Jim Cramer makes Bruno and I seem relatively sanguine about the economy. Jim, why don’t you tell us how you really feel:
For the record, I absolutely, vehemently, disagree with Cramer’s contention that the Fed should use its rate setting power as a way to prop up failing U.S. businesses. Jim — if you’re going to be a capitalist, then be a capitalist. Banks are failing because they made bad loans, and now they have to pay. In spite of the short term pain, it’s critical to the future of the economy that banks and other businesses get the message: screw up, and you’ll go under. There are consequences for bad behavior.
2 Responses to “Someone Woke Up on the Wrong Side of the Derivatives Market”
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How very libertarian of you. However, the real victims here are not the banks or the shareholders, but the poor people who were duped into buying houses they couldn’t afford, and will have their credit records ruined and their houses foreclosed upon. And the real villians here are the mortgage brokers, who were more than happy to lie or omit data from the loan applications, then move onto day trading or perhaps selling life settlemens when the real estate market turns over (Matski, I’m sure you will take aim at the issue of life settlements in a future episode).
Thanks for the comment. Absolutely agree with you that the victims here are the poor who were goaded into bad decisions by some slick operators … think that’s more support for my general point that these banks now need to be allowed to go under.
Not sure what you mean by life settlements. Would like to learn more … please post a link if you’ve got one.