more banking madness... [Archive]

ckaihatsu

6th November 2010, 16:47

With one out of four mortgages in the US under water – more owed than the house is worth – there is a growing consensus that the only way to deal with the mess is to write down the value of the principal (what is owed). America has a special procedure for corporate bankruptcy, called Chapter 11, which allows a speedy restructuring by writing down debt, and converting some of it to equity.

It is important to keep enterprises alive as going concerns, in order to preserve jobs and growth. But it is also important to keep families and communities intact. So, America needs a "homeowners' Chapter 11".

No, the entity that should be forced to declare bankruptcy is *Wall Street* (and the U.S., etc.) since it technically became insolvent in 2008....

[Wall Street] has *zero* "leadership" [...] because when *their* project hit the fan [in 2008] they had to come crying to the nation-state and to the public to be propped up.

(As usual the double-standard prevails, wherein the spotlight is put on regular people to become like hamsters, running on their endlessly turning wheels....)