BoatBanter.com - View Single Post - Obama 6 pt plan revealed: Stocks continue collapse!

Capt. JG

"Dave" wrote in message
...
On Wed, 17 Sep 2008 14:33:09 -0400, said:

Meanwhile, I wonder how Dave feels about his beloved banking industry
going on welfare.

Thus far, at least, it hasn't been the banks, but those on the other sides
of transactions with banks. (Investment banks are different beasts from
banks.) Next question is whether the guvmint will let WaMu go into FDIC
supervised liquidation.

That said, I think I said earlier that the bailout for Fan and Fred were
mistakes. Same with AIG. Essentially what's happening now is a huge game
of
musical chairs. It's not a matter of how much _will be_ lost on mortgage
backed securities and the related fallout. Those losses have already
occurred. The money's already been lost. Now we're just seeing who will
bear
the loss--which of the holders will be left without chairs when the music
stops. I'd rather see it be the stockholders and subordinated debt holders
of those institutions than the taxpayers. Bailouts just keep the music
playing for a bit longer.

Housing, and the mortgages financing them, need to find an equilibrium
market level. Until they do, lending for all purposes will be chilled.

People seem to lose site of the fact that when a company goes bust the
pieces left over don't just disappear into thin air. If Bear Stearns had
been allowed to fail, the people there, or at least some of them, would no
doubt have started up smaller investment banks--investment banks that
could
become bigger, dispersing the risk of failure of a few huge institutions.
Same thing with Fan and Fred. Encouraging concentration of the businesses,
banking or other, in fewer and fewer large firms is a recipe for further
problems. No business should be too big to fail.

Yep, you got it right. It doesn't matter how many people lose there jobs or
their homes, as long as the gov't does nothing.

Big difference between "should be to big" and "is too big" to fail.

--
"j" ganz @@
www.sailnow.com