... when the isht hits the fan! Here is just a couple of random thoughts related to the meltdown of America's financial industry.
- Consolidation is the root of the problem, not so much regulation and the lack thereof, except as they play into it. Under a more ideal system, all that bad debt would be spread among many more (smaller) banks and other lenders. Some would fail, the ones that found the right amount of risk would survive. This system would be a freer market, and more capitalistic, not less. The problem is that five firms were allowed to exceed the SEC's debt-to-capital ratio.
- This looks real bad for McCainiac & Co. Less than 24 hours after he declared our economy "fundamentally sound", that same economy was revealed to be within days of a complete meltdown (which may still happen). He should have known better; his own son managed a bank that ultimately failed, like a number of others have. As long as the news media focuses on real issues, McCain's campaign, such as it is, is in trouble.
- I don't want to be bailing out people who were stupid enough to get an "interest only" loan... or anyone who was willing to sell it to them. What about people who speculated on an ARM loan and are now getting burned? Drawing the line starts to get difficult after that.
