On Mar 10, 2009, at 8:03 AM, Charles Bennett wrote: > I think, it's just tough shit. It all needs to be public if they > intend to use public funds.
Amen > > When the government wants to use my money to bail out a private > institution then they damn well tell me who, how much and why. > > "You can't handle the truth", is not an acceptable excuse no matter > their fear of the public's reaction. It's not acceptable and it doesn't make sense. The banks can't be afraid that there will be a run when we find out they're insolvent. The already admitted they were insolvent when they took the TARP money. What they are hiding is what they did with the money. It's likely that they paid it out in various forms of executive compensation, paid it to foreign financial institutions who they had insured against defaults[1], or used it to prop up their stock prices by buying their own shares. What they didn't do was lend it to small business. Their refusal to disclose what happened to the money tells us almost as much as disclosure would. > > Might it cause a run on the bank? Perhaps. OTOH, that may be > just what SHOULD happen if the bank is near failure anyway and we > could save the tax payers money > for FDIC coverage. This is the core issue. The banks and the government maintain that the 'toxic assets' are undervalued. No one argues that they are worth what the banks paid for them but they do argue that they are worth way more than what they would sell for now. So their solution is to keep the banks afloat with public money until the market for 'toxic assets' recovers. The market itself and a remarkable consensus of liberal and conservative economists outside the government think that the current market value of the toxic assets is about as high as it's going to go. This implies that the only reasonable course of action is to shut down the big banks and make new, smaller banks from the parts that weren't involved with gambling on derivatives. The whole financial crisis points out a problem with the way most people process information these days. It's not rocket science but it is the kind of story that simply can't be conveyed in a 3 minute byte. As a result, you hear a lot of nonsense from people who don't have a clue. If you spend a bit of time on this site: <http://baselinescenario.com/financial-crisis-for-beginners/> You will understand more more than 99.9% of the population and more than 100% of the talking heads. [1] Actually a legitimate use but one that might be very controversial. -- The folly of mistaking a paradox for a discovery, a metaphor for a proof, a torrent of verbiage for a spring of capital truths, and oneself for an oracle, is inborn in us. -Paul Valery, poet and philosopher (1871-1945) _______________________________________________ OSX-Nutters mailing list | [email protected] http://lists.tit-wank.com/mailman/listinfo/osx-nutters List hosted at http://cat5.org/
