Exactly. T. Boone has been positioning himself to be at the forefront of the money trough for months now (assuming you've been following him).
He's a smart man who likes to make a ton of money.
I tell ya, I'm just a simpleton. However, some of the total junk that is coming out of Congress/Fed is something I truly think very few people in our country grasp nor even care about spending the time necessary for them to grasp it.
One example...the new "systemic risk identifier" plan being slapped together. Grand idea is to "identify" all the institutions that pose a "systemic risk" to our economy and have a plan on "how to deal with them" in times of crisis. Wonderful idea (for those who don't think/know much about how markets work) that you can sell to the voting public with ease. All the congressman and fed officials can pat themselves on the back, hand out pens when the bill is signed, etc.
The problem is that (assuming we have a free market and not a socialist system, sadly I'm serious about that comment Mr. Putin) as soon as you identify the "too big to fail companies/institutions", you create one massive moral hazard. Just like the GSE's. There was always the implicit assumption that that GSEs would be backed by the US Gov (and nobody ever thought it would come to pass, but it was there and affected every risk the GSEs priced in their past). So, given enough time for that mispriced risk to work and....PRESTO! They implode and the US Gov stands up and back them! All the nasty decisions that created the outcome of Freddie/Fannie were implicitly backed by the full faith and credit of the US Government (taxpayer). (btw, there's an interesting story of why the Feds backed GSE preferred stock which they were going to let it fail like the common -- foreign central banks turned out to be holding a TON of GSE preferred stock, so we, the American taxpayer, backed the preferred stock too).
So here's the deal -- Once these companies are identified, the free market will instantly reprice risk associated with them. If we say they are too big to fail, the free market will ensure that the business they conduct is anything but free. Just like how Fannie/Freddie paper was treated in the market for many years. The decisions that these companies make from that point on will be tainted by how they are being received by the market. They will be able to do many things (i.e. much riskier things) than a free market would normally allow.
It's kind of amazing that we're looking to create, on an even bigger scale, a setup similar to what help bring down the curtain to begin with.
Like I said earlier, when big financial decisions are being forced on humans, the majority of the time they choose the wrong path. Why? Because human nature is to, at all costs, mitigate short term pain. Once you decide to do that, you create internal, psychological, based justifications to support your desired outcome. Everybody wants to "feel good", and we (humans) are usually pretty good at fooling ourselves.
Sometimes the BEST thing to do is absolutely nothing. Perhaps the biggest "secret" since essentially nobody will accept it. Listen to some of the "elected officials": 'voters demand that we DO something!'. It's sort of like one of those transitions at super high speed on a track where you have a brief moment when the exact thing to do is NOTHING. You have the car perfectly balanced, and your job is to sit tight and just wait with the inputs you currently have to work.
We're in one of those transitions right now as a country and, supposedly, "voters" are demanding that we DO something. The hope is the outcome is different than it would be in that track scenario if we forced the driver to DO something rather than let the system work.
Hence one of things they are going to do is take essentially ALL of the bad decisions that in many cases the government either encouraged or forced (i.e. community development subprime loan requirements) on the system, aggregate them all, and make you and me responsible for the future of those decisions (this "bad bank" thing). Actually, it will be most of our children who will shoulder this responsibility going forward. Because "we" can't handle short term pain, "we" will create one of the biggest moral hazards in the history of our country while at the same time forcing every citizen of this country to accept blame and pay for the decisions of a few.
The sad part to me is that nobody really cares. They listen to sound bites, they listen to some congressman spout off about how they are "doing something" and they go back to their daily lives happy Congress is "looking out for them."
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. Jimmy Stewart was great in it by the way.