I’ve run across several extremely interesting observations from econbloggers this morning that I thought I’d share with you.
• Brad Setser has an interesting take on PBoC President Zhou’s comments on the dollar of last week. As I read it he sees it as continuing justification for China pegging the yuan to the dollar.
• Edward Harrison at naked capitalism argues an interesting case: Obama isn’t the 21st century Roosevelt but the 21st century Hoover.
• Henry Blodget (along with others at Clusterstock) wonders why bankers, notably BoA’s Ken Lewis, are getting such kid glove treatement while GM’s Rick Wagoner gets the axe. I think I can explain that. The White House’s pool of economic advisor’s isn’t filled to the brim with auto execs.
• The Good News Economist lists the positive indications for the economy.
That’s the lot.
Speaking of eye catchers: If true, this is incredible.
http://zerohedge.blogspot.com/2009/03/exclusive-aig-was-responsible-for-banks.html
This was emailed to me. I have no idea if “Zerohedge” is a reputable site or whether this piece has any credibilty. Do any readers know?
(DS – I hope its OK to post something like this on your site.)
No problem, Drew.
It’s certainly interesting. If anybody ever had the idea that we could shove $1 trillion at banks and insurance companies and not distort the market to the point at which nobody could figure out who had the button, they were kidding themselves.
Interesting, but I question the whole conspiratorial ring about AIG unwinding portfolios. I thought that’s what AIG was supposed to do. I thought AIG was getting out of some of its business lines, and that the government funding helped it unwind over a more generous time frame than insolvency in the midst of a credit crisis. Also, the government was worried less about AIG, than the (too big to fail) banks AIG had deals with.
PD, I think the issue is less one of conspiracy-hunting than of trying to cipher out what’s going on with the banks. If most or all of the the banks’ bottom line can be attributed to federal money, it’s different than if it isn’t.
PD –
It seems to me the issue is one of 1) preferential treatment of bank’s (private) security holders and 2) transparency. Now, you could say to me “what are you talking about?” The bank’s securities holders are getting gobs of govt money. Yes, but not at the detriment of AIG’s. Also, it doesn’t seem to me that there is a general understanding that this is going on.
In addition, as I snarked to odo over at OTB, does he support Obama’s announcement today that all Citi and BofA shareholders get GM cars for half price??
OK, conspiracy-hunting might be a better characterization of your regular commentor that predicts the new CEO of GM will be driving a Ford. (Oh yea, that’s me)
But Tom Maguire pointed out a few weeks ago that the AIG money was going to the big banks, including foreign banks. I guess that made sense to me, to the extent that AIG was not too big to fail, the banks for whom it was contracting for counterparty risk were.
Transparent? Hell no. One of the reasons I commented was to see if I might be corrected on my assumption that AIG is getting out of its more risky ventures. If I were running AIG, I’d be advertising it; its name has become synonymous with risk and uncertainty; how can it sell insurance?
BTW/ isn’t the reason that Ken Lewis is still around that he is doing the government’s bidding, specifically he got BofA to buy Merill Lynch? Is the CEO of Chrysler going to be around in 30 days? Probably depends on whether he makes the deal.