http://www.bloomberg.com/news/2011-11-28/secret-fed-loans-undisclosed-to-congress-gave-banks-13-billion-in-income.html Please explain how this wasn't a $7.7 Trillion dollar bailout of the big banks....
If I give you $10 to hold overnight, you give it back to me in the morning, and we repeat that process every day for a year, how big a bailout of you would you consider it? $10 or $3650? And how much of my money do you consider that to have used?
Yes - and it was returned the next day. Between that and the answer to my prior question which you avoided, it should answer your question of "how this wasn't a $7.7 Trillion dollar bailout of the big banks".
This keeps track of which banks have paid back the money. http://s.wsj.net/public/resources/documents/st_TARP_20100930.html
Yes, prove a negative, that should go swimmingly.* *Apologies in advance if not serious, sarcasm meter may have dun goofed.
First of all, I'm pleased and shocked at the nice level of discourse going on. I won't count on it continuing forever, by my thanks. Secondly, I'm also surprised nobody has yet chimed in from the 'let them fail' side. Ron Paul is on the record saying it wouldn't have been that big a deal, isn't he?
Major is claiming that it was returned the next day. And we are talking about the $7.7 Trillion from the Fed, not TARP...
Thanks for this, but let me ask: what does total collapse MEAN? The money in my checking account disappears? Here's what I keep coming back to: there's a small but vocal crowd including Ron Paul that says yes, the pain would be bad but short. Let the banks fail, competent people come in to pick up the pieces, and we start over. Of course, this is a very appealing idea. I think ALL of us would love to see the guys that caused this burn, but without burning down the entire economy along with them. If this is true, how would such a fast recovery work? In my mind, if the entire western banking system collapses, we are entering an age of what I would call kerosene lamps and shotguns. I just don't see how we make a faster recovery out of that than we do with (hateful) bailouts and socialized losses. To me, it seems the "let them fail" crowd just shrugs at the destruction. "It won't be that bad." How do you know? Are we willing to risk that to satisfy ideological purity?
What proof? That's how the discount window works. Any banks that are short on required reserves can either borrow directly from the Fed or from another bank with excess. These loans are always paid back in 24 hours. Modern banks do this all the time. I'd go so far as to say it happens every single day. That's the reason I always say banks are no longer reserve constrained. They can just go off and borrow from the Fed or from each other. These days, they're capital constrained instead. One thing you need to understand is that when the Fed gives banks additional reserves, they don't take that money and buy private jets or lavish vacations. The only thing banks are legally allowed to do with reserves is lend. The Fed was trying to prevent a credit crunch and encourage banks to continue lending. Of course...that didn't really happen because the private sector was already in massive debt and had little to no demand for additional loans, but that's another story for another time.
Oops sorry, I misspoke. Banks are allowed to invest excess reserves in "assets." The vast majority of the time, these are loans (assets for a bank, but liabilities for the debtor), but they could potentially park the money elsewhere...like Treasuries or money market funds. However, they are legally bound by the Basel Accords. The amount of capital a bank has (not deposits), can't dip below some percentage of its risk-weighted assets.
I refer you back to my original response: Go do some basic research. Learn how the Fed works. Learn what they did during the crisis. If you don't know how the Fed works, it's a really terrible idea to go post articles that don't explain it, and then ask everyone to prove why you're wrong. Instead, you should try to figure out if you're right. ToyCen really needs to work on this too.
I'll defend the status quo when it makes sense. Change for the sake of change is as stupid as the status quo for the sake of the status quo. Destroying hundreds of millions of innocent people's lives because you want to punish a few bankers is idiotic, so I will criticize it. If you have any actual points based on facts and analysis that you'd like to contribute, feel free to do so.
Talking down to people half your age on the politics section of a basketball forum with unoriginal mainstream talking points because you think it makes you look smart is both idiotic and pathetic, so I will criticize you. You are BORING, get a life.
