Blown Mortgage - Latest Comments in Institutions must be allowed to fail

Re: Institutions must be allowed to fail

mortgage lenders nate — Sat, 13 Sep 2008 13:18:58 -0000

This week is going to be our final installment of the “How To Find The Right Loan Officer” series. Over the past 4 weeks, I have talked about 4 different things that you can do to help you find the best loan officer for your situation.

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Re: Institutions must be allowed to fail

JDallas — Tue, 09 Sep 2008 12:00:51 -0000

I agree with Bloomberg, markets should be allowed to fail. Not so much for the "too big to fail reasons" but because of the "learned behavior" reasons. As long as industries/shareholders/bankers can behave recklessly and still escape relatively unscathed to the rest of the population, you leave the door open to more events driven by greed and short term gain

Re: Institutions must be allowed to fail

Fielding Mellish — Tue, 02 Sep 2008 14:33:52 -0000

Fannie & Freddie should also be considered "not too big to fail" at least insofar as their stock value & prior mortgage bonds are considered. Paulson should not have effectively agreed to guarantee the agencies' existing mortgage debt (on account of the ol' "implicit" guarantee). He should only have guaranteed newly-issued mortgage-backed agency debt (from mid-2008 on). That would have preserved the future stability of US mortgage securitization, while forcing the old boldholders to take a "haircut". Admittedly, it would have been risky to let foreign creditors show such a loss.