Desi Tamasha

The market bailout is going in the totally WRONG direction.

• For one, it will try to "restore" house prices. But the prices were WRONG! The demand/supply equation in housing was out of whack. So why would you want to restore that???
• It will increase the budget deficits to unimaginable levels. What's the point of that? It'll take the economy decades to work through this deficit. We are talking about a lost GENERATION or two, rather than a lost decade.
• No one will ever touch the assets the government is buying for $700 billion or more. The foreign governments are going to look elsewhere for growth going forward, and are never again likely to touch the toxic stuff the government wants to peddle.
• It creates disincentives for poorly-managed risk-management-less companies like Merrill and Morgan to clean up their act and exit the scene; read, for example, this morning's stories on how Merrill's shareholders are planning to void the BofA transaction and how Morgan and Wachovia have almost stopped talking

Chuck Schumer, of all people, seems to have a better plan! Please call Mr. Paulson's bluff before it's too late...

Update: The time has come to save capitalism from the capitalists.

Update Update: Opposition is kicking in and this ain't likely to go thru. At least not this weekend. A relief!

Update 3: WTF! This is a freakin' blank check!
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