I haven't written anything for awhile because as today's title suggests I'm so tired of the goings on in the financial world. I hardly check Bloomberg anymore and rarely read my financial blogs. It's frustrating to be bombarded by bailouts and such of those who took great risks and over leveraged themselves whether they are homeowners or CEO's. "Moral Hazard" is the term used to describe the mechanism by which a risk taker is punished if the risk THEY take on VOLUNTARILY goes bad. Well the Gov. and the Fed are making sure that moral hazard has been wiped clean off the face of risk.
While I feel for the family who got in over their heads because of the appearance of home values with no ceilings and the cash machine those homes became, it still stands that if they can read they knew what they were doing. An age old axiom is that "never sign anything unless you understand it", its evident that some did not understand the docs. they signed. Unfortunately myself and those who did not take on these risks and in turn "missed" out on the benefits (ie cash, flat panel TV's, new cars/boats/vacations, etc.) get to pay for those who did accept, sign, and cash out on these same risks and now have nothing to show for it.
We now have the Fed stepping in with new regulations to help "protect" us in the future from these same problems. The best thing for the Fed to do is to let the market work! Stop lowering interest rates (the rates could go to zero and we would still have a credit problem. The banks are afraid to lend money because of the uncertainty of their balance sheets, not the rate on interbank loans) and destroying the value of the dollar because of the inflation, whether real or imagined (did you see the gov Feb. inflation figure of 0%, HaHaHaHaHaHa.....,.) lower interest rates can cause. Let the market work! Companies NEED to fail! The owners, managers, employees, consumers, need to be RESPONSIBLE for their actions. They need to be punished for poor choices and risks. Competition needs to see failure to find success (I'm beginning to sound like those people who sum up life in one sentence :) ) Responsibility is a lost word in many aspects of todays society where everyone wins a medal and trophy no matter how "good" they are.
So as of today I am starting a campaign to bing back moral hazard. Maybe we can rally at the capital! Imagine 50,000 voices chanting "BRING BACK MORAL HAZARD! BRING BACK MORAL HAZARD! BRING BACK MORAL HAZARD! BRING BACK MORAL HAZARD!..." ad infinitum. It would be great. We could make signs saying "Make Moral Hazard, not War", "Get us out of this Non-Moral Hazard place", or "Death to Non-Moral Hazardites", etc. Only then can/will our voices be heard. Who's with me?????? Anyone? Anyone? Bueler? Bueler?
Apparently I am alone in this view. How sad for us, our children, grandchildren, and our country.
1 comment:
Hey, I am with you, and McCain is too. SHUDDER....... I don't agree with his foreign policy, to Bushish(Yep, I can make up words just good ole' George). But, I definitely agree with the hands off policy with housing. We'll see if that policy changes as the election nears. After all, he is a politican.
There was no predatory lending just a bunch of stupid people living to keep up with the Jones's and using credit to fund the process.
What does this say? Live above your means and the government will bail you out. It's a slippery slope. This next generation is going to be so screwed up, when it comes to what is expected from society.
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