Monday, 29 September 2008

The Loss Count

$591B so far according to Bloomberg. I honestly remember the time when a $10M loss in investment banking was shocking.

Now? Now there is more uncertainty than I have ever known. In '33 the banking crisis came just before FDR was inaugerated - 08's is a bit early, and that is of course making things a lot worse. A new administration could at least act decisively. Paulson tried, but a combination of a discredited president, an upcoming election, and over-reaching first draft were all obstacles. The FED will throw money at the markets, but it seems unlikely that will unjam the credit markets. It may even make things worse as banks know they don't have to deal with each other. What the financial system needs is more capital, hundreds of billions of it. Hey buddy, spare a billion? I wouldn't ask, normally, but I was expecting a handout from Congress, and the '37 Bentley costs a fortune to run.

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