We Need To (Re)Create The Vomitorium

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As you will know from our Opening Bell, the latest from the bailout boys is the concept that a series of mutual funds raised to buy toxic assets are the modern equivalent of patriotic "Liberty Bonds" or "War Bonds" of years past. Aside from being a rather nauseating bit of gamesmanship to compare bonds used to fight the Great War or World War II, we bristle at the suggestion that there is some patriotic duty to bail out the failed policies that fostered the illusory "American Dream of Home Ownership" for every citizen (no matter what the cost) and the fraud these perpetrated on the country. Is it not enough that we are already providing what are effectively failed institutions unbearably low cost capital while the likes of Berkshire Hathaway must wallow in high rates?
It is more than despicable that, now that the PPIP looks like it may be an abject failure even before bids have hit the screens, we should see the attempt to throw the problem onto the "dumb money" of the retail investor, without the leverage of the PPIP and while collecting fees, we might add. (As if same wasn't already going to bear the burden of several trillion in extra debt, and the taxes that will go to pay for it along with the vanity that imagines now is the perfect time to tax all energy and reform the health care system by socializing its costs). No doubt large mutual fund failures will tear of each other's ears trying to climb on top of each other to reach the brass ring of reset-high water marks by purging out units of the newest CDOs to the public.
If ever there were cause to invent the fanciful institution of the Vomitorium, this is it. You're welcome to your turn when we are though.
U.S. May Enlist Small Investors in Bank Bailout [The New York Times]

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