On September 29th I wrote about The Bailout and said that I thought the bailout would have a positive affect, obviously in the short term that was wrong. However I was referring to the long term.
I also wrote that buying the "troubled assets" was nothing more than a recapitalization program and that it amounted to overpaying for securities. I argued the banks need more capital and this was a backdoor way to get it. Turns out I was right and instead of buying the securities (which would take forever to do) the government opted for a direct infusion.
Now the government has decided to abandon this program all together - they will not buy troubled securities (which by the way have a market and are traded everyday). Instead they will use the money for other stuff.....perhaps bailing out student loan and credit card lenders....uhh, what is next?
Is it me or did we just spend $150 billion in pork to give a lame duck $700 billion to fool around with?
Perhaps, perhaps not. It is possible that the government is trying to actually get ahead of issues instead of fighting them after they've occurred. The real problem is still not addressed, though there are hints that this money will be used to help guarantee mortgages.....we'll see.
Aren't you glad at least somebody stopped this behemoth and added some oversight (and pork)?
Its time for Paulson to be given the boot......and just where the hell is Bernanke? He's the Depression expert. Paulson will be gone as soon as Obama takes office, given the lack of leadership by Bernanke, I'd be surprised if he gets another term.
I'm starting to think Congress needs to be bailed out......of their jobs.
Scott Dauenhauer CFP, MSFP, AIF