Friday, March 6, 2009
For the many who didn’t take out second and third mortgages to pay for cruises or trips to Las Vegas, or try to live beyond their means; for the many who did put their hard earned money into 401Ks, IRAs or simply put money away for retirement or a rainy day, please save our savings before you save the world. You recently said you didn’t follow the ups and downs of the market. Well it has been consistently down for the past month. Decent people who have acted responsibly are being devastated. Uncertainty is the worst enemy of financial stability. And talk of $300 billion/year Cap and Trade taxes on our utilities, doubling of electrical rates, a trillion dollar/year health care plan, the threat of runaway inflation caused by trillion dollar deficits, these are the causes of the current financial instability. Slow down! Many of these problems have been with us for dozens of years. They can wait a bit. Shore up the banks but don’t force them to make risky loans. Above all, don’t allow judges to use whim in revaluing loans. If mark-to-market is a faulty valuation system for banks, try valuing a loan that that has no downside limits. Cramdown will create more doubt on the value of assets, and that’s precisely how we got into this mess in the first place. Put first things first. You have four years to get things done.