Sunday, February 15, 2009

Barron's calls for massive help for homeowners as condition for TARP; forget "moral hazard"; Cramer gives Obama's first "English theme" an "F"


Barron’s, on Saturday Feb. 14, offers a front page editorial “The Barron’s Plan” A keystone proposal is that the offering of TARP money to a bank should be conditioned on its offering to cut the principal owed on what it says is $850 billion on subprime mortgages by 25%. Presumably, this would help a lot with “upsidedown mortgages”, negative equity or increases in principle owed because of previous negative interest rate tricks.

The article takes the position that practicality is much more important than trying to assess “moral hazard” or insisting on “justice”. As Donald Trump (who calls the current mess a depression) said on “The Apprentice,” “Life is not fair.”

The link for the article is here. However, the full text requires a subscription (or else purchase or library viewing of the print version, often available at 7-11’s and other newsstands).

The New York Times, in a front page article by Nelson D. Schwartz, “Job Losses Pose a Threat to Stability Worldwide,” link here. Most of the job losses overseas are indirect results of worldwide business depression and loss of export markets. This could lead to protectionism, or to calls for more authoritarian government, just as in the past.

Truthdig has a column by Chris Hedges Feb. 16 "Bad News From America’s Top Spy", link here. Alternet, in reprinting it, frames it with these scare headlines: "U.S. Intel Chief's Shocking Warning: Wall Street's Disaster Has Spawned Our Greatest Terrorist Threat: The Director of National Intelligence argued that Wall Street, rather than Islamic jihad, has produced our most dangerous terrorist".

I think that in a general way, there is a lot of criticism of the Economic Stimulus legislation, HR 1, which President Obama will sign on Tuesday in Denver, as containing too much pork and too much spending that really won't generate jobs rebuilding real wealth and infrastructure. Jim Cramer gave the legislation an "F" in his video blog recently.

Here's another thought in this particular posting of some assorted potpourri. We're all talking about behaving sustainably. But you have to have innovation and creativity to have sustainability. Just think of the examples in nature. Stay tuned.

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