From a profane and informed reader:
I've actually spent 15 years in the financial sector, and I actually understand the credit crisis - and there is a crisis, no matter what the multitudes who don't know jack about it say.Two quick points on the above post and I'll leave you alone:[David Cay] Johnston is way too smart a guy to be tossing around meaningless personal anecdotes as evidence of the absence of a credit crunch. The crunch doesn't start in the consumer sector, that's where it ends. It starts in the financial sector, and this very real, easily measurable crunch has been intermittently entering the red zone for several weeks. I won't bother playing unknown, self-proclaimed expert here. Just do a google news search for "overnight lending rate" and let the financial news explain it to you. Better yet, google "TED spread" and check out the stats. They're scary - scary in a way that hasn't been seen since the late-Carter and early-Reagan years (when we had 17% interest rates for prime mortgages). Bad mortgages are incidental, at this point.Second, as for your point about "enticement" of Wall Street, I totally agree that we should just swoop down and take control of the whole lot of them. But what Paulson and Bernanke are getting at is that there's a very distinct division of labor in finance, and that the corner of Wall Street which produced this mess is wholly operated by testosterone-fueled assholes with God complexes. Even now, while the straight banking and insurance sectors are pissing their pants, the douchebags that crapped out this whole mess still think they're invincible. I know I'm getting a little "strawman" here, but I know these jerks. They really believe that don't need bailed out. They think they can cook up some new, crazy derivative to sit on top of the failed credit default swaps, restore the Wild West credit market (and by extension, liquidity), and make a shitload of money. They're complete idiots. Diabolical, narcissistic idiots, but idiots nonetheless. Bernanke and Paulson quite rightly fear that a voluntary program that isn't full of gimmes and profits will have no participants and will solve nothing. These guys (and a few women) are already rich beyond most people's wildest dreams, and don't believe that can ever change. I think Paulson and Bernanke really fear that these assholes will continue to take a series of increasingly big, stinky dumps on the global economy if we don't kiss their asses and beg them to let us buy their shit. Again, I think we should be sending jackbooted thugs into their $12M meat-packing district co-ops and take every last saleable thing they own and give it to Sarah Palin to auction on eBay. Sorry - I ended up rambling anyway. As I think you can guess, I'm getting really fed up with this emerging "there's no crisis" meme. It's fueled entirely by ignorance and fury over a too-clever-by-half Republican political rope-a-dope. Keep reading Krugman, etc. They get it.
