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Commentary

Moral hazard for breakfast

HBOS says “bailout ke naam pe de de baba” (English equivalent) and then…

HBOS Plc, the U.K. bank that told shareholders yesterday it’s short on liquidity, will fly 100 branch managers and their partners to New York for four days to reward their performance.

(Bloomberg)

Well done boys, we stole their money…now let’s have some fun.

(Follows after AIG)

If, after this, homeowners choose to purposely default because beneficial loan modifications are only available to “distressed” mortgages, I wouldn’t blame them. When the banks will do it, so will the individual. This is pretty much it – the world is going to start from zero again, even if we don’t have a loan or a mortgage, because we will soon not have an economy to talk about either.

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