"I believe the banking system has been stabilized. No one is asking themselves anymore, is there some major institution that might fail, and that we would not be able to do anything about it. So I think that is a positive."
That was a week ago. Today the board of Citigroup meets in New York to figure out what to do with the crashing bank, which has lost half its value in just the last four days.
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Maybe this is a naive question, but what does the drop in Citigroup's stock price have to do with the company's ability to provide financial services?
Salmon points out that TIPS is remaining relatively stable. This current market drop may be more of a garden variety economic crisis with the banking internals actually working as they should.
Steve
Pyrrho @ 8:41 AM writes:
"In defense of Hank the situation has been so fluid and so difficult to quantify that leaders really have to improvise as they go along. I think it's a good sign that he flip-flopped last week re: TARP.
It will be a long time before economists understand what is going on and what forward-thinking policies need to be enacted. "
If that is so, my friend, then perhaps they should take NO action, or at least no large actions, for the time being. Otherwise, they're like idiot children playing with a machine gun.
I suspect that, in the end, it's all going to come down to working out/working off this monumental pile of debts anyway....so let's be about that.
Your servant,
Lord Karth
I'm somewhat with Pyrrho here; at least that sends a message that he is trying to think on his toes.
But at what level?
My guess is not very high. What qualifications do you need to be the CEO of Goldman Sachs? Conformity to their business model and a willingness to kiss enough rear to make it to the top. I don't even think an MBA makes it to the job requirements - not that that is worth anything. (Sorry if you went to Bus. School and actually learned something there - some people do!)
That's probably about it. Financial institutions like CEO's who are predictable.
Karth is right though - this is about debt and the way we perceive debt. Anything we do that does not address this singular fundamental issue only continues to postpone the inevitable.
John E. - Agn Stoic: "Maybe this is a naive question, but what does the drop in Citigroup's stock price have to do with the company's ability to provide financial services?"
I suspect that the drop in the stock price is a reflection of a run on the bank going on in the background and a fear that the bank will fail.
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