Holy Crap

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Even though I was expecting it, it's still a little stunning to see it happen.

Update - Just to be clear...WaMu failing and getting bought for a song by JP Morgan doesn't mean "OH NOES!!1! The sky is falling and we must give a trillion dollars to Wall Street or die on Monday!". WaMu was a strictly regulated bank that was, in accordance with regulations, seized and sold off, with no loss by the depositors and no cost the taxpayers. The shareholders lost everything, but, well, that is how it works - make a bad investment, lose your shirt.

The trillion dollars is all about almost completely unregulated investment banks. While there are connections between the two problems, the orderly failure of WaMu versus the Wall Street disaster simply underlines the importance of prudent regulation. If you have that then you don't need Helicopter Hank to swoop in and air drop money to the top 0.1%

Also, while I am talking financial crisis, you hear a lot these days about how whatever bailout is passed it should include something saving the homeowners that are affected by all this. While this seems like it might be a good thing to do, it's important to remember that some of these homeowners were as stupid as Wall Street. Take a look at these idiots, for example. It's hard to be sad that they are underwater when they took out $450K of equity loans on a $189K house in four years, with only 9k down.

Obviously if anything is done about homeowners it needs to be selective and only affect those that were actually screwed, as opposed to those that screwed themselves.

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This page contains a single entry by edgore published on September 25, 2008 10:12 PM.

Not Funny. Sad. Relevant was the previous entry in this blog.

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