> http://www.rgemonitor.com/blog/roubini/
> Thus, the Treasury plan is a disgrace: a bailout of reckless bankers,
> lenders and investors that provides little direct debt relief to
> borrowers and financially stressed households and that will come at a
> very high cost to the US taxpayer. And the plan does nothing to
> resolve the severe stress in money markets and interbank markets that
> are now close to a systemic meltdown. It is pathetic that Congress did
> not consult any of the many professional economists that have
> presented - many on the RGE Monitor Finance blog forum - alternative
> plans that were more fair and efficient and less costly ways to
> resolve this crisis. This is again a case of privatizing the gains
> and socializing the losses; a bailout and socialism for the rich,
> the well-connected and Wall Street. And it is a scandal that
> even Congressional Democrats have fallen for this Treasury scam that
> does little to resolve the debt burden of millions of distressed
> home owners.
Of course, if there isn't some sort of bailout pretty soon, the hedge fund industry (i.e. those 401Ks which were supposed to replace Social Security) blows up. Roubini's alternative, loosely modeled on the Scandinavian financial rescue: the Gov't should purchase failed banks outright at a massive discount, let the fat cats hang, and provide debt relief for homeowners.
What Roubini doesn't mention is that the ultimate guarantors of any bailout have to be China, Japan, the EU, Russia and the petro-states financing the US current account deficit (i.e. they need to keep buying T-bills). The quid pro quo is obvious: getting US troops out of Iraq and Afghanistan and official acknowledgement that we live in a multipolar world. I have no illusions about Obama, but I have to say, he's a sharp guy and an intelligent politician and will be able to do a deal. But if the MacChurian Candidate wins or steals the election, it's game over.
-- DRR