If I screw up my business, my company fails and nobody bails me out. Its time we had a little downsizing for "organizations too big to fail" AIG is/was run by idiots. They are being sold off and none too soon. Bank of America was broken up before when it got to big. Its time to do that again. Same goes for the rest of them: Citibank, GM, yada yada.
whats the problem then? The fed? printing money out of thin air? bank reserve requirements? I am assuming all and more.
From a european point of view its hard to understand why people are still talking about nonsense like Bush vs. Obama. Get used to it. Not to big to fail but to big to bail out. Its game over, they just have not yet admitted the complete disaster. Everybody could already know it, it is public since weeks: http://www.occ.treas.gov/ftp/release/2008-152a.pdf http://www.fms.treas.gov/fr/ http://www.gao.gov/new.items/d08926t.pdf (dont miss p. 25 here!)
From what I hear, the pump is so damn old they no longer make any spare parts. In that case, isn't it much better to dole out free bottle of water while the whole reservoir is thrown upside down to make room for the latest state-of-the-art water pump? Why the hell are we wasting money and time trying to patch up different parts when the whole damn thing is broken? The whole system must be uprooted.
That analogy is wrong. Sorry. Roughly half US banks are insolvent. The others are fine. The good banks have money to lend - but won't - because the bad banks control the bulk of credit that enters the market. In order for the economy to recover, lending must resume - predominately, from the Bad Banks. The Bad Banks won't lend because they're hoarding cash to forgo impending bankruptcy. And the Good Banks won't lend because the broader economic recovery is dependent on Bad Banks (who won't lend). The system is not "broken", per se. More like, the system is "Seized up" with crap. To unclog the pipes, the shitty (Citi) Banks need to get flushed. All the Crap Banks need to go under. Then Good Banks will lend as they control the dominate share of credit that enters the market and can be sure their self-motivated actions will lead to a recovering economy, and asset values on which their loans will be made. So its really just a case of letting the Shit Banks go under, and the Good Banks rise up and take their place. There was a term people used for this not too long ago. Its on the tip of my tongue....Creative, something. Oh yea: CREATIVE DESTRUCTION People say that type of Darwinian Capitalism is what made America Great. Imagine that?! On a trading board, no less. Why do I get the impression 98% of the posters on here listen to those idiots at CNBC all day??!?!?
They tried that before with the banks during something called The Great Depression. Hasn't been too popular since then. I wonder why? Nevertheless, they tried something following the same logic recently with Lehman Brothers---and backtracked the very next day after the feared cascading domino effect started to rear its ugly head with the money market fund breaking the buck. I've been perusing stuff like this: Systemic Banking Crises: A New Database What have you been looking at?
Folks, these are just numbers. They don't mean shit. When the press reports that Uncle Sam is forking over $1 Trillion of taxpayer money to bail out these idiotic banks, ya think you'll personally get something in return (as a taxpayer) when the economy turns around? Think again.
How does everybody like your tax dollars paying for the stupid citiFX ad at the top of the page? You would have to be crazy to fund an account with citiFX with C stock a $1. Let all worthless banks and insurance companies go under so the rest can move on.