Wall Street Survival - Futures, Options and Shocks
Posted by slowsmile September 22, 2008
“Save Wall Street !! Save us !!….Only then can other countries survive this crisis !!” - Henry Paulson
So, predictably, the Wall St bail-out package from Paulson has now trebled to $700 billion (read tax payers money). And today, the US government has allowed two Wall Street majors - Goldman Sachs and Morgan Stanley - to switch their status to become bank holding companies. The move - all part of the Wall Street panic restructuring campaign, will also give them access to US Federal Reserve Support (read US tax payers money). The package, initiated by the current high guru of the Treasury - Henry Paulson - will set up a fund to buy back much of the bad debt held by US financial institutions.
As well, Mr Paulson has been pleading with the international community,
urging them to initiate and adopt similar policies. “Save Wall Street !! Save us !!….Only then can other countries survive this crisis !!”. This is what Paulson is effectively saying. Meanwhile, certain countries in the Middle East, China and Russia must be watching all this US economic turmoil, and rubbing their hands with glee. There goes the respect…
From the presidential candidates, McCain was apparently truly “enraged” with the greed of Wall St and also conveniently blamed Bush Jnr and Congress (but was careful not to blame The Senate). He also said the rescue plan should be funded by cutting government waste rather than through taxation. Not sure what he means by this somewhat fuzzy solution. By “government waste” does he mean Ben Bernanke and The Fed ? Somehow I doubt it, since McCain always seems to blame others and has about as much depth of economic thought as a puddle in the desert.
Even worse, Obama’s suggested solution to the crisis would be to hire Henry Paulson to work within his new government. Perhaps Obama should also upgrade Ben Bernanke to a position - let’s see - maybe Comptroller General within the Government Accountability Office ? Perhaps then, Mr Bernanke - with some real responsibility and accountability for once - might actually learn something about accountancy as well as proper fiscal economics ? My own carefully considered view is that perhaps Mr Bernanke should indeed move on and, as a brilliant Economics PhD graduate from MIT, I believe he really has learnt all there is to know about the use of the printing press, don’t you ?
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