Tag archive for ‘Collapse’
Encouraging the Freedom to Fail
American business is the most robust, the most efficient, and the most effective in providing returns to shareholders on invested capital. We take capital from all points on the globe and turn it into returns that are often multiples of what they initially invested. No other country is as effective at generating wealth as the United States. We are so effective because of our commitment to capitalism and free markets. Part and parcel of that commitment is a belief in freedom. One of those freedoms has to be the freedom to fail. For if failure is not a consequence of bad decision making by private enterprise, we will surely fail in the long term in generating wealth. Life without risk, in business, is not worth investing in.
Stock Market Meltdown, Bank Failures, and Recession! Oh my!
Last week, the stock market shredded almost 20% of its value, and briefly looked as if the Dow Jones Industrial Average would march to 7000, a number that would bring the market’s value down to almost 50% from its high a year ago. Panicked investors continue to be frenzied as they worry about the value of their 401K’s, IRA’s, and government savings plans, selling in droves and fleeing for the safety of US Treasury Bonds; bonds which are almost worthless in their yields at the moment as demand for bonds far outstrips supply. In the time of market panic - cash is king. Many Americans are asking, however, why this is happening? They were told the Bail Out “rescue” plan would avoid Financial Armageddon! Why then does the market continue to be driven downward, and the credit market continue to be seized?
US and World Markets fall and Congress looks for blame.
Today’s markets plummted around the world reacting to the bailout bill, worries about the broader credit markets, and the lack of reaction by most Western governments to what is undoubtedly a broadening financial crunch around the world. Panic swept through the world’s financial markets, wiping $2.5 trillion from share values, amid concern that regulators and politicians were struggling to get a grip on the worsening crisis of confidence.
The Sting: Now that the bail out is law - will it work?
Yesterday, the President signed into law HR 1424, the Emergency Economic Stabilization and Recovery Act, also known as “the bailout bill.” With the stroke of the President’s pen, Uncle Sam entered the financial market with 700 billion dollars in cash and a mandate to buy the crappiest investments that Wall Street can muster. The hope of the politicians who passed the measure is that the massive injection of money by the Treasury will stabilize the mortgage market, stop the free fall in the value of equities, and most importantly, keep the entire fabric of western capitalism from unravelling. We should all be cheering, right?
Bail out on the bailout
Put simply - the problem with the bailout is this - who are we bailing out, exactly, with the current Bill (HR 1424)? The now 420+ paged monstrosity includes things such as tax breaks for employers who encourage their workers to take bicycles to work, a 2500+ dollar tax for electric vehichle purchases, an alternative fuel tax credit, credits for biodesiel and alternative fuels, credits for carbon dioxide sequestration, credits for geothermal heat pumps, tax breaks for the steel industry, changes to the Alternative Minimum Tax system, oh and among my personal favorites, a seven year amortization table for the expenses associated with development and running a motocycle racing track. Yes, you heard me - motocross racing tax provisions.
Entries (RSS)