This time, don't bail the bastards out

[Gutenberg]

More crooked dealings by mortgage lenders and banks has left them vulnerable to claims by investors left holding bags of worthless mortgage securities:

http://www.washingtonpost.com/wp-dyn/con...id=topnews

"Now, some of the pension systems, hedge funds and other investors that took big losses on the loans are seeking to use this flaw to force banks to compensate them or even invalidate the mortgage trades themselves.

"Their collective actions, if successful, could blow a hole through the balance sheets of big banks and raise fundamental questions about the financial system, financial analysts and a lawmaker said.

"If judges rule in favor of such lawsuits, 'it could be 2008 all over again,' said Josh Rosner, managing director at Graham Fisher & Co., referring to the Wall Street meltdown that occurred after Lehman Brothers collapsed."

Enough already. Let 'em fail, and put sufficient regulation on the ones that survive.

[mattkime]

>>Enough already. Let 'em fail, and put sufficient regulation on the ones that survive.

Yes! Who needs a functioning financial system anyway??

[Gutenberg]

The one we have is not functioning. Get the bad actors out of the system and keep the good ones. That is what should happen without a bailout.

[mick e]

It's very easy to say "let them fail".

Unless it is YOUR retirement and savings that gets lost in the boarding up of these banks.

[cbelt3]

So.. will AIG end up being their insurers too, and we'll have to bail them out... again ?

AS far as bailing out the pension programs... any number of companies went belly up, raided their pension funds to the (low) levels that the government requires, and left the Pension Benefit Guaranty trust holding the bag. Which resulted in millions of pensioners across the nation getting far less than their 'promised' retirement benefit.

When the pension fund is a governmental fund (CALPERS et al.) what will be the effect ? Will they get screwed like everyone else, or will we bail them out because they're governmental employees ?

Yet another shoe dropping... the FUBAR that is our poorly controlled and conceptualized system has as many shoes as Imelda Marcos.

[mattkime]

>>The one we have is not functioning.

Thats simply not true. It has problems, but its functioning. You just haven't made yourself aware of the functioning parts.

[kap]

Good article. Thanks!

[mrbigstuff]

mattkime wrote:
>>The one we have is not functioning.

Thats simply not true. It has problems, but its functioning. You just haven't made yourself aware of the functioning parts.

+1

the bad actors get the press and by all means they should be rooted out. The prevailing wisdom on the center-left (to which I ascribe) is that institutions should not be allowed to become so big that failure results in a collapse of the entire system. But, alas, that is not the free Free Market, now is it? Greed and avarice are firmly entrenched in our society.

[Gutenberg]

I certainly don't think that all of the banks and lenders are bad actors--I don't think a majority are bad. The ones that have been playing fast, loose and crooked with OPM should be allowed to fail. We need to go back to a sensible, sustainable economy. Make stuff, sell stuff, put real money in the bank, not like we have been doing. People who have been selling worthless paper and thin air deserve to go out of business.

[mattkime]

>>I certainly don't think that all of the banks and lenders are bad actors--I don't think a majority are bad. The ones that have been playing fast, loose and crooked with OPM should be allowed to fail.

Unfortunately thats waaaay oversimplified. From who's "guilty" to who should be allowed to fail.

Its just way too easy to play guessing games with this stuff.