Question/Comment: If banks do not have money to lend, how can Citicorp, Wells Fargo, etc. come up with billions to purchase failing banks and finance firms? Paul Solman: They aren’t forking over any cash. “Purchase” means subsume. Wachovia becomes part … Continue reading
Question/Comment: Can you explain, simply, what a credit default swap is? Paul Solman: I sure hope so. Basically, a credit default swap or “CDS” is an insurance contract to protect against bankruptcy. Say you own a lot of Ford Motor … Continue reading
- Last year Lehman Brothers’ CEO made $71 million. Now his company has collapsed. How much will he make this year?
Question/Comment: Last year Lehman Brothers’ CEO Richard Fuld, Jr. made $71 million. Today his company collapsed. How much will he make this year? Paul Solman: I don’t know about this year. You’ve covered last. In 2006, according to Forbes.com, he … Continue reading
Question/Comment: Fannie Mae and Freddie Mac, we are told, are so big, we can’t allow them to fail. We taxpayers could end up footing the bill for as much as $200 billion. Where will that money come from? How will … Continue reading
Question/Comment: My accountant told me the government’s gift of money for taxpayers (to help stimulate the economy?) is actually a loan that most middle/upper income citizens will have to repay within a year. Paul Solman: America spends more than it … Continue reading
Question/Comment: How does the U.S. “export” its inflation to other countries? And a second question: Frequently pundits say the U.S. can and does print money to achieve some economic or financial goal. However, my economics professor says the government does … Continue reading
- Doesn’t Bear Sterns hiding of their problems while continuing to sell mortgage-backed securities as if all was well constitute fraud?
Question/Comment: Bear Sterns did not go under overnight. Unless they are incompetent, the executives must have known what was happening for at least a year, maybe longer. So how come they took hundreds of millions in salary and bonuses (maybe … Continue reading
- If deficit spending stimulates the economy then won’t imminent plans to wind down the war and trim spending offset any stimulus packages?
Question/Comment: If deficit spending stimulates the economy then won’t imminent plans to wind down the war and trim spending offset any stimulus packages? Paul Solman: Hmmm, interesting point: an argument for continuing the war might be its stimulating effects. Consider, … Continue reading