Some Needed Perspective

The guys over at Yahoo Tech Ticker have been blogging up some pretty decent economy analysis lately, enough that I'll add them to the list there. For the most part I agree with their take on the current disaster, and to their credit they've often been talking to folks like Nouriel Roubini and taking what he has to say seriously (and have been well ahead of other folks.) A short commentary on the Geithner plan is worth checking out.

In this critical regard, Obama and Geithner's policies continue to evince a massive disconnect between the economic reality - some big banks are insolvent - and the fanciful idea that the problem is just one of liquidity and confidence, i.e. the belief toxic assets are merely temporarily mispriced and might someday return to their peak values, or thereabouts.

Unless and until policymakers and politicians are willing to face up to reality, we are simply repeating the same mistakes Japan made in the 1990s and allowing "zombie" banks to live off the government's largess.

These banks will have an insatiable appetite for funds and, like all zombies, will try to eat our brains. From the looks of what's coming out of Washington, maybe they already have.

Simple and to the point. Keep an eye on Aaron Task and the Yahoo Tech-Ticker crew.