Monday, September 29, 2008

For troubled sleep

The question for the evening: What if the freezing up of credit is a market response to an anticipated and ugly recession, and Bernanke is seeing it through the lens of his Great Depression research, and applying the wrong medicine? Modern financial institutions are global in ownership, clientele, and employees, so it is preposterous to think that they show loyalty just because they recieve a fat check from the country where their stock happens to be listed. It is certainly true that a bailout would have helped the national financial institutions in the great depression, but isn't it naive to expect international institutions to deploy their capital in a shrinking economy when there is greater opportunity elsewhere in the world?


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