Subject: Re: SVB bailout
GH,

Of course it is fair enough to criticize people who were suggesting that the Feds do nothing. But that wasn't RW's proposal at all - he was only saying that the Feds should stick to their usual bailiwick, which is to do a lot, but not to go the additional step of guaranteeing explicitly non-guaranteed funds. In that particular context, with you specifically responding to RW's post, for you to ask "what do you think would have happened if the Fed did nothing?" ceertainly sounds like you are attributing this non-interventionist idea to him, hence his complainte about straw man arguments. If your rhetorical question was really directed not to RW but to others who were proposing that the Fed do nothing, then why use the pronoun 'you'? I know pronouns are becoming more and more confusing, these days, and them can be you, and you can be them, (along with many other possible meanings,) but in this case, it would have been clearer (and less insulting to RW) to say "those that call for less fed involvement should ask themselves what they think would have happened if the Fed did nothing?"

Anyways, we seem to agree on the main thing, with regard to SVB and how it should have been handled. And I suspect we might eventually end up believing (as does Ackman, for instance) that the Feds have not only not done too much, they have perhaps not done enough. A couple more bank failures will nudge them out of their relative inaction, maybe.

dtb