Best bailout commentary I've read so far:
1. Robert Shiller on the role of government within our evolving economic ecosystem.
2. Judge Posner explaining in plain English how the web of contracts stretching throughout the financial system correlated risks that the same contracts were intended to keep uncorrelated.
Best solutions I've seen suggested:
1. Abrogating FAS 157 and putting the SEC in charge of accounting rules (rather than the FASB).
2. Make public firms simply report everything (i.e., the entire time-series of journal entries for each balance sheet account) along with their financial statement summaries. Internet technology means that the market can handle and process more information than ever before. Make it available. (I advocated a similar change to the SEC rules back in July.)
I think it's wonderful that the bill was defeated in the House this morning. I really could care less if weaker companies fold because they can't convince any banks to extend credit. There are a lot of other forms of credit for good companies.
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