Still not miserable

I’m mostly over Biden’s moronic comments.  It’s a new week and I’m sure he’ll offer us up a new nugget of stupid any day now.

 

I (obviously) didn’t watch the 60 Minutes interviews over the weekend (still no power, thank you), but I think a fair question to ask the junior senator would be “Senator Obama, we know Senator McCain supported the 1999 act that repealed the Glass-Steagall act that allowed for the deregulation which has led us down the road to this massive bailout proposal.  What was your vote on that bill?”

For my part, I’m not sure it was a bad idea (good idea, poorly executed?  Where have we heard that before?), but clearly the market mechanisms got ahead of the market wisdom over the last several years.

 

It was the same principle that brought down the new dot-com tech firms in the late 1990s—and oddly enough it was the same principles that make the market work.  If you have no earnings, you have no true (book) value.  Eventually perceived (market) value will catch up to true (book) value and if you’ve leveraged your firm (financed on debt) based on perceived (market) value then you will be bankrupt.  Or, in layman’s terms, if you owe more than you own, you’re on the road to lots of trouble.  The problem, recently, has been a serious overvaluation of what financial houses own—specifically certain debt holdings.  The debt holdings ceased to perform, the perceived value started to drop, the value of the companies began to drop as well, and soon they owed more than they owned and couldn’t pay the piper.

 

There’s a helluva lot more going on, like the seizing up of cash and credit markets, which are all part and parcel of the same problem.  In financial terms, it’s a big, hairy, mess (BHM).  Of course, without the repeal of the Glass-Steagall act, the investment giants would have never had any hand in mortgage lending and possibly none of this would have happened—but mortgage rates never would have been 5%, either and homeownership rates never would have shot through the roof like they did—nor would foreclosure rates.  “You take the good/you take the bad/you take them both/and there you have/the facts of life…”

 

Maybe there’s a comfy middle-ground of responsible financial practices that the powers that be can figure out…  hmmm…  Maybe someone with experience in office, contacts and relationships with lawmakers on both sides of the aisle on capitol hill, and the judgment based on that knowledge from the historical perspective of seeing not just the issues facing us today but also the events leading up to the issues facing us today could possibly steer the ship toward that comfy middle ground…  hmmm…  If only someone like that were running for President today…  Hhhmmm…

 

Still to come, a fun little rant about your friend and mine…  FEMA!!