Comments on: Hank Paulson’s plan called “truly idiotic.” Ya think?

By: z!

z! — Thu, 27 Nov 2008 22:45:42 +0000

my apologies for the typos and poor structure! CDS Fatigue

By: z!

z! — Thu, 27 Nov 2008 22:42:41 +0000

“It is the derivatives stupid”!
The CDS, or credit default swaps are 60 Trillion Dollars of Gamnbling on these defaults – CDO’s or collaterlaized Debt Obligations.
When People Default, the CDO’s default, and the CDS’s held by the Gamblers hit the Jackpot, and they get more rich…
So, Paulson, basically gives the banks the money, to pay the Gamblers..
So, check who the Gamblers are who had these bets…
The Treasury is making sure that there is enough money to pay them as the CDO’s default…! And by the way, the holders of these CDS contracts are mostly speculators, and have nothing to do with the original CDO holders who used the CDS’s for hedging…
So, the speculators are bankrupting the system, sucking the liquidity, and the Government is feeding them from the taxpayers money!
There are 2 possible solutions in my humble view:
1- Declare all CDS’s other than the Hedge ones by the CDO Holders, NULL and VOID! Whatever premiums paid by the speculators is a XMAS gift to the world!
2- CDS Sellers to Pay Back CDS Premiums, and tear down the whole CDS crap! If they can’t then Gov can fund the premium refunds over a five year period.

Any solution other than the above will mean Bail out after bail out… The betters cash in, and the taxpayers foot the bill… till 20 or thirty trillion are paid out by you and your grand kids!
It is a blackmail system… allowing corporates to twist arms, either get the money, or face the CDS claims flood if they defualt…

Hope it is clear and someone can have Obama’s ears !

By: Barbara

Barbara — Wed, 26 Nov 2008 18:35:28 +0000

That is just SAD… Very true but sad.

I also agree with Lee. Next time just give the money to the poeple and let them waste it.

Personally if the Government wanted to save the mortgage industry they should have just paid the mortgages that were faultering… Not paid them off but put money in and let the people refinance to get better intrest rates to lower the payments… and let the banks deal with the people who should never have been given the loans to begin with (especially for the amounts they were getting). Sure this is still a waste of money and would never solve the problems were having but it would have given people a chance to get their homes sold… sure many would be losing money on the deals but atleast they would not be messing up their credit or their homes compleatly. I have a family member getting ready to purchas a home for about $200,000.00 less than the previous owner paid for the home just 3 years ago. Does that tell you how over inflated things got. Banks had a lot to do with that over inflated price… and never should have given that much money for a home of it’s size regardless of where the home was located.

By: Chad Bordeaux

Chad Bordeaux — Wed, 26 Nov 2008 16:36:50 +0000

That was GREAT! I had to repost in my blog. The best line was the last “If you love America, you throw money in its hole!”

By: Tracy Coenen

Tracy Coenen — Wed, 26 Nov 2008 15:36:05 +0000

This little piece from The Onion is very appropriate:

http://www.theonion.com/content/video/in_the_know_should_the_government

By: Chad Bordeaux

Chad Bordeaux — Wed, 26 Nov 2008 15:10:58 +0000

When does it stop??

Sadly, I do not see it stopping. With each bailout, they are digging the whole deeper. They started with a shovel, and now they are digging with heavy equipment.

By: Lee D

Lee D — Wed, 26 Nov 2008 15:02:45 +0000

It would have been cheaper and more expedient to just give every man woman and child in the US, whether taxpayer, hobo or illegal, a cheque for a billion dollars.

The end result of soaring hyperinflation and destruction of the economy would be the same, it just wouldn’t take as long to get there, and would have cost less to accomplish.

By: Barbara

Barbara — Wed, 26 Nov 2008 14:41:16 +0000

Tracey I am sure you saw this coming along with many others who were aginst the bailout to begin with. Sad thing is no Democrat will say it was there fault for the screw up. They will blame Bush and the Republican party.

By: Adrienne

Adrienne — Wed, 26 Nov 2008 01:01:45 +0000

This post is long overdue and I’m so glad to see it here. Amen and excellent job.