people should go into these things opened-eyed and do their homework, but I know that I've paid more for, say, a car than I really needed to because of a good salesman at the other side of the table (and, in the interest of full disclosure, I know that I've done this more than once).
But those (relatively few) folk who were paying $400 a month to buy a house and now their payments are $600 and they just don't have an extra $200/mo, I think that the securities made up of these....lets call them what they are...junk bonds, which are no longer liquid have to be treated at their market value. And if there are investment banks that need to be turned inside-out because they over-invested in these relative to their risk (even if they didn't know the risk--the bond insurance companies should certainly have known) then so be it.
Will there be some cascade? Was there in Silicon Valley in '00? Yep. Did the Fed come to our aid and prop up our economy at the end of a similar bubble? Nope. Does Wall Street deserve any more consideration because they trade in money rather than bits? Nope.
PPS> Full, full, disclosure: I hold a 7/1 adjustable. My reset is four years out. If I can get a good fixed rate in the next 12 months--I'm going to jump on it.
fixed soon because of this mess and Bernanke dropping the prime to 0.0% then I will.
Ben Bernanke: put the pen down and step away from the desk.
Its a tough pill to swallow, and there are some dominoes to fall, but at the risk of sounding like a cold-hearted republican, I'm aligned with this view.
I do think there needs to be a safety net of some kind for those folk who were sold sub-prime loans even when they would have qualified for fixed--yes, people should go into these things opened-eyed and do their homework, but I know that I've paid more for, say, a car than I really needed to because of a good salesman at the other side of the table (and, in the interest of full disclosure, I know that I've done this more than once).
But those (relatively few) folk who were paying $400 a month to buy a house and now their payments are $600 and they just don't have an extra $200/mo, I think that the securities made up of these....lets call them what they are...junk bonds, which are no longer liquid have to be treated at their market value. And if there are investment banks that need to be turned inside-out because they over-invested in these relative to their risk (even if they didn't know the risk--the bond insurance companies should certainly have known) then so be it.
Will there be some cascade? Was there in Silicon Valley in '00? Yep. Did the Fed come to our aid and prop up our economy at the end of a similar bubble? Nope. Does Wall Street deserve any more consideration because they trade in money rather than bits? Nope.
PPS> Full, full, disclosure: I hold a 7/1 adjustable. My reset is four years out. If I can get a good fixed rate in the next 12 months--I'm going to jump on it.
fixed soon because of this mess and Bernanke dropping the prime to 0.0% then I will.
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