Formerly About Advanced Micro Devices Message Board

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Politics : Formerly About Advanced Micro Devices

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To: Brumar89 who wrote (423954)	10/8/2008 7:51:12 PM
From: tejek	Read Replies (2) of 1571529

one thing to buy mortgages of houses that will someday be worth more than the mortgage, the government could even make a profit. Another to pick up failed insurance companies or to take over payments. I agree - let the insurance companies or whoever holds the CDS's go under if necessary - a risk they assumed voluntarily. Do you understand that this whole problem is not as black and white as you're trying to make it. Many of the insurers were not mortgage insurers in the beginning......they may have insured corporate notes and/or municipal bonds and/or industrial debentures and/or something else. It was in the mid-late 90s they saw residential loans as another area in which they could expand, increasing their participation in still another industry. So then, if you let one fail, its not just a problem for home mortgages, its a problem for all the industries in which the insurer was involved. And some of these insurers had their fingers in other markets like in Europe and Asia. That's why the meltdown is not confined just to the US.

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