Sunday, September 28, 2008

CRASH TALK

Dean Baker - According to the NYT, Lloyd C. Blankfein, Goldman Sachs CEO, was in the room with Henry Paulson (former CEO of Goldman) when the decision to save AIG was made. According to the NYT, AIG owed Goldman $20 billion. If AIG had been allowed to go bankrupt, Goldman would be in line with all the other creditors, hoping for a few dimes back on each dollar of debt. Because Henry Paulson decided to rescue AIG, Goldman gets paid in full. Did Goldman's influence with their ex-CEO make a difference in Paulson's decision? I have no idea, but this thing stinks. Can you imagine if clerical workers losing their homes got to sit around with bankruptcy judges deciding the fate of their mortgages? It doesn't work that way where the rest of us live. It is impossible to exaggerate the corruption of this Wall Street crowd.

Mark Cuban - When the government sells the assets, perhaps for a profit, it should also list the price received. In addition, by posting the assets in an eBay like auction/sales environment, it would enable independent buyers to come in and buy the assets using private money rather than government money. . . By adding liquidity to the process, the government could be responsible for less and sellers could get more. This is the only way I can think of to get true transparency. Without it, I promise you that it will be impossible to account for how much money was spent on the assets and how much cash was generated from the sales process and what the net cost or benefit to taxpayers is. Without transparency, we wont have any idea how this all played out. None. Which creates the real problem of allowing it to happen again, but with the government needing the bailout.

Wall Street Meltdown Primer

Record
- A Stockton man sees the growing number of dead brown lawns of foreclosed homes in the area and sees nothing but green. Nick Terlouw has launched the Greener Grass Co., which amounts to a service in which he sprays dead lawns with a deep green, water-based dye that makes the turf look good enough for a golf course or a professional football stadium. For between $175 and $225 per yard, Terlouw uses a motor-powered 50-gallon insecticide sprayer designed for treating orchard trees. He waves his magic wand and in broad sweeps, a la painting a house, makes tired, if not expired, turf sit up and sparkle like Shirley Temple. . . At the house where Terlouw was spraying Friday, the grass looked exceedingly anemic - perhaps mostly from winter dormancy - but the turf clearly wasn't dead. After the spraying, the grass had a sparkling appearance and looked not only alive but also lush and thriving. This was so pronounced that the lawn jumped out on the street as too green compared with any other lawns, even the best kept ones, in the neighborhood. In other words, the grass looked so good as to be suspect. Paul Tamayo was visiting his daughter down the street from Terlouw's spray job and couldn't help but come over and ask about the service. "I'm going to talk to my daughter to see if she wants it done," he said. "I mean, that's beautiful."

1 Comments:

At September 29, 2008 2:59 PM, Anonymous Who really demanded the bailout, Advice to Americans: learn Chinese. said...

Big bondholders big winners in Fannie, Freddie bailout
China, Japan praise Treasury's takeover—stockowners less enthused; 'major structural flaws' cited by Paulson
http://www.financialweek.com/apps/pbcs.dll/article?AID=/20080908/REG/809089997

 

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