Here are two things that confuse my Sunday,
- Thread starter fearless9
- Start date
Iceland was warned (maybe by those who were not natives of Iceland).
Iceland's reaction: âThe reaction wasnât âThese guys might be right.â It was âNo! Itâs a conspiracy. They have bad motives.ââ ...... just jealous!
Imo, the noteworthy part of this equation which plays out time and time again, when people ignore or brush off warnings and fail to take any action to correct, those in the know (hedge funds for example) smell blood.
The hedge funds will short every way possible and when the the house of cards fall down, the losers cry "evil shorts".
Iceland's reaction: âThe reaction wasnât âThese guys might be right.â It was âNo! Itâs a conspiracy. They have bad motives.ââ ...... just jealous!
Imo, the noteworthy part of this equation which plays out time and time again, when people ignore or brush off warnings and fail to take any action to correct, those in the know (hedge funds for example) smell blood.
The hedge funds will short every way possible and when the the house of cards fall down, the losers cry "evil shorts".
I don't know much about Iceland, but I live in the U.S., so I have been following the bailouts here.
As I recall, AIG was bailed out by the Fed, but Treasury under the previous and current administrations and the Fed are all in agreement on the need for direct assistance outside bankruptcy. I don't understand their aversion to bankruptcy, and they aren't really telling us. It seems to me that bankruptcy was created for precisely these situations. Barney Frank said in an interview for CBS News that the only thing bankruptcy gives us is the ability to nullify contracts. He was talking about the GM bailout, but I think it applies equally to AIG and the money center banks. The ability to nullify contracts is huge, and it would avoid the moral hazard that bonuses etc pose.
We're being told that the bonuses are trivial in the overall scheme, and that is true in a purely mathematical sense. But I believe the moral hazard in paying bonuses to the perpetrators of this disaster -- and in the way business is being run today -- and in the split between workers and the managerial elite -- is far greater than anyone in government can comprehend. It's that moral hazard that let us into the swamp, and ignoring it is not an option.
[rwk]