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Because it was wholly unnecessary. Management should have been dismissed, shareholders wiped out and debt converted to equity.

What has been done will just prolong the pain and cause more collateral damage in the form of foreclosures and bankruptcies of other entities which would have survived otherwise.

En un viejo país ineficiente, algo así como España entre dos guerras civiles, poseer una casa y poca hacienda y memoria ninguna. -- Gil de Biedma

by Migeru (migeru at eurotrib dot com) on Mon Aug 17th, 2009 at 04:27:55 PM EST
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I agree regarding the banking crisis, and particularly the case of Iceland.  But I just wondered if Chris meant to make a general statement about socialization of losses, period, or if it was particular to the discussion of Iceland or the financial crisis.
by santiago on Mon Aug 17th, 2009 at 04:34:59 PM EST
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Socialisation of losses is fine within the right framework, I think.

To me, that means that whoever receives some sort of public guarantee, limitation of liability, or insurance, should actually pay something for it, if they are able.

"The future is already here -- it's just not very evenly distributed" William Gibson

by ChrisCook (cojockathotmaildotcom) on Mon Aug 17th, 2009 at 05:59:32 PM EST
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