The Destruction of Economic Facts – BusinessWeek

April 29, 2011

The Destruction of Economic Facts – BusinessWeek

This is huge and well worth reading… titled “The Destruction of Economic Fact”, this article is about how financial rules have been changed to circumnavigate the truth in order to gain short term profit. The end result is not just uncertainty, but an erosion of stability that previously attracted so much worldwide investment into the US economy.

Money quote:

…businesses are left to figure out reality on the basis of connections, influence, and private information. Just like we do in developing and former communist countries.

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Cause of the Financial Crisis

March 2, 2011

Zombie » Outside Job: Using the Oscars to legitimize a political theory

Good stuff shedding light on liberal advocates pushing lenders to make bad loans, then decrying efforts by those banks to turn bad money into good, and all while proudly twisting the truth in an Oscar winning movie.

Yup – sounds like a liberal.

The meltdown was not caused by the bankers who mislabeled their risky debt; the economy would have collapsed no matter who was holding the bag when it all went sour. The only crime committed by the villains depicted in Inside Job was to make sure they weren’t personally liable when all those bad investments went kablooey.

And I like this description of big business… because this is what a large company that’s trying to attract investors is SUPPOSED to be like:

It’s clever to stir up populist outrage against the fatcats who tried to enrich themselves when everyone else went broke. Who doesn’t hate devious fatcats? Even I hate them. But in this case I know that they didn’t cause the recession: they merely tried to profit from it. Because that’s what fatcats do: They try to profit from anything, in any financial climate. That’s what makes them fatcats.

And finally the bit about fooling a TV audience that’s more interested in entertainment than politics… but maybe took the bait as well:

But most Americans will never know any of this. Inside Job dominates the headlines, and the thesis it puts forth is the accepted wisdom of an angry nation. Only the few of you reading this essay, plus a handful of researchers and analysts, are aware that there’s a different side to the story. I concede my likely defeat in this particular battle from the War of Ideas. But all I can do is call it like I see it, a tiny voice in a hurricane of disinformation blowing in the other direction.


Thank You And Goodbye

January 6, 2011

Instapundit » Blog Archive » VICTOR DAVIS HANSON: The New Sophists. “In 2009, brilliant economists in the Obama administration …

This very simply says all there is to say about our current and future financial health.


GM – Pieces Are (Still) Missing

January 2, 2011

UPDATE: http://www.newsweek.com/blogs/kausfiles/2010/12/29/the-bull-in-gm-bullishness.html

So GM’s fate remains to be seen but at least from the above article I’m seeing similar opinions from others. The comments section in particular spells out exactly why I’m rooting for GM’s failure – yes, I think GM should fail. All companies that are poorly run, receive government handouts, and step all over innocent investors (who thought they were buying a Dow Jones index quality stock) should fail… the sooner the better.

And just to make sure it’s captured, here’s the comment from the above article that spells it out:

jms

Because the Obama administration allowed GM to restructure without touching the Union contracts, GM was placed right back on a new, slightly longer trajectory towards bankruptcy, which will occur under an unsympethetic Tea Party / Republican administration. This whole mess was a big scoop of tax dollars handed over to the unions to keep the party going for a year or two.

Personally, my resentment lies not in the bailout, but in the fact that the “pre-packaged bankruptcy” was really just a collusion between the Obama Administration, the Obama-controlled TARP banks, and GM to muscle the bondholders out of the way and hand the company over to the unions.

Bondholders are supposed to receive 100% of their money before unsecured creditors see a penny, but because the Obama Administration had seized control of the major banks holding the majority of GM bonds, and rewarded them by allowing them to borrow huge amounts of money interest-free from the Fed and purchase interest-bearing Treasury bills, a majority of the government-control bond holders “agreed” to forfeit their bonds. The small bondholders, like the Indiana Teachers Union and anyone and everyone who ever purchased GM bonds individually as a retirement investment were the victims of this act of outright big-government/big business theft.

That’s why I will never, ever buy another GM or Chrysler product again. To do so would be the moral equivalent of receiving stolen property. The company is permanently deeply tainted by the lawless theft of bond assets from the individuals and small investors who put their faith in the laws of the United States of America that this would not — could not — ever happen.

As far as I’m concerned GM and Chrysler can’t go bankrupt and out of business fast enough.

Today, 07:31:51 – Flag – Reply

11/20/2010 – Something doesn’t add up… GM does an IPO that is wildly successful, even to the point of driving the market up 10% in a single day.

Why?

Did the UAW disappear? Did the government’s meddling in their business vanish? Did orders for the Volt jump enormously?

I just don’t get what has changed about GM since they entered bankruptcy earlier this year. And I realize I don’t know all the subtle angles of every issue involved here… but something just doesn’t add up.


SHOCKER: Rampant Fraud Threat to China

October 7, 2010

Instapundit » Blog Archive » SHOCKER: Rampant Fraud Threat to China’s Brisk Ascent. “The exposure of Mr. Zheng’s faked cred…

This is what I’ve been waiting for all along… everyone is claiming China has their act together, they have the manufacturing sector, the growth, the MONEY. And yet corruption will leave them bankrupt like everyone else.

Wait and see – a country of that size with a communist government able to eliminate inconvenient checks and balances… and you have a situation ripe for fraud.


Grim Housing Choices

September 7, 2010

Grim Housing Choice: Help Today’s Owners or Future Ones – Yahoo! Finance

Existing homeowners vs. future homeowners…

As the economy again sputters and potential buyers flee — July housing sales sank 26 percent from July 2009 — there is a growing sense of exhaustion with government intervention. Some economists and analysts are now urging a dose of shock therapy that would greatly shift the benefits to future homeowners: Let the housing market crash.

But what happens to existing homeowners if the value of their homes is allowed to drop?

If they see an identical house down the street going for half what they owe, the temptation to default might be irresistible. That could make the market’s current malaise seem minor.

I think the housing market still has issues with a large amount of bad loans still out there… mortgages that people refi’d with a jump in rates after 5 years. These loans were still being made in 2007 and most had a 5 year grace period of low rates before the increase happened. That makes 2012 the end game for these loans, so we’re still a few years from there.



David Walker: Deficits Are Coming | WSJ.com

September 6, 2009

John Fund Interviews David Walker: The Deficits Are Coming! – WSJ.com

Just read it.