So because Bush and Obama believe in bailouts my industry needs greater regulation? Whatever. You are using socialism as an excuse for more socialism. We know where that ends up.
So you actually believe the bailouts “saved” the global economy? That doesn’t sound like Freeper material to me.
And so what if an unhedged position destroys your company and your counterparty? Who cares? I frankly don’t care that businesses fail everyday. If you want a business to not fail then look to North Korea. Businesses never fail there.
That’s all good,when the failure of the given business only affects that business and damage doesn’t spread.
lets say all banks in US got pretty mortgage insurance from AIG, and now AIG is bankrupt — good they deserve it! Now every single bank is not-solvent, and has to be taken over by FDIC (yes it is extreme example) now do you think FDIC has ability to support every single bank in US at the same time,I don’t think so. Again a financial institution,is not just itself it is all counter parties,and counter-parties of those people,etc.. And the chain never ends if one big guy fails,it pulls down everybody with it, all Firms, ,clients,and employees. Yes its an extremely fragile and interconnected system,a very dangerous system, which doesn’t happen in any other industry it seems.
And no regulation is not communism of socialism unless you are Ron Paul supporter, financial institutions are regulated already FDIC,SEC,FTC,etc.. But non of those regulations really address catastrophic risk.
If every position is hedged,then if company like AIG goes broke you can liquidate its assets and pay to their counter-parties,without having GOV Bailout. I think that is the most capitalistic way to go,personal responsibility.
Would you care if an unhedged position destroyed your country?
Do wild bears defecate in the forest?
Your industry has proven itself to be incapable of self-regulation. Strict limitations on leverage should be enforced. That's not socialism, that's just common sense.