[lit-ideas] Re: <POLITICS> Jim Webb on the Financial Bailout

The solutions there in the 700 billion. 

Its a matter of restoring the missing portions of the balance sheets. My gripe 
with Webb is that he assumes there's a market for these duff securities when 
its actually the fact that there isn't a market that makes them duff. If any 
value statements can be found its in the nominal value of the mortgages and 
other debt that those securities represent. 

The only way to restore value to those securities is to establish some 
confidence in the end products. In other words, use the 700 billion to 
subsidise the houselholders at the end of the chain. Perhaps buy to let 
programmes. 

If there's no ability to pay back the debt at the end of the chain, then the 
securities, as they were formulated, are, and remain, worthless. In which case 
the only other way round it is to turn them into other bits of paper, call them 
'govt stock', and provide some type of income stream to the value or otherwise 
of the initial mortgage deal. If you go down this route then you'll be closing 
the door on any mortage holders that remain.

Past that, governments might well be obliged to declare that they no longer 
have confidence in the market as it applies to financial transactions (giving 
or receiving loan deals and any securities created to back them up). We might 
well see a 'National Mortgage' available for houseowners who don't quite meet 
the regulated requirements for private mortages and perhaps following on, an 
increase in govt-owned houses for let. 

The possibilities are huge, are not for the faint hearted and are definitely 
outside the remit of 'liberal democracy'. In other words, Capital has messed up 
and is walking around in deep do do of its own making.

Simon
  ----- Original Message ----- 
  From: John McCreery 
  To: lit-ideas@xxxxxxxxxxxxx 
  Sent: Monday, September 22, 2008 5:09 AM
  Subject: [lit-ideas] Re: <POLITICS> Jim Webb on the Financial Bailout


  And your solution?


  John


  On Mon, Sep 22, 2008 at 12:43 PM, Simon Ward <sedward@xxxxxxxxxxxxxx> wrote:

    Webb's insistence on purchasing securities at or below market cost is 
unrealistic. The finance institutions are in this mess simply because there's 
no effective market for the duff securities that they created; there's no value 
in them. As such, the govt-backed bail out company will be creating a false 
market by creating values with little or no precedent because there's no 
'market' value.

    As for capping executive pay, what would that do for tax revenues. That 
besides, Bush would veto it at a shot.

    Webb hasn't got a grasp.

    Simon Ward
      ----- Original Message ----- 
      From: John McCreery 
      To: ANTHRO-L ; Lit-Ideas 
      Sent: Monday, September 22, 2008 2:31 AM
      Subject: [lit-ideas] <POLITICS> Jim Webb on the Financial Bailout


      Read it. Then start hammering your Senators and Representatives to get 
behind it. 


      http://webb.senate.gov/pdf/banksdodd.pdf




      -- 
      John McCreery
      The Word Works, Ltd., Yokohama, JAPAN
      Tel. +81-45-314-9324
      http://www.wordworks.jp/




  -- 
  John McCreery
  The Word Works, Ltd., Yokohama, JAPAN
  Tel. +81-45-314-9324
  http://www.wordworks.jp/

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