“Bad Bank”: Bad Idea!
It seems every time you turn around, it’s Goldman Sachs says this or Goldman Sachs says that. Or as Dr. Byrne said on Friday, the old saying is something to the effect “In Goldman Sachs We Trust.”
Our esteemed and favorite classical supply side economist Wayne Jett has drawn our attention to a great video interview from Bloomberg with William Isaac, former FDIC chairman. (Just a couple of notes on the interview. The interviewer says over and over that Rule 157 (Mark-to-Market) has been in place several years. She’s wrong. It wasn’t put in place until 2007.)
Also note that she says Goldman Sachs says mark-to-market is great and that it works. So you wonder why it’s in place?
PLEASE NOTE WHAT HE SAYS ABOUT THIS RULE: We had it IN PLACE in the Great Depression.
By the way, if you missed Patrick Byrne on the program on Thursday, you can listen to the podcast of the interview here.
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It seems that the depression of the 1930s provides us with very little useful knowledge on how to deal with our present situation; there are so many new ways now to get in trouble. Who would have thought back then that one could not only buy a stocks, but bet on the performance of a stock one does not own as well as buy an insurance policy protecting the investment, after which the speculator goes out and sells unowned stocks without ever having possession?
Nor was international speculation in the picture as it is today, allowing other countries to be sucked into the vortex.
By SemiPundit on 03.09.09 3:28 pm
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