How much experience do you have with the financial sector?
The banks are shaky so they can shake loose some more TARP bailout money.Create the illusion that we can’t survive without that particular bank and the feds will run to the rescue. And the bank will kneel to the fed with gratitude.
I agree there are a lot of stable banks that didn’t invest in shaky paper, fueled by shaky speculation, based on shaky credit.
The government needs to step up with the money that would allow the banking system to fail and create new banks that are sold to the public with clean balance sheets. People will buy into a bank that has no bad debt and lends to people with reasonable credit levels.
Ah, wake up and smell the dead roses. One major reason we are in the trouble we are in, is because of Bank of America, Chase, Citibank, Wachovia, etc trying to be more than what they are. When Clinton allowed the Securities and Exchange laws to be amended and/or changed, well, gosh...
Bigger is not better. Ever...!!!!
I’m no expert on financial matters, far from it, but your idea makes sense in that it takes human behavior into account. It’s simple human behavior to do whatever you can get away with. I know this too frequently applies to me (unfortunately) in my own life. If you know that you’ll get a bailout, you’re less likely to be careful about your choices. The government, by artificially propping up failing banks and companies, is not promoting prudent, fiscally responsible behavior. If the government lets the chips fall where they may, I think the surviving banks will learn a lesson from this and be a lot more careful the next time around.
So ignore the fact that our government is going to give the failing banks bazillions of dollars we don’t have into keeping their bloated carcasses afloat, if not out right nationalize them ? Pppffffht! Right! I’ll have some of what you’re smoking.