Should we have let the banks fail?

[Sultan Of Swing]

I reckon it might have been the beginning of capitalism...

What do you mean?

 

[SpeaksForTheTrees]

Donated to people? Is there not a danger of what happened to the Weimar republic with mass inflation?

US dollar again in real terms worth only 12% of its value , most of that comes from being world reserve currency .
Donated to the government considering they benefited many trillions.
All world convert to Judaism overnight , how would they deal with that lol .

 

[Yerda]

What do you mean?

If we allow ourselves to take the rosey view of capitalism as the system that frees human ingenuity and creativity in the creation of wealth just think what we could have done with a banking system that has lending to the community in its DNA, where the stake and share holders are the people without the forms of racketeering, exploitation and wealth concentration that drive the current financial sector.

 

[SpeaksForTheTrees]

Throughout the fed remained a neutral beneficiary of other people misfortune , they issued so much debt is a boom period for them again .

 

[SpeaksForTheTrees]

Soon comes interest rate hikes , as the economy not making them enough profits went as high as 17% in 1970 s
Good news is US has lil oil boom right now , kind of bought little time .
Selling at $40 a barrel they so desparate .
Turning the world into a pile of paper money , mammon lol worship false gods , play with the occult and this what happens .

 

[SpeaksForTheTrees]

What do we want ?
Our money back , written off !
When do we want it ?
Now !

Lol goto laugh or ya just slit your own throat and exit the game.

 

[Revoltingest]

Do you agree with the bailout though, considering you can't go into the past and change the conditions that allowed the crash to happen? If so, what about the economic chaos?

Bank failures wouldn't actually cause much chaos.
They've already failed, in that they have negative equity, & are unprofitable.
If they were broken up, & the parts (loans receivable) sold off, there would be no loss of asset value.
Only the shareholders would lose.
But contrast this with bailing out an industrial company like GM.
It's assets have value only for making a particular product.
If sold off, they'd be worth only pennies on the dollar.
And all their suppliers would be out of business too.
So while I'm not a fan of bailouts, if they're to be given, it should only be for companies of critical economical or defense value.

 

[muhammad_isa]

Bank failures wouldn't actually cause much chaos...

I would say that they already have .. the dollar's demise in 2008/9 caused a chain reaction in the Arab world, for example .. the recession hit most countries harder than it hit 'the west' .. surprise, surprise

 

[Revoltingest]

I would say that they already have .. the dollar's demise in 2008/9 caused a chain reaction in the Arab world, for example .. the recession hit most countries harder than it hit 'the west' .. surprise, surprise

These problems weren't cause by bank failures.
The banks were bailed out.
The cause was general economic collapse.
The origins for this were widespread & complex.

 

[Underhill]

I just watched the Big Short, it is an excellent film which I'd definitely recommend. I may have swallowed everything it told me like a good sheep, but I trust Hollywood. (If you feel it isn't an accurate portrayal of what happened, then have at it.)

I already sorta knew the basics of the crash, about sub-prime mortgages, CDOs, mixing in bad debt with good debt, and how the whole system collapsed basically as a result of that.

The film explained it brilliantly though, really expanded my knowledge and gives you a real insight into what these bankers were up to.

One of the concluding statements is the most damning, which was something along the lines of "They weren't stupid and didn't see it, they were clever and just didn't care. They knew the taxpayers would bail them out."

And according to the film, it looks like it might all happen again, with new "bespoke tranche opportunities" introduced in 2015 apparently being effectively the same as the CDOs (which mixed good and bad mortgages) that were created a decade before and caused the whole crash in the first place.

What is your own view on the bank bailouts of 2008? Should they have happened?

I feel like letting them fail would have taught new banks to self-regulate, they can't make the taxpayers take the fall, but on the other hand if we let the banks fail... that's total economic chaos isn't it, and a lot more suffering for the average person.

If your answer is 'No', what is the solution then to prevent this from happening again? And don't say 'more regulation', try and be specific. And especially don't say "vote Bernie", I'd just like a specific solution if you have one.

If your answer is 'Yes', are you prepared for the potential huge chaos and economic fallout that would hurt families a heck of a lot more than just bailing them out? Is it a price worth paying in order to teach the banks a lesson so they'll hopefully self-regulate?

I just watched that movie too.

I believe the bailouts had to happen or things would have been much worse. But I do think the banks should have been broken up, and in two specific ways. They need to separate traditional banking from these investment banks. And they need to limit the size of these banks. Break them up by region and don't allow them to have more than 10% of the banking business in that region (or something along those lines). I also think we need to raise the capital requirements banks need to keep on hand.

But the biggest problem, by a wide margin, is the political system that has brought us here. The courts and the political system have brought us to a point where these hyper rich have control of the system to the point where the banks can cause a massive recession (which would have been a full blown depression if not for intervention) and nothing substantial changes. A person can go to jail for stealing $500 from a convenience store, but ripping off the nation to the tune of billions is just written off with virtually no consequences.

 

[bobhikes]

If your answer is 'No', what is the solution then to prevent this from happening again? And don't say 'more regulation', try and be specific. And especially don't say "vote Bernie", I'd just like a specific solution if you have one.

If your answer is 'Yes', are you prepared for the potential huge chaos and economic fallout that would hurt families a heck of a lot more than just bailing them out? Is it a price worth paying in order to teach the banks a lesson so they'll hopefully self-regulate?

My answer is no and there is nothing we can do to stop it from happening again. The US government has been bailing out companies forever and will continue to do so because money only has value if it is trusted. Once trust fails in the monetary system the monetary system fails. There is nothing supporting the dollar or any world currency besides blind faith.

 

[muhammad_isa]

These problems weren't cause by bank failures.
The banks were bailed out.
The cause was general economic collapse.
The origins for this were widespread & complex.

Can you give us a summary of what you think caused this 'economic collapse'?

 

[Revoltingest]

Can you give us a summary of what you think caused this 'economic collapse'?

There's a lot to it.
I'll search for an earlier post about it.....

Here's one....
http://www.religiousforums.com/thre...ic-nominee-in-2016.183626/page-3#post-4597712

 

[muhammad_isa]

There's a lot to it.
I'll search for an earlier post about it.....

Here's one....
http://www.religiousforums.com/thre...ic-nominee-in-2016.183626/page-3#post-4597712

Yes, indeed .. a very good post.
I would say that many of the things you mentioned are fueled by a usurious financial system. I wouldn't propose for a system to change overnight (eg. by force), it's the matter of when most people are in favour, it can work. I suppose you could say that there is some freedom lost, but the gains would be so much better

 

[Revoltingest]

Yes, indeed .. a very good post.
I would say that many of the things you mentioned are fueled by a usurious financial system. I wouldn't propose for a system to change overnight (eg. by force), it's the matter of when most people are in favour, it can work. I suppose you could say that there is some freedom lost, but the gains would be so much better

Thank you. The interest rates during the crash weren't bad, so I think "usurious" is too ambitious a word.
Instead of reducing the rates, I'd do what I laid out in my presidential agenda, much of which addresses the crash....
http://www.religiousforums.com/threads/revoltingest-for-president.185684/

 

[Guy Threepwood]

Yes, indeed .. a very good post.
I would say that many of the things you mentioned are fueled by a usurious financial system. I wouldn't propose for a system to change overnight (eg. by force), it's the matter of when most people are in favour, it can work. I suppose you could say that there is some freedom lost, but the gains would be so much better

a financial system the government imposed on the banks- and when they failed.. the phrase 'You break it, you bought it' comes to mind!

 

[muhammad_isa]

Thank you. The interest rates during the crash weren't bad, so I think "usurious" is too ambitious a word.
Instead of reducing the rates, I'd do what I laid out in my presidential agenda, much of which addresses the crash....
http://www.religiousforums.com/threads/revoltingest-for-president.185684/

I see .. I notice that you advocate holding inflation figures near to zero..
That would mean continuing with the same financial system. The banks are there to make money, whatever the interest rate .. they take it as a 'base rate' and although investors/savers might lose out as the base rate falls, the lender always 'cops it'!
This means that it is still possible for loans to become untenable, whether through inflation proving difficult to control or unemployment.
What could replace it, do I hear you say? If loans are very hard to get, and/or generally through people that you know or family, house & land becomes much cheaper. Of course, richer people wouldn't be in favour of that, but naturally the poor would

 

[Revoltingest]

I see .. I notice that you advocate holding inflation figures near to zero..
That would mean continuing with the same financial system.

No, this would be a sea change in monetary policy.
It would.....
- Lower prevailing interest rates.
- Reduce leveraged speculation induced market bubbles.
- Eliminate inflation induced tax bracket creep.
- Eliminate the penalty (loss of value) of keeping cash on hand.
- Encourage liquidity.

The banks are there to make money, whatever the interest rate .. they take it as a 'base rate' and although investors/savers might lose out as the base rate falls, the lender always 'cops it'!

Of course, I'm well aware of that because I've had so many indexed loans.
Eliminating inflation would take that component out interest charged & paid.

This means that it is still possible for loans to become untenable, whether through inflation proving difficult to control or unemployment.

I don't propose taking risk out of lending & borrowing.
My plan is to optimize the relationship between monetary policy, lending, & borrowing.

What could replace it, do I hear you say? If loans are very hard to get, and/or generally through people that you know or family, house & land becomes much cheaper. Of course, richer people wouldn't be in favour of that, but naturally the poor would

New loans should be harder to get than they are.
Prices would fall, but to levels which reflect the market for housing needs, rather than speculative value.

 

[Twilight Hue]

So far 5 Yes votes and 0 No votes.

Yet not a single comment explaining how such a huge blow to economic stability and the potential societal chaos as people lose all their money is defensible.

It will rebound. Artifical set ups rarely last long anyways.

 

[freethinker44]

I would rather have seen all that public money that was gifted to the world's billionaires spent on financing a new banking industry owned and controlled by the people.

Yes. Although I don't trust the government enough to let them manage my money, I mean, social security is basically a government savings account and look how they mismanaged that. But I do think we should have seized their assets and distributed them to smaller banks.