Instead of doing normal things like direct investment, we’ve decided to buy a stack of crap. Crap so worthless that no one will buy it. And we are going to be able to sell it for a profit or make the BANKS PAY THE DIFFERENCE. When? What date will it become OK to CHOOSE to make banks insolvent in the future? There is too much magic involved to make this bet.
Where is the leadership? I was glad to hear George Soros come out for direct investment in banks (Swedish-style) and participation in the paper credit market (confidence building and job preserving, and therefore securities market preserving). Maybe sensibility can reign once this initial dog-and-pony show is concluded. I just fear that we’ll have bought at least $350 billion in crap by then..
“Faced by failure of credit they have proposed only the lending of more money. Stripped of the lure of profit by which to induce our people to follow their false leadership, they have resorted to exhortations, pleading tearfully for restored confidence. They know only the rules of a generation of self-seekers. They have no vision, and when there is no vision the people perish…
…there must be an end to a conduct in banking and in business which too often has given to a sacred trust the likeness of callous and selfish wrongdoing. Small wonder that confidence languishes, for it thrives only on honesty, on honor, on the sacredness of obligations, on faithful protection, on unselfish performance; without them it cannot live.”
President Franklin Delano Roosevelt, Inaugural Address, March 4, 1933
Sorry, McSame, but it’s time to both talk the talk AND walk the walk. Your service has been appreciated, but you are not the man for the times.