Nobody asked me

Report 19.

... Return to Lemon Socialism.

Robert Reich has this phrase coined, Lemon socialisum. The Winners Get Capitalism, and the lemons get socialisum. Socialize the losses privatize the profits.

... I don't mean to burst anyones bubble, but there is a "Put" option on the market that our government puts on it, because you and I are supposed to be able to invest our 401k, and pension funds etc... are heavily invested.

in September, the government went against it's long standing policy of "Lemon Socialisum" and let Lehman fail. They didn't think it was going to be that bad. Check out charlie rose yesterday with Johnney Mack. They just didn't think it would be that bad.

I'd suppose that because we have this policy of "Lemon socialisum" that has been so longstanding, when the market was faced with "Real Capitalism" it freaked out... that was what all of this has been about. So... Obama came in, and reinstated the "Lemon Socialisum" and things may recover.

Is it fair, is it right, is it what we have been taught.... NO... but I think that is how it is.

Let me try and give the other half glass.

if we ran under "Real capitalisum" P/E ratio's would be much lower... and with big companies failing, bond rates would double what we see as "market rates"

*shrug*

So, the new mortage plan... as far as it's effectivness is a push, it's either help homeowners 50% and banks 50% or help banks 100%..... It makes us feel better to help some of the people who Pay the taxes.

I said this.... "I'm fine with all you Breaders having to have your Kids pay for the mistakes of their Grandparents.".... I mean... that is just normal... I swear to god I still pay for my grandparents mistakes, and my parents... WTF, why shouldn't your kids be the same way?

The new Agrigator bank plan..... from what I read, it's actually smart as all hell. The are going to create a fund or roughly a bond, let investors buy the crappy assets with a 'put' option. if they start underperforming it won't matter. In fact they will use the TALF, which has a built in Put with the people who make deposits to it, if the assets start to underperform, they kick them back in the face of the bank that put them there. The TALF can just be where they get the assets for the agrigator. I'm still working on figuring it out. But it means that the investors can pay "par" for the assets, roughly. and no writedowns... if they don't perform.... the loss is the bank's.

I ran a model on how to mark to market a ABS, and even fully performing, mark to market it goes to .50 on the dollar. And that is with no impaired performance.