CUT CAP BALANCE

Its been a while since I've had some interest or feel for financial markets.
More often than not, I like to play  when volatility is high and have a
good feeling that the odds are in my favor for rapid trading - the last three-four
weeks have been one of those times. Here is a considered viewpoint 
by my brother, Vivin....

CUT, CAP & BALANCE

1) CUT the crap

2) CAP the housing market losses

3) BALANCE the demand
 
CUT
 
THIS MESS IS A FAILURE OF POLICY - no matter how different or special we think we are,
America has shown itself to be susceptible to the same kind of policy mistakes as others.

a. Irresponsible fiscal policy during boom times (Republicans);
b. Overly EASY monetary policy (since 1996); and
c. A populace addicted to low interest rates and high borrowing spurred 
on by policies pushing over consumption (both parties).

IN OTHER WORDS, this is NOT some hurricane that has descended from Mars or a partisan problem created by Obama in the last 2.5 years. 

Policy mistakes that need to be rectified take BIG SACRIFICES like what East Asia did. Japan pretended and is paying the price. We pretend we can stimulate out of it (liberals and Krugman) or print our way out (Republicans and Fed).

NOTHING HAS WORKED SO FAR. 
ADMIT THAT THERE HAVE BEEN POLICY MISTAKES. 
FIRE BERNANKE AND GEITHNER NOW. 

Put Dr. Hoenig or John Taylor at the Fed.

CAP
 
1) The government BUYS ALL FORECLOSURES and ALL HOUSES DELINQUENT FOR > 1 Year away from the banks at a price which leaves the banks on the brink of solvency. One time shot only. No one will be allowed to not pay and and get into the program in the future. S***W the banks and their balance sheets. The tax payer is not liable any more. 
Rates are ZERO. They will sort it out.

2) All those extra houses are then put on a fire sale under an RTC style entity. Have investors come in and buy them (no government loans or guarantees provided). Blow out the price and the inventory. Everyone else is on their own after this.
 
BALANCE

1)  Don’t balance the budget, balance the trade deficit. We over consumed by borrowing. It is time to balance
our demand. The Fed and the stimulus measures are hindering a return to sustainable demand.

2)  AND NO, THIS IS NOT DOABLE BY DEVALUING THE DOLLAR 
TO ZERO. You need demand to go down a 2-4 percentage points - that 
will do it.

3) No one will starve. Provide unemployment insurance tied to retraining.

4) REFORM taxation. Go to 2-3 slab low income tax and a heavy VAT (15-20%).

5) Get rid of ALL special interest loopholes.

6) Get rid of ALL consumption subsidy programs of the government.

7) Get rid of the debt ceiling.