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As American as a money pit...Liar's Poker

AIG's size and market significance meant it had the government over a barrel. The insurer's finance operations had grown far too big to fail, while operating in large part in the cracks between different regulators' territories.
The credit crunch is surely no laughing matter. But it is starting to look like someone's version of a twisted joke. The sorrows of bank failures and job cuts just took turns that even the best Hollywood minds would struggle to manufacture.

Take the weekend news about Franklin Bank. The U.S. Federal Deposit Insurance Corp. seized the failing Houston-based bank, with $3.7 billion of deposits and 46 branches. It was handed over to a competitor, the aptly named Prosperity Bank.

No big deal? Franklin was small and number 19 on the list of collapsed banks in the current housing downturn. But there's more. Franklin was started less than a decade ago by its chairman, a certain Lewis Ranieri.

For those with some institutional memory - or a copy of the book "Liar's Poker" on the shelf - this is significant. You see, Ranieri is for all intents and purposes the godfather of the mortgage bond market.