[patientrenter]

urbanrealtor,

I think a problem a lot of us have with the proposals that are being presented in “do or die” terms is that they involve too little pain for people who gambled and took and enjoyed the upside as long as it lasted. (See vivid neighbor example above.)

We are very suspicious that this is yet another ruse to allow people who need to change their behavior, and who will only do so when forced, to avoid doing so for a little longer. To make us feel secure that the bailout is really needed, we want to see blood. Not enough to kill anyone, but more than a little scratch. Then we’ll know it’s being done because it’s genuinely needed.

And the blood needs to come from the various parties that benefited the most from the wild and crazy party that was allowed to get way out of hand. Let me offer my personal list:

1. Homeowners that borrowed more than the normal, non-peak, price of their homes.

2. Professional middlemen who loaned to the said homeowners. (mtg brokers, mtg bankers, mtg ins writers..)

3. Investors who handed their money over to finance the said mortgages.

4. Regulators and regulatory bodies that they led who claimed that they couldn’t tell when a bubble was a bubble. (Greenie, Fed, Treasury, FHA…)

5. Politicians who protected and encouraged govt subsidies and guarantees for the buying of homes with a high amount of leverage (The godfathers of FNMA, Freddie, FHA: Dodd, Frank, Schumer, and most dems; and the friends of Wall Street Republicans, like Cheney, and most supply-side Republicans like Kemp etc).

It’s 90% of the population, so it’s hard to see it happening, but it’s the “right thing”.

[patientrenter]

urbanrealtor,

I think a problem a lot of us have with the proposals that are being presented in “do or die” terms is that they involve too little pain for people who gambled and took and enjoyed the upside as long as it lasted. (See vivid neighbor example above.)

We are very suspicious that this is yet another ruse to allow people who need to change their behavior, and who will only do so when forced, to avoid doing so for a little longer. To make us feel secure that the bailout is really needed, we want to see blood. Not enough to kill anyone, but more than a little scratch. Then we’ll know it’s being done because it’s genuinely needed.

And the blood needs to come from the various parties that benefited the most from the wild and crazy party that was allowed to get way out of hand. Let me offer my personal list:

1. Homeowners that borrowed more than the normal, non-peak, price of their homes.

2. Professional middlemen who loaned to the said homeowners. (mtg brokers, mtg bankers, mtg ins writers..)

3. Investors who handed their money over to finance the said mortgages.

4. Regulators and regulatory bodies that they led who claimed that they couldn’t tell when a bubble was a bubble. (Greenie, Fed, Treasury, FHA…)

5. Politicians who protected and encouraged govt subsidies and guarantees for the buying of homes with a high amount of leverage (The godfathers of FNMA, Freddie, FHA: Dodd, Frank, Schumer, and most dems; and the friends of Wall Street Republicans, like Cheney, and most supply-side Republicans like Kemp etc).

It’s 90% of the population, so it’s hard to see it happening, but it’s the “right thing”.

[patientrenter]

urbanrealtor,

I think a problem a lot of us have with the proposals that are being presented in “do or die” terms is that they involve too little pain for people who gambled and took and enjoyed the upside as long as it lasted. (See vivid neighbor example above.)

We are very suspicious that this is yet another ruse to allow people who need to change their behavior, and who will only do so when forced, to avoid doing so for a little longer. To make us feel secure that the bailout is really needed, we want to see blood. Not enough to kill anyone, but more than a little scratch. Then we’ll know it’s being done because it’s genuinely needed.

And the blood needs to come from the various parties that benefited the most from the wild and crazy party that was allowed to get way out of hand. Let me offer my personal list:

1. Homeowners that borrowed more than the normal, non-peak, price of their homes.

2. Professional middlemen who loaned to the said homeowners. (mtg brokers, mtg bankers, mtg ins writers..)

3. Investors who handed their money over to finance the said mortgages.

4. Regulators and regulatory bodies that they led who claimed that they couldn’t tell when a bubble was a bubble. (Greenie, Fed, Treasury, FHA…)

5. Politicians who protected and encouraged govt subsidies and guarantees for the buying of homes with a high amount of leverage (The godfathers of FNMA, Freddie, FHA: Dodd, Frank, Schumer, and most dems; and the friends of Wall Street Republicans, like Cheney, and most supply-side Republicans like Kemp etc).

It’s 90% of the population, so it’s hard to see it happening, but it’s the “right thing”.

[patientrenter]

urbanrealtor,

I think a problem a lot of us have with the proposals that are being presented in “do or die” terms is that they involve too little pain for people who gambled and took and enjoyed the upside as long as it lasted. (See vivid neighbor example above.)

We are very suspicious that this is yet another ruse to allow people who need to change their behavior, and who will only do so when forced, to avoid doing so for a little longer. To make us feel secure that the bailout is really needed, we want to see blood. Not enough to kill anyone, but more than a little scratch. Then we’ll know it’s being done because it’s genuinely needed.

And the blood needs to come from the various parties that benefited the most from the wild and crazy party that was allowed to get way out of hand. Let me offer my personal list:

1. Homeowners that borrowed more than the normal, non-peak, price of their homes.

2. Professional middlemen who loaned to the said homeowners. (mtg brokers, mtg bankers, mtg ins writers..)

3. Investors who handed their money over to finance the said mortgages.

4. Regulators and regulatory bodies that they led who claimed that they couldn’t tell when a bubble was a bubble. (Greenie, Fed, Treasury, FHA…)

5. Politicians who protected and encouraged govt subsidies and guarantees for the buying of homes with a high amount of leverage (The godfathers of FNMA, Freddie, FHA: Dodd, Frank, Schumer, and most dems; and the friends of Wall Street Republicans, like Cheney, and most supply-side Republicans like Kemp etc).

It’s 90% of the population, so it’s hard to see it happening, but it’s the “right thing”.

[patientrenter]

“I would like to see a better argument both for and against the bailout package.”

Well, I would too, urbanrealtor. I don’t know if my reasoning has fatal flaws that would be obvious to an expert in banking or economics.

What’s bothering me about the “we have no choice” line is that no one is even trying to work through the controlled liquidation alternative and explain its flaws. And it just happens that the “only possible solution” to an economic catastrophe rewards certain groups of people who have enormous political influence, and have done everything in their power to enjoy fruits without the labor. I am referring to most homeowners, stockholders, and the large professional community that caters to them (like politicians, banks, brokers etc). Could they be blinded by their self-interest? Hmmm…

[patientrenter]

“I would like to see a better argument both for and against the bailout package.”

Well, I would too, urbanrealtor. I don’t know if my reasoning has fatal flaws that would be obvious to an expert in banking or economics.

What’s bothering me about the “we have no choice” line is that no one is even trying to work through the controlled liquidation alternative and explain its flaws. And it just happens that the “only possible solution” to an economic catastrophe rewards certain groups of people who have enormous political influence, and have done everything in their power to enjoy fruits without the labor. I am referring to most homeowners, stockholders, and the large professional community that caters to them (like politicians, banks, brokers etc). Could they be blinded by their self-interest? Hmmm…

[patientrenter]

“I would like to see a better argument both for and against the bailout package.”

Well, I would too, urbanrealtor. I don’t know if my reasoning has fatal flaws that would be obvious to an expert in banking or economics.

What’s bothering me about the “we have no choice” line is that no one is even trying to work through the controlled liquidation alternative and explain its flaws. And it just happens that the “only possible solution” to an economic catastrophe rewards certain groups of people who have enormous political influence, and have done everything in their power to enjoy fruits without the labor. I am referring to most homeowners, stockholders, and the large professional community that caters to them (like politicians, banks, brokers etc). Could they be blinded by their self-interest? Hmmm…

[patientrenter]

“I would like to see a better argument both for and against the bailout package.”

Well, I would too, urbanrealtor. I don’t know if my reasoning has fatal flaws that would be obvious to an expert in banking or economics.

What’s bothering me about the “we have no choice” line is that no one is even trying to work through the controlled liquidation alternative and explain its flaws. And it just happens that the “only possible solution” to an economic catastrophe rewards certain groups of people who have enormous political influence, and have done everything in their power to enjoy fruits without the labor. I am referring to most homeowners, stockholders, and the large professional community that caters to them (like politicians, banks, brokers etc). Could they be blinded by their self-interest? Hmmm…

[patientrenter]

“I would like to see a better argument both for and against the bailout package.”

Well, I would too, urbanrealtor. I don’t know if my reasoning has fatal flaws that would be obvious to an expert in banking or economics.

What’s bothering me about the “we have no choice” line is that no one is even trying to work through the controlled liquidation alternative and explain its flaws. And it just happens that the “only possible solution” to an economic catastrophe rewards certain groups of people who have enormous political influence, and have done everything in their power to enjoy fruits without the labor. I am referring to most homeowners, stockholders, and the large professional community that caters to them (like politicians, banks, brokers etc). Could they be blinded by their self-interest? Hmmm…

[patientrenter]

urbanrealtor,

I don’t have the expertise or time to fashion an alternative, so I am looking for real experts who wrote years ago about these problems we’re having now. Maybe people like Roubini, Calc Risk and others.

But I do not subscribe to all these “we know about moral hazard, but now is not the time for…” arguments. If I had to create an alternative, it would focus on getting the needed shifts in economic activity accomplished quickly.

Since we do need maybe 50% of the banking we have now, I would identify up front the survivors by ranking them from strongest to weakest in the event of a severe and broad drop in asset prices. Then I’d offer to make good on the pre-existing contracts of all of them in the event of insolvency, with a moderate haircut for the largest creditors (like credit default swap counterparties). A mechanism would have to be built in to stagger the wind-downs over a year or so, and enough money injected into the strongest 50% to keep them going afterwards.

House prices, stock prices, and the USD would come down over that year as it all sank in, or even quicker if people stopped believing the stock analysts. Fortunately, many still do!

Smarter people would have to add flesh and a few more bones o it, but that would be it. Get to the end-point in a year or so, without spending any more time and money on attempts to prolong the existing wasteful economic activities that are causing this crisis (i.e. over-consumption fueled by borrowing against overpriced assets.)

What do you think?

[patientrenter]

urbanrealtor,

I don’t have the expertise or time to fashion an alternative, so I am looking for real experts who wrote years ago about these problems we’re having now. Maybe people like Roubini, Calc Risk and others.

But I do not subscribe to all these “we know about moral hazard, but now is not the time for…” arguments. If I had to create an alternative, it would focus on getting the needed shifts in economic activity accomplished quickly.

Since we do need maybe 50% of the banking we have now, I would identify up front the survivors by ranking them from strongest to weakest in the event of a severe and broad drop in asset prices. Then I’d offer to make good on the pre-existing contracts of all of them in the event of insolvency, with a moderate haircut for the largest creditors (like credit default swap counterparties). A mechanism would have to be built in to stagger the wind-downs over a year or so, and enough money injected into the strongest 50% to keep them going afterwards.

House prices, stock prices, and the USD would come down over that year as it all sank in, or even quicker if people stopped believing the stock analysts. Fortunately, many still do!

Smarter people would have to add flesh and a few more bones o it, but that would be it. Get to the end-point in a year or so, without spending any more time and money on attempts to prolong the existing wasteful economic activities that are causing this crisis (i.e. over-consumption fueled by borrowing against overpriced assets.)

What do you think?

[patientrenter]

urbanrealtor,

I don’t have the expertise or time to fashion an alternative, so I am looking for real experts who wrote years ago about these problems we’re having now. Maybe people like Roubini, Calc Risk and others.

But I do not subscribe to all these “we know about moral hazard, but now is not the time for…” arguments. If I had to create an alternative, it would focus on getting the needed shifts in economic activity accomplished quickly.

Since we do need maybe 50% of the banking we have now, I would identify up front the survivors by ranking them from strongest to weakest in the event of a severe and broad drop in asset prices. Then I’d offer to make good on the pre-existing contracts of all of them in the event of insolvency, with a moderate haircut for the largest creditors (like credit default swap counterparties). A mechanism would have to be built in to stagger the wind-downs over a year or so, and enough money injected into the strongest 50% to keep them going afterwards.

House prices, stock prices, and the USD would come down over that year as it all sank in, or even quicker if people stopped believing the stock analysts. Fortunately, many still do!

Smarter people would have to add flesh and a few more bones o it, but that would be it. Get to the end-point in a year or so, without spending any more time and money on attempts to prolong the existing wasteful economic activities that are causing this crisis (i.e. over-consumption fueled by borrowing against overpriced assets.)

What do you think?

[patientrenter]

urbanrealtor,

I don’t have the expertise or time to fashion an alternative, so I am looking for real experts who wrote years ago about these problems we’re having now. Maybe people like Roubini, Calc Risk and others.

But I do not subscribe to all these “we know about moral hazard, but now is not the time for…” arguments. If I had to create an alternative, it would focus on getting the needed shifts in economic activity accomplished quickly.

Since we do need maybe 50% of the banking we have now, I would identify up front the survivors by ranking them from strongest to weakest in the event of a severe and broad drop in asset prices. Then I’d offer to make good on the pre-existing contracts of all of them in the event of insolvency, with a moderate haircut for the largest creditors (like credit default swap counterparties). A mechanism would have to be built in to stagger the wind-downs over a year or so, and enough money injected into the strongest 50% to keep them going afterwards.

House prices, stock prices, and the USD would come down over that year as it all sank in, or even quicker if people stopped believing the stock analysts. Fortunately, many still do!

Smarter people would have to add flesh and a few more bones o it, but that would be it. Get to the end-point in a year or so, without spending any more time and money on attempts to prolong the existing wasteful economic activities that are causing this crisis (i.e. over-consumption fueled by borrowing against overpriced assets.)

What do you think?

[patientrenter]

urbanrealtor,

I don’t have the expertise or time to fashion an alternative, so I am looking for real experts who wrote years ago about these problems we’re having now. Maybe people like Roubini, Calc Risk and others.

But I do not subscribe to all these “we know about moral hazard, but now is not the time for…” arguments. If I had to create an alternative, it would focus on getting the needed shifts in economic activity accomplished quickly.

Since we do need maybe 50% of the banking we have now, I would identify up front the survivors by ranking them from strongest to weakest in the event of a severe and broad drop in asset prices. Then I’d offer to make good on the pre-existing contracts of all of them in the event of insolvency, with a moderate haircut for the largest creditors (like credit default swap counterparties). A mechanism would have to be built in to stagger the wind-downs over a year or so, and enough money injected into the strongest 50% to keep them going afterwards.

House prices, stock prices, and the USD would come down over that year as it all sank in, or even quicker if people stopped believing the stock analysts. Fortunately, many still do!

Smarter people would have to add flesh and a few more bones o it, but that would be it. Get to the end-point in a year or so, without spending any more time and money on attempts to prolong the existing wasteful economic activities that are causing this crisis (i.e. over-consumption fueled by borrowing against overpriced assets.)

What do you think?

[patientrenter]

All of us important and knowledgeable people (Hank Paulson, Bennie, Barney, Chris Dodd, Chuck Schumer, Nancy…) agree that there is no choice – if you want to have a productive, energetic, dynamic economy for yourselves and your children, you need to accept the only meal we have on the menu today: We start with an immediate large check from you to us. Then we move to the main course, which is the dispensing of all that money to the least responsible people during the last 5 years, the people who borrowed or lent large amounts of money to buy assets at twice their historical average prices or more. We want to make sure the prices stay high enough to allow vast numbers of people who bought assets with other people’s money to make out well, at the expense of those who saved. What’s for dessert? A surprise.

Dems and Republicans are enacting a little theater on the margins to distract the less bright amongst us. They are united in their primary purposes.

[Author]

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