Quick Links

• Following up on a post I made a couple weeks ago: Geithner is going before Congress today, and will be questioned on the AIG bailout. FT has a fantastic writeup on this topic. The article does a wonderful job of giving the reader background on the entire saga, and goes on to analyze many of the issues that brought us to a crisis. I quote from the concluding paragraphs of the article:
  

  The disputes struck, too, at the heart of a growing conceit in the financial world that nearly any asset could be priced and traded. This development was interpreted as a sign that markets were growing more “free” since the pool of tradeable assets appeared to be growing.
  ...
  What the AIG drama exposes is that much of the recent innovation on Wall Street was dedicated to creating assets that barely traded and whose values were determined almost exclusively by computer models used by the banks and rating agencies.
  In this 21st-century hall of mirrors, it has been possible for tens of billions of dollars of value to vanish or reappear at the click of a computer button – or at the behest of the rating agencies or through a change in accounting rules. That in turn makes it hard for the US government to explain whether the taxpayer really got “value for money” by bailing out AIG – or whether Americans will ever get back all the billions already spent.
  

• Financial Services: From Servant to Lord of the Economy. This relates to a post I made very early on in this blog: should commercial banking be a public utility?
• Mish Shedlock is campaigning hard against Bernanke.