Date registered: Feb 2006
Vehicle: 1999 ML320
Mentioned: 1 Post(s)
Quoted: 310 Post(s)
See my post above regarding transparency at one level but at the other level, I am very glad to see the requests for transparency. As I said back in October when Bush was doing the same thing however there are going to be times that transparency is NOT GOOD because is can have the effect of causing "RUNS" which are detrimental to solving the problem.
Example. Bank X needs $1B to get completely square after the stress test audit. WithOUT transparency the $1B goes to the bank, the bank gets fully on its feet and all investors are made whole. WITH COMPLETE Transparency it is possible that the PUBLIC will make a run on the bank, fearing that it is failing and the solvency issue will not occur, even though the $1B has been injected, mainly due to a RUN on the bank in the interim.
Without even getting into whether zombie banks should be allowed to fail, your example does not hold water.
Remember AIG is paying out WINNINGs for the bets these banks made. With full transparency,we will only discover what exactly these bets are , what conflicts of interest there are and whose head should roll for the corruption (which is BTW probably the real reason for the resistance, to protect certain well connected parties). Using the gambling analogy, just because a gambler won a jackpot does not mean he has to reveal he is actually broke otherwise.
Last edited by mlfun; 03-07-2009 at 10:46 PM.