Paul Krugman is right to be worried about the unintended consequences of the AIG bailout:
Flâneur points me to the 35-page staff report for Jay Rockefeller on “Aggressive Sales Tactics on the Internet”. It concentrates on three extremely sleazy companies, all based in Norwalk, Connecticut: Affinion, Webloyalty, and our old friends Vertrue, the employers of Ben Stein. Here’s a typical datapoint:
Today the squid is showing its human face — you know, as opposed to wrapping itself around one. Goldman deserves to be applauded for two things today: first of all Lloyd Blankfein’s admission and apology that his bank “participated in things that were clearly wrong and have reason to regret”, and secondly its $500 million 10,000 Small Businesses Initiative, under which it will team up with community colleges, business organizations, and Community Development Financial Institutions (CDFIs) — all with the aim of removing barriers to growth in the small-business sector of the economy.
Whenever there’s a surprise takeover bid at a significant premium to the (formerly) prevailing stock-market price, dozens of journalists and bloggers immediately pull up options-volume data. Much of the time, they discover a suspicious spike in options volume just before the deal was announced. The conclusion is obvious: insider trading!
As Dean Baker notes, Neil Barofsky’s report on the 100% payments to AIG’s counterparties is the news of the day. It’s sexy stuff, revisiting the dramas of the week of Lehman’s collapse, and of course going into great detail about the way in which the crisis’s designated villain, Goldman Sachs, walked away with billions of dollars of taxpayer money despite saying they never asked for it nor particularly needed it.