Haste makes Waste?

[JinianVictoria M. Herdina]

Has it struck anyone that the former Bushies and now Obama types seem to be giving away money at a prodigious rate? It seems to me that while we do have a series of mini crisis facing us giving away money (almost with the heat from the printing press still on it )is not the way to do it. There was little accountability for the first vault of money as it was given away under Bush and it now appears that mindset is still present in Washington. It seems to be..give them the money and we will worry about the details later. The problem is the devil is in the details. It was purportedly given out that these businesses were to big to fail. Never mind the fact if they were that big they should have not been. Now we learn no one knows where the money went. The banks and corporations appear to be setting on it and not lending or borrowing it as was the original idea. And now if you recall the auto companies have to come back with an operating plan within 30 days to get the next chunk of money. The money seems to be hemorraghing out at a remarkable pace to the big boys in NY and Washington...never mind the rest of us...save the fat cats. What no one seems to realize, other than to give lip service, is that the rest of us are losing retirement, pensions, jobs and homes and much more as well. Why arent we getting some of the money? after all the money is only there because the little guys paid taxes and whatever else. Arent we entitled to get a bit of what we paid in? The longer this unrestricted flow of money goes on the more waste becomes a reality. Is this what we really want? Haste in giving the money to those who caused the problem and waste of a precious commodity (rapidly deterioating in value) which is in limited quantity despite the dreams of avarice dancing in the lobbyists and politicians heads. Just wondering

[Florida]

"Aren't we entitled to get a bit of what we paid in?"

No! And your not allowed to ask questions about it either. If you think the money going to the banks and the auto companies is a hemorrhage just wait for the now $925 Billion soon to be a Trillion dollar tsunami stimulus bill is passed. I have given up, lets go for the ride.... :-)

[JinianVictoria M. Herdina]

And now it begins!!! An interesting fact to consider. There is now released to the public and Congress a required survey of banks in the US and their viability. There are now 170 banks on the troubled list. So far this year 14 banks have failed. To put that into perspective in 2008 only 28 banks failed in all of that year. Get ready for a tsunami of bank failures approaching that of the 1990/1 fiasco when 1000 banks failed. And this WILL happen despite all the posturing out of Washington. Just to cite one reason EVERY single one of these banks that have failed or are on the troubled list have a "Texas ratio" eg that is one dollar of capital for every dollar of debt. Historically every bank that has shown a Texas ratio (or at least 90%) of them has failed. There are other reasons these banks will fail also but they are obscure wonkish reasons of high finance (sic) and economics. Does anyone appreciate the fact that there are 272 trillion dollars out there approx that are simply insurance policies the banks write for each other that they will not fail to pay their debt load? But this is not called insurance so as to avoid being overseen by the Sec and other regulatory agents. These little items are not governed by anyone or any agency. They are called cd (not certificates of deposit). One third of this "insurance" is held by the 3 largest banks in the US (THATS APPROX 90 TRILLION dollars). The rest is held by smaller banks (and many of those are on the troubled list). Even the US government can not stop this house of cards coming down. If even 1 bank fails it starts the whole thing collapsing. 272 trillion is more than the combined economies of every country on earth. No one talks about this in Washington because at the moment they are sticking their fingers in the proverbial dike leaks. Put it this way...Bank A insures Bank B meeting B debts; Bank A has to meet B debts if Bank B fails (this is the way the policies(?) are written. If B collapses Bank A is now on the hook for B debts as well as own debts. Bank C has insured Bank A the same way B insured A. Thus if B collapses A covers B but if A also collapses C now has to cover A and B and so it goes....... Thus 272 trillion dollars of unsupervised debt has accumulated simply by banks reinsuring each other against their failure to pay their outstanding debt. This is the unspoken of second leg of the derivative scandels we are trying to deal with now. The politicos are crossing everything they can in the hopes that this house of cards does not start falling...but it is wavering...... The government could not print money fast enough to stay ahead of this tsunami of debt........More will follow....JinianVictoria Urman (nee Herdina)

[Florida]

"No one talks about this in Washington because at the moment they are sticking their fingers in the proverbial dike leaks."

Oh don't we wish they had their proverbial fingers in the proverbial dike. Unfortunately for all of us our, politicians are to busy pointing their irresponsible fingers at each other or throwing shovels of dirt at the dike. When BoA and CITI bite the big one the only way to stop the world wide cascade will be to nationalize all or part of the financial system and that will be no guarantee.