You still don't understand. So I'll repeat it for the millionth time. This isn't about just stepping back and HOPING things work. This is about STRUCTURED BANKRUPTCY. Do you understand what that means? This is when the government takes over and winds a bank down slowly in a methodical way, so as not to create a systemic collapse. And they don't do anything rash like forcing other banks to purchase the assets, but rather they auction the assets off. Already, Bernanke has done a few auctions of some of the Maiden Lane assets and the banks with the wherewithal to estimate the risks and the capital to purchase those toxic assets at an appropriate discount, went and invested in them. He hasn't done it in a widespread way, because he knows damned well that most of the MBS assets he bought up out of the $3 trillion in bonds he bought, are worth significantly less than he paid for them. He bought toxic assets from the big TBTF banks at full face value despite their market value being far less due to default rates. Had he wound those banks down in a structured bankruptcy proceeding, he would not have wasted all that tax payer money buying worthless shit.
This is the free market at work. And IT WORKS. What doesn't work is Bernanke's bailouts of criminals and rescinding of mark to market accounting and all the other tricks to sweep the problems under the rug.
As to deciding which are the good banks and which are the bad, let the free market decide. That's precisely the problem. Bernanke and his cohort have decided which banks they are going to support and have let the rest sink or swim. Why did they choose to support BoA and GS? Why not the million other banks out there? I'll tell you why. It's a combination of relationships, collusion, and legitimate concerns of TBTF. But once chosen as a TBTF, they had a fiduciary duty to wind those institutions down, not to prop them up and make them bigger using tax payer money. What they did was steal from the American people, but you clearly aren't bright enough to see that.
What is clear to me is that you have absolutely no clue what is really going on. Your understanding of banking and economics is so tiny that you barely comprehend the solutions I have repeated a million times. |
