Wednesday, November 12, 2008
MY AMATEUR FINANCIAL SOAPBOX
So let's get this shit straight. It's no longer a bailout but instead an investment. Initially it was going to be used to help out banks and it seems it has... a little. And it was also supposed to be used to help out folks with bad mortgages (more on that in a second). Ultimately it was going to bailout, yes bailout, financial institutions and now it will likely change. The Big 3 automakers are now bleeding, no erupting, money out the front door and need help. Meanwhile the likes of Toyota, Honda, etc., seem to be doing okay. The Big 3 are dieing a slow death because, in my opinion, they have been off the back for so long. Rather than making economical cars and pursuing hybrid technology, they continued to make "Bummers", Escalades, and Suburbans like it was going out of style. Now they are in trouble, behind the times, and look to us the tax payer to help them out. Many financial experts believe that we should help them, while others think we should let them fail. It seems that the only way for someone (in this case a company) to change or evolve is to hit rock bottom. The Big 3, it seems, have been on standard operating procedure for way too long. Would they change their ways? Since gas is relatively "cheap" will they be aggressive with hybrid and alternative fuels? Maybe we should let them fail, reorganize and come back leaner, meaner, more aggressive, and perhaps creative. You can't teach an old dog new tricks but perhaps bankruptcy could change them.
Buying people's bad mortgage is a bad idea. I say this because I, along with millions of others, went the appropriate route. My eyes weren't bigger than my wallet. I didn't buy a $700,000 with no money down. Nor did I state I made $100,000 a year when I clearly didn't. I asked questions. "What's my mortgage payment now?" Or, "What will it be in 5 years?" So to the people who went that crazy route and thought things would be sweet, even though common sense would tell you it would eventually suck after a few years, don't expect a gift. I mean another another gift.
And so it goes. The American way to "cure" a problem: Throw as much money as possible at a problem and hope it gets better. Put a Band-Aid on a gaping wound.
So look, I can fill out the 2-page application for money. I would love to have an extra $2,000 to do stuff around the house, get my teeth whitened, get a pedicure, buy some socks, and get a 1 terabyte firewire external hard drive.
Posted by twones at 8:52 AM