Over the last few months, I’ve been trying to devote time to the credit crisis and bailout. Unfortunately, the news cycle is often so short that it’s difficult to keep up. Today I was lucky to be able to catch the bailout modification. With the busy times ahead, though, there’s something that needs to be [...]

For anyone who thinks this “bailout” is any more than a haphazard guess about what the market needs to remain mobile, here’s your answer… They’ve changed their minds — again: An already disheartened Wall Street turned sharply lower Wednesday after Treasury Secretary Henry Paulson said the government won’t buy banks’ soured mortgage assets after all, [...]

The City Club of Cleveland extended an invitation to the top six presidential candidates*. Of the six candidates, Libertarian Party candidate Bob Barr, Constitution Party candidate Chuck Baldwin, and independent candidate Ralph Nader participated; Democrat Barack Obama, Republican John McCain, and Green Party candidate Cynthia McKinney were no-shows. Unlike the debates we have already seen [...]

Today’s Wall Street Journal notes that the world’s financial problems go well beyond a credit crisis: The original bubble was in housing prices and mortgage-related assets, which the Federal Reserve helped to create with its negative real interest rates from 2002 into 2005. This was Alan Greenspan’s tragic mistake, not that the former Fed chief [...]

I just received my mail-in ballot a week or so ago. The ballot, with multiple choices with arrows to be filled out next to each choice, reminds me of taking standardized tests back in the day. Some tests were easier than others but I knew that if I did not study, one of two things [...]

As I’ve pointed out before, the extreme leverage increases in our economy created a false inflation, and the de-leveraging is an inherently deflationary process. There are signs that this false inflation is easing, and possibly even heading into a deflationary curve. Consumer prices were flat in September as retreating costs for gasoline, clothes and new [...]

$700B here, $900B there, and now another $250B on top! The government put itself four-square into the country’s banking business Tuesday, resorting to what President Bush conceded was the unwelcome choice of buying into the system to loosen paralyzed channels of credit. The president said the decision to buy shares in the nation’s leading banks [...]

Yep… Worried of a liquidity crunch similar to that in the early 1930s, there’s been quite a bit of movement in the last week. Starting with last Friday’s $700B Treasury bailout of toxic debt, followed by yesterday’s $900B+ short-term lending backstop, markets still weren’t assuaged. So what happened? A big drop from the Fed in [...]

With the reverberations of the Congressional fight over the $700B bailout still shaking Capitol Hill, the lingering question has been whether that $700B would be enough to do any good. Nope. They’ll need at least double that. And Congress isn’t voting on this plan: The Federal Reserve announced Tuesday a radical plan to buy massive [...]

I hope that Representative Sherman is the victim of a bad game of “telephone”. If he is not, if the administration really did threaten to impose martial law if the bill weren’t passed, then the time has come for us to cast out the vipers in Washington D.C. Hat tip to The Crossed Pond and [...]

Here is a great compilation of the media appearances that various scholars from The Cato Institute have been making all over the media during the past two weeks making the case against the bailout: H/T: Tom Palmer

A few days ago, I tried to explain, in layman’s terms, how we ended up in this financial mess. I had this to say about the bailout: We can debate whether or not this bailout should or shouldn’t occur (for the record, I’m against it), but in an election year, there’s nothing that’s going to [...]

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Leverage: 4. the use of a small initial investment, credit, or borrowed funds to gain a very high return in relation to one’s investment, to control a much larger investment, or to reduce one’s own liability for any loss. For an investor, margin is a blessing and a curse. When you’re trading on margin, your [...]

While the rest of the politcal class debates the wisdom of John McCain’s non-supension suspension of his campaign, Libertarian Party Presidential Candidate Bob Barr seems to be one of only a handful of people out there saying we need to look at the bailout itself: In the name of restoring economic confidence, the Bush administration [...]

For those of us who value the concept of life, liberty, and property, there doesn’t seem to be much reason to be optimistic for America’s future. Last week we saw one government (taxpayer) bail out after another. The price tag seems to grow a couple of hundred billion dollars each day (depending on which figures [...]

Well, that’s what the S&P rating service is discussing, but they do point out one crucial point allowing them to retain their place: “As an advanced economy with almost no foreign currency debt — and with the ability to continue to borrow in its own currency — the U.S. ratings face little threat in the [...]

Despite the long-term damage to the economy inflicted by the government’s interference in the housing market, the government’s policy of diverting capital to other uses creates a short-term boom in housing. Like all artificially-created bubbles, the boom in housing prices cannot last forever. When housing prices fall, homeowners will experience difficulty as their equity is [...]

Late yesterday, the Treasury Department announced what may well qualify as the biggest Federal bailout of a private company in history: The government seized control of Fannie Mae and Freddie Mac yesterday in a dramatic bid to restore faith in the embattled mortgage giants and arrest a vicious cycle that has driven the nation’s economy [...]

One of the key ideas that I find myself discussing in any election cycle is the desire of Americans to elect a savior. Not gonna happen. The system is bigger than the players, and the system is flawed. But that doesn’t stop the average voter from trying to elect someone who will “run the country”, [...]