Allow me to review the bidding:
- We've got a liquidity crisis and a solvency crisis.
- For at least 170 years now (sic?), it has been accepted that in a liquidity crisis, the government has a role to play.
- Turning on the money spigot helps liquidity, and we're doing that.
- Raising the deposit insurance helps liquidity, and we're doing that.
- So much for liquidity, but as to solvency--we seem to be speaking out of both sides of our mouth.
- On the one hand, we do tough love: equity owners take the hit in Bear Stearns, Lehman, AIG WaMu and more. We've even wiped out some debt, but apparently the Chinese have told us we'd better not wipe out their debt.
- But for others, the Treasury Secretary proposes a balance sheet bailout, to the tune of $700 billion--a number, it is conceded, pretty much plucked odut of thin air.
- Nobody speaks up for this plan, but everybody says we have to; have it.
- It looks more and more like it won't do any good anyway.
Does anybody here know how to play this game?
No comments:
Post a Comment