Walking away: The new American way?

This article was originally on a blog post platform and may be missing photos, graphics or links. See About archive blog posts.

Brief and scary: The Financial Times reports that banks are being advised to play ‘jingle mail’ on a very large scale. ‘Leading banks are being advised that it would be cheaper to walk away from big buy-out deals than incur further losses on their funding commitments, increasing the chances that more high-profile private equity transactions will collapse. This advice from lawyers contrasts with the conventional wisdom that banks would risk serious damage to their reputations if they were to drop out of deals.’

Note: On first blush, the health, behavior and political desires of big financial institutions are beyond the scope of this blog. But on further review, as they say in the NFL, the play stands as called. All of this comes back to the ability and willingness of mortgage lenders to lend. And that is as important to the California real estate market as personal income.

Thoughts? Comments? I know, the link goes to a registration page. I suspect one of the readers is smart enough to find a full version of the story and post a link.