Tuesday, March 24, 2009

The(Newest) New Plan

The Plan we refer to is obviously the latest in the long procession of bailout schemes proferred forth by the Government's wizards over the past 18 months. As expected, and in contradistinction to previous bailout measures, this New Plan is largely predicated upon private sector support. Ironically, Mr. Geithner's grand unveiling occurred amidst one of the most intense populist, anti-bonus/reward/ excess-profit uproars in our memory. For that specific reason, we believe that, more likely than not, the Treasury's latest plan will be a failure.

The private sector's fear is that inevitably, the following will take place: Hedge Fund manager Johnny committs a certainl amount of capital to the Geithner Program. Treasury allows Johnny to lever himself substantially, potentially amplifying profits while limiting the downside. In the end, Johnny earns his Fund X amount of profits. As the manager, Johnny rips .2X for himself (We can assume that .2X is a hefty sum). CNN is alerted to some flagrant display of wealth that Johnny has made, and all of a sudden, everyone knows just how much .2X really is. The best case scenario at this point is that Johnny simply gives the money back, and fades quietly into the night. At worst, an angry mob holding signs bearing unintelligible scrawlings forms on his front lawn. Why subject oneself to this?

We are often critical of the Government, and for reasons that can be justified with relative ease. However, we also feel the need to expose the sad reality that is not recognized by the masses: Everything that you don't like about Washington happens because you permit it to happen. Very few voters have properly educated themselves with regard to each candidates stance on the issues. You instead choose to marinate your mind in the festering cesspool of reality television, emerging from a stupor only to bemoan the System. We have cowards and weasels(for the most part) in Washington because the populus has developed a voting pattern which favors the election of cowards and weasels. Should we really be surprised that, to date, no politician in Washington has accepted even an iota of responsibility for fostering the conditions necessary for our current Economic Predicament?

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