More on Bailouts

In one sense, this issue is not directly part of our course, but it has relevance to just about everything we do. And, as we saw in today's cases, the mindset that can lead to risky lending is nothing new. As lawyers, consumers, and Americans, the current financial crisis matters, no matter what Congress does with regard to the bailout.

Here are a couple good articles (plus one of mine), with varying view points.

Commentary: Bankruptcy, not bailout, is the right answer
Source: www.cnn.com
Congress has balked at the Bush administration's proposed $700 billion bailout of Wall Street. Under this plan, the Treasury would have bought the "troubled assets" of financial institutions in an attempt to avoid economic meltdown.

Commentary: The Paulson Plan Will Make Money For Taxpayers
Source: online.wsj.com
In 1992, hedge-fund manager George Soros made $1 billion betting against the British pound. In 2007, John Paulson's Credit Opportunities fund correctly bet against subprime mortgages, clearing $15 billion for the year and $3.7 billion for him. Warren Buffett is now hoping to make big money on Goldman Sachs. But these are small-time deals . . . .

Commentary: Bailouts Should Have Strings
Source: www.lansingstatejournal.com
Recent government-arranged bailouts for Bear Stearns and the lenders Freddie Mac and Fannie Mae have raised questions as to who's next? The debate has focused on Detroit, primarily on General Motors.

This one is just amusing:
Shouts & Murmurs: Too Big to Fail
Before you throw this letter into the proverbial round file, let’s be clear: this is the first time I have ever asked for a bailout from the Federal Reserve.