71% say government should left big troubled banks fail

[GuyNTexas]

Originally Posted by Mr. Mon

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.

The only action that will allow the system to be fixed is to "Nationalize" the federal reserve bank, taking the power to control our monetary system away from international gangsters, and back into the hands of the people, as prescribed by the constitution.

[WilliamSmyth]

Originally Posted by Hueffenhardt

A couple of things. First, we do need to reinstate the separation of investment banks from retail banks. Since the FDIC insures deposits made in retail banks, we to regulate them to make sure they are not making investments that are too risky (those would be the strings attached to being able to claim to consumers that their depositis in your bank are FDIC insured).

As for the investment banks, part of the point of breaking them up, is that it is less likely that many of them would make the same mistakes 1 of them would make. It is still possible that a ton of them make the same mistake, but statistically a lot less likely.

However, if you look at what happened in 2007/2008 collapse many of the investment banks adopted the sucessful strategies of their competitors because it was highly profitable until it wasn't. I think most entities will end up doing what appears to be reasonable and profitable. As was the case in 2007/3008 it will not be a good career move for a risk manager at a bank to stand in the way of huge profits.

I agree that somehow the assets must be segregated, but I also think that there must be more transparency in the transactions. In my mind its OK for an institution to take great risks with its own money, but other institutions that are doing business with it need to be able to understand the risks it has taken on. AIG had a triple A rating even though they were highly leveraged.

[monkeywrenching]

Originally Posted by Hueffenhardt

I think the phrase "too big to fail" is often misunderstood. It does not been that that the investment bank can't fail because it is so big; any institution can fail. The phrase "too big to fail" means that our nation's economy can't afford to let it fail because it is so big that if it failed, it would damage a large segment of the entire economy.

No one corporation should be allowed to get that big, so we need to break them up. When smaller corporations/investment banks fail, they don't cause the same economic tidal wave that the massive investment banks cause when they fail.

I dont really care if an institution or private company gets too big to fail, as long as they are not getting taxpayer money when they get into trouble. if they are in trouble, then they should fail, without any help from the goverment.

[monkeywrenching]

Originally Posted by EinsteinsGhost

Let us hope it is your bank first.

I dont care if it is my bank that fails 1st, as the amount of money I have in it is les than a paychecks worth of cash. most of my money is not in any institution at all. so if there is ever a run on the bank, I wont have to go take out my measly $3800.