The S&L thing wasn't a bailout, that was an orderly shutdown of the failed banks led by a special facility called the RTC to sell off the assets. That should have been the template for this time around. None of the banks that failed were bailed out. Hundreds were in fact closed down. When things settled down, what was left for the RTC to do was folded into the FDIC and everything went back to normal. All that happened was that the depositors were moved to other good banks, and the assets sold off. That's precisely what should have happened this time around. As for the involvement of the Fed, way too much is made of that. I worked on the Fed Funds desk for quite a while. Most of the funds banks need, whether at Xmas or any other time, they get in the interbank market, when times are normal. Fed Funds is the rate banks charge each other for funds. If you have to go to the discount window to get money, that's a huge black eye for you. That of course changed during the crisis, but I don't see that as a bad thing: the Federal Reserve is supposed to be the reserve of last resort - that's why it has that name - when there's a run. What was bad was not letting the banks that failed fail. That is the fault of one person and one person only: Paulson, who panicked, came up with the TARP, and blew the budget up for good and forever. Conspiracy theories about the Fed put a big shmear over the actual events that actually transpired. The actual event that screwed this whole thing up was Paulson's panic, nothing else.
Interesting comment Re Paulson. Incidently, with regard to the FDIC, they closed UCBH in California even though Menseng (Sp?) bank in China, who owned about 10% of stock wanted to provide the capital to keep them solvent. Problem was Menseng said they needed another couple weeks to complete the transactions (seems reasonable) but FDIC was either unwilling to cooperate, or was perhaps restricted by law. Anyway the upshot was a bank that could have been saved was not, and the common share holders took a bath courtesy of FDIC. UCBH was taken over by East West Bank. I lost some money on that deal, because I was certain that Menseng would not want to lose their investment and would step in, but i foolishly did not count on the FDIC not cooperating. I should have realized there would be problems, since Menseng was a Chinese bank.
A practical review can be had by sitting in a movie house. See "Inside Job"; Matt Damon narrates with questions of key players that agreed to "talk". If you digest the movie and happened to keep notes on what happened during those years, you can see that the movie crew did NOT use the 'tells an expert trader/investor would use. The shift in "intelligence" is about two years for the speculative, front running parasitic front funning. I remember at the peak of the problem (mid 2006) the going rate was 100K a month part time for doing white papr fixes.
I'm not very good at communicating. The word ""immunity" ONLY applies to savvy traders who trade at all times in markets and especially those in free fall. The general, unimformed public, the power structure and the financial industry are screwed. Jem, wjo always reads my posts so he cdan one up me as a detractor got my point and responded in his numb nuts usual way. As the right tren line becomes asymptotic to the last phases of the inverted saucer suceeding the failing Bull retrace of this Depression, that is when the cliff the globe is jumping off occurs In the short pattern (R2R 2B 2R) after point 3, the last leg (third)of the Depression begins. The opposite effect re the LTL of the Bull retrace of the Depression (beginning 09MAR 09). will be happening. This graphic phenomena is called Volatility Expansion (VE). You can examine all the market moves currently coing on. When a dominant short is in effect, VE's occur on that rractal. When a dominat long is in effect ther is a failure re the LTL of that pattern due to weakness. So for this Depression AND after its point 3, things will get bad and NO immunity is available to the global finaincial industry nor the assorted and various governments around the world. Expect three VE's which will successively steepen the container of the Depression. A shift to an even haromonic form the spikey VE characterisitc will then begin to fan the RTL of the Depression about 2.3 of the way through this 10 to 12 year period beginning with point 3. there are two classes of events in econometric analysis: newsworthy type events which form "history" and TA type events. Immunity is not availalbe to those who are part of or create "history". History is a lagging indicator and is created as money goes to power and power affords information. Immunity comes from the trader/investor "knowing that he knows" For example, when you see "Inside Job" take a notebook and list names. Put a check mark by those who has a clue or "immumity". Put an "X" by those who were history makers They ID'able by their association with money, power and NOT information of a deductive nature.) It is neat to see the loss of integrity of a global system. I hope some of you catch on to this ongoing situation. and rhen get yourselves equipped.
Political, Economic, and Societal complexity is how I view the multi-shelled system you describe. Hypercomplexity creates its own downfall. Human systems tend to revert to simplicity, and then, re-complexify. The real-life implications of the abstraction I described above are going to be very ugly. I reached for a similar goal. But I checked out. If you have the luxury for free time - there are incredible things out there to be doing with that time. Agreed. Yes, talk is cheap, but it's also a good way to pass the time. Exercising the mind... it's that kind of hobby. We don't have foxes today - we have parasites created by a run away system that is too large to control. These parasites know no better than to destroy their host. They are unnatural creations, and evolution doesn't look kindly on such things. They self-destruct in the end, and are replaced by parasites that know better and set limits on themselves. (Until the next generation or so, replaces them and forgets the old lessons) You want a real-life example of that? How did the Federal Government pass Glass Steagall? The parasites self-destructed - they couldn't fight back. History repeats. Today's parasites think they figured it out. Unfortunately, they didn't, and they have created the circumstances for an even greater "correction."