The director of the Congressional Budget Office said yesterday that the proposed Wall Street bailout could actually worsen the current financial crisis.
During testimony before the House Budget Committee, Peter R. Orszag — Congress’s top bookkeeper — said the bailout could expose the way companies are stowing toxic assets on their books, leading to greater problems.
‘Ironically, the intervention could even trigger additional failures of large institutions, because some institutions may be carrying troubled assets on their books at inflated values,’ Orszag said in his testimony. ‘Establishing clearer prices might reveal those institutions to be insolvent.’
As economists tend to do, the CBO director played both sides and also said, “If there’s no package whatsoever, there is a very substantial risk of utter financial market chaos.” ( http://www.reuters.com/article/bondsNews/idUSWBT00980520080924 ) A classic damned if we do, damned if we don’t.
Jim Cramer and Ali Velshi want to be friends with benefits with Paulson
As of today I agree completely with that assessment.
Looking at the subsance of this bailout I see more elephants in the room than there were at the “Hookers & Blow” party in St. Paul.
Why the amount?
Why NOW NOW NOW?
Why are there no summit meetings of the industry leaders wherein someone says “The US Taxpayer will MATCH whatever you guys put into an escrow fund”
…and the most popular pachyderm…what was the deal with section 8? SOMEBODY wrote that, right? It’s about as anti-oversight as you can get, yet yesterday Paulson’s backpedaling faster than Lance Armstrong facing a marriage proposal. Why was it foreseen to be necessary?
Let’s sleep on this whole thing, like, say…until Nov 5th.
Yeah, that would probably send some ripples through the marketplace which would be, no doubt, uncomfortable to bear. But is anyone else bothered by the underlying attitude that it’s ok, nay, essential, to lie and cover up?
You discover someone is doing something illegal. Should your reaction be “This has to be stopped.” or “This has to be covered up so it can be allowed to continue.”?
I say let the chips fall where they may. As always those at the top, investors, and those legeslators pushig for this will benifit. If credit dries up a little , perhaps we need to tighten our belts to what we can afford.Thats how our parents made America great…