<http://doughenwood.wordpress.com/2009/02/26/obama-coddling-bankers-indeed/
Obama coddling bankers indeed
It was predicted in this space just two weeks ago: “Obama to coddle bankers.” Now we’ve got official confirmation of this from one of the prime coddle-ees: Citigroup. An analysis of the Treasury’s plan produced by two Citi analysts, Ryan O’Connell and Jerry Dorost, begins with this headline....
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By now, everyone knows (or should) that Geithner's private/public method -- tortuously crafted, it appears, to preserve 'shareholder value' -- is a sub-par deal for taxpayers.
That massive issue aside, I'm wondering if it's even sufficient to accomplish its narrow objective. That is, Team Obama obviously hopes we'll emerge from crisis with the world of structured investment vehicles, fund of funds, hedge and all the rest of it battered, but still viable.
But if this system is as fundamentally broken as it seems (and as aside, I should mention that the investment firm where I've consulted for several years is in free fall, suffering an 83 percent drop in profit in Q4 '08...it's fascinating to watch capital at the multi billion dollar level have zero clue as to what comes next), will Cash Plan Geithner actually make conditions worse -- or, as you implied when you mentioned the Japan option -- prolong crisis by shrinking from what really needs to be done?
.d.