Re: Bankers' Paradise

[David Farber <dave () farber net>]

Begin forwarded message:

From: Raymcfarld () aol com
Date: May 29, 2009 12:52:41 AM EDT
To: dave () farber net
Subject: Re: [IP] Bankers' Paradise

For IP if you wish.

I would refer you to an Article in the May 2009 Atlantic: "The Quiet  
Coup" by Simon Johnson, which discusses "that the finance industry has  
effectively captured our government (sic)". Johnson was a former chief  
economist at the IMF. The item below re: the attitude on Wall Street  
is consistent with the problem Johnson cites, and he proposes some  
methods for breaking this "oligarchy's" (his word) control over the  
Government.

I have also forwarded the reference to my representative in Congress.

Ray

In a message dated 5/24/09 6:39:36 PM, dave () farber net writes:


> - GM and Chrysler deserve to be liquidated;  if the banks are not  
> bailed out the result will be chaos.  The Wall Street banks in  
> particular are a different situation and their unique status defies  
> economic theory.  A Schumpeterian, creative destruction cycle may be  
> appropriate for the technology or other industries, but it is an  
> absurd notion as applied to Wall Street.  No one could say if they  
> had any thoughts of what might happen if certain derivatives markets  
> had been allowed to collapse, but could only exclaim in fear and  
> horror, "Look at Lehman, it would be catastrophic", and,  "There was  
> fear and panic taking hold, they had to do it."  My response was  
> that Hank Paulson did the best favor anyone could have done for them  
> by letting Lehman fail in the way that he did.  In spite of Lehman,  
> King Hank is A-OK in their book.  Further, even at this late date,  
> they don't know what a compressed CDS market is really worth - their  
> estimates range from $1 to $10 trillion, and the numbers trail a  
> wake of recent, opaque transactions.  Any externalities generated by  
> the activities in the Casino (my word) are trivialities.





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