Paul Montgomery (![[info]](http://l-stat.livejournal.com/img/userinfo.gif){kind=small} paradox0220) wrote,@ 2008-09-23 11:04:00 |
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Ron Paul at his finest...
"The bailout of Fannie and Freddie, the purchase of AIG, and the latest multi-hundred billion dollar Treasury scheme all have one thing in common: They seek to prevent the liquidation of bad debt and worthless assets at market prices, and instead try to prop up those markets and keep those assets trading at prices far in excess of what any buyer would be willing to pay."
To the fed and gang: Stop acting like we are in trouble if we don't inject 700 billion. We ARE in trouble as the assets ARE already worthless. The 700 billion just props the system up a bit longer. Let's find a comprehensive solution instead of just trying to sweep the problem under a 700 billion dollar rug.
"Now that the precedent has been set, the likelihood of financial institutions to engage in riskier investment schemes is increased, because they now know that an investment position so overextended as to threaten the stability of the financial system will result in a government bailout and purchase of worthless, illiquid assets."
I'm amazed at how government, businesses, etc totally ignore positive and negative reinforcement concepts. The government is rewarding bad behavior (risky investments) and punishing the careful investors (and tax payers in general).
http://www.cnn.com/2008/POLITICS/09/2
"The bailout of Fannie and Freddie, the purchase of AIG, and the latest multi-hundred billion dollar Treasury scheme all have one thing in common: They seek to prevent the liquidation of bad debt and worthless assets at market prices, and instead try to prop up those markets and keep those assets trading at prices far in excess of what any buyer would be willing to pay."
To the fed and gang: Stop acting like we are in trouble if we don't inject 700 billion. We ARE in trouble as the assets ARE already worthless. The 700 billion just props the system up a bit longer. Let's find a comprehensive solution instead of just trying to sweep the problem under a 700 billion dollar rug.
"Now that the precedent has been set, the likelihood of financial institutions to engage in riskier investment schemes is increased, because they now know that an investment position so overextended as to threaten the stability of the financial system will result in a government bailout and purchase of worthless, illiquid assets."
I'm amazed at how government, businesses, etc totally ignore positive and negative reinforcement concepts. The government is rewarding bad behavior (risky investments) and punishing the careful investors (and tax payers in general).
http://www.cnn.com/2008/POLITICS/09/2
