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It's my understanding that the reason the taxpayer ended up bailing out the
SLs was because the customer deposits were insured by a federal agency.
FSLIC, or FDIC or whatever.
It's my thinking that the only way we (the taxpayers) would get involved
with the LTCM mess is if LTCM's creditors lost federally insured customer
deposits due to LTCM defaults.
Regulators don't care if wealthy, supposedly sophisticated investors take a
bath in a spectacularly leveraged, therefore risky, investment.
I think regulators are all nervous about banks failing. Personally, I'm glad
they are. When I make deposits into my checking or savings account at my
bank, I consider this money to be at zero risk...having your demand deposits
at banks at risk is truely something to fear and pubic outcry should demand
whatever regulations are necessary to ensure public confidence in the
security of our bank deposits.
Scott Hoffman
Issaquah, WA
>So call me cynical, but personally, I can't help but feel the American
>Taxpayer is going to end up eating this un-ordered desert sometime
>before the table is cleared. It happened in the past with the S&L's
>and, unless someone can show me differently, I'm having a difficult time
>seeing how we shouldn't expect to end up in essentially the same
>situation this time around the Mulberry Bush.
>
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