What would have happened if we didn't Bail-out the Banks???

[ktucan1]

I mean I'm just curious because from the get go they made it sound like the world financial market would have crashed if they didn't get the bail-outs? Also would they have retaliated against America in some way or some other Country if they didn't get what they wanted? I would like to get some school of thought on this.

 

[Pandora]

they would fail and stronger banks would buy them out. We would have a few less banks but they would be stronger.

Not every bank failed, just poorly run banks.

 

[dogtowner]

There was a liquidity crisis. That was for real. The issue is more a matter of degree.

Wells Fargo for example did not need bailout money but had it forced upon them and they were not alone.

Others got a lot and probably needed more.

And a few should have been allowed to fail.

Retaliate ? The ones in trouble were in no position to do anything and how would they ? Not loan money they could not ?

But another question you might ask yourself is what ever happened to all those toxic assets the Toxic Asset Relief Program was voted into law to address ?

TARP money did not buy them as planned and neither did that public / private mishmash Obama and the boys cobbled together.

Answer is they are rotting away out there and toxic as ever.

 

[ktucan1]

Ok I hear what some of you are saying. Then why was the first TARP program passed anyways? Whose idea was it to begin with anyways and why even do it?

 

[dogtowner]

Ok I hear what some of you are saying. Then why was the first TARP program passed anyways? Whose idea was it to begin with anyways and why even do it?

Because if liquidity were allowed to freeze, the feces would have hit the rotary oscillator ala the Black Friday crash. Only far worse.

Bush passed it and managed the program through the critical 3rd and 4th qtr crisis.

Only one TARP.

 

[Helicitor]

Because if liquidity were allowed to freeze, the feces would have hit the rotary oscillator ala the Black Friday crash. Only far worse.

Bush passed it and managed the program through the critical 3rd and 4th qtr crisis.

Only one TARP.

Those toxic assets are a whole lot of houses people bought thinking an inflationary market would just keep on going up forever. Now they're upside down and crying in their beer, or just walking away. The wealth was never real, the banks packaged and sold the loans, and only the folks who bought the now worthless derivatives got screwed (sorry Iceland).

If we'd just let it go? It would've fallen fast and hit hard. Many institutions would've failed, but the one's that had made sound investments could've bought up the debris for pennies on the dollar and started rebuilding. We'd be growing out of this by now if not for the uncertainty small business owners now face because of the this administration--they don't know what the cost of doing business is going to be.