Off-Topic: Martini, maybe I am Wrong

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	Name:	MartiniMan -
	Subject:	Martini, maybe I am Wrong
	Date:	9/30/2008 5:24:53 PM

I understand the underlying desire for the bailout but I am coming to the very strong conclusion that it may not be necessary in the form it was proposed. I would much prefer a market-based bailout with the government providing some of the grease to make it palatable. For example, Warren Buffet bailed out one of the smaller investment banking firms (I forget the name) simply by providing a $7B loan guarantee with all sorts of strings attached. If he gets to pull those strings at least it will be a market-based transfer of wealth and not a transfer to the government. I am of the opinion that the panic is being overblown by Congress to justify a power grab by the very people that created the crisis.

As for the alleged credit crunch, I have not seen it in my business as yet. Does not mean I won't but I have a $2.25M line of credit with Merrill Lynch and they are not distressed at all. Our clients continue to pay their invoices which for us is always a good sign. I am planning for a slowdown in payments but hope it won't happen. What we need to all remember is the current foreclosure rate is 0.19%. That means that 99.81% of all mortgages are not in default. The real problem lies in the sheer numbers (due to greatly increased home ownership rates caused by improper government intervention in the market encouraging/forcing lending to uncreditworthy recipients) and the concentration of all that risk with too few players. It was fun and profitable while it lasted but once home prices started to fall the gig was up. This was predicted as early as 2001 and even more forcefully in 2004.

Other messages in this thread:

View Entire Thread

A Refreshing Perspective - MartiniMan - 9/30/2008 4:42:16 PM

Martini, maybe I am Wrong - GoneFishin - 9/30/2008 5:11:04 PM

Martini, maybe I am Wrong - MartiniMan - 9/30/2008 5:24:53 PM

Martini, maybe I am Wrong - Talullahhound - 9/30/2008 10:39:42 PM

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