phil from Edmond

Wall Street Breakfast: Must-Know News

Further to the proposed sale of tax credits. Why would Treasury approve the sale? Effectively, they would approve Fannie Mae to accept $0.80 (or whatever) for $1 dollar of tax credits. Since Treasury is funding Fannie Mae, through the conservatorship, where is the advantage to the Treasury in this transaction. Treasury reduces its contribution to Fannie Mae by $0.80 and loses $1 dollar from tax receipts.

David Merkel's Exceptional Research on AIG

Mr. Miller, you are right. Thanks for the path to David Merkel's fine work.

What Obama Needs to Know about Tim Geithner, the AIG Fiasco and Citigroup

Maybe we will get to bankruptcy with AIG but it will be after foreign banks are paid off. The footnotes to AIG indicated that foreign banks were holders of a large amount of CDS and were using them to meet Tier 1 requirements. At 12/31/07, AIG expected these positions to be extinguished in 18 months.

6+ Questions About the Government's Stake In Those Bailed-Out Companies

Dear John Thain, I think you are right to question what happens next. It seems we are nationalizing a bunch of debt. It only works if the federal government is not asked to pay it off( to China, Russia or Saudi Arabia) or we inflate the dollar. The best path is to reduce the trade deficit. To do that we need to reduce oil imports and get other nations to buy our products that are competitive in the world market.
The worse thing is to try and stimulate an area of our economy into another bubble.