At last, at last, attention is turning to those who carry most culpability for the financial crisis – the masters of the universe aka the bondholders. Calls are gaining momentum for bondholders to share the pain of the rescue. Insiders of Clusterstock and the New York Times do not put a tooth in it.
“The sooner we force the administration to explain why it is NOT pursuing debt-for-equity swaps or debtholder haircuts, the sooner everyone will realize that they’re an excellent idea. (link to article)
To be fair other commentators have been working up to the idea in terms of future policy.
“In truth, it’s not the shareholders of the American International Group who benefited most from its bailout; they were mostly wiped out. The great beneficiaries have been the creditors and counterparties at the other end of A.I.G.’s derivatives deals — firms like Goldman Sachs, Merrill Lynch, Deutsche Bank, Société Générale, Barclays and UBS.
Smart Taxes has wondered about their apparent immunity to blame and pain before but we feared were missing something. Not so. The dam has burst – let the torrent roar!
