Got Bubonic Plague? Get More Rats

NakedShorts has previously had occasion to point out that the cures currently proffered for the current attack of financial incontinence bear a striking resemblance to the underlying causes. So, welcome aboard, Jim Grant: 

Low interest rates, easy money and malleable accounting rules are what plunged Wall Street into crisis. Yet it is low interest rates, easy money and malleable accounting rules that top the list of federal fixes. The unifying theme of the new bailout bill, all 451 pages of it, is the hair of the dog that bit you. 

Bad Medicine
by James Grant
The Washington Post Oct. 5 2008

Earlier on NakedShorts:

A nation of morons, led by idiots

Sep. 23 2008

Comments

[Danny Newton:]

Why didn't the National Defense Scholarship loan program produce a similar problem? These loas were at about half of the going rate and payment was even deferred. I realize that the magniturde of the loans was below this housing situation and that assuming the recipient actually graduated, there was a good chance of eventually recovering the money. Maybe it was not poisonons enough to cause a problem but the government did step in and end the abuses. Sixty Minutes ran a special on how people took the money and ran. I suspect that the failure of this debacle created boldness for the bigger and similar home ownership push on easy creditWhy didn't the National Defense Scholarship loan program produce a similar problem? These loans were at about half of the going rate and payment was even deferred. I realize that the magnitude of the loans was below this housing situation and that assuming the recipient actually graduated, there was a good chance of eventually recovering the money. Maybe it was not poisonous enough to cause a problem but the government did step in and end the abuses. Sixty Minutes ran a special on how people took the money and ran. I suspect that the failure of this debacle created boldness for the bigger and similar home ownership push on easy credit.

2008 Oct 06 02:21 PM

[Old Trader:]

Greg,

Not up to your usual "snarky" calibre...you're slipping, my man.

2008 Oct 07 01:43 AM