The Residential Real Estate Crash Index Message Board

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Strategies & Market Trends : The Residential Real Estate Crash Index

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To: bentway who wrote (259850)	7/11/2010 12:17:19 AM
From: Perspective	Read Replies (4) of 306849

<if the banks had been allowed to all collapse,> I'm really tiring of hearing how bad it would have been had we not bailed out the stockholders and bondholders of the banks. No banks would have "collapsed." Not a single one. They would have been restructured. The Great Depression happened because millions upon millions of Americans lost everything they had when their banks vanished and took their life savings with them. The key innovations following GDI were FDIC insurance and receivership for insolvent institutions. There would have been no banking collapse; the accounts would have been transferred to a stronger institution, the depositors made whole, the stockholders eliminated, and the bondholders would have taken appropriate haircuts. And then we might have had a recovery in lending, instead of Japan redux. Given FDIC insurance and FDIC receivership, how much worse would it have really been? Have you stopped to consider that we might actually be BETTER off now had the bondholders and stockholders taken appropriate haircuts and the debts written down? `BC

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