ajtj99's Market Pulse

[ajtj99]

TREND1, what about moral hazard? Why should the firms not fail first, other than the credit default swaps?

The whole problem is opacity, and the bailout is not addressing that. When Goldman Sachs can shield $1-Trillion in assets on Level 3 without putting them at fair value (I'm going by memory here), there's a problem.

They are not doing anything about ratings agencies, who are as complicit in this as anyone. They are not doing anything about leverage, they are not doing anything about derivatives.

They are throwing money at the problem and wishing it will make it go away.

BAC is not loaning money because it is out of Fed compliance, that's right. However, there are other ways to approach the problem than throwing money at the ones who were so wasteful and irresponsible in the first place.

I had Econ 101 way back, and the chapter on free market bailouts must have been ripped out of my book, as I don't recall it.