The markets may not have been too impressed with Treasury Secretary Geithner's plan to deal with banks bad loans, but the audience at a recent Columbia University discussion BS&T attended on the economy loved the suggestion of one of the attendees. "Why not give the toxic assets to investment bankers as their bonuses?" financial journalist Lawrence Carrel rhetorically asked a panel partly composed of Pulitzer Prize winners.After all, the now troubled assets were "their idea," Carrel said of the I. Bankers. "They'd be taking on the risks but there's the potential to make money too," said Carrel, who wrote a recently published book on exchange traded funds, 'ETFs For The Long Haul'.
Another interesting moment at the event-Code Red: the economic challenges facing Obama, which was co-organized with the New York Financial Writers Association -- was when the panelists were asked what was for them the scariest moment in the crisis. In response to the question, from Sheila Mullen, a senior bond reporter with Market News International, Floyd Norris, business columnist with The New York Times said the gravity of the situation him home about a month after Lehman Brothers failed. "I came home and my wife handed me our 401(k) statement and I was shocked-and I cover this stuff for a living, so you can imagine how everyone else must feel!"
Neal Soss, a managing director with Credit Suisse First Boston, another panelist, quipped at another point that, "inflation is a great way to turn a 401(k) into a 201(k)."
Norris noted we can drop a long-held assumption that "the baby-boomers are all going to retire," as laughing, he said, "I don't know if you've looked at your 401(k) lately."
The big assumption dropped, said Soss, who formerly worked for the New York Federal Reserve, is that the markets can be counted on to regulate themselves. We have become "socialist" overnight without a philosophy to support it, he said on the stage, re-iterating what he claimed is an unspeakable truth in an interview with BS&T in a video from the event shown here, one third of the way down a lengthy blog account of proceedings.