Larry G

The Failure to Admit Failure

I think it's an interesting article, however, letting everybody get wiped up to the debtholders hasn't been a winning fomula. If you don't believe me just look at what happen when the government wiped out the preferred shareholders in the Freddie/Fannie takeover. Nobody could raise equity money for fear they may get wiped out.

If that wasn't bad enough they let Lehman go under and the counterparty risk caused so many problems that the government had to step in with capital injections to save the system.

Making decisions based on an idealogy is bad decision making. Decisions should be made based on the facts and the risk/reward tradeoffs.