Financial Bail Out Plan

Regardless of where you stand on the issue of whether the government should intervene to prevent an ensuing financial meltdown, here is an article published in the Wall Street Journal and it sounded very sensible. Let me know what you think.

The Public Deserves a Better Deal
By JOHN PAULSON(WSJ)

The Treasury plan to buy illiquid financial assets has been widely criticized as being unfair to taxpayers, who will have to bear losses ahead of shareholders of the institutions that will be bailed out.There is a better alternative to stabilize the markets: Invest the $700 billion of taxpayer money in senior preferred stock of the troubled financial institutions that pose systemic risks. Let's call this the "Preferred plan." In fact, it is the Fannie Mae and Freddie Mac model -- which the Treasury Department has already endorsed and used in practice. It is also the approach Warren Buffett used for his investment in Goldman Sachs.There are major problems with the Treasury plan. First, by buying banks' worst assets at above-market prices, taxpayers take an immediate economic loss -- while transferring wealth to shareholders and executives of the very institutions that brought on the financial crisis.Second, this plan puts too much discretionary power in the hands of Treasury officials. Who determines what financial assets are purchased and at what prices? Who determines which bank gets to benefit from these taxpayer subsidies? Will bank shareholders continue to receive dividends, and executives continue to get paid huge bonuses?When financial institutions borrow massive amounts of money to invest in assets that are now found to be illiquid and poorly performing, it is not the responsibility of taxpayers to bear the resulting losses. These losses should be borne by the shareholders.If taxpayers have to step in and provide capital to keep operating enterprises that the government decides are key to the functioning of the economy as a whole, taxpayers must receive protection.Treasury Secretary Henry Paulson said at the Senate Banking Committee hearing this week, "[the] Fannie Mae and Freddie Mac [interventions] worked the way they were supposed to." These enterprises continued to function, maintaining homeowner access to and lowering the cost of mortgage financing. However, managements of these companies had to leave and forfeit the compensation packages they had negotiated.Shareholders had their dividends blocked and remain first in line to bear losses, as they should have been. Taxpayers came both first and last -- first to get paid back, as the new preferred stock is senior to all shareholders; and last in realizing losses, as common and other preferred equity would be extinguished before the taxpayers would be at risk.This mechanism -- purchases of senior preferred stock with warrants in troubled institutions -- addresses the problems with the Treasury plan. The financial market is stabilized, companies get recapitalized, failures are avoided, debt securities are supported, and time is gained for illiquid assets to mature.The institutions continue to function, their cost of funding will decline as equity capital increases, and innocent third parties like bank depositors, broker/dealer clients and insurance-policy holders are all protected. The only difference is that potential losses are kept with the shareholders where they belong.The Treasury plan would also entail larger outlays than the Preferred plan. By allowing all banks to sell their worst assets to Treasury at inflated prices, taxpayers would be subsidizing healthy banks which have access to private capital (Goldman Sachs, J.P. Morgan, Wells Fargo, and Bank of America, for example) as well as banks that don't have a private alternative. But under a Preferred plan, only banks that don't have a private alternative will be given federal assistance. This would reduce the outlay otherwise required to solve the crisis.Few people familiar with the issues deny that Treasury action is needed to stabilize the financial markets. However, the question is who should bear the cost?Under the Treasury plan the taxpayer pays the price. Under a Preferred plan, the shareholders of the firms who created the problems bear the first loss. Who do you think should pay?Before committing $700 billion of our money, we should encourage Congress to take a few extra days to get this legislation right.

online.wsj.com

Leggo My Diego!

If you've never been to San Diego, i highly recommend it. It's a beautiful city with a lot of character and way too much to do.

I went to my buddy, Justin's wedding out there and it was really well done. They picked the perfect locations for everything. The wedding itself was on a naval base which i thought was kinda weird until we actually got there. I'll put pictures on the slideshow from this trip so you'll get to see what i'm talking about.

Hussey and i were talking about the trip after we got back and he made a very interesting observation. Aside from us and one other person at the wedding (that we know of anyway) everyone else there was coupled. I thought about that for a second and it occured to me that i was okay with that being the case. I didn't feel the least bit uncomfortable or out of place. Of course it didn't hurt that several people there were already aware of my recent "coming out," or that there were a couple of gay and lesbian couples there as well. I don't think those factors were the source of my comfort though. I genuinely feel okay about not being in an exclusive relationship... for now anyway. I'm not in any hurry to start living a conventional adult lifestyle.

Some would say well that would be impossible anyway given your sexual preference. I beg to differ. I'm sure that there are literally thousands of gay and lesbian couples living that way (the two couples at the wedding i mentioned are a perfect example). It can be done, i know. I just don't know if i'm cut out for it. That being said, i don't think that if i were heterosexual that i would be all that keen on the adult lifestyle either.

What do i want then you might be asking (and even if you're not, i'm going to answer the question anyway)? I want to have several intimate relationships each offering something the others don't. I think people get caught up trying to find the perfect fit. I don't think there's any such thing and to suggest that would mean that if you don't find the perfect fit, you'll be alone for the rest of your life. It would also suggest that there aren't inherently beautiful things each person has to offer. To turn a blind eye to those things would be and is a travesty.

Okay, to tie it all back into San Diego. We stayed at a condo on the beach (it was an awesome place to say the least with all the Bud Light Lime and Michelob Light you could ever want) and there was a boardwalk on the beachfront side of the condo. People were constantly going by our backdoor. Needless to say there was eye candy to be had by all regardless of your preferences (unless you're into goats or something that is. Ohhhh! :-)). As people ran, walked, biked or skated by i thought to myself, man i'd love to meet some of these guys. I couldn't imagine not being able to do that because i was tied up in a monogamous relationship. Don't get me wrong, i'm all for commitment when the time is right, but i just don't see that happening for a while. In the meantime, i just want to hang out, drink a few beers, have a few In and Out burgers and listen to some really good music!

I have a feeling i will be returning to San Diego at some point in the not so distant future. Justin, i hope you have a sofa i can sleep on!

Till next time y'all!

oslo

My type...

I just got a text from a buddy who's getting married. He asked if i was coming to his wedding and if so, would i be bringing a guest. I told him i was planning on coming and that i thought i'd bring a friend who likes a good party. He replied that he didn't think this particular friend was my type...

People are always asking each other "what's your type" and i always take a minute to ponder the question. Granted i've only been asked the question under the assumption that i was "straight" and have yet to be asked since dispensing with that assumption. I have been asked what i look for from a physical standpoint, but i think these two questions are completely different. I won't spend the time describing what physical things i look for, but rest assured i do have very strong preferences for certain physical features and there are literally thousands and thousands of guys who possess those physical feature preferences.

I digress. What i was saying is that i think "type" is not just physical and is very very very subjective. Several of my friends tell me i have extremely high standards. I don't disagree, but i don't necessarily agree completely either. I know what i like and i know what i want (remember the lemons?). So if people ask me "what's my type" i won't be pigeon-hold into some cliche'd response like "i really like a guy who's confident and sensitive and has a great attitude about life and people and the world where we live. He has to be intelligent and be able to converse on multiple levels, but also be funny and kinda silly at the same time. All this and he must be a smokin' hottie!" D@mn, i guess i do have a type after all. Man that sounded like a personal ad, too, didn't it? Or maybe more like an employment ad? (i am in HR, remember?) Don't ask me to repeat my type description in person either. I'll freeze up guaranteed!

Anyways, despite what i just said, i still say type is subjective. Can you really incapsulate that description, swallow it and become that guy? On top of that, i can probably think of dozens and dozens of other qualifiers as well. Again, i won't spend the time, but allow me to add one more for good measure. There is a certain indescribeable characteristic that some guys have. These guys just have a way about them that just screams masculinity. I don't like using that word because i don't think it does the trait justice, but it's the closest descriptor i can think of in the English language. It is completely intangible, but it is absolutely fundamental and requisite. You have to have it or it's just not gonna happen.

I think i've gone on long enough so i'll go ahead and put this to bed because i need to go to bed as well. I will say this in closing, though. If you really want to know if you're my type, just ask me. You might be surprised...

I could go on and on about this topic and i really want to, but i must call it a night. If you care to engage in a discussion with me about this post, please feel free to hit me up sometime. It'll take a while so prepare accordingly and i will, too. :-))

Thanks for bringing that up guy who's getting married. It's definitely been provocative!

I'll catch up with y'all next time.

laters,
-oSLo


"Talking is just masturbating without the mess"
-Our Lady Peace