Re: I vant blood.

1

Lehman was not bailed out- conventional wisdom says it was a mistake to let them fail. They were allowed to fail to prove a point, that not every big bank would be bailed out, because Bear Sterns had just been bailed out in the spring. Lehman's failure led to mutual funds breaking the buck.


Posted by: SP | Link to this comment | 11- 8-08 9:29 AM
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CDOs were also unregulated - my own layman's understanding is that basically any financial product that doesn't fall into an existing regulated category is unregulated. It would not be hard conceptually - though it would be more complicated practically - to bring all financial products as a class into some kind of regulatory sphere, largely eliminating "creative" ways of getting around regulation.

Note that Alan Greenspan and Robert Rubin actively quashed policymaking along those lines ten years ago.


Posted by: Minivet | Link to this comment | 11- 8-08 9:32 AM
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1: That was a typo, which I'll now fix, rendering your comment nonsensical.


Posted by: heebie-geebie | Link to this comment | 11- 8-08 9:35 AM
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Well, your comment will also be nonsensical because the typo will no longer exist, so there.


Posted by: SP | Link to this comment | 11- 8-08 9:35 AM
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Blast!


Posted by: heebie-geebie | Link to this comment | 11- 8-08 9:36 AM
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I think the way to get revenge is to pass a law allowing the IRS to go back through the assets of the finance guys and confiscate some or all of their bonuses from 2001-2008. Or something along those lines. It's kind of ridiculous that they got hundreds of billions of dollars in bonuses from designing and selling those instruments, and we're now having to spend hundreds of billions cleaning up the damage.

Regulations have to be focused on lowering systemic risk, not getting revenge. Instruments were sort of indirectly regulated previously in that the I-banks had to do value-at-risk modeling that was supposed to show how much they could lose. But each banks individual VAR model did not take into account all the possible interactions with what all the other banks were doing (e.g. if there was a big simultaneous demand for liquidity, or a collective bank run). Also, in general, the mathematical modeling approach to risk management is going to be a lot less durable than trying to create a more loosely coupled and delicately interdependent system, which probably involves banning or restricting certain kinds of "financial innovation".

Also, some people (like D-sq most notably in the blogsphere) have been pushing the "savings glut" theory, which is that this is less about banking regulation than about China and the Fed trying to force too much money down the throats of American consumers, until they vomited it all back up. Banks were just the intermediaries for that, and they almost had to make foolish loans.


Posted by: PGD | Link to this comment | 11- 8-08 9:47 AM
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which is that this is less about banking regulation than about China and the Fed trying to force too much money down the throats of American consumers, until they vomited it all back up.

Making the world's largest foie gras?


Posted by: heebie-geebie | Link to this comment | 11- 8-08 9:54 AM
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to pass a law allowing the IRS to go back through the assets of the finance guys and confiscate some or all of their bonuses from 2001-2008.

This sounds totally illegal, although I would cheer.


Posted by: heebie-geebie | Link to this comment | 11- 8-08 9:57 AM
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No, Heebie, that would be if someone sliced open the well fattened American consumer and removed their liver. My analogy was different. You would have realized this if you were a less giddy and more sober-minded person.


Posted by: PGD | Link to this comment | 11- 8-08 9:57 AM
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Not harvesting the world's largest foie gras. Still making it.

I'm sober. I've been sober since July. I'm like the soberest person ever.


Posted by: heebie-geebie | Link to this comment | 11- 8-08 9:59 AM
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You're on a natural high, Heebie, although I'm still sorry to hear about any forced sobriety. I guess your metaphor might work, but I'm not sure. I'll leave it to one of our professionally trained, advanced-degreed literary critics to render judgment.

8: that's why you'd have to pass a law. But you're right, it might still be illegal then. Still, if you can make someone who sells a dime bag of pot forfeit their house and their car, I don't see why you can't do this. (Note: I may not have the most nuanced understanding of asset forfeiture laws).


Posted by: PGD | Link to this comment | 11- 8-08 10:02 AM
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... pass a law allowing the IRS to go back through the assets of the finance guys and confiscate some or all of their bonuses from 2001-2008

The bailout law does include a clawback provision that allows participating institutions to recover any compensation paid to the top 5 executives based on financial information or performance criteria that are later determined to be erroneous. It's unclear how far they could push this, even if they were inclined to, however.


Posted by: lurky lou | Link to this comment | 11- 8-08 10:04 AM
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Still, if you can make someone who sells a dime bag of pot forfeit their house and their car, I don't see why you can't do this.

I thought you were allowed to have all sorts of out-of-whack penalties for blue collar crime, but white collar criminals get winked at and re-elected to congress. I think you're confusing white people with brown people, no?


Posted by: heebie-geebie | Link to this comment | 11- 8-08 10:06 AM
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I already explained this shit.


Posted by: John Emerson | Link to this comment | 11- 8-08 10:13 AM
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11: I fear that Heebie has declined since she quit drinking, as often happens. For the sake of Unfogged, I sure hope that hers isn't a devil child. A sober Heebie plus a devil child would be really too much.


Posted by: John Emerson | Link to this comment | 11- 8-08 10:20 AM
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I've inclined, thankyouverymuch.


Posted by: heebie-geebie | Link to this comment | 11- 8-08 10:25 AM
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I know a guy who lost his house and his wife because of a medium sized grow operation. He was an otherwise law-abiding, fully-employed, educated, middle-class white guy.

His wife became the property of the State of Oregon and was bought at auction by a second-hand wife broker who paid pennies on the dollar. Forfeited property auction brides are a lot better deal than mail-order brides, but you have to check them carefully for various sorts of damage.


Posted by: John Emerson | Link to this comment | 11- 8-08 10:26 AM
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Further to 2: would it be too difficult to write a law that simply says "you aren't allowed to make up new financial instruments just to avoid regulation anymore"? Perhaps this amounts to the same thing as putting all financial products, either current or future, under one regulatory umbrella.

And Heebs, I recommend that you do some reclining during the next few months.


Posted by: rob helpy-chalk | Link to this comment | 11- 8-08 10:32 AM
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I've clined before. I guess I could re-cline.


Posted by: heebie-geebie | Link to this comment | 11- 8-08 10:36 AM
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The other main point to remember about finance is that Tom and Daisy always win. Finance is more powerful than government, God, science, normal human decency, common sense, political correctness, and good personal hygiene all added together and then squared.

They were careless people, Tom and Daisy--they smashed up things and creatures and then retreated back into their money or their vast carelessness or whatever it was that kept them together, and let other people clean up the mess they had made. . . .

So we beat on, boats against the current, borne back ceaselessly into
the past.


Posted by: John Emerson | Link to this comment | 11- 8-08 10:41 AM
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Thank god for the green orgasmic light.


Posted by: heebie-geebie | Link to this comment | 11- 8-08 10:45 AM
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19: Was that what got you into this situation in the first place?


Posted by: rob helpy-chalk | Link to this comment | 11- 8-08 10:47 AM
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18: That's really not possible. All a financial instrument, in this sense, is, is a contract. You'd be thinking of a law saying "Two private individuals can't sign a contract if after looking at it we think it's about money." That seems wildly implausibly unworkable to me.


Posted by: LizardBreath | Link to this comment | 11- 8-08 10:48 AM
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"Orgastic".


Posted by: John Emerson | Link to this comment | 11- 8-08 10:48 AM
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I think we can make these people pay through some of that redistribution we've been hearing so much about. If there's some collateral damage in the form of other extremely rich people having to give up chunks of money, well, eggs and omelets for all!


Posted by: JPool | Link to this comment | 11- 8-08 10:50 AM
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"Standpipe?"


Posted by: heebie-geebie | Link to this comment | 11- 8-08 10:50 AM
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23: But we ban classes of contracts all the time--slavery, prostitution. Why can't we say "You cannot enter into this contract if it is about only money, involves substantial risk, and is not covered by current regulation"?


Posted by: rob helpy-chalk | Link to this comment | 11- 8-08 10:57 AM
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27: Because of the words "only" and "substantial" and "covered by". Eh, maybe it could be done, but I really don't think there's any way to draw a clean line between the stuff you want to cover and the stuff you don't, which would mean that there would be large numbers of people happily entering into contracts that were maybe unenforceable without knowing about it. The litigation would be epic.


Posted by: LizardBreath | Link to this comment | 11- 8-08 11:00 AM
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The litigation would be epic.

Even worse than if we allowed women to sue over pay discrimination!


Posted by: heebie-geebie | Link to this comment | 11- 8-08 11:09 AM
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how about "you fucked up the economy, so your retirement plan is an ice floe, except you fucked up the environment, too, so we're just dropping you in the arctic ocean." ?


Posted by: Cala | Link to this comment | 11- 8-08 11:19 AM
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Well, yes. Much worse.

I'm not just trying to be a naysayer here; I've got a certain amount of experience in contract litigation. Businesses make deals, and they make complicated deals. And businesses that aren't giant, sophisticated financial entities still make complicated deals.

The sort of bad outcome I'm thinking of is like this: two entities enter into a contract, which if you look at it sideways could be considered a financial instrument under your broad definition. And one side performs, and the other side says "Dude, we couldn't possibly have entered into that contract, we're unregulated and it's against the law. Sorry about those profits you were expecting."

There are also massive problems with figuring out what it means to regulate something new if everything has to be regulated -- what are people supposed to do? "Excuse me, Mr. Government, sir. We'd like to enter into this contract, which is not something that is addressed by any currently existing regulation. Can you come up with something tailored to our specific circumstances? Quickly, too -- the banana crop is going to be ripe in a month, and we need to have it signed by then."


Posted by: LizardBreath | Link to this comment | 11- 8-08 11:20 AM
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Let's outlaw all contracts and then make piecemeal exceptions.


Posted by: John Emerson | Link to this comment | 11- 8-08 11:24 AM
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unfortunately unlike geese, US consumers don't store fat in their livers (apart from a minority of very serious alcoholics) so you would need to find another way to make foie gras humanely out of Chinese excess savings.


Posted by: dsquared | Link to this comment | 11- 8-08 11:24 AM
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I'm not just trying to be a naysayer here;

I didn't think you were. I was asking the question sincerely, because I knew people like you had the relevant expertise.

So that rules out my idea. Let's go with Cala's.


Posted by: rob helpy-chalk | Link to this comment | 11- 8-08 11:25 AM
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We are, however, similar to geese in all other important respects.


Posted by: LizardBreath | Link to this comment | 11- 8-08 11:26 AM
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Nah, geese float better in the ocean.


Posted by: Cala | Link to this comment | 11- 8-08 11:33 AM
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Which would make your plan for the financial crisis unworkable.

Damn.


Posted by: LizardBreath | Link to this comment | 11- 8-08 11:35 AM
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If only we had money left for reverse engineering geese from investment bankers. Ah, well. They'll figure that ocean stuff out.


Posted by: JPool | Link to this comment | 11- 8-08 11:42 AM
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Once the contract free society is in place, the turnip-based monetary system is the logical next step.

Geese mate for life and also practice adoption. I've seen a goose pair with a raft of more than twenty goslings, of which fewer than half were theirs. Presumably the parents of the extra goslings were off having hot faithful monogamous sex. Why the adoptive parents were doing it I don't know.


Posted by: John Emerson | Link to this comment | 11- 8-08 11:50 AM
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having hot faithful monogamous sex

Of which you fervently disapprove.


Posted by: LizardBreath | Link to this comment | 11- 8-08 11:55 AM
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Were we screwed by a culture of stinkers?

Yes. But it's the American way, Heebie. If you don't like it, you can move to France.


Posted by: soup biscuit | Link to this comment | 11- 8-08 11:56 AM
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We're people, not geese, LB, whatever you may say.

"You silly goose" is quite rightly a sexist insult. Mating for life is obviously the most extreme form of relationshipping.

We need to rise above our animal nature, especially our brantine nature.


Posted by: John Emerson | Link to this comment | 11- 8-08 12:00 PM
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Tom and Daisy Louis and Marie don't always win.

A) Re regulation of incomprehensible financial instruments:reserve requirements? Anybody wants to act like a bank, borrow short & lend long, needs to be capitalized like a bank.

B) Remove incentives with confiscatory tax schedules. 99.9999% of everything over a million.
Since I like actors & writers, I would like to bring back income-averaging.


Posted by: bob mcmanus | Link to this comment | 11- 8-08 12:01 PM
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In all seriousness seriously though, from what I understand, the consequences of the piracy are ameliorated by our reserve currency status. We could probably borrow 5 trillion next year at 2%, and the world would loan it to us.

Why? Because the US is the safest nation in the world for plutocrats. No revolution possible, sheeet, not even a possible move to the left to get back a seriously progressive income tax. Even the most brutal oligarchies have to worry about the pitchfork crowd, so will park their ill-gotten gains in treasuries.

They have us under control, well-pacified.


Posted by: bob mcmanus | Link to this comment | 11- 8-08 12:10 PM
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Why? Because the US is the safest nation in the world for plutocrats.

Bob, I love how you can work pessimism & gloom back into even the most optimistic predictions.


Posted by: rob helpy-chalk | Link to this comment | 11- 8-08 12:16 PM
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I dreamed of a press conference question yesterday.

"President-Elect Obama, currently in America, 1% of the population owning 90% (whatever) of the wealth. Could you tell us what you would like that number to be at the end of your two terms, even if not achieved, just as a goal?"

"2% of the population owning 90% of the wealth."

A numerical goal that wasn't so humiliating that Obama would even answer the question would involve near-revolution & civil war, so he couldn't deal with it.


Posted by: bob mcmanus | Link to this comment | 11- 8-08 12:19 PM
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1. Treasury buys banks' common stock.
2. Treasury asks banks to put a large proportion of bonuses as company stock into bankers' retirement accounts.
3. Even the riskiest types will not fuck with their own retirement money.

QED

*Alternative to 1, ask really nicely - the Paulson way!


Posted by: disaggregated | Link to this comment | 11- 8-08 12:20 PM
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Rob, if you trust in Jesus you too can become a plutocrat. Bob was trying to tell you that.


Posted by: John Emerson | Link to this comment | 11- 8-08 12:23 PM
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Oh, oh, a political economy thread. I've been holding this post, caressing, hell masturbating to it.

Obama and the Existential Crisis of American Capitalism

I think y'all will find it pretty funny. It will feel so familar.

Gone.


Posted by: bob mcmanus | Link to this comment | 11- 8-08 12:30 PM
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I do think there ought to be some way to define financial products that excludes commercial and other "real-world" loans - maybe something involving the collateral or length of time involved. But not having much knowledge of either finance or law, I don't think I can contribute substantively to it.

Is it likely that ratings agencies will be prohibited from accepting fees to rate financial products from their sellers? It seems an obvious first response to what we've heard about their role. Obviously, though, many sellers are simultaneously buyers, so more is probably required.


Posted by: Minivet | Link to this comment | 11- 8-08 1:07 PM
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There may be some definition that would draw a nice clean line -- I'm certainly no one's idea of a finance expert -- but my belief as I sit here is that a clean line is impractical.


Posted by: LizardBreath | Link to this comment | 11- 8-08 1:19 PM
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Kill them all and let God sort them out.


Posted by: John Emerson | Link to this comment | 11- 8-08 1:20 PM
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Ugh. I just got back from a revival of a political salon that used to connect non-profit-y political people in the late 90s. Everyone was talking about "where do we go from here? With all our hope? And change?" The only marginally politically literate person was a business reporter who explained that once Obama announces Summers at Treasury and Rubin at the Fed, the markets will regain their faith and he'll be able to govern.


Posted by: Wrongshore | Link to this comment | 11- 8-08 1:21 PM
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Seriously, shouldn't we (understood as people with even remotely relevant skills) be hammering down the doors of the federal government looking for jobs? What I'm really hoping for is that there's a generation of idealistic civil servant wannabes who will be inspired by Obama into drowning the Feds in lefty idealism.

I'd be burying Justice in resumes if I could, but I started this job six months ago and there's a two year committment.


Posted by: LizardBreath | Link to this comment | 11- 8-08 1:25 PM
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I keep saying, I'm available for any Cabinet-level position and will even consider positions with slightly less authority.


Posted by: ben w-lfs-n | Link to this comment | 11- 8-08 1:28 PM
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John, thanks for the link to my post about Obama and the crisis of American capitalism, much appreciated


Posted by: Richard Estes | Link to this comment | 11- 8-08 1:40 PM
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Bob, not John.


Posted by: LizardBreath | Link to this comment | 11- 8-08 1:41 PM
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I've sent my resume in to Rahm if he needs a hog farmer.


Posted by: John Emerson | Link to this comment | 11- 8-08 1:41 PM
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54: Ask me again in 2011 when I (hopefully) get my MPP.


Posted by: Minivet | Link to this comment | 11- 8-08 1:42 PM
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47

Even the riskiest types will not fuck with their own retirement money.

This is empirically false to say the least.


Posted by: James B. Shearer | Link to this comment | 11- 8-08 1:46 PM
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Also, they said yesterday on the news that Conventional Wisdom Sez it was a mistake not to bail out Lehman Brothers. I know that letting Lehman Brothers fail led the mutual somethings to break the buck, which instigated all this panic and froze the paper money market. But I assert that it was not a mistake because:
1) Economic panic went a long way towards getting Obama elected, and
2) Fuck these wall street firms. I want to put a little fear of God in them.

But you didn't make the decision. This is not a convincing argument that it wasn't a mistake from the point of view of the people who did make the decision. And the Iraq war also helped get Obama elected, does that mean you don't think it was a mistake?


Posted by: James B. Shearer | Link to this comment | 11- 8-08 1:52 PM
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54

I'd be burying Justice in resumes if I could, but I started this job six months ago and there's a two year committment.

A moral or legal committment? And it might be possible to get it waived for a good cause.


Posted by: James B. Shearer | Link to this comment | 11- 8-08 1:54 PM
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A girl has the right to change her mind, LB. Flutter around distractedly and bat your eyelashes.


Posted by: John Emerson | Link to this comment | 11- 8-08 2:00 PM
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Oh, it's not legally enforceable -- 13th Amendment and all that. But I gave my word, and there's a fair shot I'd take a reputational hit and alienate people I might run into again down the road. Two years isn't a long time, and I'll see what I want to do in spring 2010.


Posted by: LizardBreath | Link to this comment | 11- 8-08 2:06 PM
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and I'll see what I want to do in spring 2010

Your state's senior Senator will be up for a reëlection. You might be the sole primary challenger.


Posted by: Stanley | Link to this comment | 11- 8-08 2:20 PM
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See my last post. Leaving realism entirely to one side, a political career would kill me. I am the anti-Bill Clinton.


Posted by: LizardBreath | Link to this comment | 11- 8-08 2:27 PM
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I am the anti-Bill Clinton.

Didn't you just make a post about how every senior citizen in western PA fell in love with you? All you have to do now is learn to like the process.


Posted by: Idealist | Link to this comment | 11- 8-08 2:33 PM
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You don't get blow jobs from aides half your age? You don't have a seekrit drug-smuggling airport? No Lizardbreath Death List? No Communist affiliation? These are all good things.


Posted by: John Emerson | Link to this comment | 11- 8-08 2:35 PM
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You don't get blow jobs from aides half your age?

But I do have a crack staff of technicians working on ways to make this possible. And aides half my age aren't even minors anymore!


Posted by: LizardBreath | Link to this comment | 11- 8-08 2:37 PM
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18: "you aren't allowed to make up new financial instruments just to avoid regulation anymore"?

eg You wouldn't have been able to use leasing to circumvent rent regulation.


Posted by: Econolicious | Link to this comment | 11- 8-08 3:45 PM
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What makes me vant blood? This.

http://news.yahoo.com/s/ap/20081108/ap_on_bi_ge/bush_automakers


Posted by: gswift | Link to this comment | 11- 8-08 6:00 PM
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71: It seems pretty messed up to me that GM is still paying a dividend. You would think a company that's been hemorrhaging money for years wouldn't need the government to tell it to stop writing checks to its stockholders.


Posted by: Spike | Link to this comment | 11- 8-08 6:52 PM
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72: Wouldn't that cause all their stockholders to go away, leaving GM with even less money? (Of course I know nothing whatever about this, or why any business does anything.)


Posted by: mcmc | Link to this comment | 11- 8-08 8:12 PM
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But I do have a crack staff of technicians surgeons working on ways to make this possible. fixed


Posted by: Tiny Hermaphrodite | Link to this comment | 11- 8-08 8:21 PM
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74: Come on, the concept of "blowjob from a subordinate" is gender-transferable, and it doesn't require surgery.


Posted by: foolishmortal | Link to this comment | 11- 8-08 8:28 PM
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I like "blowjob" as a forced synonym for cunnilingus. The act needs a colloquial noun. "An eating out" just doesn't do it.


Posted by: Wrongshore | Link to this comment | 11- 8-08 8:41 PM
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"eating out" is gendered. I think the generic blowjob works just fine. Everybody knows what you're talking about.


Posted by: foolishmortal | Link to this comment | 11- 8-08 8:53 PM
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I thought "head" was the non-gendered term? Blowjob doesn't work, and anyhow, do we really need to be de-gendering from the male side again? "Dude", "guys", now "blowjob"? What's next? "Yeah, she went to the gynecologist to get a dick exam."


Posted by: Sifu Tweety | Link to this comment | 11- 8-08 9:18 PM
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Semantics aside, do you really expect me to ignore such low-hanging fruit, fm?


Posted by: Tiny Hermaphrodite | Link to this comment | 11- 8-08 10:12 PM
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comment 44 from Bob is actually pretty accurate, I think.


Posted by: PGD | Link to this comment | 11- 8-08 11:26 PM
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My current impression is that outside the singular case of AIG, credit default swaps have not been that big of a deal. Since AIG had a AAA rating, they had much looser collateral requirements for their CDSes than most issuers, which allowed them to get into much bigger trouble.

The big issue for American banks has been the exposure to mortgage-backed securities, not credit default swaps. These were radically mispriced, and all that tranching business allowed market participants to turn them into highly-rated debt, which meant they could be counted as reserves. So banks took large losses (and any time banks start taking large losses you have a banking crisis) and in the part of their portfolio that was supposed to be their insurance in the event that they took large losses.

PGD, I found your summary of Daniel's argument clearer than Daniels original argument. Thanks.


Posted by: Walt Someguy | Link to this comment | 11- 9-08 7:28 AM
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There are ocasional discussions of instruments on the econblogs. Here's one from SaturdayAngry Bear riffing off a Felix Salmon explanation.

I guess the aspects I find interesting are to what degree we should allow non-governmental actors to create money and how much we should allow. As an ignorant P-K, I consider money endogenous, which means money affects not only the price-level but can directly increase & decrease output.

Actually, endogenous money may mean that we can't directly control quantity or velocity at all.


Posted by: bob mcmanus | Link to this comment | 11- 9-08 8:12 AM
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I don't know anything, or not enough to be confidant, but I opposed the bailout and many of the popular measures because I am not sure you can increase liquidity in a deflationary economy.

Here's a tangential post by Paul Rosenberg on pathological Keynesianism

I think I differ with PR, and many others on tax cuts for the middle class, in that almost everyone who pays taxes is drowning in debt, and any cash sent their way in this recession will get "saved." So except at the very bottom, tax cuts or transfers won't be very stimulative.


Posted by: bob mcmanus | Link to this comment | 11- 9-08 8:24 AM
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83.3 is very true. An insanely liberal bankruptcy law would probably do much more for the economy than any degree of tax cuts.


Posted by: foolishmortal | Link to this comment | 11- 9-08 8:27 AM
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Deep down, I want the big three automakers to fail as punishment for making crappy gas guzzlers that appeal to vanity rather than investing in effecient technology, alternative fuels, and electric vehicles. Does this make me a bad person?


Posted by: rob helpy-chalk | Link to this comment | 11- 9-08 9:19 AM
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60: I really just vant blood. If people's actions will almost bring down teh system, it should affect not only future income streams, but also bonuses paid for the action.

Of course, nothing like this will ever happen. No Wall Street firm will begin it since all the talent would flee to other banks.

84: An insanely liberal bankruptcy law would tighten the supply of credit like [insert joke about behind here]. You think this is a credit crunch?


Posted by: disaggregated | Link to this comment | 11- 9-08 9:19 AM
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85: Me too. And for sabotaging legislation that promotes public transportation and alternative-fueled cars.


Posted by: heebie-geebie | Link to this comment | 11- 9-08 9:27 AM
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85: What happens to all the pension-holders? Other than that, the reason their industry is suffering is that their products suck.


Posted by: Cala | Link to this comment | 11- 9-08 9:30 AM
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85: They make cars that noöne really wants at $4 per gallon of gas. Historically, the market has killed firms in similar situations.

It will suck for their retirees, employees and suppliers at least, but noöne is weeping for farmers.

In 1870, there were 19 million US farmers. In 2004? 800,000.


Posted by: disaggregated | Link to this comment | 11- 9-08 9:32 AM
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88: Someone wrote somewhere that an elegant way to lay the big 3 to rest would be to toss them into bankruptcy and have the government pick up the tab on pensions.

Elegant in the sense that, if our major concern is pension obligations, why not meet just that?

Would that be cheaper than a bailout? Beats me.


Posted by: disaggregated | Link to this comment | 11- 9-08 9:36 AM
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85: Nah, I want them to all fail for that, plus being really crappy companies. This actually ties in with the dividends issue, as on multiple occasions in the past couple years, GM and Ford stock have been worth only about the same as the net cash they have on the books, or even less. Basically, the idea of that cash getting paid out to shareholders as dividends was one of the only things keeping the prices up, since the businesses themselves are fucking awful. There was joking talk (though it certainly would've been forbidden by their debt covenants) that they should just pay out all the cash as a special dividend, square up the shareholders, and declare bankruptcy right away rather than pissing away yet more value by letting the company continue operating.

Also, LB's been spot-on in this thread. The biggest problem is that unregulated contracts for complicated debt instruments are probably very difficult to sort out from corporate contracts that no one wants to regulate. Every contract for purchasing raw materials in the future is an unregulated forward. CDOs were pretty much just profit-sharing agreements (pretty common in corporate projects, I thought) on a closed mutual fund of bonds (also incredibly common, and very very rarely harmful). On the bright side, her belief that the administration would be flooded with the resumes of bright young idealists is absolutely true. Huge amounts of the best campaign workers are going to join the administration. Pretty much all the national HQ staff are moving to DC and starting in January if they aren't already on one of the transition teams. I briefly considered putting out the feelers for something at the SEC, but I'll probably wait a couple years.


Posted by: Po-Mo Polymath | Link to this comment | 11- 9-08 9:41 AM
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Feel good. (Just a few photos, no videos.)

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Posted by: heebie-geebie | Link to this comment | 11- 9-08 10:12 AM
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One of my students on a test defined "epicureanism" as "sex without foreplay." and "asceticism" as "sex with foreplay."

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Posted by: rob helpy-chalk | Link to this comment | 11- 9-08 10:17 AM
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From a journal on procrastination: "I believe if a person were not to finish an assignment then it might be hard for them to finish it."

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Posted by: heebie-geebie | Link to this comment | 11- 9-08 10:27 AM
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Then hedonism is...?


Posted by: essear | Link to this comment | 11- 9-08 10:27 AM
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92:Those are so obviously staged promos for the upcoming Hallmark movie about the campaign. Not that they didn't make me cry regardless.


Posted by: Sir Kraab | Link to this comment | 11- 9-08 10:34 AM
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but noöne is weeping for farmers.

We certainly do. In a hundred different ways, including largesse directed towards their agribusiness successors.


Posted by: JP Stormcrow | Link to this comment | 11- 9-08 11:15 AM
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I'm so sick of reading this racist shit from my students. They're eternally annoyed by minorities who keep wanting to revise the history books to take credit, instead of just getting over it already, it's over, they're the ones who're racist anyway or they wouldn't keep bringing it up.

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Posted by: heebie-geebie | Link to this comment | 11- 9-08 1:01 PM
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What happens if you are Mexican-American and go to a hospital without health insurance? You get deported to Mexico even if, as in one of the cases, you are a natural-born US citizen with down syndrome. Oh yeah, also you are an infant.

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Posted by: rob helpy-chalk | Link to this comment | 11- 9-08 2:31 PM
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Told of the progress that the younger Mr. Torres had made, Sister McBride said, "That's wonderful," adding that she thought it testament to the emergency care at her hospital. "Maybe if he had been in a different setting, he may not have survived," she said.

Ooooh, Sister McBride, you do not come off well in this story.


Posted by: redfoxtailshrub | Link to this comment | 11- 9-08 3:28 PM
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If people's actions will almost bring down teh system, it should affect not only future income streams, but also bonuses paid for the action. . . . Of course, nothing like this will ever happen.

No one who was at Lehman will be getting a bonus this year, if that's any consolation. On a broader scale, a lot of the securities-based compensation awarded in the last few years is, for the moment anyway, worthless.


Posted by: babble | Link to this comment | 11- 9-08 5:03 PM
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I thought you were allowed to have all sorts of out-of-whack penalties for blue collar crime, but white collar criminals get winked at and re-elected to congress. I think you're confusing white people with brown people, no?

Fortunately, many of the main players involved in the subprime fiasco are brown enough - or at least swarthy enough - to be smitten by the heavy hammer of American jurisprudence. Stan O'Neal and Osman Semerci at Merrill Lynch, to take two.


Posted by: ajay | Link to this comment | 11-10-08 10:46 AM
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The act needs a colloquial noun

A going down upon ?


Posted by: lw | Link to this comment | 11-10-08 10:54 AM
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One of my students on a test defined "epicureanism" as "sex without foreplay." and "asceticism" as "sex with foreplay."

Epicureanism is exquisite foreplay only, no sex, and asceticism if no foreplay, no sex.


Posted by: PGD | Link to this comment | 11-10-08 11:25 AM
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if=is


Posted by: PGD | Link to this comment | 11-10-08 11:25 AM
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Fortunately, many of the main players involved in the subprime fiasco are brown enough - or at least swarthy enough - to be smitten by the heavy hammer of American jurisprudence. Stan O'Neal and Osman Semerci at Merrill Lynch, to take two.

Here in the US we have all seen Republican ads about how Frankin Raines teamed up with Obama to destroy the economy.


Posted by: Cryptec Nid | Link to this comment | 11-12-08 7:59 AM
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