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Quick Hits

So just a couple things to vent about today:

1. Obama gives first tv interview as President with Al-Arabiya…I understand what he is doing here by reaching out to the Muslims first, blah blah blah, but this is total BS. His first call was to Abbas, and his first interview is with Al-Arabiya. Where do you think his sympathies lie? The US continues to try to appease and grant support and legitimacy to enemies of freedom. Disgusting.

2. I got an email today for an event at Barnard called “Idealist.org Global Volunteering Fair.” Apparently there will be “Workshops on topics like “International Volunteerism 101” and “The Cost of Doing Good: Affordable Options for Volunteering
Abroad.” Now I have no problem with helping others out, but come on. These people do not even live in the real world. Why are there no greedy capitalist career fairs out there? How about an event “The Cost of Doing Good: Creating Jobs as an Entrepreneuer in the US”? Not at Columbia.

3. Lastly, from today’s Daily Reckoning:

All over the world, capitalism is out…politics is in. Obama is a hero…Fuld is a schmuck. Politicians are taking control of banks. They – not investors – are deciding which firms survive and which perish.

For example, this morning brings news that the auto parts sector needs a bailout too. If it doesn’t get $10 billion of somebody else’s money, it will be in big trouble, it says. And there’s Larry Flynt, over in the porno business. He says the bump and grind industry has fallen on soft times too. Will the feds rise to the occasion and pump in a little cash, he wants to know? We will see.

The problem is, practically every industry needs cash.

Leverage is a two-way street. When the going was good, a small addition to the financial sector’s capital would be multiplied many times. The limit for Wall Street’s investment firms was 12 to 1…until it was increased to 33 to 1 in 2004. Thereafter, if you put $100 into an investment bank…counterparties would soon have about $3,300 worth of credits.

Easy come…easy go! When the financial system rolled over last year, the banks lost money. Suddenly, $100 less in bank capital forced the banks to reduce outstanding credit by as much as $3,300. Cash disappears and everyone is forced to cut back.

The guy who was going to buy a new car decides he should wait a year or two…and then Detroit is hurting. And then, the assembly-line worker is laid off…so he cuts back on his porno purchases… Pretty soon, no one has any money.

Couldn’t have put it better myself.

Cheers,

Ben

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