bailout news

Two interesting stories today - first, we just spent all the money in the US coffers in one fell swoop. Yay! Now here's where it gets interesting: also today, Wells Fargo offered 7 times what Citigroup had offered for Wachovia, and Wells Fargo isn't insisting on help from the FDIC. Why would anyone be buying a bank that has tons of bad debt on the books? Could it have something to do with the aforementioned bailout, and an assumption that the US government is going to overpay for those bad loans? I think it could.

I heard an interesting interview on NPR today, with people from some of the major ideological economic think tanks, where one person noted that, by definition, the bailout intended to overpay, because it's the market that sets the price. This theory would work better if the market for those loans wasn't so small, and the barriers to entry weren't so high, but still, it raises an interesting point. It appears we'll be given the chance to find out, since the bailout is on.

Derek (Erb) commented:
So how far are we from clicking on Kiva one day and finding micro-loan requests from New York and Arkansas up there with those requesting from Benin and Bulgaria?
on Sat Oct 4 10:05:08 2008

David commented:

I think prosper is standing in for kiva in the US - heaven knows there are enough outstanding loan requests on prosper!

Speaking of Kiva, Yahoo has started doing a series of ads on the daily show's online episodes, and one of them features the founder of kiva, who is... younger than I would have expected. I guess I'm no longer the right generation for internet startups.

on Sat Oct 4 20:49:11 2008

Add a Comment
Back to the Blog