More Descartes

Sent this to my philosophy-class buddies. Some thoughts on Meditation Six:

( What's the physical component of wealth and what's the mental? )

Pessimism on the bailout

Two pessimistic - or at least skeptical - articles on the bailout in today's New York Times:

Banks Are Likely to Hold Tight to Bailout Money, by Louise Story and Eric Dash

Banks Fail, and So Can Bailouts, by Floyd Norris

From the latter:

It will not help if the government responds to the pressure being applied by banks and some politicians to let the banks go on making up values for their weakened assets - values that will be justified by estimates of future cash flows coming from the very same people who created this junk, but now refuse to buy it for what they claim it is worth.

The Securities and Exchange Commission caved in to the banks on one fairly technical accounting issue this week, in the process saying that the opinions of the major auditing firms could be sidestepped. If it does the same on the far more important issue of mark-to-market accounting, don't be surprised to see this bailout fail.

If the regulators think the truth is too scary for the public to see, then perhaps it is.

My uninformed feeling here is that Paulson and Cox still live in Fantasy Land and are only reluctantly and slowly able to face reality, which would require that in this instance the gov't that provides the money has to tell the banks what to do, in the public interest, rather than just toss money to the banks and decide that this will allow the situation to take care of itself.