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Best Of The Exchange: No Problem In Houston, Problems With the Banking System, & Desperate Times


Minyans make sense of the current economy.


With the launch of The Exchange, Minyans now have a forum in which to express their viewpoints, comment on articles and meet other like-minded financial souls. Minyanville publishes "A Best of the Exchange" each Friday to highlight the many insightful posts and discussions going on behind the scenes.

Become part of
The Exchange and let your voice be heard!

(Editor's Note: Some of the following posts may have been modified slightly from their original form.)

Minyanville's outside legal consultant Leonard A. Spivak composed, Op-Ed: Desperate Times, Desperate Measures, Part 1 and Part 2, discussing the energy crisis, and ways to fix the problem. Several Minyans gave feedback, and offered up their own problem-solving ideas.

Minyan Bill
: Photolithotrophic bacteria turn sunlight, seawater and a few minerals into mass and could be genetically programmed to make liquid fuel. Its only a matter of time and investment before this process is a reality.

Minyan James: The point on rail infrastructure is critical. The Europeans have us beat handily here. Connecting flights consuming fuel versus a high speed train consuming electricity. If trains were as efficient here, I would never fly. I think that $150 oil is a good thing. Demand destruction is the only way change is going to happen. It is encouraging that now there seems to be a groundswell and recognition of the implications of long term security to the country.

Minyan Dean: Nice thoughts but, it can't happen as long as suggesting the American people can't have everything they want, right now, on credit, is political suicide. First we have to grow up and then maybe we'll get better politicians.

In his Special Five Things You Need To Know: Houston? We Have No Problem article, Prof. Depew wrote about Wall St. "getting drunk", the Houston housing market and compared himself to President Bush. Much debate insued.

Minyan Michael: I'm surprised---perhaps aghast---that you bite on the lie that the FNM/FRE bailout is only $25 Billion. Bloomberg reports: "Lawmakers, intent on limiting any losses to taxpayers, tied the potential aid to Fannie Mae and Freddie Mac to the federal debt limit. They also raised that ceiling to $10.6 trillion from the current $9.815 trillion." Anyone who has been reading anything here at Minyanville over the last year or two knows that Freddie & Fannie just might need much or most of that $800 Billion ceiling to remain solvent!

Minyan Olexsandra: Perhaps we do realise the peril we are in but don't rush out to shout in the streets for a very good reason. It would seem that these men in charge are indeed quite bright fellows (Dr. Bernanke of MIT, Mr. Paulson, who made a shrewd pocket at Golden Slacks and, of course- and say what you will, he is still- The President of the United States of America). Those of us who understand are silent, I think, because there is a hush in the air while we await their next, ominous move. Collectively, we sense there is something on the outside, waiting. Something BIG. Maybe bigger than we could have ever imagined- before now. I won't say I am scared. I would say anxious and watchful, wondering what these geniuses have up their sleeves.

Minyan Rick: Houston is rocking, no doubt about it. Our real estate market never got over-extended. We are desperately in need of skilled workers to construct rigs.

Prof. Shedlock gave us a list of ways to tell when the banking system is in trouble in his article, You Know The Banking System's Unsound When...

Minyan Ed: Why not sell US Citizenships--Use a new form of the "Canadian model". After the fall of Hong Kong, Canada offered permanent green cards for $200,00 if invested in a business. We should do the same for $250,000 (inflation after all!) if someone buys bank common stocks with a five year lock out. There's always a deal to be made somewhere. Mish is right but, of course, the Fed will print and inflate their way out of insovency. Citizens, get ready for a lower cost of living.

Minyan Jason: Given your rather bleak outlook on the US banking system - and I agree with most if not all of your points - where are you putting your money right now? US dollars under the mattress? Better yet, Euros under the mattress? Just curious as to best defend against the potential failure of the US banking system as we know it.

Minyan Dan: Avoid Blind Faith actions. These are the times of old wisdom and straightforward honesty. Put your money in what you know, and what you know to be true. You can't know what is true or not if it is via long distance or someone else's say so. Even credentialed advisers have to justify their advice. Taking their word without such justification is no better than expecting your tens to turn magically into twenties. Buy less, buy local. Get to know your neighbors so they can watch your back. These are all the things that the banks should have heeded, but convinced themselves that risk is just another item on a spreadsheet, and didn't check where the number came from.
Actions taken based on blind faith are evil. Hiding information is the practice of evildoers. If the banks are shaky, hiding the information won't make them sound.

No positions in stocks mentioned.

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