How Does Your Light Shine?

I have been listening to News sources all morning, and reading on the Internet. I find it humorous in their major themes. The 300 Point rise in the Dow is attributed to Traders believing that Congress will act and pass the Bailout package of Paulson. I think it is far more likely that Traders lose about $8 billion per Day per Percentage Point of underutilization in their Capital assets. Possession of no-Interest Treasuries reminds of getting Drunk on $12/glass Beer. There are much better ways to blow your Money (at least pick a Slot machine which pays of at 30%, rather than 20%). I believe Wall Street has already blown about $80 billion in the run-up to yesterday, simply to present the Markets in crisis; in hopes of getting fast Cash out of Congress which they would not have to return. Yesterday cost them an estimated $24 billion in lost revenue, simply to try and scare reluctant Congressional legislators. And here they thought the Cash would be freebie!

I wax sardonic at the examples used to highlight the Credit crunch, listing Auto dealers in the fore. The fact of the matter states that these dealers would not have gotten the Credit lines, even if the Bailout had been passed; the Car dealers being overcapitalized and overextended, with lack of Sales and overpaid Labor based upon Auto Companies standardized Wage scales. These Dealers will only survive if they receive aid from their parent Car companies. The rest of the Screams come from ‘Mom and Pop’ Stores which have not made a Profit in the majority of Quarters they have spent in business. These slow Capital drains would have to be closed anyway.

I opt out for complete Congressional inaction. Every Day spent without a Bailout package leads to another $40 billion of the at-Risk $2 trillion Credit being reduced. I heartily disagree with the current Fed activity, which has pumped too much liquidity into the Markets already, especially when Commercial banks will not engage in sloppy Credit practices again. The confidence to get Commercial banks again trading Cash with each other comes in two forms: force Commercial banks to stay out of Investment banking, and allow the inter-bank rates to float freely. Either one of the Two would double the flow of Cash between banks, and both would eliminate any need for Bailout at all. Just my Thoughts! lgl