Not Shorters

this began as an attempt at shorters. Ah well.

What do do about AIG?:

For all my sympathy with people whose stupid bets got us into this mess, I am not overeager to hand them more of my hard-earned money. But the AIG retention bonuses raise a question the government is going to have to ask again and again before all this is over: do we want to make a point, or do we want to make money?

I think that Megan's tax dollars are magic. They create a bubble around her, making every street and bridge she drives on hers, every sidewalk. Megan's tax dollars become the last paycheck the policeman pulling her over received, then they fly over to be part of the bonuses given out to AIG. And while she likes that final expenditure of "her" tax dollars best, she'd still rather have the money to buy herself a back-up Kindle 2.

The employees of AIG know which traders are good, and which ones are idiots who made a bad mess worse. But they're not going to tell us--or rather, they'll tell us, and the idiot traders will point the finger at someone else. From what I understand, you can't even just ask which traders lost money--some of the traders will be able to argue, with justice, that they lost money because they were helping the company cut its risk exposure rather than taking bets they might win. Others made good trades that were Overtaken By Events.

My god, I'm not sure $160 million in bonuses is enough compensation for the suffering these poor souls must be experiencing.

Why not just say "no bonuses for anyone at AIG"? To hell with the bums! Well, we now own the company. If we hasten the flight of quality employees out of the company, that will cost us money. The answer might be some kind of performance bond. But as in other financial firms, traders often take as bonus what should be salary, which means that they need at least part of their bonuses to maintain their lifestyle. If they're faced with bankruptcy, the traders who are talented will go elsewhere--the financial market is shrinking, but the top traders still have other opportunities. AIG has a lot of positions to unwind. Do we want to leave the job to the dregs of the organization?

Yes, we do. The organization utterly failed to successfully recognize talent, and placed people in control who literally ruined the company. The dregs of the organization might well include those who had ethics and were thus unfit to help ruin the economy in a shortsighted spree of greedy self-indulgence. Those are the people who should now be in charge.

I don't know the answer to this question. Perhaps it is true, as my interlocutors accuse, that I am too stupid to understand the obvious. On the other hand, perhaps excessive confidence in your diagnosis means that you just haven't asked the right questions.

This is a lie. Megan showed her answer to the question in how she phrased it. She wants the people who fucked everything up to stay in control, because she's comfortable with a system of non-accountability which enriches criminals and toadies.

Measurement error:

Mortgage fraud rose last year even though the number of mortgages issued fell sharply. Or did it? The Washington Post article notes that reporting has probably gone up, because banks are more worried about tracking fraud. There's also the fact that, as I said in the last post, recessions uncover what auditors can't: undoubtedly, a number of people who might have gotten away with the fraud in kinder, gentler times, got caught short.

Sure, some might see this as evidence of the failure of bankers in the recent past to do their fucking jobs and actually evaluate their loan applications, but Megan prefers to see the glass as half full.

Shovel-ready... ish:

I've been saying for months that "shovel-ready" isn't. Angry stimulus proponents said I was confused and probably just shilling for the monied interests I represent.
Advantage: Asymmetrical Information. The Wall Street Journal reports:

That demolition and replacement of a bridge in Penn will probably take until early April to get started, which totally proves that Megan was right in the posts she never really wrote. (The closest I can find in her archives is one post going nuts on Matty Y for saying the stimulus is planned out over an 18 month period, and the should have been infamous post where she said golf courses and casinos should be built with stimulus money.)
So anyway, yes, obviously the fact that a stimulus bill that was passed a little over a month ago has just begun to produce actual construction projects shows the failure of that plan. Megan wins!
I meant to find a clip of Jon Lovitz as Lord Todd in Mom and Dad Save the World doing his little victory dance to put in here, but I'm not sure if it's on youtube, and it's too damned nice out to stay inside looking any longer. So think of it in your head, n I'm out.