A Niceville man is getting national attention for his website Fed Up USA.
Last night on NBC's Nightly News program, he voiced his concern about the government's proposed plan to bailout Wall Street. We talked to him today and heard more about his plan to help the nation.
From his home in Niceville, Karl Denninger, a long-time trader, keeps a close eye on the market. Tuesday evening he got a chance to talk about America’s slumping economy on NBC’s Nightly News, and it all started with Denninger's website Fed Up USA.
The site is meant to educate Americans on this financial bailout plan that the feds say is necessary to prevent a massive collapse of our financial system. But the plan has its critics.
Sen. Richard Shelby of the Senate Banking Committee says, “I don't believe we can solve this crisis by spending a bunch of money on bad debts."
Denninger agrees and has another solution. His plan begins with disclosure of level-three assets and calculations.
Karl Denninger says, “The easiest way to explain these is that these are assets that have a value that is essentially made up. Those are making a huge amount of trouble right now because no one knows if those values are accurate."
Second is the supervision of credit default swaps.
"These are traded over the counter. There is no supervision of them at all. The problem with those today is that a lot of the people that sold those policies, if you will, there is no way to know if they can pay and in fact they can't. It's like going to the grocery store and buying a lottery ticket but the state doesn't have the money to pay the jack pot,” Denninger says.
The third part of his plan is to return to 12 to 1 leverage.
“What the means is for every dollar of cash you have, you can have $12 worth of assets. We have to get those levels back down to 12 to 1. That is a safe and sound level that has been safe and sound for 50 years. If we do those three things, the boogie man goes back in the closet and stays there,” Denninger adds.
Denninger urges citizens to contact local government officials. He says, “You need to tell them this thing cannot pass. It does not solve any of the three problems that plague the financial system.”
For more information on Denninger’s plan, go to Fed Up USA.