Strategic default is the banker’s stigma of convenience

Dec 26th, 2011  
by IrvineRenter  in Library News

Astute Observations

Astute Observation by JDSoCal
2011-12-26 10:18 AM

Regardless of the merits and implications of strategic default, IR, I think it would be more fair to compare the banks to underwater homeowners than the airlines. The banks weren’t even allowed to fail, and that seems to be more the approach of this president, just subvert the legal process by fiat and pick and choose winners.

Rather than go BK, even worse, banks and their bondholders got a nice 100% bailout, unlike what they are proposing in Europe. Never heard anything about a bondholder “haircut” when TARP came along.

And then there’s the ultimate corrupt rip-off of all time, what was done with GM, and ever worse, Chrysler. There, even the bondholders were thrown overboard for Obama’s union cronies. And of course the taxpayers took the worst of it.

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Astute Observation by peteym80
2011-12-26 06:28 PM

You mean you can’t make outrageous bets and if they go bad get a taxpayer bailout? Or how about sell mis-rated CDOs to people who do not know any better then short them right after that? How about pay your CEO millions of dollars from the taxpayer, then watch the stock price go from $50 to $5 ala Bank of America. Or pay a member of government $1.6M to do some “consulting.”

This is not capitalism. This is crony capitalism. We live in a system with socialist loses, but privatized profits.

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Astute Observation by newbie2008
2011-12-26 01:08 PM

Sound like the parable of the servant who was forgiven his great debt and then when out and was unforgiving of this fellow servant’s small debt to him. 

Not exactly alike in our case, cause the banks are the master of the Fed and the US govt (transfer of the debt, not forgiving the debt).  Anybody know of a parable that matches our situation? 

What does one get for the $155/month or $1860/year HOA?  That’s like hidden price of $40,000 in the selling price.

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