dagblog - Comments for "Bankers Want Out of Bailout Conditions"

Those are good questions. If

DF — Mon, 13 Apr 2009 05:07:55 +0000

In reply to Well, to be fair, the banks

Those are good questions. If those things are true, how close is this scenario to a contract under duress?

More like a flail, goes in

Michael Wolraich — Sun, 12 Apr 2009 23:44:06 +0000

In reply to I knew it. Pitchfork looks

More like a flail, goes in all directions.

I knew it. Pitchfork looks

Orlando — Sun, 12 Apr 2009 22:27:22 +0000

In reply to Bankers Want Out of Bailout Conditions

I knew it. Pitchfork looks good on you.

It's tough to get complete

Deadman — Sun, 12 Apr 2009 21:57:00 +0000

In reply to Well, to be fair, the banks

It's tough to get complete information and disclosure - a problem in itself - but I feel pretty confident that when the proverbial shit was hitting the fan, the government likely encouraged all financial institutions of significant size to take the bailout money so that Americans wouldn't discriminate too much versus healthy and unhealthy institutions.

So if true, was it necessary to encourage all banks to take bailout money?? If all banks hadn't participated, it's quite possible that the ones that did would have found themselves tainted for having taken the TARP money. Also, you could argue that banks which seemed 'healthy' could quickly find themselves in danger if the actions we took weren't dramatic enough to keep the system from really shutting down.

However, I think in general throughout this process, we have been way too concerned about protecting weakened institutions and not nearly concerned enough with determining in a frank and forthright manner how bad our situation really is.

Well, to be fair, the banks

Michael Wolraich — Sun, 12 Apr 2009 16:09:30 +0000

In reply to One angle that I don't hear

Well, to be fair, the banks that want to return bailout money are not AIGs and Lehmans on the verge of collapse. They can afford to pay the penalties; they just don't want to. That raises the question: Why were these banks given bailout money in the first place if they didn't really need it?

In the article, Mr. Leech implies that the government pressured him into taking bailout money. That's probably spin for the most part, but it is my sense that the government wanted banks that weren't at extreme risk to participate in the bailout in order to encourage them to lend, and that's also why it wants these banks to stay in the bailout program. Is this true? Was it necessary? I don't feel that I understand the issues will enough here.

One angle that I don't hear

DF — Sat, 11 Apr 2009 18:58:45 +0000

In reply to Bankers Want Out of Bailout Conditions

One angle that I don't hear discussed very often (at least outside of the Austrian/Libertarian circles that perennially detest the Fed, fractional reserve banking and fiat currency on principle) is that we, the people, grant banks license via the central banking system to create money and charge interest on that money. I'm not judging that practice as fundamentally good or bad, but rather stating it as fact. That's how the system works.

This is the basis for government oversight of the banking system. It's not merely that the big bad Federal government is mean and nasty and totalitarian and wants to tell private entities what to do. It's that we've allowed the private sector to participate actively and profit from monetary policy.

In light of this, I'd say that there's an option we can offer any bank that is now in the position you describe: Receivership. If they don't like the (arbuable lax) terms under which they accepted these funds, they can be received and sold off.