nice call, seems the song and dance on capital hill was a show for voters. paulson comes along with a outlandish proposal. 700bil, total authority, not executive reign in. congress whines about it for two days and they come up with a middle of the road agreement that caps executives, and lets congress oversee it.
the end result taxpayer feel they got something out of the deal but they still cough up 700billion and pay more that what the mortgages are worth. Oh and pump the stock market up and they will feel happy about it all lol.
I mean it is all about psychology, because rationally its a terrible deal and damages the taxpayer and the firms can walk away from all the toxic cdos like it never happened.
but emotionally I feel I guess its better this way, stock market is up so everyone else thinks its good too.
economically the taxpayer burden will weaken the dollar long term, cut export to the US, good luck buying a nissan or volvo, us manufacturers will be happy. chinese goods will suffer. US manufacturing will strengthen.
short term it might give the dollar a boost as foreign money flows back in.
I think there is still a lot of foreclosures to go over the next 9-12 months. consumption this holiday season will be weaker than last year. but money flow will trump actual sales and wall street will tell investor to no be so glum about it just get in for the election year\xmas rally.
