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The main question is: what would have happened if we didn’t do the bailout?
All of the banks would have gone bankrupt. Forget about fault for a second. (Was it the change in mark to market accounting rules in November 2007? Was it the aggressive subprime mortgage lending? Was it the shortsellers? Was it the run on the banks? Who knows.) Morgan Stanley (MS) would have definitely gone bankrupt. Then Wachovia. Then Citigroup. Then Goldman Sachs, Bank of America (BAC), etc.
Would this have been a good thing or a bad thing? Very bad. Read on.
Originally posted by Watts
It pisses me off that they saw no parts of the consequences of conducting business the way they did other than public ridicule... they still get their fat bonuses, still own their yachts and private jets still living a royal life. ALL of that should have went away.
Originally posted by Vanishr
reply to post by zookey
Lol im not sure people in the US or UK would share your feelings, Big Corp or Big Brother, both are **********
Originally posted by Praetorius
reply to post by woodwardjnr
Maybe someone could explain to me how this was a bad idea, but in my view, had we just either given all the TARP funds, etc., back to the people -OR- used it to pay off all mortgages directly (I believe I heard that the original 700 billion was enough to do this), the banks would have been taken care of, all homeowners with mortgages would now *own* their homes outright, that extra money they would no longer be spending on mortgages would be actually in their pockets and stimulating the economy, and we'd be a lot better off.
Instead, we have execs making big bucks, people underwater, a housing industry in crisis, a crippled economy, and hurting citizens.
I'm by no means an expert on any of this, but can someone with better knowledge let me know if I've missed something here? I think the money just went entirely the wrong way, forcing me to ask if this isn't by design...
Originally posted by Uncle Gravity
The banks shouldn't have been bailed out! This could go on for ever, they fail we pay. When is it supposed to end? They will do it again there is no doubt in my mind.
It sounds good but i dont think we could have done that and it turn out good. Thats $700billion that would flood the market creating instent inflation. Now because it went to the banks it was held in close Circles and never got on the market.
What would happen if we let them fall? Small ma and pop banks would have filled the void GLADLY and we would not have so many monster banks. but it helps to have friends in high places to give you billions