Senate hearing on the bailout

[noirua]

John McCain is now in Washington and will help to redesign the package. So all will be well. No worries! Obama's still campaigning, could this be a big mistake?

 

[wayneL]

OMG OMG!

Even that nincompoop Kaletsky sees the awful truth.... sort of (He's still in La La land):

http://www.timesonline.co.uk/tol/comment/columnists/anatole_kaletsky/article4820549.ece

 

[2020hindsight]

OMG OMG!

Even that nincompoop Kaletsky sees the awful truth.... sort of (He's still in La La land):

http://www.timesonline.co.uk/tol/comment/columnists/anatole_kaletsky/article4820549.ece

Interesting that Malcolm Turnbull was singing the praises of Henry Paulson, the US Treasury Secretary, this morning on AM. "Just the man to lead the world out of this etc".

Apparently when Turnbull worked for Goldman as as Partner, Paulson was Senior Partner

http://www.timesonline.co.uk/tol/comment/columnists/anatole_kaletsky/article4820549.ece

Save the world? Hank just didn't have a clue
The staggering incompetence of the US Treasury Secretary is now acknowledged - and is a disaster for George Bush

Mr Paulson may be a former chairman of Goldman Sachs, but as US Treasury Secretary he does not know what he is doing. His recent blunders, starting with the “rescue” of Fannie Mae, have triggered unintended consequences around the world, resulting in the death-spiral of financial values. But last Friday Mr Paulson outdid even these Rumsfeldian achievements, when he demanded $700 billion from Congress for a “comprehensive and fundamental” solution to the global financial crisis, without apparently having any idea of what he would actually do.

The good news - before I return to the perils of Mr Paulson - is that his blunders no longer matter very much. There will still be a huge US government bank bailout, which will probably avert a disastrous slump in the US and global economies.

This article ends up full circle back with Paulson's plan... (having rubbished it)

The "error" according to that article seems to be that Bush etc have given away the political initiative to the Dems, who will (maybe?) soften the blow to the public. ala "Main St" as they like to call it. (time will tell of course).

But because Mr Paulson has lost the political initiative, this bailout will now be led by the Democratic leadership in Congress and will be structured around its priorities - relief from mortgage foreclosures, restrictions on bankers' pay and big government shareholdings in US banks. For President Bush it is a disaster, dashing his last faint hope of having a tangible achievement to his name before he leaves office

Here're those excerpts from ABC's AM this morning... (interview with Malcolm Turnbull)
http://www.abc.net.au/am/content/2008/s2373734.htm

CHRIS UHLMANN: Now you're a former chairman and managing director of Goldman Sachs. How much blame should merchant banks take for the current financial mess?

MALCOLM TURNBULL: Well as Hank Paulson has said, there's plenty of blame to go around and I agree with those legislators in the US that say that executives of financial institutions should not be rewarded. Indeed, they should get nothing out of this and I'm sure Congress will ensure that happens.

But you know, the world is lucky to have Hank Paulson as US Treasury Secretary right at the moment. I've worked closely with Hank. He was the chairman of Goldman Sachs, the senior partner when I was a partner of the firm.

And he's shown real leadership in the past. I mean when Korea ran out of foreign exchange at the end of '97, it was Hank Paulson who brought Wall Street together, who got together with, brought JP Morgan in and showed real leadership in providing the rescue package that got Korea through that very difficult period.

CHRIS UHLMANN: But you and Hank Paulson would also have dealt in these product derivatives that are the toxic waste that's now flowing around the world. Why should we entrust you, or him, with its salvation? etc

CHRIS UHLMANN:Now how can you trade in that kind of money, how can you trade in that kind of system and tell the world that that was a good way to behave?

MALCOLM TURNBULL: Well I'm not saying, I'm saying it was a bad way to behave. It was clearly very mistaken.

And I mean it's not an area of investment banking that I've ever worked in. My area was always on the corporate advisory side, advising companies on acquisitions and buying assets and selling assets. So this area is not something that I've worked in directly.

Goldman Sachs, as it happens, and this is long after I ceased to be involved with Goldman Sachs actually recognised the anomalies, the weaknesses in the US housing market, and that's one of the reasons Goldman Sachs is one of the only two independent investment banks surviving this turmoil on Wall Street.

But the real issue though is one of political leadership and you need to have people who are prepared to lead, who know what they're doing, who understand financial crises and financial problems and the world is lucky to have Hank there.

I mean, let me tell you Chris, China is an incredibly important player in this. If the Chinese lose confidence in the US dollar, then the consequences will be considerable, very dire indeed. Paulson when he became Treasury Secretary was a man who had personal relationships with the entire Chinese leadership, had been to China more than 80 times in the previous 10 years... etc

 

[tcoates]

Wayne,

Rather skeptical on everything that I read.

That is, damned if they do, and damned if the don't. The fact remains is that we are in this position 'serious economic crisis' (not my headline) and that something needs to be done.

I probably don't think that a real plan could be hatched in one week given the length of time that it generally takes governments to create plans - except for emergency measures.

With that in mind...

1. who is a credible commentator (in your view) which provides an objective view?

2. what is the real solution?

Again... damned if they do, and damned if the don't. And (sadly?) the the market and the world moves on while they all argue.

Tim

 

[tcoates]

PS to previous post...

I do look at (read) most articles on this crisis but it is at the point that (in once sense) I don't care anymore.

It is being treated like any natural disaster in coverage (at least on the web) and there a nothing new being said as to a solution. For example, in the 24 hours there are more than 68000 web pages on the net re "us bailout"

Tim

 

[Julia]

Wayne,

R
1. who is a credible commentator (in your view) which provides an objective view?

2. what is the real solution?

Again... damned if they do, and damned if the don't. And (sadly?) the the market and the world moves on while they all argue.

Tim

I'd also be interested in what you think should happen, Wayne?

 

[Julia]

Maybe he reads ASF!:

Given that Prof Sachs is considered amongst the 100 most influential people in the world, that may be a little unlikely!
(I was rather suggesting that your own thoughts appeared to equal the intellectual rigour applied by Prof Sachs.)

I don't see any reason why the government should be helping people that can't pay their mortgages any more than they should be helping investment bankers. If someone takes out a mortgage and can't pay it - then unfortunately in a free market system they have to bear the consequences.

The reality is that people being irresponsible and taking out mortgages that they had no chance of being able to pay back is what created the mess in the first place - along with the greedy sales people that sold the mortgage to them regardless and pocketed the commissions - but at the end of the day the consumer is responsible for their own decision to take the mortgage out in the first place (or the equity loan or the credit card or the student loan etc. etc. etc.).

Completely agree, Cuttlefish. I wasn't suggesting this should happen, but rather that I could feel for the resentment of the taxpayer being asked to fund the excesses of Wall Street, especially when the main architects of the disaster have pocketed multiple millions in bonuses.

The ideal would be that they wouldn't bail anyone out at all. They may have been better off letting the institutions (fannie, freddy, AIG etc.) and the banks that are in difficulty all go under but they would still have had to capitalise the FDIC to cope with it or face almost certain civil unrest.

The bad subprime paper would still have existed but would have been sold by administrators at real market value to private and foreign investors. End result possibly similar to the outcome of the current bailout - though probably far more difficult to control. It would also have likely created a very big confidence crisis in the USD which would have potentially created a new host of problems.

Though this may all still be there to come and this current bailout may just be postponing the problem. It really does depend on whether they've actually run some figures and quantified the problem to come up with the $700 billion figure or are just flying blind.

Seems a bit like the flying blind option at present.

 

[bean]

A paper submitted to congress on the Bail

Proposed $700 Billion Bailout Is Too Little, Too Late to End Debt Crisis; Too Much, Too Soon for U.S. Bond Markets

September 24, 2008 |

JUPITER, FL, September 24, 2008 ”” The proposal before Congress for a $700 billion financial industry bailout will not only fail to end the massive U.S. debt crisis but could actually aggravate the crisis by driving up interest rates, according to a white paper submitted to Congress and banking regulators today by Weiss Research, Inc. Therefore, Weiss recommends limiting and reducing the bailout as much as possible, while bolstering existing safety nets for consumers.

Based on recently released FDIC and Federal Reserve data, Weiss Research finds that:

1. 1,479 U.S. banks and 158 U.S. thrifts are at risk of failure, with total assets of $3.6 trillion, or 36 times the assets of banks on the FDIC’s list of troubled institutions.

2. Among those with $5 billion or more in assets, 61 banks and 25 thrifts are heavily exposed to nonperforming mortgages.

3. The bailouts announced and proposed to date, although expected to cost over $1 trillion, are too small to rescue most institutions at risk, let alone address multiple problems with U.S. interest-bearing debts outstanding of $51 trillion and derivatives held by U.S. banks of $180 trillion.


Martin D. Weiss, president of Weiss Research, comments: “There should be no illusion that the $700 billion estimate proposed by the Administration will be enough to end the crisis. Nor should there be any false hopes that the market for U.S. government securities can absorb the additional burden of a $700 billion bailout without putting major upward pressure on U.S. interest rates, aggravating the very debt crisis that the government is seeking to alleviate.” Among its policy recommendations, Weiss urges Congress to:

1. Severely limit the government’s authority to buy bad private-sector debts by requiring it to pay strictly fair market value, including a substantial discount that reflects their poor liquidity.

2. Disclose to the public that there are significant risks in the financial system that the government is not able to address.

3. Focus more resources on strengthening existing safety nets, including FDIC insurance of bank deposits, SIPC coverage of brokerage accounts and state guarantee associations that cover insurance policies.

“Rather than focusing on the protection of imprudent institutions and speculators,” concludes Weiss, “Congress should do more to protect prudent individuals and savers.”

Regardless of what Congress decides, Weiss recommends that individuals continue to invest and save prudently, seeking the safest havens for their money, such as safe banks and U.S. Treasury bills or equivalent.

The Weiss Research white paper, “Proposed $700 Billion Bailout Is Too Little, Too Late to End the Debt Crisis; Too Much, Too Soon for the U.S. Bond Market,” is available at
http://www.moneyandmarkets.com/files/documents/Final-Bailout-White-Paper.pdf.

Weiss Research Submits Policy
Recommendations to Congress Today

 

[fimmwolf]

I don't see any reason why the government should be helping people that can't pay their mortgages any more than they should be helping investment bankers.

Sure, I'm with you all the way. To hell with this new American Socialist Republic.
Let's kick eight million struggling Americans out of their homes. And where's Pink when I need him? (pink floyd)

I mean c'mon, I can think of a few people who could really use that 700 billion.

Let's see, there's Richard Fuld, he only made $354 million during his five year tenure with Lehman brothers.

What about ex-Bear Stearns Cos. President Warren Spector, who sold $382 million in stock before resigning in 2007, nice timing Warren

Then there's Merrill Lynch boss John Thain, who had to go three-ways in 200 million.

Peter Kraus, strategy head for Goldman got a groovy $US95 million

Oh yeah, don't forget Merrill Lynch Trading chief Thomas Montag struggling with a measley $76 million!

And I'm sure Mr Paulson wasn't thinking of keeping any of it himself, no sir-ree, he's got mates to look after.

<end sarcastic rant>

 

[pepperoni]

Wednesday, September 24, 2008

Dear Friends,

Whenever a Great Bipartisan Consensus is announced, and a compliant media assures everyone that the wondrous actions of our wise leaders are being taken for our own good, you can know with absolute certainty that disaster is about to strike.

The events of the past week are no exception.

The bailout package that is about to be rammed down Congress' throat is not just economically foolish. It is downright sinister. It makes a mockery of our Constitution, which our leaders should never again bother pretending is still in effect. It promises the American people a never-ending nightmare of ever-greater debt liabilities they will have to shoulder. Two weeks ago, financial analyst Jim Rogers said the bailout of Fannie Mae and Freddie Mac made America more communist than China! "This is welfare for the rich," he said. "This is socialism for the rich. It's bailing out the financiers, the banks, the Wall Streeters."

That describes the current bailout package to a T. And we're being told it's unavoidable.

The claim that the market caused all this is so staggeringly foolish that only politicians and the media could pretend to believe it. But that has become the conventional wisdom, with the desired result that those responsible for the credit bubble and its predictable consequences - predictable, that is, to those who understand sound, Austrian economics - are being let off the hook. The Federal Reserve System is actually positioning itself as the savior, rather than the culprit, in this mess!

• The Treasury Secretary is authorized to purchase up to $700 billion in mortgage-related assets at any one time. That means $700 billion is only the very beginning of what will hit us.

• Financial institutions are "designated as financial agents of the Government." This is the New Deal to end all New Deals.

• Then there's this: "Decisions by the Secretary pursuant to the authority of this Act are non-reviewable and committed to agency discretion, and may not be reviewed by any court of law or any administrative agency." Translation: the Secretary can buy up whatever junk debt he wants to, burden the American people with it, and be subject to no one in the process.

There goes your country.

Even some so-called free-market economists are calling all this "sadly necessary." Sad, yes. Necessary? Don't make me laugh.

Our one-party system is complicit in yet another crime against the American people. The two major party candidates for president themselves initially indicated their strong support for bailouts of this kind - another example of the big choice we're supposedly presented with this November: yes or yes. Now, with a backlash brewing, they're not quite sure what their views are. A sad display, really.

Although the present bailout package is almost certainly not the end of the political atrocities we'll witness in connection with the crisis, time is short. Congress may vote as soon as tomorrow. With a Rasmussen poll finding support for the bailout at an anemic seven percent, some members of Congress are afraid to vote for it. Call them! Let them hear from you! Tell them you will never vote for anyone who supports this atrocity.

The issue boils down to this: do we care about freedom? Do we care about responsibility and accountability? Do we care that our government and media have been bought and paid for? Do we care that average Americans are about to be looted in order to subsidize the fattest of cats on Wall Street and in government? Do we care?

When the chips are down, will we stand up and fight, even if it means standing up against every stripe of fashionable opinion in politics and the media?

Times like these have a way of telling us what kind of a people we are, and what kind of country we shall be.

In liberty,

Ron Paul

 

[cuttlefish]

Given that Prof Sachs is considered amongst the 100 most influential people in the world, that may be a little unlikely!

Don't worry my comment was purely tongue-in-cheek.

Seems a bit like the flying blind option at present.

I agree, particularly if these numbers from the Weiss report that pepperoni posted are correct: Truly scary.

1. 1,479 U.S. banks and 158 U.S. thrifts are at risk of failure, with total assets of $3.6 trillion, or 36 times the assets of banks on the FDIC’s list of troubled institutions.

2. Among those with $5 billion or more in assets, 61 banks and 25 thrifts are heavily exposed to nonperforming mortgages.

3. The bailouts announced and proposed to date, although expected to cost over $1 trillion, are too small to rescue most institutions at risk, let alone address multiple problems with U.S. interest-bearing debts outstanding of $51 trillion and derivatives held by U.S. banks of $180 trillion.

Interesting that the report suggested capitalising the FDIC - I think that may have been a better way to go as well though I doubt (especially based on the above figures) that 700 billion would be close to enough to capitalise the FDIC if there are that many banks under threat.

 

[cuttlefish]

Sure, I'm with you all the way. To hell with this new American Socialist Republic.
Let's kick eight million struggling Americans out of their homes. And where's Pink when I need him? (pink floyd)

I mean c'mon, I can think of a few people who could really use that 700 billion.

Let's see, there's Richard Fuld, he only made $354 million during his five year tenure with Lehman brothers.

What about ex-Bear Stearns Cos. President Warren Spector, who sold $382 million in stock before resigning in 2007, nice timing Warren

Then there's Merrill Lynch boss John Thain, who had to go three-ways in 200 million.

Peter Kraus, strategy head for Goldman got a groovy $US95 million

Oh yeah, don't forget Merrill Lynch Trading chief Thomas Montag struggling with a measley $76 million!

And I'm sure Mr Paulson wasn't thinking of keeping any of it himself, no sir-ree, he's got mates to look after.

<end sarcastic rant>

America preaches capitalism and free-markets almost like a religion. Live by the sword, die by the sword. The wall street bankers were greedy but so were the private citizens that overgeared to buy houses and goods they couldn't afford. But like I said in my post I don't believe either should have been getting a helping hand so don't paint me as a supporter of the executives of the institutions that participated in creating the mess because it is incorrect.

There's plenty of homeless people around the world that could do with a helping hand and a lot of them aren't homeless because they overstretched the mortgage to buy the latest flat screen TV.

 

[explod]

Yahknow, the total debt of the US is over 90 trillion. It was half that when Chief Burnin Bush took charge 8 years ago. The derivatives component which is in addition and seperate is deflating as we speak, was measured at 62 trillion. And it is all lookin like a total mess; 152 trillion of trash, repeat 152 trillion of TRASH. And here on this thread we are discussing 700 billion as a bailout to help the shiny a'Sed top end of Wall street.

Yar gotta be joking.

Good to be in gold by jove.

 

[fimmwolf]

There are 2 groups

One that swoons, another that struggles.

I know which group should pay

 

[cuttlefish]

There are 2 groups

One that swoons, another that struggles.

I know which group should pay

Yeah - thats easy - both should pay - both are guilty of being greedy and irresponsible. The ones that shouldn't pay are those that didn't overgear, lived within their means and kept money aside for an emergency situation.

Unfortunately they are the ones that will actually end up paying.

 

[Julia]

And maybe spare a thought for the smiles on the faces of the Chinese, so long considered inferior by the great U.S. of A. Here is an extract from an article by Michael West:

While more than $US500 billion of writedowns have been taken in the West, Bloomberg data shows the Chinese have incurred losses on mortgage-backed securities in the order of just $US4.3 billion.

According to a Bloomberg article, "It's ironic Paulson has become the manager of many large financial institutions,'' said Wang Jun, a finance specialist at the World Bank in Beijing. "He will have to ask the Chinese leaders about their experience of managing state-owned assets.''

Not that it's a good look for human rights and the evolution of democratic government, nor a model to be pursued, but the Chinese communist dictatorship seems to be doing a lot better than their didactic rivals in the US. There will be many more rich ironies before this crisis is over.

To the likely outcome of a bail-out: markets love certainty and appear comfortable with Hank Paulson's reassurances that the $US700 billion ''trash for cash'' deal will restore confidence. It is no stretch then to assume that once the plan is approved world share markets may bounce sharply.

They cannot however fly in the face of economic fundamentals. Price/earnings multiples on US markets are still not particularly low by historical standards and the trend for earnings revisions, downwards, remains in place. Lower earnings forecasts mean lower share prices so a sustained rally is unlikely until there is a prospect of economic recovery in sight.

Meanwhile two other factors loom. One, accounting chicanery and, two, the prospect of further defaults and their viral effect on counterparties. On the first, the unravelling of Fannie Mae and Freddie Mac demonstrate just how tricky and deceptive the accounting treatments had become in the US. Wall Street banks still have big problems not only with their off-balance sheet SIVs and conduits but with dubious practices the likes of booking profits from marking to market the discount on their debts.

Then there are the nasty surprises yet to come. Another mortgage giant, the thrift Washington Mutual is teetering in the face of serious liquidity problems. And counterparty risks from the likes of Lehman Brothers' collapse are yet to work through the system.

The risks of bailing out Wall Street are precisely those which Hank Paulson in his former life as a free markets exponent railed against, ''moral hazard'' that is, the proposition that intervention will only allow the problems of poor management, leverage and ill-conceived speculation to linger.

mwest@fairfax.com.au

BusinessDay

 

[dhukka]

Wednesday, September 24, 2008

Dear Friends,

Whenever a Great Bipartisan Consensus is announced, and a compliant media assures everyone that the wondrous actions of our wise leaders are being taken for our own good, you can know with absolute certainty that disaster is about to strike.

The events of the past week are no exception.

The bailout package that is about to be rammed down Congress' throat is not just economically foolish. It is downright sinister. It makes a mockery of our Constitution, which our leaders should never again bother pretending is still in effect. It promises the American people a never-ending nightmare of ever-greater debt liabilities they will have to shoulder. Two weeks ago, financial analyst Jim Rogers said the bailout of Fannie Mae and Freddie Mac made America more communist than China! "This is welfare for the rich," he said. "This is socialism for the rich. It's bailing out the financiers, the banks, the Wall Streeters."

That describes the current bailout package to a T. And we're being told it's unavoidable.

The claim that the market caused all this is so staggeringly foolish that only politicians and the media could pretend to believe it. But that has become the conventional wisdom, with the desired result that those responsible for the credit bubble and its predictable consequences - predictable, that is, to those who understand sound, Austrian economics - are being let off the hook. The Federal Reserve System is actually positioning itself as the savior, rather than the culprit, in this mess!

• The Treasury Secretary is authorized to purchase up to $700 billion in mortgage-related assets at any one time. That means $700 billion is only the very beginning of what will hit us.

• Financial institutions are "designated as financial agents of the Government." This is the New Deal to end all New Deals.

• Then there's this: "Decisions by the Secretary pursuant to the authority of this Act are non-reviewable and committed to agency discretion, and may not be reviewed by any court of law or any administrative agency." Translation: the Secretary can buy up whatever junk debt he wants to, burden the American people with it, and be subject to no one in the process.

There goes your country.

Even some so-called free-market economists are calling all this "sadly necessary." Sad, yes. Necessary? Don't make me laugh.

Our one-party system is complicit in yet another crime against the American people. The two major party candidates for president themselves initially indicated their strong support for bailouts of this kind - another example of the big choice we're supposedly presented with this November: yes or yes. Now, with a backlash brewing, they're not quite sure what their views are. A sad display, really.

Although the present bailout package is almost certainly not the end of the political atrocities we'll witness in connection with the crisis, time is short. Congress may vote as soon as tomorrow. With a Rasmussen poll finding support for the bailout at an anemic seven percent, some members of Congress are afraid to vote for it. Call them! Let them hear from you! Tell them you will never vote for anyone who supports this atrocity.

The issue boils down to this: do we care about freedom? Do we care about responsibility and accountability? Do we care that our government and media have been bought and paid for? Do we care that average Americans are about to be looted in order to subsidize the fattest of cats on Wall Street and in government? Do we care?

When the chips are down, will we stand up and fight, even if it means standing up against every stripe of fashionable opinion in politics and the media?

Times like these have a way of telling us what kind of a people we are, and what kind of country we shall be.

In liberty,

Ron Paul

I think history will show that one of biggest lost opportunites for true change in the United States was that Ron Paul was passed over for a borderline senile old fool like McCain. Obama may mouth all the right platitutes but Ron Paul was the only presidential candidate that represented true change. The only candidate who wants to end the USA's foreign policy of global hegemony, eliminate the Federal Reserve and return the country to a policy of sound money to encourage savings instead of rampant, unsustainable debt driven consumerism.

 

[wayneL]

Wayne,

Rather skeptical on everything that I read.

That is, damned if they do, and damned if the don't. The fact remains is that we are in this position 'serious economic crisis' (not my headline) and that something needs to be done.

I probably don't think that a real plan could be hatched in one week given the length of time that it generally takes governments to create plans - except for emergency measures.

With that in mind...

1. who is a credible commentator (in your view) which provides an objective view?

2. what is the real solution?

Again... damned if they do, and damned if the don't. And (sadly?) the the market and the world moves on while they all argue.

Tim

re 1. I don't read Oz papers anymore, and I can't think of one credible commentator there anyway. Kaletsky, as 2020 noted, doesn't know whether he is Arther or Martha. As little as 4 months ago he was preaching endless bullishness and an impregnable economy. These days, he has cognitive dissonance, again as 2020 noted.

Commentators who have foreseen this whole schmozzle include Jeff Randall, Ambrose Evans-Pritchard and Peter Schiff. All have got it pretty well spot on.

re 2. see below

I'd also be interested in what you think should happen, Wayne?

It's more of a case of what should have happened Julia. The above commentators, have been banging on about this for a long time, as has myself and several others here at ASF; only to suffer mocking and derision from those who now have egg all over their faces.

What should be done now? Well unfortunately, to avoid the complete meltdown of the whole financial system, a bail-out is imperative. But as with all radical solutions, it is the fine print that matters. The devil is in the detail.

The problem with the proposal on the table is that there is no fine print. Paulson and Uncle Ben want carte blanche to do whatever they think without any oversight whatsover. The lunatics want charge of the asylum.

That means Wall Street gets mountains of cash thrown at it and those responsible for this mess continue to amass fortunes with impunity at the expense of Joe and Martha Sixpack. NO WAY! A despicable moral hazard at its most repugnant worst.

If the world needs to bail out these schmucks, then the prudent deserve their pound of flesh, and the execs deserve to suffer the consequences of their imprudence.

 

[Julia]

have [/U]happened Julia.

Yes, of course it is. But the mess now exists so there needs to be a solution found. This is what I was hoping you might be able to suggest in terms of the detail which seems to be lacking in the current ten paragraph bail out proposal effectively giving Mr Paulson carte blanche as you have suggested.

What should be done now? Well unfortunately, to avoid the complete meltdown of the whole financial system, a bail-out is imperative. But as with all radical solutions, it is the fine print that matters. The devil is in the detail.

OK. But if you were a US Senator and had the opportunity to write in that fine print, perhaps including some regulatory changes for the future, and including also some sort of responsibility being placed at the door of the wealthy CEO's who have engineered this remarkable feat of incompetence, what would you include?

 

[nomore4s]

If the world needs to bail out these schmucks, then the prudent deserve their pound of flesh, and the execs deserve to suffer the consequences of their imprudence.

Unfortunatly this is probably not going to happen as one of the not so great traits of our society now is a lack of consequences for your own actions. I don't see this situation being any different.