NJ5 said:
Why no depression? If more and more banks go down, how will people and businesses be able to sink even more into debt in order to keep the economies going?
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Because we are being doped by congress. It's bad, but not The Great Depression bad. In the great depression, 40% of all home loans defaulted. Right now we are at 4%. In the 30's we did not have FDIC, so most people lost there entire life savings. That can not happen today. Not all banks have stopped giving loans. It's only the ones with questionable lending practices. Most local banks are operating normally.
In fact, I tried to get a loan the other day at my bank, and it took 3 days because the loan officer was so busy (I then got the loan). They were busy because due to there quality lending practices, the are still going strong.
If you don't bail them out, the Banks that did the right thing are rewarded. If you do, the one that loaned money to anyone to make a quick buck are.
Guess which banks lobby congress ;)
