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Investors assume that Miami is too big to fail. The government bailed out (most of) the financial firms in 2008. Bailing out (figuratively and literally) floodi
by xapata 10y ago
Investors assume that Miami is too big to fail. The government bailed out (most of) the financial firms in 2008. Bailing out (figuratively and literally) flooding cities will be a popular plan when the time comes.
Just as with the housing collapse, the question will be whether the government bailout will successfully resolve the crisis.
- __derek__ 10y agoExactly. The answer is moral hazard. As long as it's possible to keep Miami dry, post-Katrina New Orleans basically guarantees that Miami and similar will see a massive influx of money to rebuild. Once these properties are physically/financially underwater, the corporate bailouts effectively guarantee that they'll be made whole-enough. Meanwhile, they get to make money off of the buildings.