Quote:
Originally Posted by taxwonk
I may be wrong, but I think if the banking system had collapsed, it would have been the super rich that would have been fucked. The Fed could have come in the day after the collapse, picked up the good pieces, pulled them together, and sold that off to someone else, subject to a lot more supervision.
I don't know too many middle class folks who were over-invested in CDOs and credit default swaps. I don't think most of them would have felt a thing. But that's easy for me to say, because it didn't happen. I acknowledge that.
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I don't think that's how it would work. If the next bank fails, there's a run on banks. If multiple banks fail, the
money is gone, not just the CDOs and credit default swaps. The banks used
your money to gamble on those products. And the FDIC wasn't created to insure every person's money from every single bank. And if the US system goes down, the world system goes down.
TM
