>
>
> You may be right. If I was conspiracy minded (and I am thanks to too much
> bad television and film) I'd suggest that Greenspan pushed the White House
> to get a deal on the repeal of Glass-Steagall which will enable the
> megamergering of financial institutions prior to the big POP. These monsters
> will be TBTF (too big to fail) thereby simplifying the government's clean-up
> job. (Plus, former Treasury Secretary Robert Rubin is now one of the three
> heads heading Citigroup. Coincidence? I think not.)
Could be. On the other hand, it appears that the bubblemeisters have already made it clear that no large bank will be allowed to fail, with or without megamergers. In fact, the threshold for TBTF and socialization of risk has been relentlessly lowered during the last 10 years. First, the S&L - no question about it, their failure would probably have destroyed the financial system. Then, Mexico - a big deal, no doubt, but Mexico had already defaulted in 1982 and the US financial system withstood the blow. Last year, LTCM - a fairly small hedge fund, in spite of horror tales about leverage. What's next, bailing out Planet Hollywood?
-- Enrique Diaz-Alvarez Office # (607) 255 5034 Electrical Engineering Home # (607) 272 4808 112 Phillips Hall Fax # (607) 255 4565 Cornell University mailto:enrique at ee.cornell.edu Ithaca, NY 14853 http://peta.ee.cornell.edu/~enrique