tag:blogger.com,1999:blog-15909236.post631319084394099264..comments2023-09-24T09:03:30.716-04:00Comments on Random Musings: Our representatives should be hearing from usScott Wimerhttp://www.blogger.com/profile/07398480470740937873noreply@blogger.comBlogger5125tag:blogger.com,1999:blog-15909236.post-87505245334086799582008-09-21T21:21:00.000-04:002008-09-21T21:21:00.000-04:00Shannon,My understanding of the swaps isn't what I...Shannon,<BR/><BR/>My understanding of the swaps isn't what I would call great. But, as I understand it, if you can keep the insured securities from getting marked to market or their issuers from going bankrupt then the various swaps won't get called in.<BR/><BR/>The goal isn't to make good on the insurance, it's to artificially make it unnecessary.Scott Wimerhttps://www.blogger.com/profile/07398480470740937873noreply@blogger.comtag:blogger.com,1999:blog-15909236.post-90034596928743031702008-09-21T21:08:00.000-04:002008-09-21T21:08:00.000-04:00I used your letter for all the good it will do. Bo...I used your letter for all the good it will do. Both Senators and my Congressman....Clint Cookhttps://www.blogger.com/profile/08626108515803165181noreply@blogger.comtag:blogger.com,1999:blog-15909236.post-12140401804128574782008-09-21T16:58:00.000-04:002008-09-21T16:58:00.000-04:00Interestingly, most people I've talked with are ve...Interestingly, most people I've talked with are very very concerned about this and generally don't like the idea.<BR/><BR/>But, Congress seems to be going full speed ahead. If this goes forward, incumbents are going to get hit very hard at the election.<BR/><BR/>I repeat, something doesn't add up. If there are 5+ trillion in swaps out there, what good is 700B going to do?<BR/><BR/>GSUnknownhttps://www.blogger.com/profile/17399912178019016015noreply@blogger.comtag:blogger.com,1999:blog-15909236.post-38912655267571379182008-09-21T15:50:00.000-04:002008-09-21T15:50:00.000-04:00The impact of not buying these "assets" for someth...The impact of not buying these "assets" for something near what their holders have marked their value would be very large and quite bad. If this happens, it's quite likely to trigger a storm of Credit Default Swap activity since many of these things are insured. That would absolutely pound the people issuing the insurance or counting on the insurance (since the insurers would likely tank). That means pension funds, money markets, municipal bonds, corporate bonds, etc. all getting a serious drubbing.<BR/><BR/>It would be bad. Really bad.<BR/><BR/>The people and corporations involved all freely entered into these contracts. For the past several years, they have enjoyed outsized gains as a result of these overly risky investment decisions.<BR/><BR/>Corporations that exercised proper judgment did not do as well over this same period.<BR/><BR/>It strikes me as fundamentally wrong to protect those who made poor decisions at the expense of everybody else.<BR/><BR/>If the bailout goes forward, I guarantee that the American people will not learn from this. We will have privatized the gains and socialized the losses, moving wealth from the many to the few with the rule of law.<BR/><BR/>However, if we are allowed to suffer the impact of our own bad choices and decisions, there is the hope that we will learn from it. We will at least have been given the chance.<BR/><BR/>I think my view is a simple extension of my belief in a right to fail. If you take away the ability to fail or to suffer the natural consequences of that failure, you make it substantially harder for people to learn.<BR/><BR/>Companies basically went to Vegas, bet millions, and are now telling Paulson that unless he ponies up a huge bucket of cash the whole economy will tank. Even if they are right about the consequences, the cash shouldn't be forthcoming.Scott Wimerhttps://www.blogger.com/profile/07398480470740937873noreply@blogger.comtag:blogger.com,1999:blog-15909236.post-30195654980711252752008-09-21T07:24:00.000-04:002008-09-21T07:24:00.000-04:00Scott, my sense is that the Paulson and Bernanke t...Scott, my sense is that the Paulson and Bernanke told Congress about some consequence of not doing the bailout that we (the public) haven't been told yet.<BR/><BR/>The reports of congress's reaction to the briefings seem to be more than just about that amount of $$.<BR/><BR/>So, my question is, what are the real consequences if they don't do this or someother bailout?<BR/><BR/>GSUnknownhttps://www.blogger.com/profile/17399912178019016015noreply@blogger.com