Commentary Magazine


Posts For: March 19, 2011

The Next Financial Collapse?

In today’s Wall Street Journal, James Freeman interviews Paul Singer, who runs the hedge fund called Elliott Management and also serves on COMMENTARY’s board of directors. The interview is well worth your time, but it may disrupt your sleep, because it offers an all-too-believable scenario for the next financial disaster. This time, according to Singer, it might happen due to legislation and regulations passed in the wake of the 2008 meltdown that will bring troubled financial institutions too close to government. In the bailout process, government agencies will have the right to choose which creditors get paid and which don’t—and the uncertainty of that will cause all of them to flee the firm once a bailout is even thinkable. This is the ultimate “unanticipated consequence.”

I can attest to Paul Singer’s prognosticative powers. I first met him in June 2007, and I asked him at the time about the subprime mortgage market, whose problems had begun to make the front page. “The worst recession of our lifetimes is now baked in the cake,” he said, 15 months before the meltdown of 2008.

So he’s worth a listen.

In today’s Wall Street Journal, James Freeman interviews Paul Singer, who runs the hedge fund called Elliott Management and also serves on COMMENTARY’s board of directors. The interview is well worth your time, but it may disrupt your sleep, because it offers an all-too-believable scenario for the next financial disaster. This time, according to Singer, it might happen due to legislation and regulations passed in the wake of the 2008 meltdown that will bring troubled financial institutions too close to government. In the bailout process, government agencies will have the right to choose which creditors get paid and which don’t—and the uncertainty of that will cause all of them to flee the firm once a bailout is even thinkable. This is the ultimate “unanticipated consequence.”

I can attest to Paul Singer’s prognosticative powers. I first met him in June 2007, and I asked him at the time about the subprime mortgage market, whose problems had begun to make the front page. “The worst recession of our lifetimes is now baked in the cake,” he said, 15 months before the meltdown of 2008.

So he’s worth a listen.

Read Less

On Operation Odyssey Dawn

“Our mission now is to shape the battle space,” said the Pentagon spokesman in describing the military task underway in Libya, “and let other nations take the lead.” So, as the world watches, the United States is taking the lead in Libya, even as the administration continues to argue that, in fact, the U.S. is just playing a supporting role. Odd. Of course, if the end result is the quick toppling of Qaddafi, the argument will not matter, because the president will happily and properly take the credit, especially since it will poll well.

“Our mission now is to shape the battle space,” said the Pentagon spokesman in describing the military task underway in Libya, “and let other nations take the lead.” So, as the world watches, the United States is taking the lead in Libya, even as the administration continues to argue that, in fact, the U.S. is just playing a supporting role. Odd. Of course, if the end result is the quick toppling of Qaddafi, the argument will not matter, because the president will happily and properly take the credit, especially since it will poll well.

Read Less




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