Which is more expensive? Propping them up every quarter from now 'til whenever? Or letting them go bust? Either way it costs, I just want to know which one costs less.
I’m not sure which would hurt worse.
I am beginning to look at this whole fiasco like I do bailing out a relative on drugs.
I give them money..they live better than I do..and keep coming back for more.
Well...not that I am endorsing any of the government's solutions, but, you let banks fail...then you get bank runs by average J6P types like you and me, and exhaust FDIC funds...and then, all of a sudden...you (the Fed) HAS to run the printing presses to come up with the shortfall within a short period of time. And that's not even the biggest problem...bank runs are like dominoes (say if C, BAC, and JPM all fail in the same week) you're talking enventual rioting, chaos and marshall law and military intervention type stuff; if that happens, at least IMHO...so those costs aren't exactly as measurable as what the pigmen bankers and politicians are doing to save their wealth and keep power; kicking the can down the road, slowly devaluing the dollar, putting a band-aid on bad loans and the hedges/securites/bets associated with them (CDS's); and hoping somehow, miraculously, that our day of reckoning as a result of our credit addicted society, unaccountable greed, foolishness, and shortsightedness will somehow elude any adverse consequences to that behavior. At least they can give dollar amounts on bailouts and it makes for good headlines and gives the pigmen some sort of purpose.
At any rate...also IMHO...bank stocks are already zombiefied...they may as well be bankrupt. To quote an economist from another forum I frequent, "These firms (banks) are already bankrupt if anyone bothers to perform a simple dispassionate balance sheet analysis. Their common and preferred stock is worthless. They continue to trade only on the premise that our government would come in and bail them out with an endless supply of taxpayer dollars, mortgaging our nation and its future in order to keep these bankers and their investors from suffering their just desserts as a consequence of their voluntary, irrational and patently unsound lending decisions."
You should really visit this link Link And examine a few others there and peruse some of the posts here.
Its a little heavy...and I admit I'm a econ junkie. Apologies if I'm giving the impression of pimping another site...IMHO, its a pretty good site of %98 financial truth...as I also consider FreeRepublic a site of political truth and an untainted source of news.