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Originally Posted by kane
In almost every case I would fully agree with this. However, with this case the widespread use of sub-primes and bad derivatives (so called toxic assets) was so widespread that if they let every bank that fell victim to them crash and burn it could easily start the house of cards failing and could lead us into a depression.
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..hehe, I'm not sure that banks "fell victim" to toxic assets. ;-)
Quote:
Originally Posted by kane
Of course there is no guarantee that we won't eventually end up there anyway and all these bailouts and stimulus stuff is just prolonging the inevitable, but I think this particular case the bailouts were meant to help us avoid a full on collapse of the economy.
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Exactly. If this hadn't be allowed to go so far, and for so long, we wouldn't be mere inches away from a full on collapse of the economy.
Quote:
Originally Posted by kane
Right now a few good banks are getting screwed because they didn't get help, didn't do anything stupid and are having trouble surviving. If we let all the big banks fail, most of those little banks would follow suit and crash right behind them.
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I agree that the small players are being screwed, but the thing is.. if the Federal Reserve was not so corrupt, and in bed with the Big Banks & Wall Street, the smaller players would have not had to resort to being sucked in to compete with the Big Banks. The smaller banks would not have touched sub-prime lending, and could have grown in a more healthy natural way. The Big Banks could have been left to fail instead of being constantly infused with cash.