Michael Brandl's Macroeconomic Update pt.1

[sailjc]

A good example of a moral hazard is a rental car. When you rent the car you may also add a damage waiver. Since the car is not yours and you will not be held responsible for any damage to the car, you treat it like crap. You would never do the same with your own car. This is the point that Dr. Brandl is trying to make wrt the bailout of these risky lenders. If the fed is always there to bail me out, then why should I be risk adverse?

[corbinmoore]

Would it be better to let market forces be the catalyst for any corrections, which might have included Bear Stears going away in a more cataclysmic function?

[Mike1977a1]

Wow this guys thinks banking directors are moral, he is so naive!