Rob says 15 years ago

Ed, big fan, follow the blog daily, did you catch Tadashi Nakamae’s article in the FT in the Markets & Investing section on 3/31? Tremendous article that puts out your asset-based economy credit write-downs thesis, that he completely agrees with and puts into a Japanese perspective.
1. Edward Harrison says 15 years ago
  
  Rob, I just noticed his post from January 2008. How is that relevant? Perhaps you can give a link to the more recent post.
  1. Rob says 15 years ago
    
    Sorry for the confusion.
    
    https://www.ft.com/cms/s/0/a5295546-3c0a-11df-9412-00144feabdc0.html
    1. Edward Harrison says 15 years ago
      
      Yes, I just found Tadashi Nakamae’s piece. I was just discussing it on twitter. He makes good points. I especially like it when he says “Tadashi Nakamae says “demand-side fiscal and monetary policies have served only to delay the much-needed elimination of excess capacity.” That is exactly what I have said.
      
      But I have concerns that his ‘solution’ of firing people en masse as he suggests leads to a deflationary spiral. More likely, it is better to allow marginal firms to fail.
      
      You see General Growth Properties which filed for bankruptcy, rising from the dead, right? That’s what needs to be done with TBTF as well. However, the Irish are having the same dilemma with Anglo Irish Bank because it is TBTF. They are worried about credit growth. Putting AIB out of its misery means lights out for the Irish economy. So, the choices are hard.
      
      I am very much in favor of breaking the largest institutions up, recognizing the trading losses now marked to maturity and nationalizing the organizations that have a resultant shortfall. These companies would then be stripped of their bad assets and re-privatized.
      
      I won’t name names, but I’m sure you know which firms of the big six are likely to be nationalized.

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