Masters of the Universe
Jan. 7th, 2009 05:39 pm![[personal profile]](https://www.dreamwidth.org/img/silk/identity/user.png){kind=small}
rizhi_finCapital adequacy rules for banks will become countercyclical, or at least that is what FSA and ECB are talking about (and many in private sector as well). Efficient market theory is under question thanks to the Masters of the Universe.
When TARP was announced and Hank Paulson was in charge, I imagined Mr. Paulson and his wife at breakfast:
- Hank, dear, what are you doing today?
- (yawning) I am gonna save the world... Pass me sugar, please.
___________________________________________________________________
Other changes in the air:
mark-to-market accounting - because of distortions of balance sheets in a liquidity crisis
short-term shareholder value vs. long-term - it is inadequate for companies of size of Pakistan to concentrate entirely on the next quarter profits
death of wholesale credit markets
strong deposit taking
diversity of funding
SIVs gonna go
economies of scale - bigger banks survive, boutiques gonna go.
When TARP was announced and Hank Paulson was in charge, I imagined Mr. Paulson and his wife at breakfast:
- Hank, dear, what are you doing today?
- (yawning) I am gonna save the world... Pass me sugar, please.
___________________________________________________________________
Other changes in the air:
mark-to-market accounting - because of distortions of balance sheets in a liquidity crisis
short-term shareholder value vs. long-term - it is inadequate for companies of size of Pakistan to concentrate entirely on the next quarter profits
death of wholesale credit markets
strong deposit taking
diversity of funding
SIVs gonna go
economies of scale - bigger banks survive, boutiques gonna go.
