Saturday, August 29, 2009

Same as it Ever Was Pt. II

William Cohan over at The Atlantic (I am really starting to like that magazine) has a nice article, entitled "An Offer He Couldn't Refuse" (but the online version is entitled "The Final Days of Merrill Lynch"), describing the events leading up to and during the purchase of Merrill Lynch by Bank of America; a transaction which was, for all intents and purposes, forced upon BofA by the thuggery of Bernanke and Paulson and, by extension, the Fed and U. S. Government (and, by extension, the U.S. citizenry -- you and me). I won't excerpt out the juicy bits for you, but this quote is central to the real issues of the legality and Constitutionality of what Bernanke and Paulson did:
" also sounds an awful lot like what happens in a banana republic or in Putin's Russia, when the captains of industry did favors for the government in exchange for economic subsidies. How do you stop from going down the slippery slope and becoming like Putin's Russia?"
There is decent discussion about the vast amount of "moral hazard" wrought by Bernanke and Paulson (not just with regard to the Merrill deal, but also the GM bail out, TARP, etc.), the sanctity of contracts, and how the markets can function properly if the rules can change whenever the Fed or government decides to change them or if big risk-takers can bet on being bailed-out.

PS - The graphic in the online version of the article is just part of the full graphic in the print version. The full graphic is priceless as it shows Lewis being forced into eating from a bowl of bubbling, green, malignant, toxic sludge.


Blogger Unknown said...

you still rock.

Sep 11, 2009, 7:50:00 AM  
Blogger Unknown said...

The alt a's are starting to reset now, through 2013, but how many Marin home owners bought using toxic loans? From graphs I've seen, not many. Will homes in Marin ever be in line with earnings, since San Francisco is still a healthy source of well-paying jobs (compared to most of the rest of the country)? I truly, deeply want to know people's thoughts on this. Marin was once affordable for middle class families. In 2011, will it be affordable again, or is that just a pipe dream?

Sep 14, 2009, 8:27:00 PM  
Blogger Unknown said...

Check out this smug article in the IJ, written a few months ago, saying that Marin will never be touched by the housing crisis, because there is no national housing market--we are in a different kind of bubble--an eternally protected NIMBYBUBBLE, and nothing is ever going to rain on our parade.

They aren't right, are they?

Sep 14, 2009, 8:33:00 PM  
Blogger Matthew said...

"Housing Crisis"... one of the most misused and misunderstoond terms throughout this debacle.. the housing crisis continues.. it started in 98 and continues right now in Marin as prices have not been allowed to reset...

long term, I will bet on the math and basic economics, which means housing prices have only one way to go from here... down !! ... short term, who the hell knows...

We're really a dumb country, after all, so anything is possible .. at least over the short term..

One other comment.. I see the slope of the downturn last summer in both the stock markets and the housing market to be directly proportional to how much fraud and false props in in place to hold up prices... just like a finger in the damn... BB and the Fed got a big enough finger put back in the damn after it broke last summer/fall to slow the gush down to a trickle now... that said, anyone who thinks BB's and the Fed's/Congress fixes will assure long term prosperity in real estate are complete nuts... complete nuts... show me the math...

Sep 16, 2009, 8:09:00 PM  
Blogger fortunateone said...

I agree!
Who gives a dam?

Sep 17, 2009, 1:16:00 AM  
Blogger Alarming said...

"The Future Will Be A Total Disaster"

"The future will be a total disaster, with a collapse of our capitalistic system as we know it today, wars, massive government debt defaults and the impoverishment of large segments of Western society," Marc Faber, The Gloom, Boom & Doom Report, September 2009

Marc Faber is an international investor known for his uncanny predictions of the stock market and futures markets around the world. Dr. Doom also trades currencies and commodity futures like Gold and Oil.

Sep 23, 2009, 6:51:00 PM  

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