Yeep, and by the time that happens, there will be a new pres in office and he'll get all the credit for what an awesome economist he is.

I just hope if that certain someone is the new pres, people remember he was more interested in a televised debate than doing his job in washington at that time.

*waits for the Boooos*

it's okay. I understand.

Just more BS fluff from McCain.

Neither of these guys is an economics guru, their job is simply to vote. They can both vote and still keep the debate as scheduled....as Obama has said.

Maybe jet lag is too much for the geezer.

Why buy the loans? Why not just guarantee them? A Fed guarantee would make them pretty attractive and would take a ton less money.

??
The article is not by McCain

The article is by Andy Kessler, a former hedge-fund manager, is the author of "How We Got Here"

Mr. Kessler is someone who could definitely be called an economics guru as could Warren Buffett who has agreed with the plan.

guaranteeing the loans wouldn't solve the problem the same way. They certainly wouldn't be as potentially profitable. Also there wouldn't be the immediate boost to the banks which will allow them to stay in business, loaning out money so that the economy keeps afloat.

I'm not 100% sold on the plan, but from reading a number of articles it isn't as bad as it first sounds.

My personal thoughts on Andy Kessler are that if he's promoting ANYTHING, he has a dog in the hunt.

<a href='http://www.plime.com/redir.p?&quot;http://www.youtube.com/watch?v=aTdWg2datt8' class='plime' target='_blank' rel='nofollow'><b>flash video</b></a>

has there been any discussion about how much of a dividend the American people would get for making this "investment?"

What is 2.2 trillion divided by 301,139,947?

My comments have to do with the McCain ploy to cancel the debate not the article.

Neither of these two guys will add anything of substance on the issue of economics so there is no need for them to do anything but vote.

The guarantees may not result in profits but they would not cost anywhere near 700 billion dollars either.
There is no real guarantee that the Feds will profit at all under the current plan. There is a huge risk.

Here's the thinking:
Remember Enron, WorldCom, Adelphia, and other companies had artificially put assets on the books? They'd say something was worth $10M when they bought it, but eventually it decreased in value, and they never updated the value in the books. That was part of the fraud. Under current laws at that time, they were all convicted and put in jail for fraud.



Then we got all mad and made all these new laws that are coming out the wazoo called sarbanes oxley. It's a huge, massive law but the idea is that we were going to mandate ethics to corporate America because apparently they didn't have any, according to the Enron failure. It's now a total pain in the butt to execute it in a publicly traded company.

It didn't work because you can't cause ethics to happen. However, it does make each company each day restate what their assets are worth if sold on the market. This accounting procedure is mark to market accounting--you need to remember that. It's a good concept and keeps companies from having loaded balance sheets.

How This Affects Us Today
However, it's part of what's caused this in the news now. Merrill Lynch was sitting with $30 billion tied up in sub-prime loans with houses. Stupid! They get what they deserve for doing that, and I'm with you on that. Those houses didn't become worthless all of a sudden because those people couldn't sell their bonds. Since they couldn't sell them, they basically gave them away for 22 cents on the dollar. Now do you think all those houses lost 80% of their value underneath that deal? No, they didn't, so they gave them away for 22 cents on the dollar (about $6 billion total) because there was no market for them. Nobody wants to buy sub-prime bonds because they suck. They're junk bonds. But at 22 cents on the dollar, it's a bargain because even if you foreclosed on every one of the houses in there, you'd probably get $20 billion back out of $30 billion, and so the company that bought those for $6 billion got a deal! But there's no market for them. That's where these companies are stuck. They can't sell this stuff, but accounting-wise, they've had to mark it down to market and it's frozen the marketplace.

Economist Wesbury is saying that if we change that one rule and don't force them to mark down to market value and just let them hold on to all the stuff, and say just on sub-primes for this period of time you can change that rule -- a temporary change -- that'll free the market up. It's seized right now; it's frozen. This will thaw it out and get it going again. He says that'll solve 60% of the problem ... and I think he's right.

That one accounting rule is what made Merrill Lynch sell out. That one accounting rule is what's driving other ones into the dirt. Would you rather let them change their accounting rule or loan them $700 billion for us to buyout their bad paper?

I'd rather them work their own crap out than change the accounting rule.

I don't like giving them any money or any help with my tax dollars. But I'd rather see that than see the whole thing turn completely upside down in a fruit basket turnover than have a whole meltdown or something and freak out here in the middle of the election season. Why don't we just take the FHA insurance program and extend it across these sub-primes? What that means is that you and I are guaranteeing the lender that they're not going to lose as much or any money on those mortgages. Now I don't like guaranteeing them, but I like it better than buying them. In other words, instead of $700 billion in tax-payer debt going out there to bail out these companies, just extend the insurance out. You could probably do that for less than $40 billion. It's like a 95% savings!

If the government insured those mortgages, they would then be marketable. And could sell them. And the companies would stay afloat. And we, the people, don't have to get into the mortgage business. Now we're going to get in there a little bit because of the insurance on those getting foreclosed on. But foreclosures aren't causing this. This is being caused because these companies are frozen and seized up. We've got to let some of the steam come off and put some oil in there to get this thing moving again. We can do that without going into debt $700 billion.

Around $7,000

umm ... we will most likely see the money in 10 yrs when gas is $1,000 a tank :)

lol ... man, I liked that one !!

edit:dupe post

Maybe, maybe not, but this was historic - I appreciate a guy who can say 'ya know, I am still in office, I'm going to behave as such'

and that's how I took it.

_I_ took it.

there was a quote on cnn where the obama camp said it was a ploy and McCain needed to get on with the debate, because the american people need it.

then later in the paragraph, he's quoted as saying 'we're going to fix this, all of us, dems and reps together'

okay. awesome. so instead of calling mccain to the playground, go participate in the office you were elected to during a historic and monumental move by your current employer.

*shrugs* ah dunno, maybe I'm a sucker for the cowboy, but it seems like Obama's side is mad they didn't think of it first. ;) and I appreciated the 'drop everything and handle stuff' attitude on the other side.

...Love,
Undecided