Archive for September, 2008

My three point plan to solve the current financial crisis

September 29th, 2008

Here is my three point plan to solve the current financial crisis:

  1. Offer tax cuts to people who buy houses in the next six month
  2. Offer tax cuts to financial companies that offer credit in the next six months
  3. Offer temporary immunity from recourse to people who default on their mortgages (or renegotiate it to reflect the current market value of their home)

I have written about my reasoning behind this plan and hope to spark a discussion about it on

3. et cetera , , ,

My view: more doom and gloom in the markets

September 24th, 2008

1929 crash

  1. If you are ‘too big to fail,’ you are ‘too big to go unregulated.’
  2. The bailout plans being discussed now are all *terrible*

    • they reward companies that were recklessly over-leveraged
    • they reward homeowners who were recklessly over-leveraged
    • they penalize any people or companies that did not participate in the reckless borrow & spend tactics
    • they substitute lack of accountability in the private sector for lack of accountability in the public sector
  3. Short sellers provide accountability to companies – they aren’t the problem, they are part of the solution
  4. As we focus on government bailouts, we are missing the fact that Bank of America’s has put US tax payers on the hook (through FDIC insurance) for a catastrophe in Merrill Lynch’s portfolio
  5. This bailout is going to pale in comparison to what happens when there is a run on the mutual funds. More on this later, but look up “embedded tax liability” and you’ll get a peek at what will almost certainly happen as baby boomers reverse the trend from net contributions to net disbursements in mutual funds
  6. To all those who repeat “focus on asset allocation because markets always go up in the long run”: don’t forget that the “long run” has meant 25 years in at least one case in our history
  7. Neither Obama nor McCain or any other political leader has a clue what do right now

Unfortunately, I do not have a solution to these incredible problems. I do believe that acknowledging these problems sooner rather than later is critical in containing the damage of twenty+ years of living beyond our means as a country.

Have a good day!!

2. politics, 3. et cetera ,

“The music may sound different…

September 18th, 2008

…but the message is the same.” Weird and oddly catchy.

3. et cetera ,

Olark Livehelp