Financial Market Time Bomb

Latest reports from Hank Paulson over at the U.S. Treasury is that the U.S. Government is going to financially prop up banks but there is a catch. They want stock in return for the favor. I suppose that is better than handing the banks a check and getting a toaster in return for it. Doing the math the deal works out to 15,555,555 toasters at $45 a piece. I don’t think Uncle Sam could ever sell that many toasters on Ebay without greatly affecting the world wide toaster markets so I‘m good with that deal.

For all of you folks following the markets and politics, Rachel Maddow has this interesting video on it…

Video Link



Is it just me or does it not make sense to anyone else for the McCain campaign manager Rick Davis to make a statement like he did in the above video?

“There’s very little a candidate for President, and frankly, after watching today, very little even the President can say about what’s happening in the stock markets other than to hope that they correct themselves.” - Rick Davis

Is it possible that Rich Davis is a “Closet” Obamaican? Then when asked why John McCain or Sarah Palin are not talking about the markets he had this to say in the above referenced video…

“I don’t know if you really want to turn a campaign into a CNBC News show on the stock market. I mean it doesn’t mean that we don’t care and aren’t trying to do something about it. It’s just I’m not exactly sure what you would say everyday.” - Rick Davis

If for no other reason, both candidates need to be talking about this issue every single day for a reason. To instill calm in the markets should either one of them become President. Well it turns out that Obama is talking about it in a logical way that will support new jobs in the small business markets. Just like after 9/11, making credit available to the thousands of small businesses that needed to either rebuild, restructure, or start all over again. It also turns out that John McCain is talking about it but his plan leads to panic in the markets. McCain is proposing, take a deep breath, suspending the “Regulations” (I never saw that one coming…NOT!) to allow people to draw out their 401K and IRA’s without penalties?

One plan builds up small businesses, the other puts a rush by millions all across America to dump their stocks, bonds, and every other investment vehicle for the old Mattress Savings Bank.

Just something to think about over the weekend. John McCain himself has said in the past that he knows nothing about economics and his latest plan would in fact put a full run on banks, company 401K’s, and investments in any form of retirement fund. Common sense dictates what would happen if the penalties for early withdrawal were suspended.

Papamoka