TheRealMafoo on 11 July 2009
| Slimebeast said: Interesting thread indeed! I just scimmed thru the OP quickly and will dwelve deeper into it later, but need clarficcation on just one phrase thats unfamiliar to me: What meaning has the word 'default' in this context? (as in "allow excessive debt to be defaulted") |
Defaulted means to just not pay the loan, and not to be obligated to ever play the loan.
So if a bank has 10 billion in debt, and the bank folds, the people that banked owed the money to just loses any option to get that money. It's just gone.
This would mean many banks would be folding (or filing chapter 11, having there debt wiped, and continuing), and it would cause some pain, but it's pain we need to go though before we are out of this.
What government is doing, is not letting those banks fail, and prolonging the problem.
