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Let big banks fail, bailout skeptics say

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posted on Apr, 21 2009 @ 01:35 PM
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As the stale economy continues to annoy the life of folks at large, the rescuers designated are more willing to consider other strategies to add fizz to the works. The usual remedy to prop up the economy by lowering interest rates failed, coz this type of flu shot didn't work with the new strain of virus that infected the system.

It's becoming more and more apparent that the Feds diagnostic tools were not sharp enough, so the remedy flickered. It wasn't applied with respect to the very principles of the bailouts strategy. The Feds saw the house of cards precariously moving toward its side but failed to identify the king of clubs that unleashed the domino effect; the Feds let Lehman Brothers go and that was a mistake, as they learned from the costly rescue of AIG with credits frozen near solid that sent chills to the economy. Mission not accomplished . . .

There is a chance the opponents of the bailout strategy could be invited to the round table and their prescription could possibly find its way into the pharmacy.


Hoenig said authorities must set up a procedure that would allow big nonbank financial firms to be temporarily taken over by the government. Regulators would then replace management, wipe out shareholders and seek to sell the cleansed institution back into private ownership.
Stiglitz, formerly an aide in the Clinton administration, said the process of briefly taking over banks then selling them back to investors would be much less costly for taxpayers.

money.cnn.com...

This and other similar concepts became very unpopular with bonus loving execs who spread around propaganda leaflets with the word "nationalization" printed in fecal colors. The propaganda had a schizophrenic effect on the lay populace that has found both words "bailouts" and "nationalization" offensive.

An "improving economy" doesn't mean stability a.. A shot of morphine isn't the remedy to make a malignant tumor disappear, so watch out before giving a call to you real estate agent.
www.theage.com.au...


[edit on 4/21/2009 by stander]




posted on Apr, 21 2009 @ 01:49 PM
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I am one that thinks they need to let the whole house of cards collapse. All the trillions they have and will continue to throw at this are only postponing the inevitable collapse and leaving the govt and tax payers broke and the fed rich. While it would be terrible for the economy to collapse it will be far worse when that happens and we are so far in debt that there is no help for us. Bad business, I thought the whole thing of a capitalist society was success or failure, not bailout after bail out to keep something dead alive.



posted on Apr, 21 2009 @ 02:03 PM
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Very good sources. In my opinion (which is also fecal-colored by the media) I think that the banks should all be nationally regulated. Because that way, it's controlled (I think, because I'm not one to believe the government is super messed up. I know, what am I thinking?) and also it's equally regulated and it can be watched closely.

I mean, the bailout money not to businesses but the other money... it's paying my dad's unemployment, it's helping me pay for college, and it's also paying for a course my dad is taking to become certified for something.

And if we just let the banks fail without the government taking control... talk about fighting for food and shelter...



posted on Apr, 21 2009 @ 02:19 PM
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before the clinton era the banks were regulated and the regulators had teeth. While Clinton was in office the congress removed almost all regulation on the banks. all because the banks promised to police themselves, promised that this exact thing that is happening today wouldn't happen. we see how well that worked out. and what regulations there are left on the banks are not enforced by the regulators because they have been paid off by the bankers to look the other way.

The way the government has been acting since last sept. is they would rather have 9 big zombie banks rather than letting the big banks fail and allowing the smaller banks to take them over. which in a normal course of capitalism is what would happen. Instead we have the government stepping in closing the smaller banks and selling them to the bigger banks and using the tax payers money to do it with.

I'm sorry but any business that a government deems is "to big to fail" is to big to exist in today's world!

19 of the biggest banks are undergoing stress tests and the results are suppose to be made public in may. the government and the fed are going to say those banks are now fine but they will still need some taxpayer money.

Sorry but any bank that needs taxpayer money to weather any storm is not in good shape and actions should be taken to break those banks up and sell them off to the smaller banks that can afford to buy them without help from the taxpayers!



posted on Apr, 22 2009 @ 12:47 AM
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reply to post by ravenshadow13
 

This is way too complicated, coz there are many influences that don't hold the same end of the rope. The government empowers one of its agencies to create money in such a manner that it best suits the economy conditions. But the agency is not free to decide how the money is distributed; it can't scoop the pile by the printing press and give it to GM unless the Congress approves the direct hand out, which is unlikely to happen. Everything has to go via "taxpayers" also known as the American people, otherwise the Congress loses its power, even though the taxpayers were not asked to forfeit part of their paychecks to the task of building the $700 billion bailout piggy bank, coz the economy would blew another gasket.

Now if it turns out that there is not much left in that piggy bank but the banking monster is still hungry, the executive branch would have to ask the Congress for approving another contribution to keep the boat afloat. No one seems to be ready to conduct this "stress test." Other options would have to be exercised and one of them is to mourn the wasted $700 billion for a while and then see the bad guys sailing on Titanic to the rescue boats without sinking the ship. The big bankers spread a word around that without a pilot, the plane is doomed, but that's not always true.
news.aol.com...

The option to kick out greedy execs and temporarily take over the bank would shut up the slogan "we are too big to fail" that the devil's disciples blackmail America with.




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