Sunday, March 21, 2010
Declaration of War
By passing Obamacare despite overwhelming public opposition, Congressional Democrats declared war on the American people. As Dan Rostenkowski was chased through the streets of Chicago, may Congressional Democrats be chased through every street in every city in America from now until November when they are returned to live among us proletariat.
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Labels: Obamacare
Thursday, March 11, 2010
Credit Default Swaps
Professor Bainbridge offers a good discussion of credit default swaps at the link.
If you are confused by the whole issue:
A "covered" swap would be:
A borrows $100 from B.
B pays C an agreed amount in exchange for C's promise to pay B $100 if A defaults.
In effect, the amount B pays to C is credit insurance. If this is illegal, then what FNMA and FHLMC do should be illegal. Even credit life insurance would be questionable in that it covers one possible reason for A's default..
A "naked" swap would be:
A borrows $100 from B.
C pays D an agreed amount in exchange for D's promise to pay C $100 if A defaults.
In effect, C has placed a side bet with D.
The "agreed amounts" clearly reflect the market's perception of A's creditworthiness, but either one of these makes A more likely to default . . . how exactly?
The credit default swap market doesn't make Greece more likely to default, but it makes it painfully clear the market thinks there's a big risk of default. Attacking credit default swaps is akin to shooting the messenger.
To reply, email texthepontificator at yahoo dot com.
If you are confused by the whole issue:
A "covered" swap would be:
A borrows $100 from B.
B pays C an agreed amount in exchange for C's promise to pay B $100 if A defaults.
In effect, the amount B pays to C is credit insurance. If this is illegal, then what FNMA and FHLMC do should be illegal. Even credit life insurance would be questionable in that it covers one possible reason for A's default..
A "naked" swap would be:
A borrows $100 from B.
C pays D an agreed amount in exchange for D's promise to pay C $100 if A defaults.
In effect, C has placed a side bet with D.
The "agreed amounts" clearly reflect the market's perception of A's creditworthiness, but either one of these makes A more likely to default . . . how exactly?
The credit default swap market doesn't make Greece more likely to default, but it makes it painfully clear the market thinks there's a big risk of default. Attacking credit default swaps is akin to shooting the messenger.
To reply, email texthepontificator at yahoo dot com.
Thursday, March 04, 2010
If you are the author of this article, do you put it on our curriculum vitae?
Digitus Impudicus: The Middle Finger and the Law
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Honoring O.J. Simpson, Dennis Rodman, and RuPaul for Black History Month?
How could such people be named in the same context as Frederick Douglas, Sojourner Truth, George Washington Carver, Booker T. Washington, Thurgood Marshall, Colin Powell, Condoleezza Rice, Clarence Thomas, and so many others whose names do not immediately come to me? What are the values of anyone who could consider putting O.J. Simpson, Dennis Rodman, and RuPaul in such company?
To reply, email texthepontificator at yahoo dot com.
To reply, email texthepontificator at yahoo dot com.
