Actually, we (collectively) feel fine. The reference is, of course, to the REM song: It's the end of the world as we know it, and I feel fine." Well, Hank Paulson, the nation's chief panic-monger, told us for two weeks that if we didn't bail out Wall Street, the world as we knew it (or at least the economic world as we knew it) would come to an end. Yeah, right. As I write, the Dow industrial average today is up 350 points. Paulson can take back what John Boehner called his "cr@p sandwich" and swallow hard.
John Berlau suggests that mark-to-market accounting is partly responsible for the current financial meltdown because it forced banks to write down their assets even if they really weren't worth any less if held to maturity.
Hank Paulson and Ben Bernanke believe that another Resolution Trust Corporation, armed with a $700 billion line of credit from the U.S. taxpayer, could resolve this crisis using market principles -- reverse auctions for distressed assets, most likely.
Now Hank Paulson, formerly of Goldman Sachs, knows full well that the beauty of the market is that if you see an opportunity, you can make a profit. If mortgage-backed securities are currently undervalued due to some arcane accounting rule, you can bet that Paulson and Co. are all too ready to pounce. Taxpayers, get ready to profit.