WHEN FINANCIAL COMPANIES STOP BEING POLITE AND START TRYING TO KICK THE HELL OUT OF EACH OTHER.

Noam Scheiber has an interesting story in this week's New Republic tracking the effort by the banks to screw over the professional investors. The very short summary is that the banks wanted a "safe harbor provision" that would give them legal immunity from investor lawsuits if they modified mortgages. This has, in turn, generated a massive counter-lobbying campaign from the hedge funds and other types of investors. "Think of the new dynamic as a kind of Iran-Iraq war come to Capitol Hill," writes Scheiber. "Where there are no obvious good guys, the next best thing may be two powerful rivals beating each other to a pulp."

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