Skip to main content

The Credit Perspective

  • Author:
  • Updated:

The Across the Curve blog often has insightful and potent analysis, with a focus on credit markets that reveals some real expertise in the area. Today, however, its author, originally a weak supporter of government intervention, has made a rather public about-face.
We are forced to agree with him. Matters are quickly getting out of hand and deeper government involvement in the essential engines of the economy, and the deficit spending required to entrench it, is looking less and less desirable by the day.

From the outset, I have always been a supporter of government intervention as a means to prevent this unique crisis from taking the system down. I have always believed that the consequences of inaction were greater than the cost of government involvement. I question that assumption now.
The bailouts began with the deal in which JPMorgan took control of Bear Stearns with government assistance and continues to this day with the government intervention in the Bank of America union with Merrill Lynch.
The Federal government will now be an integral part of the financial system for a very long time and will influence decision making and risk taking in that sector during the time in which taxpayers are a partner in those businesses.
I now think that we would have been better off with some truly cathartic event which would have curbed the animal spirits of traders but which would have established a basis for a market prescribed recovery. Succinctly stated, the government is not in the business of taking risk and I would argue is in the business of risk avoidance.
In retrospect, the commonweal would have been better served had nature taken its course and allowed for capitalism to travel its natural course. I fear that this new course has placed on us a path to a very slow recovery and one in which innovation and risk taking will be viewed through the narrow and ill begotten prism of some bureaucrat.

Some Opening Comments [Across The Curve]


A Little Perspective...

From time to time around these parts, when things get particularly rough, we like to take a few moments to get a little perspective. Yes, you could be facing a significantly reduced bonus. Yes, you could be facing layoffs. Yes, you could be facing a class-action lawsuit by your investors, not to mention first-degree murder charges. But you're not this guy and for that you should be thankful. Patrick Gallagher, of Lansdale, Penn., has filed a $50,000 lawsuit against the Philadelphia-area Penthouse Club claiming a stripper injured him so severely during an on-stage dance that he was left with internal bleeding from a ruptured bladder. Gallagher’s friends had gone all-out for his bachelor party back in 2010, getting him the “bachelor’s package” which included a special performance from a stripper. During the dance, Gallagher was laying flat on the stage when a stripper slid down a pole “with such force” that she ruptured his bladder upon landing, the lawsuit said. His lawyer, Neil T. Murray, said the woman came from a “great height.” After the hard stripper landing, the injured soon-to-be groom called it a night. The next morning he went to the hospital where he was advised of his injuries and underwent surgery, the lawsuit said. Gallagher also says he suffered nerve damage to his back and hip. Pennsylvania man sues strip club, claims he was severely injured by dancer