Philip Gvinter

So the Perpetrators Are Now Our Saviors?

The short sellers did not cause a run on the bank and the mortgage securities do not have to be worth nothing in order for a bank to be insolvent and ripe for failure. If a bank has a capital ratio of 10% and 30% of its assets turn out to be of dubious quality and only worth 65% of par value that bank is essentially insolvent. This was the case with WM, WB and LEH.