Time Magazine comes out against the bailout, for the most part:
Do not be fooled. The $700 billion (ultimately $1 trillion or more) bailout is not predominantly for mortgages and homeowners. Instead, the bailout is for mortgage-backed securities. In fact, some versions of these instruments are imaginary derivatives. These claims overlap on the same types of mortgages. Many financial institutions wrote claims over the same mortgages, and these are the majority of claims that have “gone bad.”
At this point, such claims have no bearing on the mortgage or housing crisis; they have bearing only on the holders of these securities themselves. […]
Follow the money. Average Joes and Janes are not the holders of the other side of complicated, over-the-counter derivatives contracts. Rather, hedge funds are the main holders. The bailout will involve a transfer of wealth — from the American people to financial institutions engaging in reckless speculation — that will be the greatest in history.
I am wholly unqualified to make a judgment on the bailout, but I’ll take the
editors of Time opinion of these authors over politicians any day. As noted in the comments to an earlier post, the bailout is nothing more than the opening of the world’s largest hedge fund.
Update: Sorry. I thought this was an editorial. The article was actually written by Ari J. Officer, who has a master of science degree in financial mathematics from Stanford University and by Lawrence H. Officer, a professor of economics at the University of Illinois at Chicago.