NOTRE DAME, IN - In an unprecedented action by government regulators, the Taylor Group of the Department of Chemistry of the University of Notre Dame has been purchased by the Federal Reserve. Fed Chairman Ben Bernanke announced the stunning results to a crowd of shocked graduate students and two or three tired, bewildered postdoctoral fellows in the Taylor group room. Federal Reserve regulators reviewed the balance sheet of the Taylor Group and determined that, along with large drums of hexanes and acetone, Taylor Group purchasing agents had also unwittingly acquired $26 billion dollars of complex collateralized debt obligations and credit default swaps. It is believed that they were purchased through Aldrich, which is known for their inaccurate and bizarre shipping and accounting practices. The securities were found in the bottom drawer of the group room computer desk.
Professor Richard E. Taylor expressed surprise at his group's purchage of mortgage-backed securities: "All this time, I thought we were buying precursors for Evans auxiliary -- I knew that D-phenylalanine and sodium borohydride couldn't cost that much. Well, I hope we can recycle these securities like we're supposed to recycle the cleaved auxiliary..." Senior Treasury officials believe that after the acquisition of the Taylor Group, there will be no more need for the government to keep propping up large financial institutions, total synthesis groups and your local 7-11.
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8 comments:
Alright Jim and Mike, this is your time to shine. McCain and Palin are dancing around the regulation issue. Yesterday, Palin made another blunder that is, of course, under reported about how we need to update our regulatory system so it can get out of the way of the private sector. Huh?
Let me know your feelings about these government bailouts and convince me that some regulation is not needed.
Keep in mind, the S&L crisis from twenty years ago.
Thanks.
We need some regulation, since common sense doesn't seem to be working.
This is a serious debacle. I'm not for these bailouts... we need to put a whole bunch of people in jail.
The thing that really gets me is how many fund managers/brokers made millions while they lost the shareholders money.... then the taxpayer picks up the tab.
We need to JAIL some people.
I'm not making any substantive comments until someone acknowledges that this post is frickin' funny.
Alright Jim. It was funny but I kept looking for a reference to Steve Patterson as the leader of those poor accounting procedures.
Thanks Mike we have found something to agree on.
Well, since taxpayers are paying for this, some level of regulation seems to be called for.
I don't think that any of the three of us know what that regulation should be or how it should be applied. All we know is that someone screwed up, somewhere. What we should do to those "someones", I have no idea. Neither does McCain or Obama or their advisors, for that matter.
P.S. Thanks, Rich, I needed that.
If there's something so large that feds feel should be rescued to preserve the economy then that's something that should be broken up as a part the bailout (cf the ATT breakup of many years ago).
Concerning me as the leader of poor accounting... well there are three kinds of chemists: Ones that can count and ones that can't.
The original post was funny, Jim.
For your reading pleasure:
http://www.washingtonpost.com/wp-dyn/content/article/2008/09/23/AR2008092303695.html
http://meganmcardle.theatlantic.com/
http://theamericanscene.com/2008/09/19/welcome-to-history
http://www.usnews.com/blogs/capital-commerce/
http://delong.typepad.com/sdj/
http://krugman.blogs.nytimes.com/
http://www.marginalrevolution.com/
Those guys seem to be spread rather widely across the political spectrum, seem to have economic expertise and they all are near-universally opposed
to the mega-bailout as proposed.
Ron Paul had some interesting comments as well:
http://www.cnn.com/2008/POLITICS/09/23/paul.bailout/index.html
Interestingly, bill S.109 Federal Housing Enterprise Regulatory Reform Act Of 2005 was brought before the senate sponsored by Hagel. It wasn't passed largely due to opposition from democrats.
here's the summary:
1/26/2005--Introduced.
Federal Housing Enterprise Regulatory Reform Act of 2005 - Amends the Federal Housing Enterprises Financial Safety and Soundness Act of 1992 to establish: (1) in lieu of the Office of Federal Housing Enterprise Oversight of the Department of Housing and Urban Development (HUD), an independent Federal Housing Enterprise Regulatory Agency which shall have authority over the Federal Home Loan Bank Finance Corporation, the Federal Home Loan Banks, the Federal National Mortgage Association (Fannie Mae), and the Federal Home Loan Mortgage Corporation (Freddie Mac); and (2) the Federal Housing Enterprise Board.
Sets forth operating, administrative, and regulatory provisions of the Agency, including provisions respecting: (1) assessment authority; (2) authority to limit nonmission-related assets; (3) minimum and critical capital levels; (4) risk-based capital test; (5) capital classifications and undercapitalized enterprises; (6) enforcement actions and penalties; (7) golden parachutes; and (8) reporting.
Amends the Federal Home Loan Bank Act to establish the Federal Home Loan Bank Finance Corporation. Transfers the functions of the Office of Finance of the Federal Home Loan Banks to such Corporation.
Excludes the Federal Home Loan Banks from certain securities reporting requirements.
Abolishes the Federal Housing Finance Board.
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