I have very little doubt when we poke around in the bowels of the other actors in this drama (Citibank, etc.) we will find much the same thing; firms no longer content to have "good earnings", but who tried to skim off the gravy without understanding the risk they were absorbing at the same time. That's easy to do when times are good, and then it comes back and bites you and everybody says "Gee, that's a surprise!"That's precisely why we must refuse to bail them out and let one (or more) of the big players abjectly fail. It would serve as an excellent lesson. What kind of lesson will be served if we bail them out? And what approach will they take next time an outsized risk with commensurate outsized returns presents itself in the future?
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