Robbing Peter To Pay Paul Is Not An Economic Strategy.
And that is exactly what the recent string of government bailouts amount to: a short-sighted, desperate attempt to avoid paying the piper.
Why? Read more
This Is Capitalism?
I read the following in a New York Times article this morning about an apparent bidding “war” taking place between Citigroup and Wells Fargo for Wachovia:
Citigroup and Wells pressed regulators to seize Wachovia and let them buy its assets and deposits, as JPMorgan did with WaMu, or provide some sort of financial guarantee, as regulators did with JP Morgan’s acquisition of Bear Stearns, according to people briefed on and involved with the process.[1]
My 2 Cents On The Financial Crisis
1) The Fed should not lower the federal funds rate today.
2) The government should not bailout AIG.
Let’s end this so we can move on (told you it was 2 cents). Read more
Now This Makes Some Sense.
Last Monday, September 8, 2008, I wrote about how the US stock market’s response to the Fannie Mae and Freddie Mac bailouts made no sense:
The U.S. government decided to step in and take control of Fannie Mae and Freddie Mac yesterday.
This Makes No Sense.
The U.S. government decided to step in and take control of Fannie Mae and Freddie Mac yesterday.
The U.S. stock market responded today by jumping higher: the Dow Jones Industrial Average closed up about 290 points or 2.58% and the S&P 500 was up 25.48 or 2.05%
How can piling on more national debt to “bailout” Fannie Mae and Freddie Mac be considered a good thing for the American economy and American businesses? Read more
Is it rational not to save?
If you’ve read any of my previous posts you know I believe in consuming less than you produce, saving the rest, and thereby building wealth through the accumulation of capital (unconsumed production).
I read an interesting blog post today which argues that, in an inflationary environment where paper money is not backed by gold, it is rational for folks not to save because by doing so they lose money: inflation is greater than the Fed’s artifically low interest rate and so savers lose. Read more