“It Depends on What the Definition of ‘Is,’ Is” Too much risk is just as bad [as too little]. Just ask the financial wizards at American International Group who ended up on the wrong side of tens of billions of dollars in financial contracts, almost bringing down the world’s biggest insurer. –Andrew Ross Sorkin, “Taking...Read More
Wall Street Who-Dunnit: No One?? Victory has a thousand fathers, but defeat is an orphan. –John F. Kennedy Hurricane Katrina was an act of nature. The economy’s Wall Street-triggered financial collapse is not. If and when anyone is actually held accountable for that, you can expect to hear variants (combinations?) of the following defenses. (Im)plausible...Read More
Hollywood Couldn’t Come Up With This Stuff “The AIG bailout, in effect, was Goldman [Sachs] bailing out Goldman [Sachs].” –Matt Taibbi, “The Big Takeover”; Rolling Stone (3/19/09) “Here’s the dirty little secret . . . most of the stuff that got us into trouble was perfectly legal. And that is a sign of how much...Read More
If you’ve been out of the loop the last 48 hours or so, the big finance-related news is the political firestorm precipitated by AIG’s bonuses, and the Fed’s decision to create $1 trillion in new money (by buying mortgages and mortgage-backed securities). On the blogosphere, there is a quick consensus emerging that the the public,...Read More
Dealing with AIG: More Ideas One day after [the President’s] economic advisers insisted that their hands had been tied by contracts requiring the payments, Mr. Obama ordered the Treasury Department to “pursue every single legal avenue to block these bonuses” and make the American taxpayers whole. –“Obama in Effort to Undo Bonuses at AIG“; The...Read More
AIG Creditors’ Hold on U.S. Treasury “I used to think if there was reincarnation, I wanted to come back as the President or the Pope or a .400 baseball hitter, but now I want to come back as the bond market. You can intimidate everybody.” –James Carville If Carville were to update his answer today,...Read More
