As complex as all the finances are, the politics aren’t hard to follow. By creating an urgent crisis that can only be solved by those fluent in a language too complex for ordinary people to understand, the Wall Street crowd has turned the vast majority of Americans into non-participants in their own political future.
Okay, so I’ve been bailout obsessed. I used to work on Wall St. Well, midtown anyway. This will be the last bailout post for awhile. Some sensible analysis of the bailout. UPDATE: Deep thought — What if markets actually are functioning, and we just don’t like what they are saying?
Average Joes and Janes are not the holders of the other side of complicated, over-the-counter derivatives contracts. Rather, hedge funds are the main holders. The bailout will involve a transfer of wealth — from the American people to financial institutions engaging in reckless speculation — that will be the greatest in history. This is one [...]
My congressman on the bailout. Here’s an idea: capitalize a couple of new banks with clean balance sheets under a new and intelligent regulatory structure. Treat these banks as safe havens for deposits transfered in from the FDIC from other failing banks. Let everybody else fail. Key advantages: Eliminates moral hazard. No secret handouts or [...]
One thing that is continually missing from the debate is any true understanding of what all the “toxic” waste actually is. The Federal Reserve should release the books for Maiden Lane LLC so we can all find out. If you read pro-bailout pundits, you get a lot of napkin math that fundamentally misunderstands structured MBS. [...]
I came up with my own bailout plan. It’s the same as Senator Dodd’s plan, except that the first 10 billion dollars must come from private individuals who have profited from the private financial sector over the last ten years, and furthermore, Paulson himself must put up over 80% of his personal fortune. These people [...]
One name keeps coming up when pundits discuss who accurately predicted the current crisis. Does he pick lottery numbers?