Tag: Financial Meltdown
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A Not-So-Simple Question: How Many Countries Is Citigroup "In"?
Many, many people spent a busy weekend hammering out the details of the government rescue of Citigroup that was announced last night. The rescue clearly is a Portentous Event, so I went searching this morning for insights about what the portents are portending. I got as far as the third paragraph of the Wall Street […]
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Quote of the Day
The internets are a-twitter with news that the Detroit automakers flew on private corporate jets to argue for bailouts in front of Congressional committees in Washington. “There’s a delicious irony in seeing private luxury jets flying into Washington, D.C., and people coming off of them with tin cups in their hands,” Rep. Gary L. Ackerman […]
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Bankruptcy is the Right Medicine for Automakers
Look at the bright side – GM stock only has $3 farther to fall. (From Yahoo Finance) The more I read and think about a potential further bailout of the auto industry, the nuttier the idea sounds. Michael E. Levine is a former airline executive, so he knows about bankruptcy. He puts it this way […]
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Bailouts: Further Down the Slippery Slope
David Brooks makes the case against an auto industry bailout more eloquently than I did: A Detroit bailout would set a precedent for every single politically connected corporation in America. There already is a long line of lobbyists bidding for federal money. If Detroit gets money, then everyone would have a case. After all, are […]
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It’s a Bad Idea to Ridicule Others (They May Be Right)
Via Andrew Sullivan, a video showing how Peter Schiff, a.k.a. “permabear” and “Dr. Doom,” was subjected to an extraordinary level of derision on cable business programs last year as he correctly forecast the coming economic crisis. It’s longish (10 minutes) but offers a powerful statement about why it’s generally a bad idea to ridicule people […]
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The Slippery Slope of Government Bailouts
Stephen Bainbridge has done the best job I’ve seen of describing why bailing out the U.S. automobile industry — as proposed by Congressional Democratic leaders — would be a terrible mistake. Point by point he shows why the public interest would be better served by letting the big automakers go bankrupt, because bankruptcy reorganization would […]
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Krauthammer Explains the Election
I’ve argued before that it is deeply ironic that the financial crisis benefited the Democrats this year, since the Democrats drove the reckless expansion of access to mortgages that led to the crisis, while Republicans — specifically, McCain and the Bush Administration — were sounding alarms. As usual, Charles Krauthammer has the explanation: This was […]
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Wall Street Compensation in the Bailout Era
As bonus time approaches, Wall Street firms are trying to balance the need to retain key executives against concern about the “optics” of giving boatloads of bailout money to the people who arguably created the need for the bailout. It’s easy to sneer at what passes for frugality on Wall Street when it comes to […]
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The Allure of Going Nuclear in the Late Innings
Losing the Presidential race has to be even worse than losing the World Series. If you lose the World Series, you at least get to put up a banner proclaiming that you were the League Champion for the year. Your hometown throws you a consolation rally, and you start talking about the future (“hey, we’re […]
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In Defense of "Wall Street Greed"
The titans of Wall Street gathered this morning at the NYSE to discuss the ongoing crisis. The writeup of the gathering in the WSJ Deal Journal blog is well worth reading, once you get past the inexplicable opening links to poetry and “Error 404”. (Blogging famously involves publishing without an editor, and here we see […]