You do realize those are my initials, right? You confused the hell out of me for a second.
I'm pretty convinced that this isn't going to act like that kind of signal. BS was pretty much destroyed, and the people involved were not really rewarded for taking those risks. I just can't see any other investment bank looking at what happened and considering that a viable safety net. When push comes to shove, BS shares went from $130 to $2 in less than a year: that's just not a win for anyone. (OK, the takeover bid's up from $2 now, but presumably someone pointed out to JP Morgan that BS's building alone is worth more than that)
But just to be a wiseass, let's think about the message it sends home buyers and mortgage lenders if the Federal government is willing to step in and save them from foreclosure. Is that going to change the behavior of predatory lenders or irresponsible buyers? If the sheer volume is what triggers it, all that tells the lenders is that if they're going to screw up, they'd better screw up REALLY BIG.
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timeasmymeasure
no subject
Date: 2008-04-14 08:01 pm (UTC)I'm pretty convinced that this isn't going to act like that kind of signal. BS was pretty much destroyed, and the people involved were not really rewarded for taking those risks. I just can't see any other investment bank looking at what happened and considering that a viable safety net. When push comes to shove, BS shares went from $130 to $2 in less than a year: that's just not a win for anyone. (OK, the takeover bid's up from $2 now, but presumably someone pointed out to JP Morgan that BS's building alone is worth more than that)
But just to be a wiseass, let's think about the message it sends home buyers and mortgage lenders if the Federal government is willing to step in and save them from foreclosure. Is that going to change the behavior of predatory lenders or irresponsible buyers? If the sheer volume is what triggers it, all that tells the lenders is that if they're going to screw up, they'd better screw up REALLY BIG.