A closer look at a toxic avenger

To paraphrase Paul Krugman, it looks like the zombies have won. Insolvent banks continue to roam the earth, sucking up unfathomable sums of taxpayer capital, provided to hedge fund intermediaries as nonrecourse loans. The scheme is designed to create inflated “auction” prices by incentivizing investors to over-bid on assets which carry almost no downside risk …

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DeLong has a little brother in this fight

Since the Obama administration leaked details of its toxic asset plan on Friday night, the reaction in the blogosphere has been swift and harshly critical: the zombie plans have won, writes Paul Krugman; it’s a Rube Goldberg device for shifting losses to the Treasury, writes James K Galbraith; really bad ideas, writes Atrios. There has, …

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The Protégés

In earlier posts, we’ve highlighted Robert Rubin‘s network of protégés, who have assumed nearly every economic policy post of consequence in the Obama White House. In spite of his abysmal record of institutional leadership – Citigroup entered penny stock territory on Friday and Harvard, where Rubin’s influence as a member of the Corporation is unrivaled, …

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