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To: rabscuttle385

For all those of you who are so indignant about TARP, just ask yourself one question:

If we hadn’t passed TARP and foreigners had decided to liquidate all their time deposits from our institutions, how much more would it have cost the FDIC to pay off all of the bank deposits that were insured when ALL of the major financial institutions were shut?

All of you forget that the FIRST THING that happened before TARP was that most of the major money center banks raised capital from the foreign sovereign wealth funds, about $20 billion worth. ALL of that capital was lost in less than a month.

It was clearly stated to the US government by these investors who had just been RIPPED OFF by US institutions that if the government didn’t get involved they would withdraw their money from the US banking system.

THAT would have been TRILLIONS in withdrawals. All of you big talkers have any idea who would have replaced that money?

When a bank loses it deposits it either has to call in its loans OR SHUT DOWN IMMEDIATELY.

TARP was clearly the lesser of two evils. The problem with TARP is that it should have been given to the smaller, healthier banks to buy the assets of the schmucks that lost it, not to the large money center banks.

That way, moral hazard would mean something, the loss of power and lifestyle of the NY-centric banking world.


16 posted on 02/14/2010 7:02:45 PM PST by LRoggy (Peter's Son's Business)
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To: LRoggy

BS


17 posted on 02/14/2010 7:27:57 PM PST by rae4palin (islam is of the devil)
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