#1 - "Too Big to Fail"

[rablrouzer]

Remember Romney's lie in the first debate: "But I wouldn't designate five banks as too big to fail and give them a blank check."

That from the man whose "rescue" of the Salt Lake Olympics was funded by a $2.7 Billion Federal Bailout.

The fact is, there ARE banks (and brokers) "too big to fail."

Bush Treasury Secretary Paulson let Lehman Brothers collapsel in September, 2008.

And caused an unprecedented bank run that nearly wiped out every bank account, money fund, stock, bond, IRA, 401k, 403b, pension---in the WORLD.

The "blank checks" Romney would have withheld? Be very glad they were written.

Would I have liked to see some "perp walks?"

You betcha!

But even more, I'm glad that President Obama, Secretary Geithner, and Fed Chairman Bernanke have steered us through four turbulent years, my IRA has doubled from its Bush low, and, in fact, that I still have an IRA . . .


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The Norwegian government's pension fund, just one Lehman investor, lost at least $800 million when Lehman collapsed.
http://online.wsj.com/article/SB122266132599384845.html

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Salt Lake City Olympic bailout: http://www.politicolnews.com/romneys-2-7-billion-olympic-bailout-by-john-mccain/

[Scootaloo]

1. There answer is to break them up so that they are no longer "too big to fail"

Also, banking reform, so that all the money they're creating can actually be tied back to actual fiscal assets held by the bank, rather than the current model where a bank that receives $1,000 can make a $900 loan and claim that it now has $1,900.

[rablrouzer]

2. Too Bigger to Fail

No question you're right.

The reason that isn't happening (and isn't practical) is they can only be broken up if they're already financially healthy. Otherwise the small parts would die, separately.

The "rescue" of Merrill Lynch spread benefits in places I'd rather not have them gone. But for sure the investors whose mutual and money market funds would have disappeared benefited a lot.

And short of "nationalizing" ML much as GM and Chrysler were (a hard sell in a country terrified of "socialism," the sad answer to ML was to merge it into an even larger entity, meaning the surviving bank was even "too Bigger to Fail."

As if Bank of America isn't already a zombie.