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get in get out

Posted by m0t0r1zed on Thursday, November 20, 2008 6:27:05 AM

get in get out

ideally, that would be the best thing to do for gov't in these interventions. gov't may have stabilized the credit situation, but its continuing presence will have a disruptive influence on behavior.  institutions may hold off on major decisions because they are all waiting to see how gov't will act, legislate, regulate, boondoggle, etc.

gov't needs to hand off what it's doing back to the private sector - such as purchasing commercial paper - as fast as possible.  gov't needs to get in and get the heck out.

when you have a murky pool of water, by leaving it alone, it will become clear on its own.  the more you agitate the water, the murkier it gets, and right now, gov't intervention is agitating the water and making murky the economic situation.

gov't has to be decisive and clear in its pronouncements and discussions of future plans.  it can't hedge or mumble or shuffle its feet or leave options open in the future.  all that will do is stir up more mud.

a congressmen mentioned an "exit strategy" for gov't intervention - a VERY important idea.  list the plan and current actions being taken 1, 2, 3 as clearly as possible.  there should be a time horizon for when you will expect to terminate these programs, and how you will pass off these responsibilities back to the private sector when they are ready to stand up on their own against the insurgency.

if banks still aren't lending, then so be it.  just be done with it and move on.  you can't wait for them while they wait for you.
 
a large scale plan to stimulate jobs and the economy will probably then be the next step.  it could be that banks and investors are waiting for the details of just such a plan so that they know where to place their bets, uh, i mean investments.  unless bush and obama agree upon a plan, the economy will be in limbo for the next month and a half.  woohoo!  everybody do the limbo!

also, i give up on gm, etc.  congress cannot execute complicated maneuvers.  heck, they can't even go from point a to point b.  so just let the autos fail or just give them $50 billion, no strings attached, and tell them to go away for two years.  if they live, they live.  if they die, they die.  if congress wants to drive us deeper into recession, fine.  let them do it sooner, so that we can get it over with. =P

the worst thing right now is for gov't to linger in areas where it's not supposed to be. be decisive. do it, be done with it, and move on.

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i told u so ...

Posted by m0t0r1zed on Tuesday, October 28, 2008 3:48:57 PM
gee, i didn't see this coming ... -_-

White House tells banks to stop hoarding money
 
 
oh wait, i did.
 
 
so, now you have fed the cancer, and it seeks to grow larger.  brilliant.
 
also, i think the ADHD media is fixated on the most recent, sexy credit crisis and has completely forgotten that the slowdown started over a year ago due to the constricting effect of oil - also created by overleveraged hedge funds / speculators jumping out of housing and into oil and commodities and wreaking havoc to industries, stalling growth in china and india, blah blah blah, and then jumping back out before the stuff hit the fan. wunderbar.
 
i could be wrong (what the heck do i know), but perhaps too much is being attributed to the credit crisis, and most of the current economic bad news have long been in the pipeline.
 
also, i'm not as opposed to assisting companies that got caught up in this chain reaction mess - since they were not direct culprits in creating it.
 
bah, whateva.  why i am wasting time with this garbage that i know little about? 
 
wish my headache would die down. it's been killing me all day.
 
this is a blog, so i can whine randomly about whatever i want. :P
 
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FIX. ECONOMY. SIMPLE.

Posted by m0t0r1zed on Thursday, October 16, 2008 1:42:44 AM

We've been focusing too much on just the banking system.  We seem to have forgotten that the early slowdown in the global economy was not due to the housing mess and its ripple effects. 

It was oil.

Oil siphoned off trillions of dollars out of the world economy, businesses, and consumers.  The rapidly booming markets in China and India hit walls because of high oil prices.

Although the oil bubble has burst, it is because the world is tanking - as I kinda expected.  The drag effect of high oil prices has sapped the confidence of consumers and was compounded by the credit nonsense.

However, the credit and financial mess has been addressed - imperfectly perhaps, but nonetheless addressed. 

I think we now need to focus on stimulating confidence in the general economy.  One of the ways is by driving down the price of oil.

Every time confidence in the economy improves, oil speculators spike prices back up - essentially driving confidence back down.  We need to obliterate the price of oil and gas.  Nothing will improve consumer confidence more than to see regular back down to around a buck and being able to fill up our gas tanks without wincing.

To drop oil prices, the following should be done.

1) Release the hounds, er, the strategic reserves.
2) Raise interest rates by 1/4 pt. Low rates aren't doing squat anyway.
3) Pass a drilling bill including the highly symbolic ANWR
4) Begin building nukes
5) Pass legislation limiting some types of oil speculation.
6) Push solar, coal, wind, etc. funding, blah blah blah.

Low oil and gas prices will have a strong, positive ripple effect on the world economy - THAT EVERYBODY CAN UNDERSTAND - and doesn't require friggin psychoanalysis and hand holding of bank lending fears.  Stop mucking around with banking reform.

IT'S DAMN SIMPLE. SPIKE OIL AND GAS DOWN FAST. NO RECESSION. THE END. 

Sheesh, we don't need to create a freaking new world global banking system or neo-socialist order to fix the "crisis of confidence" in the world.  There are additional things that could be done to fix the general economy, but I adhere to the principle of KISS, especially since I am simple and stupid.
 
edit:  I view the concepts of living and non-living very differently from most people. A dumb analogy but ... perhaps the world economy could be likened to a living organism and money as its blood.  Ideally, you want the blood to be flowing to where it is most productive and needed.

For example, you always want blood flowing to the brain, heart, and other vital organs.  When thinking, you want an increased blood supply to the brain.  When exercising, you want increased blood flow to the muscles.

Blood is always flowing and changing as it is directed to different regions.  By this analogy, I would say that during the past spike in oil prices, all of the blood in the world economy was flowing towards our a$$.  Yes, we still had blood flowing to our vital organs, but the brain that conjured new innovations and the muscles that powered industry all had a bit of a dropoff in performance.  Recently, I believe that we had a lot of blood dilating our rear end to no great purpose.

And that is my very technical analysis of the world economy. =P

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random

Posted by m0t0r1zed on Wednesday, October 01, 2008 11:00:33 PM

if i were a bank, why would i lend out money and expose myself to risk when i know that gov't is gonna bail me out? and if i think that congress might pass another bailout bill, why shouldn't i wait a little longer to see if there's another one on the way with even better terms?

not an economist, but wouldn't knowing that congress will bailout my bad loans make the credit crisis worse?

doesn't congress leaving the door open to further bailouts make the crisis linger?

wouldn't the proper way to get the banks lending again be to help businesses find alternative sources of credit and financing that compete with banks?

dunno ...

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What is Libor?

Posted by m0t0r1zed on Tuesday, September 30, 2008 8:33:42 AM
link to article by Alan Zibel explaining what Libor is and how it is a reflection of the current credit difficulties ... in case ya wondering.  seems a lot of other news entities printed the same article. 
 
just been watching CNBC, and they kept saying how impossible it was to explain to the average american what Libor is because we are all a bunch of idiots.
 
 
hmm, looking at historical charts of Libor rates ...
 
Libor historical rates
 
Bloomberg article on jump in Libor
 
 
hmm, wonder what the actual volume of lending is?  and are there alternative sources of funds?  also, wonder if i can look at historical Libor rates without looking at other factors in the economic environment at that time ... and after an orgy of easy credit, you'd expect some retrenchment.  pfft, wonder if the "solution" might end up causing another crisis in the future like an oscillating wave with too much overshoot.  how much of the crisis is irrational fear vs. rational behavior?  questions questions questions.
 
whom do you trust? 
 
no one.
 
even the experts can't guarantee that the bailout will work.  and i sense that they lack the proper tools for rigorous analysis of the problem.
 
but it would be interesting to really dissect this thing apart and see how it ticks ... so time intensive ... would be tricky to figure out all of the different levels of selection, the relevant time scales, and the many species involved within the economic environment.  meh.  don't have time. time. time. time. =P
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