Reply to SVB Bank Run: Fed Calling Emergency Meeting

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[quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous]Not sure many around here would do well in the world that would exist in the absence of bailouts.  [/quote]

“Around here?” WT ever loving F are you talking abt?  Babe, you won’t survive a banking crisis either.  IDGAF if you are a farmer, a marksman, a mountain climber…whatever libertarian BS you believe.  Every single person in this country would be F’ed if our entire banking system went down.  Give me a break …. You’re not a big strong man[/quote]

I lived through 08-09 front and center. There was no credit - the system froze. But we chose to bail out the banks not consumers or small business owners. And that has had disastrous results. Income equality, political divisiveness, a coup.

So having experienced that why should we continue to bail out the financial services industry ? I watched the US pay Goldman Sachs 100 cents on the dollar - par - for their credit default swaps with AIG. Why did Geithner tell us we had to foam the runway for 10 Million foreclosures ?

So tell me again why we have to bail them out ? And when we do and I sit in front of them they tell me they can’t help me because that would be moral hazard like they did in 08 and 09 ?

All the while my AIG neighbors were getting bonuses and putting in pools ?

Sure as hell felt like Armageddon for us regular folk…so really not interested in the nonsense that we can’t afford to not bail them out.

Let them eat cake.

[/quote]

The AIG bailout is little investigated, and remains shrouded in mystery but many think it had to do with saving the European banking system. [/quote]

I did not know that.

I always though GS getting par for their AIG swaps was a back door bailout to GS that gave GS the ability to say they weren’t bailed out and didn’t have to take Government money. 
[/quote]

AIG's French subsidiary sold enormous amounts of first loss guarantees on European loan exposures.  If they failed, not only would the guarantees be gone but the European banks' regulatory capital ratios would have plunges as under the rules the guarantees allowed them to have lower capital requirements against the loans.

GS saved itself by becoming a bank holding company (as did MS) and both were among the large banks more or less forced to to take funds via issuance of TARP preferred stock to the government.  Some of them needed the funds, others didn't, but making them all take it helped shield those who needed it from market stigma.[/quote]
+1 But I think Wells Fargo was the only one who didn’t really need it.[/quote]

Long been rumored Wells was the biggest garbage barge of all. Lots of financially sophisticated people looked at it closely and it didn’t make sense. But it had some very powerful friends![/quote]

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