December 05, 2007
– Comments (4)
I was invited to babble on KMOX in St. Louis today, with Paul Harris. It was a good time. We talked mortgages and bailouts.
Here's a link.
Heard it live. Felt like I was back in Econ 51 at UMC. Your comment, privatizing profits, socializing losses pretty much hits the nail the move on the head. The only good thing to come out of this is that the appetite for anything less than old school mortgage investment should be completely sated.
As far as Goldman Sachs, shorting the very debt instruments they were creating, I hope there are a large number of "walks of shame." I am not talking white collar country club prisons, I am talking about the big house. These are the "Smartest Guys in the Room", they knew exactly what they were creating and sought to profit from it. Any chance we will see a witch hunt?
Time will tell, but I my gut tells me that this is just delaying the pain. The "invisible hand" will correct the markets. Government intervention normally makes it exponentially worse.
Thanks TDRH. Gotta keep the record straight, though: Someone else deserves credit for the "privatize the profits, socialize the losses" line. I'm not sure who coined it, but it's becoming very popular -- for good reason -- in this discussion.
"Some people might call that sleazy... I might be one of them". That line is pure Bent! Funny stuff, as always.
Hee. That's a truthful waffle. I really am not sure just how sleazy it is. Part of me thinks it's 100%, let's get the torches and pitchforks sleazy. Another part shrugs and goes "eh, what else can you expect?" I mean, if someone were willing to pay me loads of money for utter garbage, and I could sell it for a premium, then turn around and short it (or closely related garbage), I'm sure I'd have to think about it.