Congress Weighs O’Connor, Volcker, Levitt to Investigate Crisis
Bloomberg News 2009-05-08 19:49
One big question for them to ask & answer is, How bad would it have been if mortgage underwriting standards hadn't been abandoned? After that, Cont'l Illinois and the "TBTF" (too big to fail) doctrine: why was the Bear Stearns warning shot not heard (as everything & everyone was collateralized why was Bear 'systemic'?); as Bear was TBTF why wasn't Lehman? And why AIG, for Pete's sake? Collateral was their contagion, not CDS, and they're not an intermediary, so why not step into their CSAs instead of lending $182+ bln. The grand-daddy of all questions from this crisis is how to put the 'moral hazard' genie back in the bottle after bailing out everyone -- AIG, Citi, BSC, MMkt Funds, CP, TARP, TALF, ad nauseam, right down to Crazy Woman Creek Bancorp. of Wyoming and 604 other 'systemic' (?!) banks.
JRB
5/8/09
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