Bookraft

The New York Times gave a page to guest economist, Bob McTeer, trying to argue that the current bailout and it almost unprecedented powers is not a Moral Hazard nor a Bush Financial Iraq- "trust us, we will only charge you taxpayers $700Billion (more than the accounted for cost of the Iraq War) to get you out of a possible depression that only 5% of you are responsible for but likely more than 50% of the high finance community are - but because if they don't co-operate, we will have a recession/depression."

McTeer's arguments are a classic case of Mr McTeer redefining the problem down to a few CEOs and companies who have been caught in the downdraft and have been punished in the markets. Meanwhile the bulk of the derelicts wh have caused the financial fiasco continue to operate as before having gone 1)scott free - there is no measure of accountability or regulation or reprimand in the Bush Bailout plan. The very few "losers" Mr.McTeer cites are precisely not the problem. The problems are financial risks are out of control while confidence and trust have been deep-sixed by vulture financiers willing to bury " fellow financial execs" with buyouts at fractions of pennies on the dollar. Meanwhile these same vultures defy and resist any move to regulation yet are unwilling to commit to private insurance or rescue measures. R.I.P. Lehman, AIG, Fannie Mae and Freddy Mac.

So markets continue to gyrate with unprecedented variability(gold up $70 or over 10% in one day), diverse commodity, loan, and equity bubbles are inflating (and deflating - housing, oil, and financial stocks) precisely because major chunks of the markets have gone: a) unregulated and private, b)complex with derivative instruments not-understood but by a very select few (for example the $62Trillion in fitfully operating CDS-Credit Default Swaps which were designed to prevent the crisis conditions financial markets are now having; c)heavily leveraged with huge 30 to 50 to 1 debt to equity exposures that make one misplay capable of wiping out all a company's capital position and d)more than willing to offload their "toxic positions" to the public at the publics great risk and no possibility of gain whatsoever other than the reward of avoiding a catastrophic market meltdown.

And as for Mr. McTeer - I think he is a snake oil artist dressed in USA colors and trying to put one over on the public that may not understand the financial subtleties but certainly can see a Moral Hazard -> we bailout the finance industry that has been courting disaster with highly risky finance instruments, deadly leverage ratios and disguised positions- and having relieved the public of $trillions they but for an unlucky few get to resume business with no accountability, no regulations, and no obligation to pay even a fraction of what they have wrought. No deal.

One only has to see the financial fiasco of the Savings and Loan Crisis and RTC to see that this is just a repeat but with broader financial market failures, bigger $risks, and increasing unregulated hidden private equity players ready to act for their own gain above all else including country. See references here:
SL Bailout
Cost to taxpayers of SL's RTC -
Peoples Blogs on Bailout <
and
Blunt Exposure of Bad Financial Players