Will the sub-prime meltdown influence Watters V Wachovia?

[1003s.com]

Will the sub-prime meltdown influence how the case

is decided? I realize as a matter of law, the

subprime meltdown will not be considered. However,

the court could look at it from the stand point

that state governments are clearly failing to

govern sub-prime lending, and at the same time

asking the court to transfer more regulatory

authority over to them. Granted none of this has

anything to do with the more scholarly question

of balancing power between state and federal

government, however in the past many decisions

were made by the court that reflected the times

they lived in, rather than pure rule of law.


"May you live in interesting times"

[Erik]

Well... it took a while but I'd say the free market has done it's own job of regulating subprime because the natural consequences we're seeing happen right now. Would we better off with government regulation? That's hard to say.

[1003s.com]

The industry was way less regulated 15 years

ago and has become worse with increased

regulation. I think as a general sense, regulation

falls victim of "the rule of unintended consequences."

Another question is should their be a bail out?

The housing market has become too inflated in

part due to loose credit. If the GOV lets

these loans go bad, values will drop, in the long

run I think that would be a good thing.

Why should the government reward people and

companies who made poor decisions?

While I agree there will be people put out in the

street if nothing is done, on the flip

side there will be people who will be able to

purchase houses they can afford due to the

lower prices.

At the end of the day, the question really boils

down to the redistribution of wealth, if

you think wealth should be redistributed, the bail

out makes sense, if you are against

wealth redistribution the bail out makes no sense.