Obama is Bush part 3

Distinguishing Between Out of Favor Sectors and Doomed Ones

DM: On an unrelated note, what should be the terms for bailing out Lehman Brothers?

What? Why do you assume a bailout is necessary?

Lehman's counterparties are all "institutional investors". People with MBAs and PhDs. People who collect millions of dollars per year in compensation because they are supposedly so much smarter than everyone else.

The argument to bail out Lehman (or WaMu or any other) is ridiculous. The consumer is roughly 70% of the economy -- that's more than ALL the banks put together. If XYZ bank is too big to fail, then the consumer is way way way too big to fail.

So we should all send our mortgages and credit card bills to Paulson. And under the too big to fail doctrine, we have every right to expect him to pay every single one of them. 70% of the economy is clearly too big to fail. And the majority of consumers do not have MBAs or PhDs like the "sophisticated investors" who work on Wall Street -- we are far more deserving of help. Where is our bail out?


Or, we could follow the ideas that once made America the great country it USED to be (and could be again). Let the people who made poor investments bear the consequences of their decisions.

If you traded with Lehman or WaMu or whomever -- you get the results of your decision good OR bad. If you make money, its yours. If you lose money, its also yours.

Of course, this means a lot of Wall Street will fail. But they are hardly "victims" of anything, except their own decision making.