The reference to the Depression and Asian crisis was to their effect on the poor v. rich.

Did you not read what I wrote? Or are you choosing to twist my words?

I am glad you understand what caused the Great Depression. There are so many conflicting opinions on the topic and, frankly, many of them do not make sense. Maybe you can enlighten the ignorant among us. Was it too much government interference? Or not enough? Was it because they did not bail out the “shadow banking system”?

Oh, have mercy on me. I have cried for investment banks, Fannie and Freddie, AIG, and the banking system. I am drained. I have no more tears left to shed for the pitiable folks of the shadow banking system. Have a nice day.

get us outta here already!

Isn’t using TOO MUCH DEBT so that price deflation didn’t happen what got us into the current mess and the Great Depression?

What I find hard to stomach is the impression one has to get that the politicians are ignoring all evidence from prior financial crises about the right, necessary steps towards a solution.

Just as a thought, could one adopt the Obstfeld-model of currency crises to the situation, and the politicians still feel that a regime switch still is costlier than doing nothing? If so, it obviously is a myopic view.

Palley is calling for much broader support, although I cannot imagine how you sell that politically. The measure you pointed to is limited to depositary institutions and bank holding companies and permits them to buy asset backed commercial paper from money market funds. This appears redundant given the money market fund guarantee program, although participation in the latter is not certain.

And the other measure, to purchase agency discount notes, is again narrow, focused on a particular instrument. Palley’s point is the powers that be need to backstop players, not asset prices.

Anon of 5:55 PM,

Unfortunately, outstanding credit default swaps cannot be migrated to an exchange. They are far too heterogeneous. The industry needs to standardize terms, and then newly created CDS could be exchange traded.

Real Soon.

EVERYONE’s dirty laundry, out of the closet, on to the auction block.

Why won’t this happen?

The useless parasites who cooked up this Ponzi would be exposed. This would include Many Notables Nobles in finance and politics.

Not good for them.

The lynch mobs could spot them much easier.

Most CD(i)s are worthless. Big losses, chain reactions, lost weekends in the Hamptons, gone, gone, gone…

The Dawn came Up like Thunder

The first moves in a crisis are almost always wrong; we see that here, but it’s a truism. First moves are conditioned responses. Conditioned responses map to prevailing conditions, i.e. ‘the box.’ Crises blow out or collapse fundamental parameters of the box. Thus, by definition first moves get the transformational conditions wrong, and so bungle. If we could get policy makers to see this, we _might_ get better policy. But there is the parallel issue that major public policy ventures, especially financial ones, are as much about ’signal’ as about ’substance.’ Policy makers know that much of their power is in signaling, so they give the signals which are expected in prevailing conditions; not to do so would decrease their initial advantages and confuse participants. it’s a double bind of a kind. What we need are Solon’s who stay current, and anyone with that kind of ability isn’t going to be in the public sector when they could be raking it in on their own. Just the way of the world, my friends . . . .

Hey, Vlade, good to see yah. I’d been worried that the zombies et your fund since you’d gone quiet. I’ll chew over your questions later, and squawk if I have three cents worth of opinion to rub together. Now, I have to get ready to go to work. The world may (seemingly) end, but life and labor trudge onwards.