Here are two things that confuse my Sunday,

1 ... AIG pays bonuses from tax payers money and the gov. says it cannot prevent the payout.


2... Iceland ranked seventh in the world by Transparency International and yet nobody saw the crash coming.

regards
f9

 

Iceland was warned (maybe by those who were not natives of Iceland).

Iceland's reaction: “The reaction wasn’t ‘These guys might be right.’ It was ‘No! It’s a conspiracy. They have bad motives.’” ...... just jealous!

Imo, the noteworthy part of this equation which plays out time and time again, when people ignore or brush off warnings and fail to take any action to correct, those in the know (hedge funds for example) smell blood.

The hedge funds will short every way possible and when the the house of cards fall down, the losers cry "evil shorts".

 

hard to believe any of it at times.

 

I don't know much about Iceland, but I live in the U.S., so I have been following the bailouts here.

As I recall, AIG was bailed out by the Fed, but Treasury under the previous and current administrations and the Fed are all in agreement on the need for direct assistance outside bankruptcy. I don't understand their aversion to bankruptcy, and they aren't really telling us. It seems to me that bankruptcy was created for precisely these situations. Barney Frank said in an interview for CBS News that the only thing bankruptcy gives us is the ability to nullify contracts. He was talking about the GM bailout, but I think it applies equally to AIG and the money center banks. The ability to nullify contracts is huge, and it would avoid the moral hazard that bonuses etc pose.

We're being told that the bonuses are trivial in the overall scheme, and that is true in a purely mathematical sense. But I believe the moral hazard in paying bonuses to the perpetrators of this disaster -- and in the way business is being run today -- and in the split between workers and the managerial elite -- is far greater than anyone in government can comprehend. It's that moral hazard that let us into the swamp, and ignoring it is not an option.

[rwk]

 

Yes I agree.

Legality must follow morality in any decent society.

As I recall Moses came home with ten basic laws to a better life for all.

He did not come home with a tax code or SEC regs. Those were to come later.

regards
f9

 

Nobody cares about Moses's commandments in Wall Street.

 

That is obvious.