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By relying on asset-backed securities, large amounts of leverage and unregulated hedge funds as its key elements, the U.S. Treasury Department's overhaul of the banking-system bailout plan is essentially relying on some of the same ingredients that caused the financial crisis in the first place.
This time around, someone should take the punch bowl away before the party even gets started. Otherwise, as Yogi Berra once said, it will be "Déjàvu all over again."
The only difference this time around is that the U.S. Treasury Department is calling the plays.
About the Author
Shah Gilani boasts a financial pedigree unlike any other. He ran his first hedge fund in 1982 from his seat on the floor of the Chicago Board of Options Exchange. When options on the Standard & Poor's 100 began trading on March 11, 1983, Shah worked in "the pit" as a market maker.
He helped develop what has become known as the Volatility Index (VIX) - to this day one of the most widely used indicators worldwide. After leaving Chicago to run the futures and options division of the British banking giant Lloyd's TSB, Shah moved up to Roosevelt & Cross Inc., an old-line New York boutique firm. There he originated and ran a packaged fixed-income trading desk, and established that company's "listed" and OTC trading desks.
Shah founded a second hedge fund in 1999, which he ran until 2003.
Shah's vast network of contacts includes the biggest players on Wall Street and in international finance. These contacts give him the real story - when others only get what the investment banks want them to see.
Today, as editor of 10X Trader, Shah presents his legion of subscribers with the chance to earn ten times their money on trade after trade.
Shah is also the proud founding editor of The Money Zone, where after eight years of development and 11 years of backtesting he has found the edge over stocks, giving his members the opportunity to rake in potential double, triple, or even quadruple-digit profits weekly with just a few quick steps.
Shah is a frequent guest on CNBC, Forbes, and Marketwatch, and you can catch him every week on Fox Business's "Varney & Co."
He also writes our most talked-about publication, Wall Street Insights & Indictments, where he reveals how Wall Street's high-stakes game is really played.
Do you actually think that Gilani's "open letter" to the president actually reached him and that if, by a miracle, it did, do you think he'll pay attention to it or know enough to do so?
Don't you realize, as Martin Weiss also should, that these pleas to the president – a sort of "friend of the court" brief – do nothing except make the writer feel better (or impress his readers with his prowess)?
I know, I'd done the same thing myself.
different idea but one that in other situations has been proven over and over again – the individual knows best how to allocate money to best suit his needs – suggest in this case that the government give to each individual citizens of the is country a sum of money equal to the loss in real estate value and retirement plan value and let them spend it any way they see fit. They could pay off their loans refinance, spend ion renewable energy or conservation etc. They will spend it as they see fit – guess what it solves a big problem it creates demand. Right now everyone I know is holding on to every penny they can and not spending further feeding the cycle. Banks if they want some of this money would then have to bid on it by paying an appropriate interest rate or offering an appropriate loan rate.
If uncle same wanted to guide some of this investment to specific areas give tax credits sized to accomplish the goal.
Just my 2 cents.
Trackbacks
[…] News from the bailout front grew more pessimistic during the week as Treasury Secretary Geithner's initial attempt to win over Congress, investors, economists, and the media proved no more successful than Hank Paulson's before him. The stock market had run up significantly in the days leading to his speech, as folks hoped to hear some specifics about how the next round of the Troubled Assets Relief Program (TARP) (and other initialed programs like TALF) would work far better than the initial plan. Instead, disappointed investors ran for cover when his remarks left many questions about the valuations of toxic assets and private/public partnerships unanswered. […]
[…] There is nearly universal agreement that the opening salvo of the Obama administration's campaign to restore health to the financial system, delivered last week by new U.S. Treasury Secretary Timothy F. Geithner, fell with a loud and ugly thud. The most common criticism is that the announcement was short on detail. […]
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