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The recent indication that one of the biggest banks had lost $2 billion to $4 billion on some exchanges really panicked many people. They thought, "Oh hell here we go with another bank bailout." According to this poll 71% of likely voters say, "Just let them fail". It is obvious, to me, that some other banks will take their place and nothing serious will take place since the new owners would probably hire all the managers up to the CEO. It may lead to a new "monopoly" if done enough times but this government we have can regulate that.
Those who don't like the outcome of this poll remember that the same group lists Obama 46% and Romney 44% today. They must be very close to right in the eyes of Obama lovers.
I wish there was a way for big banks to fail, but it has to be done in a controlled manner; it would have been a disaster to let the banks simply all collapse at the same time. There's no reason to throw out the baby with the bathwater here, and there's a middle ground. Ideally, a bipartisan effort would find a way to save banks (and markets) from complete, catastrophic collapse, but would also simultaneously have a way to have government or some quasi-government entity receive the funds temporarily and then let the bank restart as a new entity or have shares/assets sold off to other banks. Basically, a better version of what we have now, but one that doesn't reward banks for their failures.
The recent indication that one of the biggest banks had lost $2 billion to $4 billion on some exchanges really panicked many people. They thought, "Oh hell here we go with another bank bailout." According to this poll 71% of likely voters say, "Just let them fail". It is obvious, to me, that some other banks will take their place and nothing serious will take place since the new owners would probably hire all the managers up to the CEO. It may lead to a new "monopoly" if done enough times but this government we have can regulate that.
Those who don't like the outcome of this poll remember that the same group lists Obama 46% and Romney 44% today. They must be very close to right in the eyes of Obama lovers.
That makes no sense at all. If a major bank completely fails it's going to be because they have lost the money of those that fund their ability to invest which is bank customers.
Sure they have insurance up to so much but can the FDIC ensure every penny of every customer of the bank? Next you actually believe that every single employee would be hired on the spot by the new parent bank? BOA got 5 billion from Buffett then said they were going to get rid of 30k jobs.
Stricter regulations should apply to those banks that hold a majority of people's money and investments as those are the ones that when they fall they bring everyone else down with them. Smaller investment firms should still have regulation but at the same time losing one of them is not as big of a deal.
Allowing the major banks to fail is truly not an option IMO simply because the number of people who would lose either everyday money, savings etc would be ridiculous BUT they also need to have tighter restrictions on them.
If you are talking to me, no, the smaller investment banks would not be bailed out; they'd be permitted to fail and close shop.
The only reason we had to bail out the super large investment banks, is because they were so large that if we permitted them to collapse, they'd take a large section of the economy with them. If you are that big, that you as a single entity have that much sway over the nation's economy, you are too big.
So, break them up, so that no entity is that big. Then, let the failures fail.
What options would there be if the vast majority of "smaller investment banks" engaged in some activity that undermined them? Would we still have the option to let them fail just because each individual bank was small? I really don't see much difference between letting say 9 out of 10 large investment banks fail vs letting 90 out of 100 smaller investment banks fail.
The problem with the situation in 2007 and 2008 is that no one knew how extensive the damage was. I'm not sure the situation would be improved if there were more entities.
I guess one could argue that if there were 100 investment banks vs 10 that there would be a greater likelihood that they all wouldn't follow the same path into trouble. But I think the heard mentality in a bubble would likely draw in most participants.
There is no such thing as a "Too Big to Fail Bank". The Bankers themselves along with close political and Federal Reserve allies are most likely the ones that came up with that monicker.
What would've happened if we let these corrupted Institutions naturally fail and spent the Bailout money on actual citizens that would lose money and deposits as a result? That seems like it would've been the best approach. $16 Trillion surely would've been enough to cover the losses inflicted on actual individuals instead of Corporations and Institutions.
Credit Unions and Banks willing to play fair and honest would then step up to usher in a new Banking era. Unfortunately, that didn't happen. Could have something to do with the fact that "TBTF Banks" have so much influence and power in Government and the Federal Reserve.
Why would they let go of the reins when they still control the horse?
There is no such thing as a "Too Big to Fail Bank". The Bankers themselves along with close political and Federal Reserve allies are most likely the ones that came up with that monicker.
You could use a better argument than a conspiracy theory. For example, what implications do you see if massive banks are collapse?
So, break them up, so that no entity is that big. Then, let the failures fail.
Breaking them up changes nothing. The losses are on the books and cannot be taken off without setting off the Krugman Keynesian Klan's conspiracy theory of the economy collapsing.
71% of people say that because they had the luxury of not experiencing the hell that would have stemmed from allowing the banks to fail and crashing the world economy.
The only other option would have been to decapitalize and nationalize the failed banks, then selling off the leftovers to the responsible banks left in the wake. That would have been far more responsible than giving other banks blank checks to take them over. But that would have forced CEOs and big investors would have had to be responsible for their actions without destroying the economy, so no go.
Couldn't rep you again, yet, Mr. Mon.
As for the survey - unless those 71% are all macroeconomists, I don't care what they say.
You could use a better argument than a conspiracy theory. For example, what implications do you see if massive banks are collapse?
LOL, what conspiracy? Please explain. Do you deny that The Federal Reserve and TBTF Banks have a long history together?
I wrote what I thought should've happened. The Bailout money could have been spent on individuals that would lose money as a result of these corrupt Institutions failing.
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