captainccs

Two Prominent Economists Admit Leverage Kills

Yes, let's listen to the Nobel Laureates who have brought us one of the biggest market crashes ever.

Maybe if they got out of their ivory towers and joined the hoi polloi on the streets they would understand why mark-to-market is not the solution, it is part of the problem. Mark to market had the unexpected consequence of making a bad situation worse.

The real problem is the backing of the Wall Street Robber Banks by the Fed. The real problem is having allowed them to become too big to fail. Had they realized they could fail they might have been more prudent in their lending. But since they operate in a risk-free world, the risk is all transfered to the tax payer via Fed and Treasury, they have no need to be prudent. That is the core problem to solve!

Bring out the trust busters!

Break Up the Big Banks

If a bank or any other company is too big to fail because failure threatens the nation's economy then the logical action is to call in the trust busters and cut up the company into smaller pieces that can fail safely. That is what was done with Standard Oil and with Ma Bell. The breakup of Ma Bell led to much more affordable telephony and a shower of new services that the AT&T monopoly was withholding from the consuming public.

All the banking behemoths must be cut down to size, not fed more taxpayer money. They must be small enough that failure only hurts their own shareholders, not the world at large.

Hedge Fund Tracking: Lee Ainslie's Maverick Capital, Q3 2008

Reading these stock sheets is like reading a tip sheet and about as useful. Maverick will not call you up to tell you they changed their minds about a stock so you buy after Maverick has already pushed the price up and you sell after Maverick has already pushed the price down. Somehow that does not sound like the best way to invest, picking at hedge fund droppings.