Brinksmanship: the market

Shall we let the market crash and burn, or support it artificially and let all the bad players get saved from their mistakes. I guess I'm a hyper-capitalist, so I suggest to do the former. Someone like Buffett will come in a take a few pennies on the dollar for those CDOs. Let the financials drag the market down until people separate the companies generating real value from those who just speculated with other people's money.

I distrust Paulson who is too interwined with his Wall Street friends to let them hang out to dry. This bailout will for sure be the biggest windfall for those financial companies in history!!!

I think allowing the market to price something is what we want. Why have gov't intervene? With some new special legislation companies must disclose how much so called toxic mortgages they have instead of hiding it and the market will come in and figure out if a company deserves to sink or swim. It's very simple. No more allowing companies to guess at -- and generally inflate -- the price themselves.

CA 1-cent sales tax increase

The Republicans in the state legislature aren't agreeing with Schwarzenegger's proposal for a cent sales tax increase -- which, by the way, supposedly takes the sales tax back down after a few years (probably a little added grease in the proposal for those against any taxes). I thought that if I were a Republican I would be for the sales tax. I mean Republicans tend to be fiscally conservative. They wouldn't spend their money willy-nilly like wealthy urban liberals. And they're not poor for whom the greatest portion of their income is spent on stuff for survival (though they and everyone else in the state get a sales tax break on food and medicine). In any case, Republicans would more likely have computers at home and do some internet shopping if it really bothers them (okay, they would legally have to pay those sales tax back in income tax later, but CA isn't yet NY where the online vendors automatically add tax to transactions). So Republicans wouldn't be hit very hard by a one-cent sales tax. Any other tax rises, such as income or property taxes would be even worse tax hit on Republicans. I suppose those are complete non-starters.

I guess the Republicans just want to issue bonds to borrow our way out of this budget crisis or just blindly cut spending. But I think California schools and roads are bad enough as they are, no?

Someone mention stagflation?

Reuters It was reported that Greenspan mentioned the word. While I didn't say stagflation in September, I mentioned something else in a post which was housing and credit collapse causing significant reversal in economy.

HRC Consumer Guide for 2008

PDF (2MB) Seems to be constantly updating, yet some things stay the same. Don't buy gas from Exxon or Mobil, they got a big '0' from Equality survey in treatment of their LGBT employees. Instead go to Chevron or BP. Better to use UPS instead of Fedex. Also, Target instead of Walmart or ToysRUs, Best Buy instead of Circuit City, Staples instead of Office Depot, Whirlpool/Maytag instead of GE, AT&T instead of T-mobile, and Toyota, Ford, GM, Chryser, Suburu, Volkswagon instead of Nissan.

Breaking my Walmart habit will be tough, and I'm sort of locked into T-mobile at the moment.

Banker worries about the weakening dollar

NYT What does it mean to America, the increasing lack of confidence in the dollar? In previous statements economists have said that it doesn't necessarily mean anything drastic will happen, but I hear allusions to virtuous circle of consumption in this piece.

Once again on the carbon use tax by a Harvard economist

NYT Author makes an interesting point, that the sum of all tax receipts wouldn't change. It's just that they would be shifted around. So there would be a new carbon use tax, but it would be compensated by less income tax on individuals and businesses. Those businesses and individuals generating a lot of carbon dioxide -- basically big energy consumers -- would pay up the nose. But okay, it could be phased in gradually so that people with those high consumption rates could plan to become more efficient.

Greenspan strongly criticizes current administration in new book

Link 18 months after leaving office, Greenspan talks about how Republicans sacrificed their traditional fiscal discipline to try to pay their way into a 'permanent' Republican majority.

Sleasy Countrywide steered customers to ruinous loans

Link Loans with huge prepayment penalties. Unconscionable.

Money scarce

Link I wonder how this is going to turn out. Probably badly. I don't think I've been through something like this. But at least I'm not on an adjustable loan that can't be refinanced because my asset is worth less than the loan.

Democrat talks about Carbon Use Tax

Link Of course, the use tax is another tax. But Economists believe a use tax is more beneficial and effective than cap and trade. Cap and trade is like an incremental tax based on government managed and estimated usage levels and potential efficiencies. If the whole of carbon-dioxide generation was taxed then solar, wind, and nuclear would become much more competitive.

On a related note, Economist talks about wind and solar as if people didn't realize the fuel is free. I would think that much was obvious, no?

Injecting fiscal responsibility

Link The Democrats may pass a Pay as You Go bill, but would the President veto it? The author notes future structural deficits from medicare and social security are a major concern.