Your humble blogger has said that rationalizing and recapitalizing the banking system is essential for recovery. Economists like Ben Bernanke attribute Japan’s failure to dig itself out of its hole to not being aggressive enough in terms of fiscal and monetary stimulus,. Yet Japan did a great deal on both fronts. The biggest difference between […]
Read more...I cannot recall a major US policy initiative being met with as much immediate revulsion as the so-called Geithner plan. Even the horrific TARP, which showed utter contempt for Congress and the American public was in some ways less troubling. Paulson demanded $700 billion, nearly $200 billion bigger than the Department of Defense, via a […]
Read more...On the one hand, the demand by China that the US somehow guarantee its $682 billion in Treasury holding reads like a political and negotiating strategem rolled into one. It reenforces the idea that the economic crisis is the solely the fault of the corrupt, profligate West and it constitutes a demand that the US […]
Read more...That one word assessment of the Geithner plan, as previewed in the New York Times tonight, comes from reader Scott, and is good enough to print. I am so disgusted with this entire proceeding that I am going to dispatch it quickly. Let’s start with the basics. The US banking system is insolvent. Got that? […]
Read more...I’ve never seen Martin Wolf speak before, and he’s refreshingly energetic and direct. Watch Part One here. And Part Two.
Read more...Remember the embarrassing ten weeks of so of Henry Paulson failing about to try to get his “get the bad assets out of the structured investment vehicles” effort, the MLEC, also fondly known as The Entity, off the ground? It quietly faded from the headlines.. Why? It was supposed to be a private sector solution, […]
Read more...Churchill’s famous dictum, “Democracy is the worst form of government, except for all those other forms that have been tried from time to time,” could also be applied to mark-to-market accounting. However, like democracy, mark-to-market may be on its last legs. The stock market rally of late last week was fueled by the rumor that […]
Read more...David Sirota at Salon gives a concise, brutal assessment of Obama’s economic team and its priorities. We’ve now had two bait and switch Presidents in succession. Bush promised “compassionate conservatism” and dragged the country far to the right, enriching those at the top of the food chain and leaving everyone else with the empty promise […]
Read more...This blog was early to draw a comparison between the US financial crisis and emerging markets crises. As we wrote in March 2008: Although the Journal does not draw this comparison, the US is in very much the same boat as Thailand and Indonesia in 1997, during the emerging markets crisis. And although the US […]
Read more...Even before its inception, we’ve been very skeptical of the TARP. Paulson managed to get the type of spending authorization that you only see in wartime, with almost no contraints on what he could do, and most troubling, put himself beyond the reach of law. From the original draft of the bill: Decisions by the […]
Read more...Guest blogger and former Congressional staffer Lune was kind enough to provide this post on Volcker’s testimony before the Senate Banking Committee today. Enjoy! From Lune: Paul Volcker, former Fed chief and currently the head of President Obama’s Economic Recovery Advisory Board, and the chairman of the Group of Thirty, testified to the Senate Banking […]
Read more...L’affaire Madoff gets more interesting by the day. I had though the failure to pursue the hedge fund scamster had more to do with incompetence and a disinclination to go after investment managers (insider trading cases, which is what seems to get the SEC’s enforcement division juices going, usually pick up penny ante players at […]
Read more...I believe I am permitted to hyperventilate only once in an evening, so I’ll have to act with a modicum of restraint here. The Obama executive compensation restrictions for bailout fund recipients have been leaked, and may be long enough on appearances to appease an angry US electorate. But the shortcomings of the supposedly tough […]
Read more...Oof, that key phrase in Martin Wolf’s column in the Financial Times, “Why Davos Man is waiting for Obama to save him,” is only slightly more cheery than, “Abandon all hope, ye who enter here.” Wolf gives a quick recap of Davos, recent international economic forecasts and market developments, which is worth reading, and then […]
Read more...Dear God, let’s just kiss the US economy goodbye. It may take a few years before the loyalists and permabulls throw in the towel, but the handwriting is on the wall. The Obama Administration, if the Washington Post’s latest report is accurate, is about to embark on a hugely expensive “save the banking industry at […]
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