If Kashkari can’t say that a $3 million bonus for an AIG exec is out of line his judgment is so poor, he doesn’t belong in his position.

He’s supposed to manage the TARP funds and I don’t see how that relates to whether an exec gets a bonus. It just shows his Wall Street bias.

They should be asking Paulson if he can tie bigger strings to TARP money to require $1/year CEO pay (they can’t since the law covered CEO pay) or to require firms continue to lend (they might be able to require that, though it’s hard to quantify what would be ‘normal lending’ when these banks are simply saying their decision-making is normal.

Where I think banks should be kicked in the ass is where the Fed is backing bank loans and they still insist on not loaning. That shows something terribly wrong.

mahoney: what is the social utility of CDSs?

warren: i have difficulty understanding if there is one. i am anxious to be educated but i am skeptical.

Isn’t it just another way to hedge investments? If you could buy an insurance policy to cover losses on any investments then you could make much bolder risky investments to try and make more money. That’s what it’s about…making more money.

Problem is somebody is supposed to be backing the CDSs and apparently they weren’t holding enough reserves because there wasn’t proper regulation.

Finally, I wonder, if there were sufficient regulation requiring adequate reserves on a CDS, then would they suddenly become unprofitable to offer and therefore just disappear. THAT would be interesting to know. After all, regular insurance continues to exist despite regs requiring reserves.

warren: premature for me to see much about this, but see p 19 of our report. see uk (?) example. banks were recapitalized with an explicit promise that they would continue to lend.

I don’t think anybody here had a clue the banks would take the money and still not lend.

Did the UK recapitalization occur AFTER the U.S. example? If so, they got a good lesson and knew to include the requirement for banks to continue lending.

It is a sorry spectacle indeed, which we are witnessing. The abject failure of the ruling classes (America’s Own Ari$tocracy & the Polirical Class) to ‘manage’ the economy in such fashion as to sustain our society, is nothing short of crimminal.

In fact, the deliberate disdain which they evidence as regards the rest of us should inspire something akin to a new American Revolution.

Constitutional Convention, anyone?

What were those words?

Something to the effect of, “If we don’t hang together, then we shall certainly hang alone.”

So, again, thanks selise and Hugh for ‘hanging in there’ for all of us.

(I only wish that you both might be able to ask the questions which must be asked … and answered … or else … a ‘reckoning’ is due those who would destroy this nation for mere money … filthy lucre … and the obscene lust for absolute power and the corruption it inevitably brings)

DW

congress has capitulated all of it’s power… they seem unwilling to take responsibility for any kind of decision making let alone governance.