Feeds:
Posts
Comments

Posts Tagged ‘bailout’

At the delayed morning meeting with an attorney that hates attorneys, we got around to talking about the money… yeah, THAT money.

There is the Stimulus Package I & II, the normal government loads to states, the bailout to some banks (but not the ones with a passion for customer loans), the bailout of the car mfgs which seem, now in retrospect to amount to overspill from a Super Bowl game by comparison. But en masse, we’re talkin’ real money here folks.

Does anyone grasp the numbers anymore? Yeah, yeah, yeah, I know that is slightly rhetorical.

We do need to do some stuff and that is what we are doing but it occurred to me that the numbers are all running together and perhaps even Federal Reserve Chairman Ben Bernanke doesn’t have the necessarily grasp on the meaning of those $$$$ trillions. But, maybe I am wrong. He deals in money. We don’t. For all we know he may be more scared than we are… On the other hand, none of them want to have the collapse of the world’s leading economy on their watch.

During the Obama speech Tuesday night the camera’s panned to Hillary in the front row. It’s as if a little cartoon bubble rose above her head during the 2nd third of the speech and it had in it…

“I’m soooooooooo glad you are standing there right now….”

Oh, there is a new item that came out after the address to both Houses and the Judiciary of the government… another $75.5 billion for the two fronts of the war… which seems to have gone to the, “I don’t know why we’re here now; ask the guys from Halliburton” stage and another $663.7 for 2010 defense spending.

So, where are we? We have a $3.5+ trillion plus budget and we are not sure what that will bring or yield. Talk about a ‘faith-based’ initiative! We need the changes but no one said the right ones would be the first ones.

Here’s the deal. The people in 99.5% of the positions in Washington DC got there by doing some things better than their opponents. They won. They learned from those there how it all works. They copied those methods and those rationales. They were re-elected with the promise to continue to do the job like they’d been doing.  (read: status quo) That also is the case for the bankers, the auto executives, and some of the brokers on Wall Street.  You’ve heard it before and it applies here as an example of what went terribly wrong:

to a carpenter, every problem can be solved with a hammer.”

Now we need some new technologies and greater grasp of other ‘tools’ besides a hammer.

Changing individuals is difficult.  Changing cultures is almost infinitely more complex to pull off. You have to change the contingencies, the consequences of behavior to get different results. Not at all easy. The culture there is strong and ideas of what is right and wrong only die when the people holding them die. Any changes that come quicker are difficult to anchor because no one knows how those will work in that culture.


And, just about the time they get a rhythm and some solutions there will be another election. That is why you have to follow what’s going on.  Short of death you can get rid of those that don’t do right by the country’s standards.  Elections!

One component is to follow the money. Another is to follow your representatives in Washington and your state as they get THE MONEY. Things have got to change. No one wants to pay more taxes but everyone wants something more from the government.

You want a bailout? It will cost your kids. You want cheap money? It will cost a lot more? You want something for nothing? Good luck with that… maybe the tooth fairy will entertain that idea but even she require a tooth.

It’s time… lead, follow or get out of the way.

Read Full Post »

“To put a trillion dollars in context, if you spend a million dollars every day since Jesus was born, you still wouldn’t have spent a trillion,” McConnell said.

This comes from a CNN editorial on our perspective on the number 1 trillion.

You know nothing makes a number seem big and important like putting a reference to the birth of Jesus.  This is the worst comparison between units I’ve ever seen.  

a) when was jesus born?  you might say 2009 years ago.

b) what’s 1 million times 2009 years x 365 days in the year (don’t forget leap years!)? right a little under 733,285,000,000 billion. 

c) providing the context of religion and dollars and time eternal makes this far confusing than it needs to be (the intention, i know!)

This is important stuff, ya know.

Read Full Post »

We know that behavior is not simple but there are simple behavioral components that keep getting ignored. Relative to what we all experience in life like conflicts in the Dan Ariely remarks below and in a previous blog on this site.… we recognize his statements on habits, good and bad, etc.  Yet there is a second component that comes to be more easily considered as well.  Follow along…

Dan Ariely: ….(on the October Bailout, politicians, Wall Street, etc.)

The second thing is that nothing has changed much in the short term living of people. In some sense, this is smaller than the effect of the increasing gas prices.

Greer: Yeah.

Ariely: What is happening? Basically the thing is we are creatures of habit, if you think about it. The best predictor of what we will do tomorrow is what we did today. That is it. Habits are good and bad. They are good because they help us save energy. We don’t have to think about it. We don’t have to contemplate every cup of coffee if it is worth it or not. As a consequence, we get into habits.

When we lose 50 or 500 interactive habits all at once via an earthquake, hurricane, family death, financial threats, loneliness, fall from grace, rejection…etc. (you get the idea) we have nothing to replace those ‘habits’ that are the products of conditioning shaped by consequences over years. We don’t have any behavior to replace those lost dynamic relationships with… literally!. We have to figure it out all over again. Sometimes it is too much to handle.

Take the following stories bunched together from Associated Press just today…10/7/08

Tuesday, October 7th 2008, 11:31 AM

AP/The Courier-Journal

LOUISVILLE, Ky. – A deputy coroner confirmed Tuesday that Hope Orwick stabbed her two children to death and then shot herself.

Deputy Jefferson County Coroner Bob Jones said Emily Orwick, 9, and Lindsey Orwick, 8, were stabbed multiple times, though he could not say how many. He said Hope Orwick, 35, shot herself in the head.

RELATED: FATHER KILLS SELF, FAMILY IN MURDER-SUICIDE DRIVEN BY FINANCIAL PROBLEMS

Louisville Metro Police spokeswoman Alicia Smiley said a family member stopped by the house just before 7:30 p.m. EDT Monday and found the bodies.

Jones said he hasn’t been able to pinpoint when the girls died, and police were trying to determine a motive for the killings.

Crisis counselors will be available at the girls’ elementary school Wednesday, said Jefferson County Public Schools spokeswoman Lauren Roberts, who would not say which school they attended. Public schools in Louisville were closed Tuesday for parent-teacher conferences.

RELATED: MOM KEPT DAUGHTERS’ REMAINS IN THE FREEZER

Along the quiet, well-kept southwest Jefferson County street where the family lived, children played in their yards Tuesday. All was quiet at the family’s modest, ranch-style house, where there were no signs of activity.

Two chaplains were at the scene Monday night, and Smiley said 15 or so family members gathered there. Police talked to relatives to see if they could help explain what may have led to the deaths.

Neighbor Mechelle Rockey, 48, told The Courier-Journal that she has lived across the street from the family for about six months. She said the two girls often played outside.

Contingencies around us control our behavior. We give them other ‘causes’ but as you can see it is contingencies that have all the power, be you the Pope, the President or the paparazzi… all the people above lost what they saw as options on what to do. Ariely and the others represent the loss (of behavior) on how to cope, what strategies to use, what methods to embrace, etc. They lost their behavior.

What contingencies control your behavior and generates your ‘habits’ that define who you are and what you’d do in your crisis?

Read Full Post »

Dan Ariely is a professor of behavioral economics at Duke University and the author of Predictably Irrational: The Hidden Forces That Shape Our Decisions. I recently talked with him about some hidden forces shaping the current financial crisis.

Mac Greer: You have a lot of Americans seeing this as a Wall Street crisis and not so much as a “Main Street” crisis. What do you think it will take for most Americans to reach some sort of a consensus that this crisis really requires immediate action?

Dan Ariely: Well, one thing is we have been telling a lot of people for a long time that whatever they have in the stock market is about long-term strategy and not any short-term things. So the current change in speak, in some sense, doesn’t seem to be very effective. We have been telling people for 20 years the money you have in the stock market is about retirement, it is not about anything urgent. Don’t look at it. It is all about long-term strategy. It is very hard to convince people that all of a sudden that it is short term. That is one thing.

The second thing is that nothing has changed much in the short term living of people. In some sense, this is smaller than the effect of the increasing gas prices.

Greer: Yeah.

Ariely: What is happening? Basically the thing is we are creatures of habit, if you think about it. The best predictor of what we will do tomorrow is what we did today. That is it. Habits are good and bad. They are good because they help us save energy. We don’t have to think about it. We don’t have to contemplate every cup of coffee if it is worth it or not. As a consequence, we get into habits.

Read the full post from Motley Fool.

Read Full Post »

Here she is, check it out.

probably worth reading considering as a tax payer you’re about to spend $6900 of your money on it (per person in your house!).  I like to know what I’m buying….

SEC. 2. PURPOSES.
1
The purposes of this Act are—
2
(1) to immediately provide authority and facili-
3
ties that the Secretary of the Treasury can use to
4
restore liquidity and stability to the financial system
5
of the United States; and
6
(2) to ensure that such authority and such fa-
7
cilities are used in a manner that—
8
(A) protects home values, college funds, re-
9
tirement accounts, and life savings;
10
(B) preserves homeownership and pro-
11
motes jobs and economic growth;
12
(C) maximizes overall returns to the tax-
13
payers of the United States; and
14
(D) provides public accountability for the
15
exercise of such authority.
16

Read Full Post »

Come-on people…it is gut-check time!!! You want a republic to be proud of? Now’s the time to find you spine.

We got the government we worked to get. Right, none of us worked hard enough and this is what laziness has wrought.   We didn’t mind when it was someone else’s dollar. Enron was a joke. Now we are all in the same financial concentration camp.

  • Bills, in one form or another, assigning $700 billion to Paulson are on the table or will be…

  • Henry Paulson, is the Secretary of the Treasury; a Cabinet position, fifth in line to succession as President.

  • He and the other people who 3 months ago said the economic fundamentals of the nation were sound are now in the triage room trying to keep the economy alive. Our economy…

Before succumbing to fear’s faux response, the watermark of the major arguments for everything for the last 7 years, we, not Congress, should re-read Article 1, Section 1 of the Constitution; our Constitution.

“All legislative powers herein granted shall be vested in Congress of the United State, which shall consist of a Senate and House of Representatives”

The congress has abdicated essential legislative powers in the last 24 years to the executive branch making this bail out not only ill conceived and anti-market driven but above the law. Supplanting the rule of law – laws written by the elected representatives now abdicating their responsibility to leave for legislative recess – with the rules of the executive branch places another jewel in the imperial presidency.

This is about information and misinformation, subjects addressed here without much coddling or political correctness. Right now the putzes in Washington want you to decide without information.

First of all, legislative control of public funds is not a discretionary matter for our government. It is not as Commander and Chief of the Treasury that the President or a Supreme Court Judge gets to ramble on down to Wall St. in an exercise to control the flow of capital through the veins of American Capitalism.

In a free market the impact isn’t always positive. There is always a risk of malfeasance as well as determined but unpredictable events robbing the speculators and the institutional investors of their goals.

When new programs are reviewed be they healthcare or tax treatments we get no where. The Congress stifles discussion and leadership.

Subject Matter Congressional Response

Social Welfare Reform:

“…just a payoff to lazy cheats!”

Socialized Healthcare Reform:

“…just another liberal giveaway scam…”

Socialized Capitalism

Thank God!

WE ARE RUDDERLESS!

You can’t tell the difference between the parties any more. None of them can tell themselves apart from the people they ridicule across the isle or across the sea.

The enormous range of intricacies including our financial services under siege is of our Congressional making. Financial services are interesting because they are THE bridge between the private and public sectors that were shunned by congressional oversight and lack of cohunes to make the tough decisions for two decades.

If you abdicate getting involved and allow this bailout, which program might you consider more seriously in the future? Healthcare, earthquake relief, atomic weapons for Texas…? Find you spine!

As George Will has stated, “these are micro problems, although quite huge, pale next to the macro problem…”

And what are those you ask?

o Retirement of 78 million baby boomers in roughly the last 9 months

o Aging population with medical needs that can’t be met

o Transition to a welfare state requiring more economic growth, not collapse

o Lower revenues for everyone moving from a manufacturing to service entity

Today’s crisis will require our governments to print large amounts of capital further devaluating the dollar here and in the world market – at an accelerating rate that has been dropping for almost 6 years.

o That money is being allocated based on a non-existing economic plan

o That money being controlled by people who didn’t do the job they were hired by Congress to do in their Cabinet positions.

o That money is being allocated on non-economic considerations

o That money allocation is not subject to review by Congress just like we are being asked to forfeit the right to do in governments hast today

Either way, we are all going to suffer for past bad business entanglements that our government put in the hands of the very people who are now telling us that $700 billion will make the problems go away.

I don’t believe it.

What’s more, are subsequent generations willing to sign up to pay for rippling cost acceleration generated by a predatory role of the state in allocating financial resources without consequences that even Congress walked away from?

Read Full Post »

Great piece from Black Swan author,Nassim Nicholas Taleeb, on Edge.org.

Read it.

What Is Fundamentally Different About Real Life

My anger with “empirical” claims in risk management does not come from research. It comes from spending twenty tense (but entertaining) years taking risky decisions in the real world managing portfolios of complex derivatives, with payoffs that depend on higher order statistical properties —and you quickly realize that a certain class of relationships that “look good” in research papers almost never replicate in real life (in spite of the papers making some claims with a “p” close to infallible). But that is not the main problem with research.

For us the world is vastly simpler in some sense than the academy, vastly more complicated in another. So the central lesson from decision-making (as opposed to working with data on a computer or bickering about logical constructions) is the following: it is the exposure (or payoff) that creates the complexity —and the opportunities and dangers— not so much the knowledge ( i.e., statistical distribution, model representation, etc.). In some situations, you can be extremely wrong and be fine, in others you can be slightly wrong and explode. If you are leveraged, errors blow you up; if you are not, you can enjoy life.

So knowledge (i.e., if some statement is “true” or “false”) matters little, very little in many situations. In the real world, there are very few situations where what you do and your belief if some statement is true or false naively map into each other. Some decisions require vastly more caution than others—or highly more drastic confidence intervals. For instance you do not “need evidence” that the water is poisonous to not drink from it. You do not need “evidence” that a gun is loaded to avoid playing Russian roulette, or evidence that a thief a on the lookout to lock your door. You need evidence of safety—not evidence of lack of safety— a central asymmetry that affects us with rare events. This asymmetry in skepticism makes it easy to draw a map of danger spots.

Read Full Post »