Tuesday, March 31, 2009

Is the U.S, Treasury turning itself into a hedge fund, just like AIG did?


Robert Samuelson has an interesting perspective on p A17 of the Monday March 30, 2009 Washington Post, “Geithner’s Hedge Fund”. These like an ironic play on AIG’s piggybacking a gigantic hedge fund on top of itself.

Sanuelson goes on to give a “math test” (or perhaps an “It’s Academic”) example with a fictitious stock..

He goes on to discuss cycles of leveraging and deleveraging, the latter of which is better known in history textbooks as “panics”. So Timothy Geithner tries to brake the deleveraging with “slight” releveraging. It’s like treating insulin shock with sweets. He goes on to give another math test example. I guess this article could provide some material for this years algebra SOL’s.

As for the president’s firing of the GM president, I remember that back in 1984, GM bought EDS and H. Ross Perot was on the board. If he were still there, I can’t believe that GM would be in this mess.

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