The Silence is Golden ... Maybe

Slave to the Dogs recently took me to task in the comments for what she believes is a "one-sided view" of the current competitors for the US presidency. She perceives me as being biased toward the Democratic Party candidate, for some reason.

My contention is that under the circumstances, I'm as balanced as a gyroscope, it's just that the Republican Party candidates are so incredibly pathetic, desperate, and immoral that they make Nixon look principled.

I fully intend to answer STTDs charges--after all, one should put one's arguments where one's blog is. However, I'm too busy to post right now.

I'm in full election fever mode. I have a civic election and a federal one within a month, and of course there's my preoccupation, now easing somewhat, with wondering how some thirty-five percent of allegedly responsible adults could still support the wrong side in the US contest.

And then there's the financial crisis ... I'm doing something I have not done ever before--speculating.

Heretofore, my retirement investments have all been very conservative. I like Guaranteed Investment Certificates and other types of bonds. There's a security in that word "guaranteed."

Mme Metro, however, has had a flutter on the higher-risk section of the spectrum for a couple of years. She has been investing in a fairly aggressive (read: "risky") portfolio.

Which has, of course, tanked. From a peak value of around twelve bucks a share, it's hit $8.50 or so, with most of that loss coming in the past month.

So I'm buying.

Why? Well it's simple: The US Federal Reserve must act. I originally figured they'd extend the same attitude to the massive shadow banks (institutions that don't accept deposits but make their money off trading and fees) that they did to the homeowners who are being foreclosed on.

To this day I believe that bailing out the homeowners would have been a better solution, since all of this financial chaos had its genesis in the mortgage crunch.

{You can probably skip this bit}

Think about it: Under the current plan, $700 billion (a figure that essentially fell full-blown out of Hank Paulson's ass) goes straight into the vaults, propping up the banks and giving their directors and shareholders big bonuses ... straight out of the taxpayer pocket.

Under the plan likely to pass, the US government will essentially buy shares, with similar results but hopefully less obscene greenmail to the people who caused the problem.

Under the Metro plan, the money goes to top up people's mortgage payments. It flows from regular humans to the banks, filling the vaults while generating revenue for the people processing the transactions. And people don't lose their homes.

The economy is a machine. It pumps money back and forth. What Paulson seems to be proposing is to shove some gas in the tank, and then sit back and see if the engine spontaneously starts. My idea would be to check the timing and then see if it starts before pouring more fuel into a tank that isn't actually empty.

But what do I know?--I'm a writer, not an economist. But I do read a lot (Which makes my opinion considerably more informed than that of George W. Bush, Sarah Palin, and John McCain [S&L much?]).

Okay--that was a cheap shot. But they make it so easy!

{Here's where you can start reading again}

In any case, this disaster is so wide-ranging that it actually poses a global threat. Action must be taken, and inaction isn't an option. Despite the Bushies bloviating about how government regulation is the problem for seven years, they seem in the eighth to have woken up and realized that it's actually the solution.

So I'm betting that one rescue package or another will pass before the end of the week, and I'm buying into the same aggressive growth fund as Mme Metro, on the principle that once the bailout goes through, the rising tide will lift my puddle duck racer along with the Wall Street yachts.

So that's what I'm doing instead of posting ... as I just did.


Side note: Here's a summary of the Bush legacy in seven words:

Heckuva job, Brownie
Mission accomplished
Voluntary regulation