Over at correntewire.com, lambert relates Barry Ritholtz's latest rant:
So far, the Obama administration approach to bailouts has been to keep running Bush Economic term III. They have been far too kind (genteel even) showering taxpayer monies on the incompetents and fools who drove their firms over the abyss. Indeed, it's all but impossible to see where the largesse of the Bush bailout policies ends and the Obama bailout policies begins.
If today were November 2012, I would not vote for this team. As far as the banking sector is concerned, this gang is no different than the knaves and dolts who came before. It is more of the same irresponsible, expensive and reckless policy that preceded them.
That anyone is even debating pulling Derivatives out of the shadow banking system and putting them into a regulated derivatives exchange — transparent, reserved for, counter-party guaranteed, exchange supervised – is embarrassing for our nation, its corporate and political leaders.
But even better is the quote from John Hussman:
[T]he debate about the long-term economic fallout from this defense of bank bondholders is anything but academic. I recognize that I have been on a virtual rant about it in recent months, but the reason is that it is literally the most important fiscal and bureaucratic event that we are likely to observe in our lifetimes, and is very possibly the precursor to enormous future economic difficulties. You simply cannot have an economy lend out trillions of dollars in bad debt, and then make the lenders whole with public funds (while still facing a massive second wave of probable mortgage defaults) without destructive repercussions. There is very little chance, in my view, that the current downturn is over. We have enjoyed a nice reprieve – if over a trillion dollars in redistribution could not accomplish even a reprieve, it would be a surprise. It's clear that investors are hopeful that we can simply return to rich valuations, debt-financed economic expansion, and abnormal profit margins based on excessive leverage. From my perspective, this hope is as thin as those that we observed at the peak of the internet bubble, the housing bubble, and the profit margin peak of 2007.