Comments on: The morals of bailouts http://blogs.reuters.com/felix-salmon/2009/12/01/the-morals-of-bailouts/ A slice of lime in the soda Sun, 26 Oct 2014 19:05:02 +0000 hourly 1 http://wordpress.org/?v=4.2.5 By: drewbie http://blogs.reuters.com/felix-salmon/2009/12/01/the-morals-of-bailouts/comment-page-1/#comment-9512 Wed, 02 Dec 2009 17:43:12 +0000 http://blogs.reuters.com/felix-salmon/2009/12/01/the-morals-of-bailouts/#comment-9512 a, I think you’re confusing “amoral” with “immoral.”Captialism is an amoral system because it’s based on letting buisnesses choose their own path to success (or failure), not dictating that path.

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By: Ginger Yellow http://blogs.reuters.com/felix-salmon/2009/12/01/the-morals-of-bailouts/comment-page-1/#comment-9491 Wed, 02 Dec 2009 10:03:13 +0000 http://blogs.reuters.com/felix-salmon/2009/12/01/the-morals-of-bailouts/#comment-9491 “In general, a government has the right — but emphatically not the obligation — to bail out absolutely any company it wants, anywhere in the world.”That’s only somewhat true. In Europe, for instance, state aid rules place strict limits on the form and scale of bailouts – they can’t give the bailed out company an unfair competitive advantage. So, for instance, when ING was bailed out by the Dutch government, the EU forced them to increase the fee for the state guarantee and to sell off half their balance sheet. All the bailed out banks have been forbidden from paying discretionary coupons on their hybrid capital instruments.

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By: a http://blogs.reuters.com/felix-salmon/2009/12/01/the-morals-of-bailouts/comment-page-1/#comment-9487 Wed, 02 Dec 2009 08:56:21 +0000 http://blogs.reuters.com/felix-salmon/2009/12/01/the-morals-of-bailouts/#comment-9487 “the ruling family in Dubai is simply defaulting on its non-recourse underwater loans in accordance with the amoral principles of capitalism”There’s nothing amoral about it. The banks loaned their money to entity A. A may go bankrupt. The banks said they thought the sovereign would bail them out, but the sovereign never said so. So because the banks made a mistake, the sovereign is supposed to pay them off? In what bizarro world?”Some such companies carry an implicit government guarantee, even in the face of explicit denials that such a guarantee exists — that was the case with Fannie and Freddie.”So who gave this implicit government guarantee? Oh I know, the *buyers* of the Agencies, since no one in government ever did. So again those who lent the money talked up the point that they *thought* that the Agencies had a guarantee, even though every prospectus said clearly that they were not. It’s a bizarro world when the buyer of a bond is the one who decides whether there’s an “implicit” guarantee or not.The Agencies were bailed out and the U.S. taxpayer was slammed because the Treasury and Fed were beholden to asset holders, not to taxpayers. Apparently Dubai and Abu Dhabi are more responsible, and less corrupt, than our own government. That is what is truly sad.

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