Today's Crystal Ball Award

First let me make the typical excuses: "There is so much information out there, sometimes something slips through the cracks and is missed; I was busy; I was out of town then; I was going to but....."

Having provided those excuses, let me add that there really is no excuse for my missing Ed Kane's piece for so long. Thankfully, the NY Times had my back and drew it to our attention.

Fair Game - How a Wall Street Revamp Expands the Status Quo - NYTimes.com:

"Last August, Edward J. Kane, a finance professor at Boston College, wrote about just this likelihood in a paper titled “Ethical Failures in Regulating and Supervising the Pursuit of Safety-Net Subsidies.”....

“When a substantial portion of the financial sector appears to be at risk, it is far easier to patch up the weaknesses in the system with ad hoc loans and guarantees than to negotiate genuine reform,” he wrote."....

For top regulators to be able to push through larger bailouts, he argued, two conditions must hold. “First they must be able to control the flow of information,” ...“so as to keep taxpayers and the press from convincingly assessing either the magnitude of the implicit capital transfer or the anti-egalitarian character of the subsidization scheme.”

(FP's emphasis)
and secondly:

"Regulators’ commitment to these bailout policies “must be continually nourished by praise and other forms of tribute from the bankers, borrowers and investors whose losses are being shifted to less-influential parties.”"

Well well. Professsor Kane congratulations on today's Crystal Ball award! You definitely nailed it!