All Posts Tagged With: "bailouts"

21st Century Monopoly

As a child, I used to play the board game of Monopoly.  I still vividly remember the excitement of a “Get out of Jail Free” card and the royal blue of Boardwalk and Park Place.  My brothers would be angered when I’d loft off to using the pink pastel colored dollars for other, imaginary scenarios in make-believe businesses. Who knew at a young age, I’d be an energetic entrepreneur, only my lessons of business and true capitalism would come from something other than playing monopoly with my brothers.

By looking at the meaning of Monopoly as an adult, I am only reminded how badly its lessons are in truly preparing us for the real world and as a Free Market.

Playing the Game:

Monopoly was …


On National Debt, Default is Inevitable

Much attention has been focused on the size of the national debt as a whole; roughly $14.4 trillion. That number is astonishing, but the sheer size of the debt actually hides the true horror which is in store for the economy and future generations.

The debt has many component categories, the largest of which is called Marketable Debt. That means the portion of the debt that was issued in treasury securities that can be sold in the secondary bond market, and it is around $9.2 trillion. The rest is Non-marketable, and held mainly by the Social Security Administration through bonds that cannot be sold.

The Marketable Debt also has its own sub-components, based on the type of security that was sold to incur the debt …


Politicians, Bailouts and Bank-Owned Houses

Around the corner from my former apartment in Newton was a house that was taken in foreclosure. The “For Sale” sign had been there for a very long time, the lawn wasn’t mowed regularly and the shrubs had died in the winter but hadn’t been removed.

Walk around your own neighborhood and see how many houses are for sale. Sometimes the sign openly states that it is bank-owned, other times you might have to search on the county assessors website. There are plenty of bank-owned houses in Iowa; there are many, many more in California, Nevada, Michigan and Illinois.

The point is this: With such a large supply of bank-owned houses, of course houses will continue to fall in price. When a store has excess …


Washington’s Shrewd Investment

Today the headlines read something like:  Government Stands to Reap $7.5 Billion Profit from Sale of Citi Stock.  This was reported in both the Wall Street Journal and our local rag, the Des Moines Register, and while estimates vary as to the extent of this transaction, the range of the government’s take is somewhere between $7 and $7.5 billion.

There is nothing intrinsically wrong with this.  The federal government bailed out Citigroup in the fall of 2008, and took an ownership interest in the company in exchange for TARP (or is it TRAP?) funds.  The purpose of TARP was to shore up the banking system, and in the process, the economy.  While many of the banks that took TARP money claimed to not need it, …


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