Re: "I still think you misrepresent the issue by putting in terms of favoritism...'
>>> Hey, money talks... especially big campaign contributions.
>>> Congress MADE the S&L mess.
>>> 1) by raising deposit insurance from $40,000 to $100,000 (OK, not so much wrong with that,,, but they did it in conjunction with #2) 2) Removing restrictions on S&Ls making risky (junk bonds, anyone? high-risk real estate and oil drilling partnerships?).
>>> Why shouldn't the S&Ls make risky investments... with the government guaranteeing the deposits no matter what they were invested in, no matter what reserves where banked against losses.... It was a 'free play', not a free market.
>>> (Broker-Dealers buy private insurance to backstop investors against the bankruptsy of the firm... why couldn't S&Ls?
>>> Then Congress made the Trillion dollar screwup: they IGNORED the deposit insurance limits, and bailed out every penny of deposits, no matter how many millions were in an account, no matter how sophisticated the investor was (many millionaires were 'shopping' S&Ls for the highest junk bond-style yields... knowing full well they were over the deposit insurance limits.
>>> And the taxpayers were left the Trillion dollar bill for the bailout. |
