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Politics : Stockman Scott's Political Debate Porch -- Ignore unavailable to you. Want to Upgrade?

To: SOROS who wrote (8162)	10/17/2002 12:28:01 AM
From: pbull	Read Replies (3) \| Respond to of 89467

Remember the S&L fiasco in the late '80s? Cost the government (aka us taxpayers) half a trillion dollars to clean up the mess. At the bottom, Citi traded at 8. The bears said it would go bankrupt. The bulls made a fortune. Remember Mexico in 1994? Big U.S. banks got in trouble again. As Latin America was about to go into the abyss, at the last minute, the U.S. decided to back most of Mexico's debt. Remember Brazil, 2002? Again, U.S. taxpayers (not necessarily of our own choosing) rush to the rescue. Greenie speaks of the "moral hazard" of bailing out the stock market when it gets in trouble. But when it comes to the big money-center banks, why shouldn't they be reckless? After all, it is not they who ultimately pay the price. Remember Long-Term Capital Management in 1998? A hedge fund for the wealthy, loaded with derivatives. When it collapsed, the New York Fed decided that its well-healed investors should be made whole. But as for Joe Blow's 401(k) fund, well, that would present a "moral hazard." I'm not saying it's right or wrong. That's just how it is. As I said, I've learned to live with it. PB