Has President Bush, Secretary Paulson, Chairman Bernanke, or Speaker Pelosi taken a single action or spoken a single phrase during the past month to inspire confidence in their ability—not to solve the problem—but to simply comprehend it and characterize it?
By “it,” of course, we mean the current liquidity crisis facing certain institutions that seem to have […]

Today’s (September 30) Wall Street Journal contains a front-page article, Industry Is Remade in a Wave of Mergers, which reports that the three largest banks now control over 30% of the nation’s deposits.
We’re writing because we take issue with the paper edition’s blurb: “For the economy and government officials, the very size of these banks means […]

On Monday in a post, A Better Solution (than a government takeover), we proposed a serious, alternative solution to the financial liquidity crisis that is decentralized and free-market oriented.  In addition, it could quickly be implemented with a few changes to the tax code.  The main idea: permit private buyers of distressed securities to immediately expense the […]

Update: the House failed to pass the first bailout bill.  Here is a serious and efficient alternative that could be implemented very quickly…
But first a bit of our usual criticism: while dismayed, we were not surprised by the political response to the financial crisis surrounding the issuance and holding of suspect mortgages and mortgage-related securities.
We’re peeved at […]

During the past week, we have criticized the President’s and Congress’s proposed financial bailout on principle and for what we will call strategic and tactical reasons.  The title of this post pertains to some of the tactics, which we’ll mention later in the post.  However, we’ll take a moment to reiterate our primary opposition.
First, we disagree in principle with the […]

Is from an article, Bailout Plan Gains Key Support, at The Wall Street Journal’s web site today, Sunday, September 28.  U.S. Representative Mark Udall speaking about his constituents’ phone calls regarding the proposed financial bailout: “My calls are mixed between people who say no and people who say hell, no.”
We’re not a constituent of the rep […]

We’d bet that Bank of America is too busy swallowing Merrill Lynch and attempting to identify its own problem assets to ask (and answer) our question, but we really hope that is not the case.
It would be a shame because B of A should have asked it before the Merrill Lynch acquisition rather than now when, now, when its capital is […]

We view the huge sums spent on advertising various causes and issues to be a sign of the economy’s general health—or at least a sign that some folks have more money than they need. 
We’re not talking about the politicians.  We’re talking about AARP and One and the rest of the groups and alliances that have supplanted failed banks […]

As a test of our will and discipline, we attempted to watch tonight’s debate.  We are weak, and we failed the test, or perhaps we weren’t sufficiently self-loathing to fully appreciate the event.  On the other hand, perhaps we place a unreasonably high value on wit, and therefore the disappointment was ours and ours alone.
Regardless, we found all parties lacking, […]

in a Mark-to-Market Accounting Regime.
Here’s a couple of related issues that we can discuss in the context of today’s The Wall Street Journal article, Bailout Proposal Gets Hung Up Over Central Issue: Will It Work?
We’re deeply concerned about the moral hazard implications of any government bailout, and we doubt that we are the only observer to harbor […]

Oh, what a party we’d have.  We used that title once before and got a decent number of hits from it, and we’re nothing if not an opportunistic—albeit neophytic—SEOer, which is why we mention Lipstick Jungle, too.
Since August, when we began paying closer attention to our daily hits and the rankings of various posts, our silly […]

Wolf! Wolf! Wolf!
The sky is falling! The sky is falling! The sky is falling!
The biggest banking collapse in US history, and, as far as we can tell, Chicken Little, despite all the noise nothing much has happened.  Oh, certainly some folks, including a private equity firm, lost a good deal of money, but that seems to be the nature of private […]

We doubt it.
But maybe cicadas or General MacArthur.
With Goldman Sachs and Morgan Stanley becoming commercial banks, many commentators are noting the demise and extinction of investment banks.  We’re not so sure.
This is clearly a highly-speculative and long-term prediction but we think private investment banks, circa the 1980’s, will be back.  Why?  They provide control mechanisms and levels of oversight and scrutiny […]

(And a long aside about the nature of CDOs.)
The Wall Street Journal has an incredibly inane article in today’s (September 25) edition.  It is entitled Crisis Stirs Critics of Free Markets.  Actually, the crisis has stirred advocates of free markets, including the entire senior management at Spero Consulting.
The three writers of article don’t seem to understand that the US […]

A few days ago we read an article—it was likely in The Wall Street Journal—where a trader from Chicago complained about a question that Ohio Senator Sherrod Brown asked of either Mr. Paulson or Mr. Bernanke; we don’t recall to whom it was directed.
Senator Brown had asked something to the effect of: at what price will […]