It’s all very upsetting, all the more because it’s so predictable. You put Republicans in charge, they deregulate everything, economic disaster ensues and then the Democrats have to come in the next election cycle to clean up the mess.
And then the Republicans will blame the whole thing on the Democrats, anyway.
The turmoil on Wall Street is beginning to rock a foundation of the financial system: the ability of institutions to make good on their many trades with one another.
Today, a struggling bond insurer, ACA Financial Guaranty Corp., will ask its trading partners for more time as it scrambles to unwind more than $60 billion of insurance contracts it sold to financial firms but can’t fully pay off, according to people familiar with the matter. The contracts were intended to protect Wall Street firms from losses on mortgage securities and other debt they own.
