A Quote by Stephen Moore
In a world without an Ex-Im Bank, which finances just 2 percent of U.S. exports, private firms would provide the insurance and credit these companies need, but at market rates that reflect risk of default.
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I would not outlaw or eliminate private health insurance. But if we do a good enough job, with a robust public option, there really should not be as much of a need for private insurance in the market.
I have argued that we need livelihood insurance, which would protect people against the risk of seeing their skills and expertise no longer needed. Such insurance could be offered by the private sector.
A credit derivative, at its core, is actually a very simple concept... The simplest way to think of a credit derivative is it is analogous to insurance against the risk of a credit default by your counterparty, your business counterpart.
I think the credit default swaps can take the place of the rating agencies who really have missed the ball in this procedure and are quite conflicted by the way the ratings are paid for. So, I would like to see credit default swaps become an evermore important way of understanding credit risk in the economy.
Ex-Im Bank doles out billions of dollars of loans and insurance subsidies every year and has become the poster child for corporate cronyism in Washington. Think of the bank as food stamps for America's Fortune 500 companies.
Credit-default swaps remedied the problem of open-ended risk for me. If I bought a credit-default swap, my downside was defined and certain, and the upside was many multiples of it.
By creating the European Central Bank, the member states exposed their own government bonds to the risk of default. Developed countries that issue bonds in their own currency never default, because they can always print money. Their currency may depreciate, but the risk of default is absent.
The underlying strategy of the Fed is to tell people, "Do you want your money to lose value in the bank, or do you want to put it in the stock market?" They're trying to push money into the stock market, into hedge funds, to temporarily bid up prices. Then, all of a sudden, the Fed can raise interest rates, let the stock market prices collapse and the people will lose even more in the stock market than they would have by the negative interest rates in the bank. So it's a pro-Wall Street financial engineering gimmick.
We also need to reduce corporate tax rates. This applies to small, medium and large businesses. At 35 percent, we have the second highest corporate rates in the world. It restricts the growth of small enterprises that need to plow capital back into their businesses and forces companies and jobs to move overseas.
It took a little over a decade to build a coalition strong enough to beat the insurance companies, but in 1990, then Senator Tom Daschle and I passed a law regulating the private market for supplemental Medicare insurance policies.
This program could destroy private initiative for our aged to protect themselves with insurance against the cost of illness....Presently, over 60 percent of our older citizens purchase hospital and medical insurance without Government assistance. This private effort would cease if Government benefits were given to all our older citizens.
If investors avoid the Treasury market, we could be unable to pay off maturing securities, which would mean an immediate default. Market participants generally agree that even a brief default would create potentially catastrophic risks to the financial system, like the meltdown of 2008.
My biggest fear, that 27 percent of Americans under 65 have an existing health condition that, without the protections of the Affordable Care Act, would mean they would - could be automatically excluded from insurance coverage. Before the ACA, they wouldn't have been able to get insurance coverage on the individual market, you know, if you're a freelancer or if you had a small business or the like.
I was able to use credit default swaps to protect not only my investments but the hundreds of jobs that exist because of my investment. I understand the dangers of credit default swaps and the benefits of credit default swaps.
I think we do need to try to not just rely on the central bank to, in its wisdom, adjust interest rates, but allow for people to avoid being exposed to inflation risk.
Increasingly, the real estate developers can't get bank loans for their project financing in China. They're now going into the Hong Kong market to raise money in the bond market at very, very high rates, as high as 15, 20 percent.
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