Tuesday, February 10, 2009

Point Of No Return?

The complete and utter lack of substance in the Treasury Secretary's speech today made me think of a Stephen Hawking quote:

"However, we believe that there are much larger objects in the universe, like the central regions of galaxies, that can also undergo gravitational collapse to produce black holes; an astronaut on one of these would not be torn apart before the black hole formed. He would not, in fact, feel anything special as he reached the critical radius, and could pass the point of no return without noticing it. However, within just a few hours, as the region continued to collapse, the difference in the gravitational forces on his head and his feet would become so strong that again it would tear him apart." -Stephen Hawking, A Brief History Of Time
The treasury's unwillingness to force the shareholders and bondholders of the megabanks to take losses is being treated with suspicion by some, and perplexion by others. Although incompetence and hubris should never be tossed out as motive explanations for politicians, in my more fatalistic moments I worry about a third possibility. If we're already passed the point of no return, these bailout plans should be looked at as ways to delay public recognition of the fact, not as preventative measures. If that's the case, I wish Obama and Geithner luck, since a controlled descent is preferable to a crash landing.


Paul said...

I'm glad it wasn't just me who listened to him and kept waiting for him to say something, anything! meaningful. I'm worried he lacks the strength of character that we need in this crisis.

Max said...

Looks like the market agrees with us. At this point I don't think anybody cares what the plan is, so long as we know. We need a guy like Markopoulos in there.