Dumb Central Bankers

Interesting post out of naked capitalism about one of the proposals that came out of Jackson Hole. It dealt with setting up an equity insurance fund for the banks that when tough times come the banking industry can use this insurance for equity injections. That has to be one of the dumbest things I have ever heard of in my life. But the world bankers somehow think this is a good thing. The blog post goes on to expose the lunacy of it.

http://www.nakedcapitalism.com/2008/09/troubling-signs-from-feds-jackson-hole.html

One interesting tidbit in the long post was that banks are not taking losses. The bulls keep complaining about all the mark to market losses the banks are taking and how it will be a huge earnings surge. According to Bridgewater, not only is that not the case but in fact its the other way.

Bridgewater Associates estimates banks have taken only 1/5 of the losses they estimate they have already suffered.