經濟,財務,統計學,數理科學與政治評論

My Dear American Friends:

  It is time to move on without looking back anymore.I know there are a lot of people who have angers for Wall Street. But it is your fault to let those ghost stories happened again and again. The LTCM is funded by J.P. Morgan and other big institutions at the time, you choose to bail it out in case of its liquidity problem may cause bigger systemtic risk. It is the first and the foremost bail out which sets an example that Wall Street can play the game and leave the mess to the government(from the government bonds issued for the disaster)! And you also have some big problems as you let the Citi to run against the Deutsche Bank, the financial system of Europe is their banks are largerly held by the government or quasi-government agencies. It means if the institution creates larger profit, it will go to the government eventually as the government holds a larger protion of their common shares. If it creates some big losses, even the government has to bail out, it will have to pay back to the government in the form of dividends or higher share price as it is a nationalized institution. But for your nation, your financial institutions are privately held, and there is no good mechanism to guarantee that even those institutions ruin the system, it has to pay back to the government as the government plays the role as the larger shareholder. So you have to ask Citi or other institution to issue common stocks or preferred shares to exchange for the government's money. It guarantees that as those banks get thenselves back on track, then they will and have to pay back to the nation in the form of dividends or higher share prices. But you neglect some points that the most beneficial one needs the least funding from the government in the disater, and it means that those institutions get larger benefits from the disaster as there is much less competition in the market in those dire moments. They can get a larger share of those profits and have larger bonuses for themselves. It is the big issue that people think to be an UNFAIR thing and has to be adjusted from the law or something else. I guess you have to make it right in the future crisis dealing. Maybe it is time for you to think about the issue of how to nationalize those institutions at the dire moment in case to face the unfair bonus issue next time!!