Links 10/26/09

Darwin’s Robots h+

Report: Cyberterror Not a Credible Threat ThreatPost

Democrats seek power over failing companies Financial Times and U.S. Considers Reining In ‘Too Big to Fail’ Institutions New York Times . Sanity check, dear readers: if Congress can’t pass a meaningful bill on credit default swaps after AIG, do you think anything other than a fig leaf will come out of this effort?

How to Solve Crime: Let the Criminals Decide what’s a Crime! Jeff Matthews

Too-Big-To-Fail Resolution: Why One Size Can’t Fit All Adam Levitin, Credit Slips. Makes a very important point (read the whole piece, and remember these guys are bankruptcy experts):

Thus in most failures of too-big-to-fail institutions, the government will have to provide funding for the resolution, and this makes the resolution a political issue. For this reason alone, I think we are kidding ourselves if we believe that we can regularize the resolution of systemically important institutions.

Shareholders attack banks in bonus row Telegraph

“Showdown In Chicago”: Protesters Swarm Bankers Convention Huffington Post

Antidote du jour:

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  1. Carrick

    How the U.S. Blew Trillion-Dollar Trade of Century: Mark Fisher

    “Mitigated Animosity

    The government had an opportunity to structure the following innovative investment solution: Uncle Sam could have demanded 25 percent to 30 percent of the underlying equity in the banks before agreeing to negotiate a bailout package with the weakened institutions. Had the government brokered a deal that tied bank earnings to taxpayer payback over time, the animosity between Wall Street and Main Street that exists today would have been eliminated, or mitigated at the very least.

    I’m certainly not advocating government control of the banks; rather, just the opposite — the government would have taken a passive stake and then stepped aside to let business take care of business.

    Unfortunately, our leaders in Washington lacked the shrewdness required to guarantee taxpayers a permanent ownership stake in the banks their money was being used to save. An innovative investment solution could have secured some of the necessary funds to fix our disaster of a health-care system or Social Security mishap.”

  2. MyLessThanPrimeBeef

    From the Fisher story: “Unfortunately, our leaders in Washington lacked the shrewdness required to guarantee taxpayers a permanent ownership stake in the banks their money was being used to save.”

    I am not sure if we can’t say the say about bloggers and voters in general. I remember many were against the bailout, so against it that most didn’t mention anything about getting a permanent ownership. So, I guess most people, not just the leaders in DC, lacked that shrewdness.

    Perhaps those of us who live by shrewdness will persish by shrewdenss…kind of like living by the sword perishing by the sword. And if the alternative to the sword is arms-control treaties, the alernertive to shrewdness and smartness is shrewdness-control treaties.

  3. LeeAnne

    Thanks for that article by Mark Fisher. His attribution of naivete to the people who have engineered this coupe is staggeringly naive, if not pure propaganda. That anyone would swallow this is beyond belief. It reminds me of the Greenspan congressional appearance where he has us believe that his ‘world view’ I think he put it, was as it turns out ‘incorrect.’ Not that he was the point man, the PR for the biggest ongoing crap game embezzlement and takeover of public treasure in the history of the world.

    Nationalization and secret distribution of generations of American treasure and that of future generations completes the Bush 2000 election Coup d’état.

  4. DownSouth

    @ “How to Solve Crime: Let the Criminals Decide what’s a Crime”

    Ring up the Nobel Prize committee! From Jeff Mathews’ description, this Donald J. Boudreaux seems to be a perfect candidate.

  5. attempter

    The Levitan piece is especially suggestive regarding how it’s not just trillions of oour dollars but our democracy itself which has been stolen by the bank rackets.

    Everything involved is political – oh yes indeed, and where politics is hijacked by $24 trillion corporatist looting expeditions, there’s not much political space left for democracy, as we’re seeing with the bogus bag of “reforms” being touted.

    The piece also touches on the hijacking of foreign policy as well. I think maybe we were too fast to say Obama did nothing to receive that Nobel. Certainly the Europeans needed him to be 100% on board with the bailouts. That’s the kind of “peace” TPTB all over the West care about nowadays.

    And we were silly enough to wonder if the “Peace” prize should be given to a guy who has escalated a war which already looks permanent (and sounds so in his rhetoric).

    That’s not where peace is at nowadays for the financial power structure. Remember what “Great Moderation” always really meant under predatory globalization. Not what it sounds like.

  6. DownSouth

    Adam Levitin says:

    The problem with too-big-to-fail institutions is not the institution itself—no one really cares about the distressed firm qua firm. Instead, the concern is about the distressed firms’ counterparties and the impact its failure will have on them…. the goal in resolving a systemically important institution is to protect a particular set of counterparties.

    I believe Levitin underestimates the level to which the government has been captured. From what I have observed over the past year, it is extremely difficult for me to buy into his notion that “no one really cares about the distressed firm qua firm.”

    And when he speaks of protecting “a particular set of counterparties,” it seems like the only set of counterparties the government is intent upon protecting are well-connected insiders like Goldman Sachs.

    Granted, the questions as to which distressed firm gets saved and which does not, and which counterparty gets protected and which does not, are political questions.

    They are therefore questions that demand political solutions. The fact that the Obama administration “has made clear it isn’t going to get into this mother-of-all-banking-regulation-battles” only means that the administration has opted for a political solution (or non-solution?) not to our liking. This problem has only two solutions: 1) Engage in political action to alter the administration’s solution, or 2) get a new administration.

  7. MyLessThanPrimeBeef

    Criminals can’t decide what the crime is, nor can the guys who created the problem be the solution.

    I am thinking, if Wall Street is responsible for the financial mess, they can’t be the solution.

    Now, and this is the hard part – if scientists are responsible for global warming with their discoveries of the internal combustion engine and technologies to extract oil, just to name a couple of examples, then they can’t be the solution either. After being fooled many, many times, we shamelessly shame ourselves by continuing to let science pretend to the solution for the problems it created in the first.

    How can that be? If you are the problem, you can’t be the solution.

  8. MyLessThanPrimeBeef

    My apologies. It should read, ‘Criminals can’t decide what is a crime and what is not…’

    And also, it should read, ‘…pretend to be the solution for the problems it created in the first place.’

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