700 Billion, Then what?
Published in Les Echos
(France) on September 26th, 2008
by (link to original)
(France) on September 26th, 2008
by (link to original)
Translated from
by Louis Standish.
Edited by .
Debate intensifies in the United States on the bailout of financial firms introduced by the Treasury Secretary Henry Paulson. After a moment of shock for some, relief for others, the 700 billion dollars will be paid by the taxpayer, in the hope that hypothetical subsequent regulations, starts to bump morale.
However, emergency calls. The markets have greeted the plan to save them from a certain death, but the American way now makes its demands heard.
Various representatives deplore that it doesnt better protect the taxpayers and business owners or that it doesnt at all foresee any punishments for those responsible or at least a salary cap for corporations who will receive the governments help. Congress demands some independent guarantees for authority over control of the plan; and the two presidential candidates attack propositions, collective or divergent, with the hope to respond better than the other one to the publics anxiety the appropriation of these 700 billion is without a doubt needed, the circumstances of its application are sketchy at best. It isnt even sure to bring the fever down. What then will treat the sickness?
The mounting losses, universally considered enormous, have already sparked off some questions. Supposedly to cover the rotten core from easy real estate, it is likely that it will equally aid car or student loans, whose social impact is also painful. Some would freely add the risk of acquisitions as an effect that corrupts the balance sheet. And when they know that the sum of particularly problematic assets of the seven principal banks shoot up to about 600 billion dollars, theyre not assured that the size of the effort will be enough.
In the course of enacting it, they have to still figure out the price to bring the declining titles back into the markets. The architects of the plan will be reduced to expanding the reference price by means of bidding or theoretical calculations, a source of consternation or even suspicion. And it doesnt count the small trades that could devise some new imaginative speculators on the opportunities of the new procedure. It might cause a form of administrative economy, inevitable in a distribution system of rotating assets. Finally, the hope of stabilization will not be reached while it subsists on mark to market accounts with its redoubtable fitness to increase in the least unpredictable balance sheets of the situation these 700 billion dollars are without question noteworthy signs of an underlying sickness, that of an American democracy taken aback by its finance.
However, emergency calls. The markets have greeted the plan to save them from a certain death, but the American way now makes its demands heard.
Various representatives deplore that it doesnt better protect the taxpayers and business owners or that it doesnt at all foresee any punishments for those responsible or at least a salary cap for corporations who will receive the governments help. Congress demands some independent guarantees for authority over control of the plan; and the two presidential candidates attack propositions, collective or divergent, with the hope to respond better than the other one to the publics anxiety the appropriation of these 700 billion is without a doubt needed, the circumstances of its application are sketchy at best. It isnt even sure to bring the fever down. What then will treat the sickness?
The mounting losses, universally considered enormous, have already sparked off some questions. Supposedly to cover the rotten core from easy real estate, it is likely that it will equally aid car or student loans, whose social impact is also painful. Some would freely add the risk of acquisitions as an effect that corrupts the balance sheet. And when they know that the sum of particularly problematic assets of the seven principal banks shoot up to about 600 billion dollars, theyre not assured that the size of the effort will be enough.
In the course of enacting it, they have to still figure out the price to bring the declining titles back into the markets. The architects of the plan will be reduced to expanding the reference price by means of bidding or theoretical calculations, a source of consternation or even suspicion. And it doesnt count the small trades that could devise some new imaginative speculators on the opportunities of the new procedure. It might cause a form of administrative economy, inevitable in a distribution system of rotating assets. Finally, the hope of stabilization will not be reached while it subsists on mark to market accounts with its redoubtable fitness to increase in the least unpredictable balance sheets of the situation these 700 billion dollars are without question noteworthy signs of an underlying sickness, that of an American democracy taken aback by its finance.
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