How to vote against the bailout October 3, 2008
Posted by Jeff Nabers in : Money, Personal Enjoyment, Self Directed IRA Solo 401k , add a comment
- Don’t call or write your Senator or representative
- Don’t sign any petitions online
- Don’t join a consumer advocacy organization
Our government is not one for the people anymore, and we must oppose the bailing out of failing, irresponsible, fraudulent corporations.
Reasons to vote against the bailout
- The corporate officers who made the decision to pursue short term profits at the cost of later bankruptcy often received tens of millions of dollars in bonuses and dismissed adequate warnings from advisers about the future consequences of their decisions.
- Bailing these companies out is a reward for behaving dishonestly, unethically, and fraudulently.
- If running a company into the ground is rewarded with free money, then this puts sound-minded companies in a position of competitive disadvantage.
- This would create new rules of business: If you are a small company, you must follow sound-minded practices to thrive; if you are a very large company, destroy your company and it will be rebuilt at the cost of American taxpayers.
- Bailouts are requiring the Fed to create an extraordinary amount of new money which throws fuel on the fire of the already double digit inflation. Runaway inflation steals wealth from citizens to give it to the banking system and the government.
How do I vote against the bailouts?
Because our system of (more…)
Our free(ish) market becomes less free with the ban of short selling October 2, 2008
Posted by Jeff Nabers in : Money, Self Directed IRA Solo 401k , add a comment
A couple of weeks ago, the SEC illegalized a type of investing that makes a market what it is – short selling. Simply put, a person can bet on the market going up by “going long” and buying securities in hopes of selling them for a higher price at a later date. Long positions can be leveraged by margin. A person can bet on certain stocks going down by selling them if he already owns them. The leveraged way to bet on the market going down is to “sell short” which is simply selling stock on margin.
Going long makes prices go up. Selling short makes prices go down. This is part of “price discovery”. Most people don’t even know about short selling or they’ve been convinced to not do it. Securities brokers don’t want people to know about investment strategies that will make market valuations go down because their commissions are tied to market valuations. Their entire system is a mechanism of inflating values to further inflate values.
SEC temporarily bans short selling of companies whose price will go down
Read the official SEC action here. They are, by force of law, inflating the value of the stock market. They are also prohibiting (more…)
Who will bail out the government? October 1, 2008
Posted by Jeff Nabers in : Money, Personal Enjoyment, Self Directed IRA Solo 401k , add a comment
Although the House rejected the recent $700 billion bailout, there is plenty of bailing out that has already happened, and there is more to come. Already:
- $80 billion injected into failed AIG
- IndyMac bank taken over by FDIC
- Bank of America bought Merrill Lynch for $50 billion – 70% over its September 12 closing price
- Bear Sterns was bought by JP Morgan Chase for $1.2 billion and the Fed then loaned JP Morgan Chase $29 billion (without recourse) to ensure that JP Morgan Chase didn’t actually have to suffer the consequences of buying a failed bank
- Washington Mutual failed – it is the largest bank failure in American history. In 2007, its share price was $45. By the time it was sold to JP Morgan Chase, it’s share price was 16 cents. The CEO stepped down on September 8, 2008 and a new CEO received a $7.5 million sign-on bonus. 17 days later, he received an $11.6 million severance package as WAMU filed for bankruptcy.
- Bank of America has become the nation’s largest mortgage lender by purchasing Countrywide & Interfirst
Hundreds of billions of dollars have already been injected into the system as seen on this timeline. It’s been happening every couple of months – 5, 10, or 20 billion dollars at a time. That kind of help hasn’t helped enough, and the $700 billion bailout is a sign that zeros will soon be added to the bailouts, and they will total in the trillions of dollars.
What happens to a company that gets bailed out?
- It becomes either under the control of whoever provided the money; and/or
- It becomes indebted to whoever provided the money.
How will our government pay for this?
Firstly, it’s important to understand that (more…)
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