Nu, nu. So I’ll make heter iska on all of them.
Also, the more I understand about the bailouts, the differently I feel about them.
The banks were not failing only because the mortgages were going down in value. Even if half the mortgages in the RMBS market had defaulted, the losses would only have been about 3.5b. Merril Lynch lost about 20b in the 4th quarter of 2008.
The market was spiraling on itself, but it was just panic–not actual decline in value.
Meanwhile, the banks were forced by regulation to deleverage, and they were doing that by dumping assets which further exacerbated the problem. They really should have done that by raising more capital, but, for complicated reasons, it didn’t make sense for the banks’ equity holders to do that. The bailouts forced them to deleverage by raising capital.