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March 19, 2008


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this is how you spell "ludicrous"


I know. What's your point?

Nicole Gelinas

Hi - I am glad that you are concerned about my education, but I know about the prisoners' dilemma. However, I don't really care. These are creditors we're talking about, not insured depositors. There can be no run on the bank under the traditional definition, where depositors overwhelm an institution, leaving those who didn't get their first out of capital in the absence of insurance, because Bear is not allowed to commingle clients' assets with others, and cannot pledge them against liabilities; even if every single account-holding client pulled out, Bear should have enough money to cover them. It's a flight of creditors, including counterparty traders, that was the real problem -- and who cares if creditors flee from a company? Nobody cared when Enron's did. It is not the Fed's purview.

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