Tuesday, September 16, 2008

Does anybody in Washington know the meaning of "moral hazard?" - Via Megan, the Federal Reserve is going to essentially purchase AIG.

To turn a phrase: capitalism ain't beanbag. You take your risks and if you succeed you reap the rewards; if you fail, you lose everything.

When rogue trader Nick Leeson concealed huge losses at Barings Bank, nobody came in to save what was then the oldest merchant bank in England (founded 1762). In 1995, the Dutch bank ING purchased the bankrupt Barings (and assumed its liabilities) for a single British pound.

Tough luck, old sport, and let that be a lesson.

More - From Memeorandum.

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