Tea Parties: Whats really going on?

[Kasz216]

akuma587 said:

Viper1 said:

The FDIC is who took over IndyMac when it failed.

Besides, the government wouldn't need to buy out every mortgage from a failed bank because they would be delegated during bankruptcy to another healthy bank at real or below market value. In other words the market would have saved itself.

Those bankrupt banks would have then had the ability to pull out of bankruptcy now that those illiquid mortgages are off their books and returned to good operating standing.


PS: "and some banks are already starting to pay it back..." <- That's because the Federal Reserve secretly dumped out several billion dollars. I'll let you take a wild guess where a lot of it went.

Who is going to buy a bank when the banking sector itself has imploded?  Even with the government having stepped in, there are still major liquidity problems.

You are looking at the effect all of these bankruptcies would have in isolation and not the affect they would have as an aggregate.  Bankruptcy is great when you have one company who is unhealthy and needs to go under.  Bankruptcy doesn't work so well when you have an entire sector of the economy that has buckled under.

If all these banks would have failed, no investor would touch any of these banks with a ten foot pole for years to come.

I think the Federal Reserve had a good strategy that worked.  The banking sector has already had a major rally on the stock market when many people were worried that it would see systemic failure.  You can't really argue with results like that.  And everything that they borrowed has to be paid back regardless of what they used the money on.

 

This assumes all banks were failing.  All were not... after all... they found buyers for the first few failed banks, no?

Furthermore interestingly enough... one of the most overlooked aspects of this economic downturn is the rise of new banks.

There are new banks up opening everywhere in small and mid-level chains, picking up the slack where the big banks screwed up.

Had these big banks actually collapsed.  The mid level and smaller level banks still would be loaning money.  The only issue is... are the mid level banks big enough to take on all the corporate loans companys make to make paroll... since a LOT of companies think money left in hand is money wasted.

Overall i'm not sure any of this spending will help much.  We build a green energy plant.  Great.  These people have jobs... they buy stuff at Wal-mart. They take jobs from other power plants... mostly in the US.

Where is the stimulus plans that will keep the money in the US?  There aren't any, because anytime we do that people challenge tariff wars.

It seems like we're screwed either way.  Now if we spent a lot of money to establish like... services that aren't usually provided inside the country... that seems like the money that would be worth spending.  Tax breaks for building factories inside the US and stuff like that.