Monday, February 9, 2009
A complete meltdown
The rise, and potential fall, of America’s banks
The federal government — working without a road map, and without a net — is putting together a plan to keep U.S. banks from collapsing. Not just to get the banks lending again. To keep them alive.
Posted by gardeniadotnet @ 09:42 AM (790 views)
4 thoughts on “A complete meltdown”
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gardeniadotnet says:
If something could be done, it would have been done already.
p. doff says:
Hi Gardenia. Apologies for off topic, but did anything ever come from your exponential plant-cutting propagation excercise, or were your critics right?
gardeniadotnet says:
2. p. doff said… did anything ever come from your exponential plant-cutting propagation excercise, or were your critics right?
Nothing’s come of it as yet, but I remain optimistic (/irony).
51ck-6-51x says:
Nice article.
Not sure I agree with:
“The emergency medicine prescribed by the last administration — flooding the financial system with billions of federal bailout dollars — hasn’t worked. If anything, banks are sicker.”
though – the banks are not sicker, the trust between them is still not there but I don’t think they have more bad loans than before, and they certainly have more capital than before.
“The longer they wait, the more damage there is to the economy and the more it will cost taxpayers”
This is true, and it’s certainly past the point at which anyone denies there is a need for the state to use such money. However, some however already howl “bad money after good!”, maybe because of the prior efforts.
Separating assets is a good idea since it should free up capital flows and therefore stay the impending and infectious wave of business defaults. The taxpayer, understandably, wants to protect herself against the worst of it (unfortunately this is a little circular, since who would need to step in if the worst does happen?!). The best she can really hope for, however, is to punish the shareholders and executives instead (and the latter will be hard if they walked between the lines painted by others) and she must remember that she is going to have to trust those …err elected officials …err people’s representatives …err hmm pesky kids(?) …to make the right moves. Scary times, however I remain mildly optimistic myself, we’ll boom again (and bust of course).