Comments on: Chaos and Opportunity

By: Pat Pattillo

Pat Pattillo — Sat, 21 Mar 2009 23:29:06 +0000

So Obama is less aware of opportuntiy and shifting winds than those here? Or does he just have a different sense of timing? Time will tell. What will happen when those on political left and right call for Geithner’s head? The lynch mob has hardly gotten warmed up.

By: s

Wed, 18 Mar 2009 13:40:24 +0000

I hope someone will get some laws on the books that will regulate enough that we don’t have anymore “too big to fail companies”. If a company gets that big, there should be some indicator to say, you deal with it if they fail. I also think a ban on bonuses in companies not making a profit might be reasonable.

By: Dave S

Dave S — Wed, 18 Mar 2009 01:31:28 +0000

Can Obama legally nationalize AIG? We did a lot of that in the last banking crisis; shouldn't be an issue. I haven't really heard anybody in or outside government raise it as an issue. Youngstown Sheet & Tube Co. v. Sawyer apparently (but vaguely) limits the president's power to sieze private property in an emergency, but as Joan said, if we own 80% of the thing, it's pretty much already nationalized.

By: joanr16

joanr16 — Tue, 17 Mar 2009 22:28:30 +0000

Can Obama legally nationalize AIG?

We pay for it, we own it? Pretty sure there’s no law against that.

By: MNPundit

MNPundit — Tue, 17 Mar 2009 21:48:48 +0000

Can Obama legally nationalize AIG?

By: Dave S

Dave S — Tue, 17 Mar 2009 21:21:06 +0000

talking dog, I’m not all that sure we have a law problem per se. What we have is eight years of not funding the enforcement agencies, and staffing them with people who are not inclined to (or were told not to) enforce the rules.

And I’m not convinced that outlawing credit default swaps is necessary. I think they should repeal the 2000 law (I think it was passed in 2000) that said that speculation in the credit default swap market was exempt from the state gambling laws. Making that illegal again would bring stability to the system, and give us the added benefit of removing insane people from the market. (Anybody who speculates on derivatives is, by definition, certifiable.)

What we do need to do, imo, is set some rules on how big banks and insurance companies are allowed to get. Then if somebody finds themselves in an unhedged CDS hole in a bad market, they can be properly punished by quietly going out of business without their retention bonuses and without taking the world with them. And the guys who buy these “products” will learn that they have to do some homework to make sure the seller is sound. Proper regulation should provide the information to make that informed decision.

In other words, I personally don’t think it’s the government’s place to tell someone how much risk they can accept. I think it’s the government’s place to make sure that this risk isn’t assumed by the taxpayers if they take on too much and fail.

PS: We also need to beat some sense into the CEO of AIG, preferably using the business end of a shovel. I think the Bush administration had a whole bunch of guys specially trained and authorized for that kind of work.

By: Swami

Swami — Tue, 17 Mar 2009 21:01:59 +0000

A word to the wise is sufficient?

I don’t consider this whole episode of bonuses to be a distraction..I see it more as a focal point that’s bringing attention to credit default swaps and how damaging the alternate universe of financial dealings has been to our economy. Talk about derivatives?…I see this whole financial mess we’re facing as being a derivative of a Ponzi scheme. And the only way it can end is by collapsing.

When the current value of existing credit default swaps exceeds the value of all the economies of the entire planet..you have know that something is terribly out of whack, and that you have a big big monster on your hands.

By: Sammi

Sammi — Tue, 17 Mar 2009 18:03:13 +0000

I think there’s a lot of undoing from the past administration that’s biting us all in the behind. It’s like cleaning up toxic waste and finding another sinkhole deeper than the others. Let’s just keep bringing these things to light and hoping sooner rather than later that chaos becomes abundance.

By: c u n d gulag

c u n d gulag — Tue, 17 Mar 2009 17:10:41 +0000

I think too many of the people on Obama’s economic team come from the University of Chicago School of Economic’s. And that’s the group that led us down this path from the time of Leo Strass, to the unfunny Uncle Miltie, to Greenspan.

They specialize in ‘disaster creation,’ not disaster recovery.

By: MarijuanaLobby

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