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To: Perspective who wrote (259998)	7/11/2010 7:12:15 PM
From: bentway	Respond to of 306849

Well, we'll just have to agree to disagree. I believe things could have been done in a way that would have protected the taxpayer MUCH more. But, you had a departing president basically tell us that he didn't understand what had happened, but his economic team had told him if he didn't DO these things, the world economy would fall off a cliff. The incoming president was maybe smarter, but equally clueless economically. He put in place a LITTLE more taxpayer protection, but basically followed the plan. As I said, I'm glad they did it. I don't know if it will save us, I rather doubt it. I think we're moving into a new type of depression for America and Europe, based on globalization. All the jobs shed in America will NOT come back. Unemployment may continue to grow. American workers are not globally competitive. ALL workers are threatened by automation, but due to their cost, American and European workers are MUCH more vulnerable. This depression may not involve the markets, which are also global now. They may do fine. Just humans will be impacted.

To: Perspective who wrote (259998)	7/12/2010 1:45:32 PM
From: RetiredNow	Respond to of 306849

15 recommendations and that's too low a number. Exactly, bobcor. Good post. Let the free markets punish the looney folks who took too much risk (on the sell and buy sides) and we would have been better off.

To: Perspective who wrote (259998)	7/12/2010 2:25:36 PM
From: pstuartb	Read Replies (2) \| Respond to of 306849

Not a single bank should have been "bailed out." They should have gone into receivership. No depression would have resulted. I agree. I keep rethinking this issue as the months go by but I don't believe I'll ever change my mind. The complicating factor was the huge CDS overlay. We didn't just have a bunch of banks with bad loans that could get worked out by the FDIC. These institutions also had enormous interconnected CDS exposure, and if more of the big ones besides BSC and LEH went down, their CDS counterparties would have freaked and required additional capital from still other CDS counterparties which would have in turn become insolvent. The chain reaction could have imploded the entire financial system in a matter of days. Or so the story goes. From what I can tell, that danger was real because the CDS exposure is so large and complex. But it still seems possible - as it was suggested at the time - that the main offenders among the commercial banks could have been quarantined, with the FDIC backstopping depositors, and with the various CDS exposures being wound down in a relatively orderly manner over time. Maybe it wouldn't have worked, but it should have been tried. Paying the offenders whatever they needed to stay in business prevented a sudden meltdown, but it was morally the worst choice, and in the end it's likely to have just exacerbated the inevitable.