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Wall Street takes the First Step in Recovery, Eleven to Go!!!
Goldman Sach and Morgan Stanley change their status to holding banks and it's perfectly clear which way the rational people will vote this election. They're going for Obama. This is like a giant first step in a 12-step program. These behemouth organizations are admitting they are powerless over their greed and their "lives" have become unmanageable.
It might even be said they've gotten to step two, coming to believe a power greater then themselves, government, could restore them to sanity. Well, the government has exercised its power by bailing them out. The US Government has so much more money then any private organization in the world. Nothing comes close. They're admitting the government has the power and even surrendering to greater restrictions.
This gives us all hope. Now, the comes the critical months when we see whether Wall Street is really committed to recovery, or wehther there will be a relapse. Electing John McCain would signal relapse. There is nothing in his entire 27 year career in the Senate to suggest he has any intention of restraining Wall Street or anything else [except maybe a woman's choice].
Comments (4)
Are they really? They're not capitalizing further on their greed, taking advantage of relaxed restrictions (at the price of more oversight and administrative overhead) on borrowing money, acquiring other companies, and potentially getting a bigger slice of the $700,000,000,000,000 bail-out package?
September 22, 2008 6:42 AM | Reply | Permalink
It's more a case of the individual entities believing they were getting away with something and fooling everyone else. Now they are realizing that everyone was doing it and they cannot get away with it.
This is akin to the person who spills a little gas in their favorite fishing hole and throws soap on the spill thinking nothing happened until one day all the fish wash up dead on the shore because everyone has done it.
September 22, 2008 8:23 PM | Reply | Permalink
I see the Paulson plan as more of a leveraged buyout. They're trying to convince the government that the same model they used to get into this mess can be used buy the government to get them out.
The only difference is that the seller is making the deal this time and the buyers aren't going to be able chop up the companies and sell off the parts that have value or restructure anything.
So, now that I think about it... it's more like convincing some schlub that he needs to buy a house he can't afford with adjustable rate payments set by the banks...
September 22, 2008 9:29 AM | Reply | Permalink
At this point, after doing it this way for so many years, I doubt they can even conceive of doing it any other way.
September 22, 2008 8:24 PM | Reply | Permalink
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