There seems to be little outrage as the US, a country where free enterprise is supposed to reign, moves to nationalize losses without even contemplating reform.
By Bill FleckensteinWe are at another moment when those of a bullish persuasion, whose financial muscle memory was developed under former Federal Reserve Chairman Alan Greenspan, are determined to put lipstick on the pig at every opportunity.
As soon as any facet of each financial minicrisis ends -- whether that be in certain subprime lenders, certain Alt-A lenders, certain monoline insurers or certain banks -- folks act as though all is well, even as financial institutions continue to implode.
At nearly every one, there's a lot more than meets the eye, because much of the surface strength centers on the perception that these institutions have correctly marked their mortgage-related assets. Recently, the portfolio of Cheyne Finance, one of the more infamous structured-investment vehicles, or SIVs, was sold at 44 cents on the dollar. I suspect that similar assets are not marked anywhere near that valuation on financial institutions' balance sheets. So, the game of "everything's contained" continues, albeit in a different form.
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