notes oct 13 monday 2008
October 13, 2008 § Leave a comment
.from calculated risk blog quoting Krugman in The Great Unravelling.
.. It seems clear to me that one should regard America’s right-wing movement — which now in effect controls the administration, both houses of Congress, much of the judiciary, and a good slice of the media — as a revolutionary power in Kissinger’s sense. That is, it is a movement whose leaders do not accept the legitimacy of our current political system. [pp. 5-
8:58 the problem is will bailing out banks also bail out society? Or has banking got us in a debt problem that means assets sum to near zero? My view is that the problem of interest requiring exponential growth has got us in a very bad situations. Is the a way to recover within the current rules?
9:02 from calculated risk
Apparently Paulson is considering making equity investments in strong banks to keep them lending. This would be voluntary. From Interim Assistant Secretary for Financial Stability Neel Kashkari this morning:
Equity purchase program: We are designing a standardized program to purchase equity in a broad array of financial institutions. As with the other programs, the equity purchase program will be voluntary and designed with attractive terms to encourage participation from healthy institutions. It will also encourage firms to raise new private capital to complement public capital.
I wonder what “attractive terms”means?