Bank of America executives have recently expressed shock at the bad state of recent acquisition Merrill Lynch. Maybe they would not be so surprised if they had considered Lynch CEO John Thain’s $1.22M renovation bill for his office last year, which featured an $87,000 rug and $15,000 sofa — even as he cut expenses for others and laid off staff. After all, the CEO sets the tone for the rest of company, right?
The financial crisis is all over the news nowadays, but some people did see it coming. Watch this CNBC appearance by Peter Schiff if you want to see someone getting it right two years ago… and listen to Art Laffer foolishly attempt to rebut him with see blind, jingoistic optimism.
I’ve been giving some thought as to the actual value of continuing with this series, because a)over the weekends the bailout proposal has changed considerably, and as of the time of my writing this this newer agreement has already been turned down by the House of Representatives. Continue reading “The Paulson Trillion-Dollar Bonanza: What’s Not to Like, Part III”
Here’s an interview excerpt (with context) from Bert Ely, a credentialed American banking expert, who shares my (and Denninger’s) opinion that Paulson’s mega-bailout just isn’t necessary.
Ben Bernanke spent a lot of time in front of Congress on Tuesday arguing that there’s a credit crisis out there, so why did the Fed recently shrink the float by $125 billion and why is it still resisting a consensus-recommended half-percent rate cut? Is it, as some paranoid people could suggest, a way to generate a need for an all-encompassing mega-bailout plan?
Yesterday I wrote at some length about how the US economy has gotten to the point where Paulson and Bernanke decided it would be worth spending 5 hours promising Congress gloom & doom unless they got a record-busting bailout measure passed. So, why not like this (theoretically) $700B plan to “save the markets”? There are a number of reasons, which I shall put forward here. For reference, here is the draft proposal for the bailout so you can follow along.
In case you’ve been asleep in a cave with your hands over your eyes and cotton in your ears for the past few weeks, the American economy has been in a world of hurt recently. US Treasury Henry Paulson has put forward a far-reaching plan to deal with this crisis. As it turns out there are indeed a lot of things not to like about it, but in order to see what’s wrong with it we need to take a look at how the American economy got itself into this mess in the first place. This will tell us what’s wrong with the economy and whether the bailout plan will address that.