Wednesday, January 28, 2009

Bad Bank: Final Invitation?

What was the reason for the party yesterday, and continuing today? Financial sector leads the upside, and the only reason, I can see so far is the "Bad Bank Rumor" in the U.S.

"Bad bank" is good for shareholders, but here is a list of opinions, why it is not good for wider public:

- by Paul Krugman
- by Martin Wolf
- by Willem Buiter
- by Felix Salmon

Here is an alternative opinion by Mike Mayo ... Well, obviously existing shareholders of bad banks would party!

If available money is not allocated in an efficient manner, we may start asking questions about responsible policies?

UPDATE: Dean Baker explains the bad bank ...

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