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Re: Objectively intelligent.
Quote:
Originally Posted by sebastian_dangerfield
1. Banks are not different than other businesses. We protected GM and AIG for the same reason we did banks. TBTF.
2. The assets only recovered value because we propped them up with accommodating monetary policy and direct purchases of MBS.
3. Businesses can have all the assets in the world, but if they can’t liquidate them to cover operations and no one will lend to them, They Go Under. Bear Stearns and Lehman were also holding assets which eventually recovered value later (somewhat). But they got caught in a cash crunch.
If you can’t fund operations and the market deems you untrustworthy and thinks it’s preferable to watch you die, you are failed. Those are failed banks. Almost all of them. They exist by grace of the taxpayer. They are, in the deepest Trump accent, truly (unlike most of his targets for the insult), Losers.
Wachovia, WAMU, Bear, and Lehman are at least honorable losers. They went down. Goldman begged Uncle Henry for an 80 cents on the dollar payout using AIG as the stealth delivery method. That’s crony capitalism at its worst. I’d have done the same, as would you, but I’d like think we’d both admit to our skullduggery. Not Goldman. They’re entitled and unashamed, the ultimate “welfare mothers” of Wall Street.
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Dude. I agree with you on the politics of this, but banks are quite different from other businesses, for important reasons. No one makes a run on a bookstore. And when a bookstore fails, it doesn't jeopardize a lot of other businesses. We have a regulatory apparatus designed to avoid repeating mistakes of the Great Depression. It was tested in 2007-08 and it basically worked. When Lehman and others failed, it was managed. Things could have been a lot worse.
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“It was fortunate that so few men acted according to moral principle, because it was so easy to get principles wrong, and a determined person acting on mistaken principles could really do some damage." - Larissa MacFarquhar
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