Who makes the laws around here?!
I think we should go further, though. Congress should pass a law saying that any CDS contracts held by or owed to American companies are non-binding. If the parties want to continue to pay them, fine. If they don't want to, fine. It is as if they simply never happened.
This would have much the same effect as the bad bank strategy that's been floated, but even the threat of that legislation should be enough to force the value of these instruments to plummet to zero, where they belong, wiping out the miscreants who got us into this mess in the first place. Good riddance.
It'd probably also be more efficient, as the banks would then, on their own time, trade these worthless assets away in some kind of gigantic orgy of write-offs. When the dust settles, the people who were defrauded by people selling them junk bonds hidden inside AAA rated firms, like AIG or whoever, should be allowed to file personal civil liability lawsuits. Then they can all exhaust themselves suing each other, keeping vast armies of paralegals fully employed until the sun goes nova. ¶ 9:57 PM
Friday, March 6, 2009
I liked this post about the high-finance shenanigans and what we should do about them.
I think we should go further, though. Congress should pass a law saying that any CDS contracts held by or owed to American companies are non-binding. If the parties want to continue to pay them, fine. If they don't want to, fine. It is as if they simply never happened.
This would have much the same effect as the bad bank strategy that's been floated, but even the threat of that legislation should be enough to force the value of these instruments to plummet to zero, where they belong, wiping out the miscreants who got us into this mess in the first place. Good riddance.
It'd probably also be more efficient, as the banks would then, on their own time, trade these worthless assets away in some kind of gigantic orgy of write-offs. When the dust settles, the people who were defrauded by people selling them junk bonds hidden inside AAA rated firms, like AIG or whoever, should be allowed to file personal civil liability lawsuits. Then they can all exhaust themselves suing each other, keeping vast armies of paralegals fully employed until the sun goes nova. ¶ 9:57 PM
