http://www.nytimes.com/2008/09/22/business/22lobby.html?_r=1&ref=business&oref=slogin
Looks like the bail-out will end up being yet another case of machine politics and schmooze. People in the know tell me that AIG was saved because it had deep political connections - as well as it being more entangled thanks to Credit Default Swaps it issued.
Joseph Stiglitz thinks that this rescue is to the markets what Berlin Wall was to Communism - he could be right.
If they really want to - the Chinese and Russians can wreak havoc by buying out one of the investment banking firms and then using it as a bull-whip on the entire financial system. Of course - that will not be allowed to happen in "free market" Socialist Republic of America, where the government owns or guarantees more than half of all mortgages! (thank you Fannie and Freddie)
3 comments:
this just in: goldman sachs and morgan stanley have just become retail banks. so the independent investment banks have gone the way of the dodo (and so, ghost, no russian or chinese can buy them and wreak havoc! -- somebody read your mind, looks like).
this is a good thing because the investment banks have had no regulations on them, and have been highly leveraged (ie their debt may be 30x their equity) while retail banks have much lower leverage.
Comrades Bush, Paulson and Bernanke Welcome You to the USSRA (United Socialist State Republic of America)
http://www.rgemonitor.com/roubini-monitor/253529/comrades_bush_paulson_and_bernanke_welcome_you_to_the_ussra_united_socialist_state_republic_of_america
This is nothing new.
Didn't Dubya's dad also give public funds to rescue "savings and loan associations" in 1989 to the tune of over USD$120 billion?
US Govt. seems to have a policy of welfare for the rich!
(Silverado Savings and Loan collapsed in 1988, costing taxpayers $1.3 billion. Neil Bush, son of then Vice President of the United States George H. W. Bush, was Director of Silverado at the time. Neil Bush was accused of giving himself a loan from Silverado, but he denied all wrongdoing.)
Post a Comment