Home » The Watercooler for 10/23/09 1:00 AM

The Watercooler for 10/23/09 1:00 AM

DFA's home for a free form, open-ended discussion of what matters most to committed progressive activists.

Watercooler resets everyday at 1am, 9am and 5pm. Past threads can be found in the Watercooler Archive

- a pie in your face, blog

By Phil Specht on Oct 23, 2009 3:01 AM EDT

RIP Soupy

- Every death is sad

By SofiaDad on Oct 23, 2009 8:15 AM EDT

Simon sez - a moment of silence.

Okay continue on.

You're out, Simon didn't say.

Simon says, "Continue blogging."

Thanks for making me laugh as a child, Soupy.

- Howard is first.

By Phil Specht on Oct 23, 2009 3:08 AM EDT

nice come from behind effort by the angels

it ain't over til it's over

harvest is til the hurricane (typhoon ?) passes

nasty night here

probably messes with the championship series in NY

- wake up Mike, wisdom from across the pond

By Phil Specht on Oct 23, 2009 7:13 AM EDT

Mervyn King thinks that the government's efforts to fix the financial system have not gone nearly far enough - and could even be founded on a delusion. That's the not-very-hidden message of his speech to Scottish business organisations in Edinburgh.

Mervyn King It's not just this government that is being too timid. King thinks the entire G20 approach to reforming financial regulation may eventually have to be re-thought. Why? Because it's partly based on the assumption that once you have told banks that they are too important to fail, you can somehow prevent them from taking crazy risks on the taxpayers' dime.

http://www.bbc.co.uk/blogs/thereporters/stephanieflanders/

"It is important that banks in receipt of public support are not encouraged to try to earn their way out of that support by resuming the very activities that got them into trouble in the first place. The sheer creative imagination of the financial sector to think up new ways of taking risk will in the end, I believe, force us to confront the 'too important to fail' question."

- it will take awhile to turn this around but we have to push on with reform

By Phil Specht on Oct 23, 2009 7:27 AM EDT

anytime someone is "reducing" risk through the use of derivatives a speculative position is created to take the other side

this would not be a risk to the larger economy if the money was on the table

there would be a winner and a loser

increasing margin requirements in the current environment means a contraction elsewhere as capital available for lending heads for that tabletop

the amount of magic money the Fed (and all from Treasury still out)has put in so far has gone to cover bad bets from the past and so the systemic fix contraction necessary is yet to come