Facts and Assertions

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Dave

Dave is a part-time blogger that writes about whatever suits him at the time.

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4 Responses

  1. Avatar Francis
    Ignored
    says:

    Well, yes. This. I have no problem with Lehman going bust. I have a big problem with the idea that Wall Street has effectively created a system in which profits are privatized and losses are socialized, which is what we have now. But creating a banking system that both functions within the internAtional system and protects consumer deposits is not easy or obvious.Report

  2. Avatar Lyle
    Ignored
    says:

    Just to note that the WaMu holding company did go bankrupt it was just the Bank that got saved. Creditors of the holding company got nothing which they deserved as they were aware of the rules. In most cases the FDIC takes over the bank and leaves the holding company high and dry and bankrupt. H Paulson was mad at the FDIC because he said this sort of thing made the crisis worse. But the FDIC only cares about depositors up to the limit, the fate of the rest is not their concern.Report

  3. Avatar Jaybird
    Ignored
    says:

    Those concerned about financial stability and the rule of law should not support “doing nothing” when there are financial firms whose failure can spread through the financial system and the economy as a whole like wildfire. Such an idea is dangerous, irresponsible and, frankly, stupid. Assuming that we will still have institutions that are too big to fail, we need a way to step into a situation where such a firm is failing before the damage gets too widespread.

    Wildfire is an interesting analogy.

    Some theorize that the emphasis on preventing forest fires actually make the inevitable fires worse when they do come… not only does the overgrown underbrush result in even more tinder, but the fires are hotter and it takes longer for the land to get back to normal after such a fire.Report

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