That's the system we have. And, that system is international,
so expect some banks in Europe to blow up too.
There are banks and financial institutions that did not
participate in this activity, only the biggest banks did.
Maybe, we should just let them blow up, and healthier
smaller banks who did not participate in this financial
engineering will replace big institutions.
Then the lesson will be learned forever, financial engineering
will never be done again... until the next bubble, but
that will be for our grandkids. Meanwhile, the government
should help the innocent folks who did not
create the mess withstand the fallout from the crisis,
instead of giving
cash to the banks, so they can lever it all up even more.
How about lending to
companies that suffered unduly thanks to berserker derivative
bidding in commodities? How about stimulating small businesses?
Etc., etc... Our main focus MUST BE THE REAL ECONOMY, NOT
PROPPING DERIVATIVE MARKETS.
Now, if they are onto banning shorting, how about banning
OTC derivatives?
The proposed bailout package is EXACTLY THE SAME APPROACH
that led to this mess, only much bigger. Bail out big
institutions, that creates more moral hazard, derivatives
will keep growing exponentially, with a larger blow up
down the road, or... a complete collapse of the currency,
as berserker financial bids appear everywhere, while
the real economy is choked by the rising costs... |
