Drew Horn

Wall Street Breakfast: Must-Know News

Yeah, "culture of corruption" my left foot! Judges who make sentencing decision's based on "culture" probably got their jobs as a result of a "culture of political corruption". This precedent probably means that Representative Jefferson who was caught with $90 K in cash in his freezer (you cant call that hot money :-) should be sentenced to two weeks in Disney Land.

Financial flim flam artists will continue to ply their trade until some are sentenced to their rightful occupations -- cleaning our sewers or redesigning / reform of bank regulations, both subject they are very familiar with.

Wall Street Breakfast: Must-Know News

I agree, the Swiss approach is useful but it will never be imposed on the US financial industry for two reasons: 1) the banks and insurance industry "own" congress and 2) Geithner, Sommers, ET AL know they have temporary jobs and may already be maneuvering for a financial CEO job even before Obama' leaves office.

The real "systemic risk" is that the political system is responsive only to money which has proven to be fully capable of buying almost any election result. Eisenhower warned about the military / industrial complex. There should be a new warning about the Madison Ave / Washington Lobbyists complex. So long as the first amendment is held to mean that money = free speech, government and our economy will be in the hands of the banks.

Wall Street Breakfast: Must-Know News

The "experts" ( Krugman, Rogoff, etc.) admit that they don't have the "tools" needed to predict the future of this economy. One very important reason is globalization. All prior economic downturns were in economies wherin economic activity was primarily domestic. Globalization has made things worse and unpredictable. Countries that have less global economic activity will fare better.

If we provide liquidity to GMAC and people buy cars on credit, the resulting economic activity will benefit people in other countries more than us. If those loans default, only Americans will pay the bill. In effect, USA tax money used to pump retail sales (70% of the economy) will benefit global others more than us.

Geithner, et al, are using US money to stimulate a world economy. Unfortunately, we don't have enough money to effectively do so and printing more will cause such high inflation that it will make our current problems seem trivial. It is probable that we will have to create a new economic paradigm.

The real problem is that our "leaders" are unwilling to see or admit that we cant go back to 2007 and they are not prepared to lead us into the future.