Toxic Debt, Banking, Greed and Stocks

Well it seems the banks who currently have toxic debts on their books want to keep them. Why?  Apparently the upper echelon want to make sure they keep their fat pay cheques, their bonus structure, and their ability to use “golden parachutes”. If the Secretary puts up a reverse auction (bidding starts high, then goes down) that would allow the government to be involved with the banks and cut the income, collapse the “golden parachutes” and put a limit on the bonuses or pay cheques.

What happens when the banks keep the toxic debts? The depositors have their money in an unhealthy bank, the stability of the bank is undermined. All in the name of greed, apparently.

Last night the candidates were asked what they would do first when they got into office. Personally, my agenda would be to find those very upper echelon people, investigate them using these refusals, and if possible persue charges. The other thing I would do is go into the books of Fanny Mae and Freddy Mac for some of the information on shady trading that is documented there and follow that up. Names of companies, traders, etc should be there, so find them, follow the paper trail and do what is necessary to take those same greedy, self-centered, narcissistic people out of the system, if only by taking away any licenses etc they may have.

Second on my agenda is those damn lobbyists. Kick them off the fat-cat train, get them out of the halls of the House of Representatives, the Senate, and off capital hill.  If necessary, create a law that makes lobbying highly limited. Yes, there are some lobbyist for education, schools, social issues, and they need to have a voice somewhere, but there are some lobbyists that want to promote greed, capitalism and money interests and those must be dealt with severely.

The entire world has now been sucked into this whirlwind. I can bet that a lot of people around the world are looking at the very shady business practices and cursing out loud. This is one mess that must be cleaned up, starting with those who pushed for the change in regulation in congress, in the banks, in the investment houses, and put those people out of power. That will include Paulson, because as an executive in Goldman Sachs he pushed for the opening of the door to creating some of these same toxic financial papers now choking the entire world banking system.

I can bet a lot of the people who played this pyramid scheme, ponzi game, whatever you want to call it, are now becoming aware of just how much damage they could cause. I can also bet that the impulse to find those people is growing. Let the law, the FBI, do that job.

I have read so much financial information in the last two weeks I almost feel like a banker myself. Good grief! Maybe this will, pardon the pun, pay off later. What I have found out is that putting trust in the stock market, the investment companies, is often betrayed. That betrayal is fast turning to anger, outrage, and frustration.

Obama needs to alleviate some of the frustration as quickly as possible. Find the players who played with lives, played with jobs, played with the stock markets by selling empty, toxic papers bundles, and abusing the trust of not only the American people, but the banks and people over the entire world. This will not be easy, mostly because the banks will demand privacy. Phooey! When you wreck an economy, cause people to loose homes, put self-centered greed and interest ahead of anything else, you have become a public figure, in my opinion.

Economists have no clear idea where this is going, mostly because this is unique. Yes, banks caused some recessions, Savings and Loan fiasco caused some serious losses, but this has become unique because it involves the world now. It started in the US, it started with the CEO’s and upper echelon, but it is going to finish off a huge number of jobs, good companies, and maybe a far longer list of decent neighbourhoods too.

Hang in there, this is going to be going where no man or woman has ever gone before, without the spaceship. We all live on one small planet, so maybe this is the time to truly become neighbours.

Stock Markets falling, Recession is here

Random notes here, but they may tie in later.

People are all looking at the stock markets and the falling prices. Some are trying to figure it out, some are just scratching their heads in wonder. I had a though today that makes sense to me, although I may be the only one. Perhaps people are looking at the stock markets and saying, ” You want your cake and eat it too” by demanding government bailout money and investors too. So people with investments, like retirement funds, are taking that money and putting it into bonds. They are basically saying, “You may be getting my money from the tax rolls, but I am taking as much as I can back. You will not get a double benefit from me.” I may well be off here, but it makes as much sense as any of the explanations I have heard elsewhere.

Keeping your head above water in these situations means some creative solutions. One that struck me today was using your home to make money. It means you don’t have your total privacy, but it may just save your home from being foreclosed on. What am I talking about? Renting either a room or part of your home. It may mean you allow someone to share your home, but with the increase in income, you may benefit not only yourself but someone else.  If you do decide to do that, make sure you are asking for a reasonable rent, not because you want to be seen as a sucker, but because you need to try to ensure a long-term renter. Make it decent, not a rat hole, and make sure you do get references. If you would live in it yourself, and consider the rental space a decent deal, then you will likely fare better than someone who wants the money but not the tenants. Those days are soon to be over anyway.

Your car. Do you need it for work or can you get to work by transit? If you can cut down on your car expenses, or even sell it, then you will save a lot of money over time. Most people living in the urban centers usually can manage to get to work with transit, and yes, I know it takes longer, but when you are getting down to the necessities, then maybe this is the time to change your habits.

Second hand stores. These may be the boom area in the next few years. Yes, it means you shop for things that are not brand-new, but it also means you are not spending money on new things. That money can go into savings. In the short or median term, money in the form of cash is going to be king. Saving on things like cell phone calls, even high priced cable, internet, may well be the difference between eating and living within your means and finding yourself in deeper water.

Borrowing. Unless it is an absolute necessity, don’t. If your family is one of the millions that have lived decent, honest lives, maybe consider pooling money into a larger savings. Not to borrow, but to have funds growing for crisis that may happen, and if you manage your lives well, then you can have a pool of money. The reason for doing this? Bonds can pay interest, and if your pool puts enough money into bonds, you can all get some interest back. Building a pool like this means you all need to keep track of the money in it, who put it there, and be able to return the money at a later date.

Renting or moving down in property size and level. This is one time when you really need to take a hard look at the markets around you. If rents are higher than what you are paying on your mortgage, there is really no reason to move out, but if you can find a cheaper house that can be something you know you can live in, then perhaps look into that. Remember you do have to find a buyer for the one you have now, though.

Community Kitchens. These can be a very efficient use of energy (cooking a large amount of food on a stove or in an oven) than cooking small meals at home. The kitchens also can be a place where several families or people can combine ingredients to make meals that each person would not have the ingredients for, ie: stew. One person may have potatoes, another may have carrots, another may have access to cheap meat, etc. Combining them will provide families or the senior citizens with meals they cannot afford to cook themselves by sharing the costs.

Plan on gardening. If you have access to a 10 foot by 20 foot piece of land, you can grow a fairly large amount of food. Potatoes, peas, carrots, and a few others that are easy to grow will all fit in that space. If you don’t have a continuous area, using raised planter boxes is just as effective. Peas can grow up above the other plants if you put up netting for them to follow.

Internet. Most people now need to have access to it. Libraries have them in most areas, but if there is a place either in your home or in your community center to set up several computers with an access, then you can get together within your community and operate this center. What that will do is save most people the cost of the internet connection and still allow access. It may mean a small monthly charge to cover the use of the connection, but certainly not as costly as individual connections.

Computers. There are free operating systems available. These can be used by people who have had problems with their computers on paid operating systems. What you can do is take one computer, clean out the hard drive, then install the free systems. Ubuntu, a version of linux, is free to anyone, anywhere. In fact, if you contact them, you can get up to 20 free disks. They have no problem with you copying the disks, sharing them, using them, and even giving the disks to others. Linux has drivers for accessories, word processing which does “talk” to other operating systems, as well as a huge variety of other options. It may mean you need to download them, but as of right now, linux has no viruses, trojans or other malware problems. Europe is turning to Ubuntu and linux for commercial purposes too. When a demand for an application, accessory, or user need appears, then a world-wide network begins immediately on developing the solution.

Recycling. It is amazing what people have done with items out there, from using pop bottles for automatic watering (fill the bottle, turn it upside down and bury the neck into the soil) to making houses out of old car tires. Imagination is the only restraint here, but remember to keep things like mercury, lead, and other toxins out of your life. Recycle old batteries, flourescent light tubes, because they do have toxic chemicals in them.

Cleaning. Vinegar is cheaper than most of the store cleaners and also is an effective anti-bacterial agent. Dissolve vinegar in water, use it to clean glass. Add in some soap (dish or even hand) and make yourself a decent floor cleaner.

It is time to look at what we all CAN do, rather than see all the limitations.