You know, I have a really hard time feeling sorry for the company (or any of the financial companies who got themselves into trouble with the sub-prime market). I feel bad for all of the hard working people in the company who had nothing to do with the poor investments (HR, IT, other support units, and the brokers who were not involved) but I personally feel that it is about time they were left for dead. The executives and brokers who caused this royally screwed up and don't deserve to be bailed out or given another job in the financial field.
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I agree with you to an extent. They completely got themselves into this through foolish practices and it isn't like they couldn't have seen this coming. I remember reading about how dangerous this pattern of lending was for several years now in magazines, but no one wanted to hear that at the time. But as much as they should bear some responsibility isn't the only reason they are getting assistance because letting them collapse is far more dangerous to the rest of us? I'm no economist, but I don't think they are getting bailouts because anyone thinks they deserve them. It seems to be more to prevent a meltdown that will ripple out and screw us all. Not that we aren't screwed by taking on their debt as taxpayers... but that can only go so far. I suppose we are about to find out what happens when the gov't stops rescuing them.
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Also I remember that this whole situation traces back originally to one guy whose name I can't recall right now. As a trader he introduced the idea that banks could take a mortgage and trade or sell it like any other bond or whatever. Which basically kick-started the whole thing because once a bank was removed from personally being liable for mortgages they gave out they went crazy passing them out to anyone who could sign their name.
Anyways- I wonder if the same bankers who praised that guy as a genius now use his name as a curse?
I agree with you to an extent. They completely got themselves into this through foolish practices and it isn't like they couldn't have seen this coming. I remember reading about how dangerous this pattern of lending was for several years now in magazines, but no one wanted to hear that at the time. But as much as they should bear some responsibility isn't the only reason they are getting assistance because letting them collapse is far more dangerous to the rest of us? I'm no economist, but I don't think they are getting bailouts because anyone thinks they deserve them. It seems to be more to prevent a meltdown that will ripple out and screw us all. Not that we aren't screwed by taking on their debt as taxpayers... but that can only go so far. I suppose we are about to find out what happens when the gov't stops rescuing them.
Yeah, they're doing really bad. Last I checked, weren't they down like 94%?
I think the gov´t should not have helped any of those banks at all, right from the start of the crisis. They just burn the taxpayers money for short-lived effects. What protects the banks helped with tax money the first time from getting into the maelstrom a second time? Of course, there is a high risk in just letting the whole thing run its course, but OTOH the banks etc. do have some kind of reinsurance these days, so that at least the customers account deposits should not be lost if the bank crashes. It is sad if a lot of bankers lose their jobs. What would have happened with the tax money if it were not used for helping the banks? Perhaps some federal orders supporting other companies? If several billion dollars are not available because they are used for stabilizing the banks, this loss will be felt elsewhere.
Stefan
