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Bair's insistence on loan modification makes sense if you just back away from the morality play and look at it objectively: both the buyers and everybody up and down the whole securitization feeding chain firmly believed there was 110 if not 120 cents in the dollar. She just wants to bang their heads togehter and make them redo the deals on the basis there is 100 cents in the dollar.
Jan 11 14:49 pm
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All Comments by Tom Armistead »Sheila Bair - World's Worst Regulator - to Stay at FDIC [View article]
That is a better solution the destroying the whole system trying to hang onto value that just wasn't there when the deals were made.
Where I have trouble with Bair is that WaMu was adequately capitalized by regulatory standards when seized, so shareholder value was appropriated in the name of feeding WaMu's deposits to some recipient deemed more worthy of the Bush administration's largess.