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No self-respecting shylock is going to loan a thin dime to any consumer in these waters. In fact, only the surest of sure bets in the commercial market is going to see a nickel of any money we throw out into the ether.
This bailout bill is a bill to stall the inevitable and make it the problem of the next administration to deal with. Pure and simple. No one in a position to spend money in this economy is going to get a thin dime out of any Washington bailout.
Resolved, then, we're in deep kimche.
The problem is that banks won't loan money to other banks because no one knows what any payee's exposure is to any of these nonsense derivatives instruments. And no one wants to say, either.
Issue 0: Hire some competent federal regulators and fund their goddamn departments properly.
Issue 1: FORCE bankers to reveal their portfolios to federal regulators. Isolate and insulate those banks and credit unions that can be salvaged. Support profitable institutions and jail the fools who were looking to make quick money using high-risk decisions [theft by any other name is still theft].
Issue 2: Derivatives are just fancy tools designed to insulate competent investors from risk, and bury the unfortunate and the foolish. It's just like a regular market only that risk is financed by the ignorant, while the well-connected and well-educated get more out of their investment than they rightly deserve.
Loan decisions need to be made based on sage wisdom and good business sense, not a gambler's choice as to when or if an asset's value will be higher or lower than predicted by market experts who establish these prices on a daily basis.
The net effect of this attempt to eliminate risk from an inherently risky business is to develop economies that stagnate because they reward mediocrity and stability at all costs, and overly punish businesses that take risks. After all, someone has to pay dearly when their stock drops unexpectedly and those who bet that it would are paid hard-earned capital for the gift of being cynical...or prescient...or criminal. Conversely, these same potential benefactors are punished more harshly than an ordinary stock investor who might have placed the money they lost in a better business industry -- instead insiders and brokers absorb these funds and use them to fund lifestyles of consumption that cost the economy more than they are worth in jobs and productivity. All of this based on an economic activity that is as passive as gambling.
So get rid of derivatives. Simple puts and calls are plenty risky and plenty passive...no need to pile on.
Issue 3: The bastards who blew up the economy are the bastards that need to fund the recovery. If not, we fire the Federal Reserve and decertify all of its member banks and bankers and turn all trade instruments into toilet paper overnight. Then we recapitalize with a new currency using increased asset-value to back up the new currency. Amero? Maybe. But first we have to kick Chavez's butt and steal his oil. Then it doesn't matter how rich China thinks they are, they won't have the energy they need to build a rival economy.
None of this is as well thought out as it might sound...but we need to be aggressive and provocative with thieves, or they'll just keep taking our money out for a drive and bringing it home wrecked and in need of repair.
