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Old 11-13-2011, 01:40 AM
Namazu Namazu is offline
Join Date: Jan 2007
Posts: 185
Default Re: Fernholz: Hack, Carney: Clueless

Originally Posted by stephanie View Post
Absolutely. I think that's why Tim had the reaction he did. I thought Timothy ended up seeming kind of ridiculous, like he was reaching for something his example didn't support.

And I agree with the rest of the post.
From a financial markets perspective, Timothy's point was obvious. Forget Corzine and compare Bank of America to smaller, sounder banks which aren't at risk of being sued out of existence. B of A's lower borrowing cost is a monumental "too connected to fail" taxpayer subsidy. A "key man" provision for shareholders would have been a measure of Corzine's unique ability to grow MF Global, but the bondholders accepted a lower return for his unique ability to salvage some of their investment should the stock go to zero. Unique connections would be an asset. Tim should do his homework before invoking Occam's razor, and not strain so hard against the obvious.
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