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November 20, 2009


Charlie (Colorado)


I'm doing too much editing....


Save this quote for your Lefty friends ...

BURGESS: Glass-Steagall has come up this morning. If I recall, Glass- Steagall was repealed -- that bill was signed by Bill Clinton...

GEITHNER: You're right about that.

BURGESS: ... not George Bush.

GEITHNER: You're absolutely...

BURGESS: And I frankly don't understand. If that's such a good protection, this president's been in office for 10 months. Where's the signed legislation reinstating Glass-Steagall? What...

GEITHNER: Actually, I would not support reinstating Glass-Steagall. And I don't actually believe that the end of Glass-Steagall played a significant role in the cause of this crisis.

What about the crony stimulus bill that was more of a Congressional Democrat wish-list than a serious attempt to stimulate the economy?

When the Congress is of the the president's party, it seems in this millennium the animating spirit is 'Kindergarteners we have to use up these finger paints by tomorrow.'


it's the esoteric financial instruments, stupid!


"esoteric contacts all over the world"

You mean contracts, right?


This is like Iran and Iraq, can't they both lose, or Dumb and Dumber


Who is David Brooks? who --or what-- is a Paul Krugman, what is the New York Times?


whether it was AIG or the whole magillah, it's a corrupt, insider game these days and that's what needs to be fixed. LUN


Actually if one thinks about it--Elliott Spitzer is the one who got the ball rolling going after Greenberg in the first place. So it's all his fault.


That's right I am going to say it.

Whenever I hear Obama and his white house staffers talking about those horrible bankers, I always get the feeling they dropped the word 'Jewish' from banker for public comments.

Obama spent alot of time learning from Rev Wright, who also had a thing about Jewish bankers.


I just listened to Dennis Miller interview Sarah Palin on the radio.

Miller said that Palin is twice the woman that David Brooks is.

Melinda Romanoff


You have only a glimpse of what Santelli is allowed to mutter about now. NY leans on him hard.

And just him, as you might imagine.

David D.

A thoughtful blog...with good research. I've added to my favorites!

1) It's pretty clear from AIG and LTCM that nobody knows how to regulate derivatives and that even their expert masters cannot control them. So ban them. They have done far more damage than they are worth.

2) Big banks need to get broken up.

3) Big banks need large bondholder haircuts to become solvent again.

4) Homeowners need to have their mortgages reduced to the appraised value of the home.

Then we can get back on track. It will hurt, but the foreclosure/bank capital drain death spiral must be broken.




"Now on the one hand a firm with a $100 billion net worth ought to be able to pay off $32 billion in claims."

Sorry, but that is one of the most business/finance-illiterate things that I have read in quite some time.

If you don't understand why, then I strongly suggest that you stay far, far away from commentating on matters of business and finance.


I'm with Tom on LTCM. I just think the "let 'em go bankrupt" plan was still the right idea ten years later. A guy who did some work for Barclay's confirmed what theory would suggest, that unwinding all of Lehman's supposedly opaque and convoluted transactions took a couple of weeks of lawyers working overtime to accomplish.

The thing is, in fall 2008 people were still arguing that the problem was liquidity rather than solvency--it was all just a big bank run of sorts and if we could do the FDIC-equivalent backup for securities and derivatives all would be well. Unfortunately, that turned out not to be the case for many of these firms' portfolios. They were fundamentally unsound ("had no bottom" as Daniel Dafoe would have said) in the sense that the underlying loans were not going to be paid back on any time scale. So bailing out ("insuring") the feckless counterparties, instead of causing an FDIC-style rebooting of confidence and the return of normal business amounted to a partial and unprincipled subsidy of connected insiders that actually reduced overall confidence in the system.

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