Digging in & Getting Dirty: Making the Bailout Work

I saw this a few days back at Clusterstock and thought the question made a bunch of sense. There are good reasons why accounting hocus pocus (ie banning mark to market accounting) is a bad idea. IMHO we are much better off taking our medicine now.

A key component of successful financial system bailouts in the past has been forced asset writedowns, in which the government makes banks reduce the carrying value of this assets to nuclear-winter levels before the government injects new equity. This move does several important things:

  • It removes the fear that banks and bank investors will be hammered by future writedowns
  • It turns the banks’ attention 100% to putting the new equity to work
  • It attracts private capital (because investors won’t worry about getting sandbagged)
  • It eliminates the death-by-a-thousand-cuts scenario that killed Japan. Continue reading “Digging in & Getting Dirty: Making the Bailout Work”

Digging in & Getting Dirty: Making the Bailout Work

I saw this a few days back at Clusterstock and thought the question made a bunch of sense. There are good reasons why accounting hocus pocus (ie banning mark to market accounting) is a bad idea. IMHO we are much better off taking our medicine now.

A key component of successful financial system bailouts in the past has been forced asset writedowns, in which the government makes banks reduce the carrying value of this assets to nuclear-winter levels before the government injects new equity. This move does several important things:

  • It removes the fear that banks and bank investors will be hammered by future writedowns
  • It turns the banks’ attention 100% to putting the new equity to work
  • It attracts private capital (because investors won’t worry about getting sandbagged)
  • It eliminates the death-by-a-thousand-cuts scenario that killed Japan. Continue reading “Digging in & Getting Dirty: Making the Bailout Work”

Peggy Noonan on Sarah Palin: "She doesn't seem to understand"

Peggy Noonan is a columnist for the Wall Street Journal and is conservative. She doesn’t appear impressed by this nation’s hottest gov: (subscription required)

….we have seen Mrs. Palin on the national stage for seven weeks now, and there is little sign that she has the tools, the equipment, the knowledge or the philosophical grounding one hopes for, and expects, in a holder of high office. She is a person of great ambition, but the question remains: What is the purpose of the ambition? She wants to rise, but what for? For seven weeks I’ve listened to her, trying to understand if she is Bushian or Reaganite—a spender, to speak briefly, whose political decisions seem untethered to a political philosophy, and whose foreign policy is shaped by a certain emotionalism, or a conservative whose principles are rooted in philosophy, and whose foreign policy leans more toward what might be called romantic realism, and that is speak truth, know America, be America, move diplomatically, respect public opinion, and move within an awareness and appreciation of reality. Continue reading “Peggy Noonan on Sarah Palin: "She doesn't seem to understand"”

Peggy Noonan on Sarah Palin: “She doesn’t seem to understand”

Peggy Noonan is a columnist for the Wall Street Journal and is conservative. She doesn’t appear impressed by this nation’s hottest gov: (subscription required)

….we have seen Mrs. Palin on the national stage for seven weeks now, and there is little sign that she has the tools, the equipment, the knowledge or the philosophical grounding one hopes for, and expects, in a holder of high office. She is a person of great ambition, but the question remains: What is the purpose of the ambition? She wants to rise, but what for? For seven weeks I’ve listened to her, trying to understand if she is Bushian or Reaganite—a spender, to speak briefly, whose political decisions seem untethered to a political philosophy, and whose foreign policy is shaped by a certain emotionalism, or a conservative whose principles are rooted in philosophy, and whose foreign policy leans more toward what might be called romantic realism, and that is speak truth, know America, be America, move diplomatically, respect public opinion, and move within an awareness and appreciation of reality. Continue reading “Peggy Noonan on Sarah Palin: “She doesn’t seem to understand””

Katrina RICO case stayed until mid-December

This Minute Entry on the docket of Shows v State Farm speaks for itself.

Minute Entry for proceedings held before Magistrate Judge Linda R. Anderson: Telephone Conference held on 10/14/2008. Participants: Bryan O. Blevins and H. Scott Spragins. The Court discussed the present status of the case with counsel and informed them that the case would be stayed until 12/19/2008. A telephonic status conference will be scheduled for that date also. (WG) (Entered: 10/14/2008)