The solution to which firms get to fail is very simple.
When a common stock based company fails, the common stock goes to zero, and subsequently the debt flounders until the stressed assets are put in a more productive mode.
Usually this means a haircut on the debt, whereby the human emotion runs strong literally giving assets away, whereas smart vulture firms find the meat.
This is capitalism.
When the government steps in , preventing the haircuts, or the failure of equity, then the result is socialism. At this stage, a government imposed type of price fixing interferes with the market's pricing mechanism.
http://www.bloomberg.com/apps/news?pid=20601109&sid=a0v71H6gketc&refer=home
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The SEC is also catching the disease.
The SEC thinks that limiting selling, and not limiting buying is a logical way to prevent harm to the markets.
What the SEC is doing is interfering with the pricing mechanism that only markets should be performing.
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Let there be no question that both the SEC and the FED are making a mockery of capitalism, and have failed capitalism.
The market, and not government impostions should be in control of prices.
When a common stock based company fails, the common stock goes to zero, and subsequently the debt flounders until the stressed assets are put in a more productive mode.
Usually this means a haircut on the debt, whereby the human emotion runs strong literally giving assets away, whereas smart vulture firms find the meat.
This is capitalism.
When the government steps in , preventing the haircuts, or the failure of equity, then the result is socialism. At this stage, a government imposed type of price fixing interferes with the market's pricing mechanism.
http://www.bloomberg.com/apps/news?pid=20601109&sid=a0v71H6gketc&refer=home
..........................................................................................
The SEC is also catching the disease.
The SEC thinks that limiting selling, and not limiting buying is a logical way to prevent harm to the markets.
What the SEC is doing is interfering with the pricing mechanism that only markets should be performing.
..........................................................................................
Let there be no question that both the SEC and the FED are making a mockery of capitalism, and have failed capitalism.
The market, and not government impostions should be in control of prices.