The Meltdown - reprise

I continue to look with amazement at wreckage of the global economy. A friend said that he had attended a private governmental briefing..

“… and it is much worse than you think.” Rob said.

“That’s impossible,” I thought.

“Governments have already spent $7.8 trillion ($7,800,000,000,000.00) and it’s not going to be enough. It’s just going to get worse.”

“So,” I replied. “We’re not close to the end.”

“He said that we were getting close to the end of the beginning. The banks acted just liked people. It’s like using a credit card to buy a Ferrari even though you have no money. Now the banks have to work themselves out of the hole.”

“I can recommend someone with expertise in this area,” I thought.

“The bankers actually believed that they were brilliant. Dick Fuld, former CEO of Lehman’s, gave a talk at Swiss Re a year ago. He said he was successful because everyone worked together and agreed on a course of action. He said ‘I pay Simon $100M/year and he agrees with me. I pay Marcus $75M/year and he agrees with me..”

“I’d agree with him for a lot less,” I interrupted. “Perhaps,” I thought, “I understand why I don’t always agree with Nicola.”

“The Swiss government tried to recover the bonus that UBS paid to their former CEO, but he wouldn’t return it.”

“Really?”

“Yes. He said he had earned it.”

“Didn’t UBS take a $70B writedown?” I replied. “Aren’t they being bailed out by the taxpayers?”

“Precisely.”