The audacity of dopes (bankers)

[eridani]

http://www.huffingtonpost.com/william-k-black/the-audacity-of-dopes_b_165637.html

There are proven ways to resolve the crisis that are far cheaper and more effective because they don't subsidize bankers and "risk capital." We know how to resolve failed banks. The Federal Deposit Insurance Corporation (FDIC) can place even the largest banks in "pass through" receiverships on Friday at the close of business and reopen them as "New Federal" bank Monday morning with minimal disruption to customers and creditors and retain "going concern" value. This is how the Reagan administration resolved failed S&Ls during the debacle.

[babylonsister]

1. The Reagan era didn't turn out so well. ?? Bon soir and nt. nt

[sandnsea]

2. Sounds like a last resort to me

You don't want to use the biggest tool in your box if for no other reason than to always have somewhere else to go if your first plan fails. The more time we get to sort this mess out, the better.

[eridani]

6. It's a vastly cheaper first resort

We have a big deficit, remember?

[sandnsea]

7. And if you nationalize the worst banks

Then what do you do if that doesn't work?

[eridani]

8. Strip and sell whatever assets they have left.

That works. The more you do it, the greater the percent of healthy banks left.

[sandnsea]

9. No. You plunge us all into bankruptcy

The more you allow banks to lose investors money, and risk the people's money, the worse the economic crisis gets.

[eridani]

10. It is by giving the peoples' money to investors that plunges us into bankruptcy

Depositors are insured up to $250K. The investors are the people who got us ino this mess, and they need to lose everything but $250K.

[sandnsea]

11. If they nationalize banks

and lose that money too - then the rest of the people are going to start having a fit over giving up the $250,000 per person when we shouldn't have "socialized" the banks to begin with. People are going to pull their money out of all banks and start stuffing mattresses again. It's a recipe for complete disaster. An absolute last resort for this country. Confidence will be worse than the Depression if they do that. I can't even imagine the panic in this country if the government fully takes over banks. It's stunning to me that anybody could think throwing the people into complete turmoil would ever be a good idea.

[eridani]

12. Ever heard of the Resolution Trust Corporation?

Government ownership is not meant to be permanent, and it would only apply to failing banks. Most banks arn't failing. Deposit insurance would be available to depositors, not to investors. There are way more of the former that the latter, and the latter can just go to hell and be grateful they weren't lynched.

[truedelphi]

3. K & R.

I have been trying to figure out why there are average people out there so nervously wanting and insisting that this that and the other BailOut plan - any Bailout plan, get passed as quickly as possible.

Chris Matthews sort of explained a bit of that to me tonight when he admitted that when he thought about what might happen to his stock portfolio if the stock market goes below 8000. But even with that, with his knowing that his investments are on the line, he agreed tooth and nail with Pearlstein of the Washington Post.

We need one of two things to happen - either have a really carefully designed Bailout Plan, one that DOES NOT allow for the same crowd of fellows that got us into this jam to have any say so over the monies we taxpayers are throwing into the fray. Unfortunately this week's version is only slightly better than the first 700 Billion dollars of monies we handed over to Paulson and Kashkari, and which the two of them got to magically dissipate into thin air.

Or we need to do nothing.

But continually agreeing to be blackmailed or coerced into continuously giving into the demands of the banking crowd, in the hopes that we might appease them, seems rather pathetic. Like Pearlstein kept mentioning - you cannot appease that crowd. Sure, if we give them the eight trillion dollars they are demanding tis week, the stock market will do well for like five or six days. But within two months, they will be wanting another 8 Trillion bucks. And then 90 days after that, another 8 trillion.

After all, what they are hoping will happen is that their friends who made their bets inside of "derivative" speculation regarding the fact that the economy would go belly up - the bankers want all those bets to be paid off. And the bill for that is 550 Trillion or more. To appease them for that full amount means that we will have to run the printing presses 24/7 for thirty years, and within twenty four months or so, a loaf of bread will be 20 bucks.

[uponit7771]

4. OR lower their refi rates to 3.0 percent for 2 weeks and get more business than they can handle but

...they are greedy and very stupid people.

[Waiting For Everyman]

5. It's like putting money into a blown clunker car, and then having to buy a new one anyway.

It's inevitable. IMO, it's the other central bankers who are in the way. They would have to do the same. And then, nations would be in a position to get off of globalization, and go back to national economies. And coincidentally, there's a widespread movement among workers around the world to do just that.

But who would be upset about that? The multinational corporations. I think we're teetering on the edge of a huge power struggle over that, and the multis are threatening to throw everybody out of work.

Of course, they already have to a large degree anyway. But it would be worse than it is now.