October 29, 2008

Quote of the Day

For example, recent media reports have lauded the prescience of Edward Markey, the Massachusetts Democrat who has long called for increased regulation of financial derivatives. Not that this says much about derivatives. Mr. Markey has also called for increased regulation of the Internet, cable TV, telephones, prescription drugs, nuclear plants, natural gas facilities, oil drilling, air cargo containers, chlorine, carbon dioxide, accounting, advertising and amusement parks, among other things. -- WSJ Ed Page: Barack Wrote a Letter...
110th Congress Posted by John Kranz at October 29, 2008 12:33 PM

Gosh, he's a regular Paul Krugman or Mark Zandi: keep predicting a "looming fiscal crisis," or a recession, then take credit when it finally happens!

Side note: I wonder what Krugman will have to say about any fiscal crisis when it happens while Dems have the White House and Congress.

There's actually much unnecessary hullaballo about derivatives. First, it's impossible for all derivatives to come into play at once. Think of it like the human brain: yes, you'll die if all your neurons fire at once, but it just can't happen (leading to the myth that we only use 10% of our brains, which is true if it's "at any given time").

Second, many derivatives cancel each other out. Not all, but enough so that there really isn't $50 trillion worth of liabilities.

Posted by: Perry Eidelbus at October 29, 2008 2:27 PM

Stopped clock, twice a day.

Nobel Laureate Krugman will curse the deep hole that Republicans dug for the brave Democrats to pull out of.

Posted by: jk at October 29, 2008 2:53 PM | What do you think? [2]