September 24, 2008

'Grave Threats' To Economy

CNN notes the Fed chairman on 'Grave Threats' To Economy, but the lack of oversight clause seems more like a tactic to avoid a taxpayer equity stake and push instead a gift to Wall Street.

picture via Digby

Update: It's not a matter of the complexity of the "financial instruments" that a "computer tells you" are real. It's a matter of biased assumptions and dummy variables; see How Wall Street Lied to Its Computers at The finance guys weren't interested in resilient systems. The players already knew that these "instruments" were Ponzi schemes or something similar and that they couldn't always controls the herds.

Of course investors don't understand, because the game requires they don't! Now that The Fed and its allies want the marks to cover the losses, we should really question where "the money has just disappeared" to.

The actual wealth is still around; it was just skimmed off quick to protect it. After all, in Pottersville we serve hard drinks for men who want to get drunk fast.

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