LOTM – RE Financial Crisis – two posts
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You may or may not get some traction. This kind of thing endures despite persistence of the sex-deficit liability – over-leveraged data streams. Best I can tell, half the people think “as it was, as it ever will be, forever and all amen”, half the people think it’s Bush’s fault; half the people think it’s Soros’ fault; and half the people are too obsessed with AGW to see bank failures as anything but an inevitable consequence of off-shore drilling. And the math speaks for itself.
To my mind the last three elections, including this one, should have been about economics and the threat to national security presented by Islamic terrorism and its evolutionary counterparts, in equal parts. That didn’t happen in the wake of chads and swift-boating and pompadours. And it looks like this election might boil down to Obama’s psychological profile as evidence of his fitness to serve or not. As a thought experiment, try adding Bob Rubin and Zbigniew Brzezinski and see if that policy picture is one you want to support – sans any halos symbolizing anointed insight leading to national salvation and a properly leveraged mortgage for every family. Rubin has good rep from Clinton administration (one of few) but Brzezinski is pure red meat in foreign policy.
The pending bank failures are a complicated brew of (1) policy demanding fill-in-the-blank for everybody at government expense; (2) the proliferation of new (and not-so-new) securities vehicles that were hard value (CDO’s and derivatives) and even if they could be valued, represented nothing more than gaming the markets, not growing a business or industry; and (3) the arrogant and hubristic failure of bank officers to manage the leveraged assets of their institutions. Capital is now not available to any of the severely troubled institutions because their books are so bad. How did that happen? Can’t blame it all on the policy makers or the vehicles.
The big question is how Congress will fix it. That is just frightening to contemplate.
This so-called up-tick rule that guarded against short-selling for so long and was repealed on the basis of some academics who wrote a paper – it now appears that academic paper well bought and paid for.
This stuff happens because nobody, I mean nobody, gives a rat’s eyeshade.
