Monday, September 29, 2008

Bailout bad or good?

Obviously it's on everyone's mind and there seems to be some very strong opinions about it. I've read a LOT of people who are against the bailout but I'm having a hard time understanding why there's so much resistance to the proposal (keep in mind I am NOT an economist). I get that there are those out there who believe a capital market should be left alone and not nationalized. I also get that there are those people out there who think those banks and institutions screwed up and therefore should pay for it. I also get (and very much agree with) the issue that compensation for the CEOs of these companies are ridiculous when they are "bought" out.

I understand all those points that people bring up but most seem to forget one major point and this doesn't even take into account the credit crunch/freeze that will happen if we don't do anything. The FDIC and Federal Reserve already have the right (and obligation) to deal with failed banks. The FDIC comes in as a bank fails, finds a healthy bank to take over the failed one, protects the deposits, and often takes over bad loans from the bank. Usually the FDIC has a reserve of money but that is FAST running out. This is their job and they will continue to do this as banks continue to fail. This is without Congress' approval or any oversight committee.

For the Citibank takeover of Wachovia, the FDIC is sharing the risk on a $312 billion portfolio of loans (without needing the express approval of Congress). They have already provided money for IndyMac, Freddie and Fannie Mac, and AIG failures, again without Congress' intervention. Without Congress and this bailout the FDIC and Federal Reserve is completely reactive, chasing after each failed bank and figuring out what to do with it, spending money it doesn't have (ultimately coming out of the taxpayer's pocket), and slowly running out of healthy banks for mergers. Getting the $700B from Congress with rules, regulations, and oversight committees will allow the FDIC and the Fed to be proactive and hopefully allow for transparency on the entire process. Until that happens, the FDIC and Fed will continue to bailout the failing financial industry and taxpayers will continue to pay for it. No matter what happens, the taxpayers will pay for this financial disaster. Wouldn't you prefer to have some limits, regulations, and committees making sure the money is used properly and something like this never happens again?

Wednesday, September 10, 2008


So Mike and I have headed to the Big Island of Hawaii for our anniversary vacation. We usually vacation around the beginning of september for two reasons. First it's our anniversary (9/12) but most importantly it's usually off-season pretty much anywhere. Kids are just in school so parents aren't taking them on vacation, the weather is still fantastic, and vacationing tends to be a bit cheaper this time of year.

This year we've gone to the Big Island of Hawaii for 8 days. We were in Maui and Kauai for our honeymoon. We loved Hawaii so much that we wanted to come back but try a different island.

The time difference is really wreaking havoc with my system (6 hrs) and I'm surprised at how long it's been taking me to adjust to the time. We've already been here 6 days and I'm still waking up in the middle of the night. Unfortunately I'm resigned to the fact that I'll get used to Hawaii time just as we have to leave on friday. Oh well, that still doesn't detract from the really great time we're having here.

We've been slowly updating our activities on Mike's blog so I'm just going to link to it here. I'll update more on my blog but it'll just be random bits of thoughts and opinions that didn't fit in our daily activities.