It sounds like your first comment got saved somehow, and when you tried to reenter it the system was unhappy. One workaround if that happens again might be to edit your comment slightly so it does not look like a duplicate.

Do other people get asked to review their comments?

Citi has a CDS (Credit Default Swap) of 450 basis points (45%)

Yes. If we look at sustainable complex natural systems, we see not only expendable components, we see specialization with niches and organs. Such systems are inefficient, but inefficient in a good way.

The crash of ‘87 did not kill the economy, so I am not sure if it should have been curbed. Still, if it mattered, measures could have been taken to rein in speculation.

And I am quite skeptical of the idea that reasonably astute regulators can’t smell these things. In the spring of ‘87 even I, whose long suit is definitely not fundamental analysis, could tell that stocks were overpriced.

I just realized the pun in your handle. ;)

One of the key issues going forward is keeping the ratings agencies honest. This means not allowing them to work for the product issuers, and “back checking” their rating processes regularly.

As far as Citi goes, they are in as much trouble as all the others who still horde toxic assets in the non-MtM portfolios. It is now a race to the finish line. Where the overall economy goes from here will determine if all, or any, win.

If you look at a ratings report where a rating agency justifies the rating it has given, it will say as much. For example, here is the disclaimer from a random S&P Ratings Services report on my desk: “The credit ratings and observations contained herein are solely statements of opinion and not statements of fact or recommendations to purchase, hold, or sell any securities or make any other investment decisions. Accordingly, any user of information contained herein should not rely on any credit rating or other opinion contained herein in making any investment decision … Ratings Services receives compensation for its ratings. Such compensation is normally paid either by the issuers of such securities or third parties participating in marketing the securities.”

The problem is, even if the rating agencies view their “opinions” that way, others have given the ratings a special status (e.g., policymakers in using ratings as a proxy for creditworthiness in defining eligible investments in regulations or market participants when they are selling a specific security to an investor).

first, in terms of the TARP money, many of the banks did not want it. treasury secretary paulson decided that everyone should get them because he didn’t want to tell the world which banks the treasury thought were in terrible shape. in retrospect this strategy didn’t work all that well anyway as everyone “knew” the answer anyway.

in addition, many of the banks would have had serious liquidity difficulties last year because they had trouble raising money (ie issuing bonds) from private investors. so they were allowed to raise these funds with FDIC support — essentially with a government guarantee. i don’t know the terms of this, whether the banks are paying an insurance premium for this guarantee or not.

and yes, the banks are paying interest on the money (i think 6%) and this is one reason they want to pay it back.