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View Diary: "79% of investors have no trust in the financial system." (154 comments)

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  •  urm, explain to me why this is bad? (15+ / 0-)

    So everyone knows the TBTF banks are rotten to the core and they aren't investing in them anymore.  The TBTF banks aren't lending to anyone on Main Street, haven't for a while.  They've been parasitic with their foreclosure practices.  They've been firing thousands of their low-level workers.

    The collapse of the TBTF banks at the beginning of the Great Recession would have been catastrophic.  It is no longer catastrophic, except for the remaining low-level workers.  But Hostess employed lots of workers and the prospect of them going bankrupt wasn't accompanied by apocalyptic warnings.  And if the TBTF banks DO go bankrupt, hopefully the Dodd-Frank bill will allow for an orderly dissection, and the actual Main Street functions that employ all those workers might be able to continue ticking over, with only the rot at the top being expunged.

    Lehman Brothers going down was a shock to the market.  Now even if Goldman Sachs went down, it wouldn't be a shock to anybody.  The TBTF banks are parasites on society and now everyone knows it.  I say goodbye and good riddance!

    •  Why is it bad?? (6+ / 0-)

      Because every scam and transaction taking place is now with the complicity, and money, of our government.  And they are totally invested (no pun intended) in keeping these banks inflated, to the very real detriment of civilian investors.  And the government is making no effort to unravel the mess, sudden, or slow motion.

      •  Of course the criminal activity of the banks is (2+ / 0-)
        Recommended by:
        shaharazade, lotlizard

        bad.  But the diarist is saying that the DOWNFALL of these banks would be bad for the economic system.  I think it would be terrific if they all went bankrupt and disappeared.  I think our economy is resilient enough to take it.

        From a moral hazard point of view, the fact that these criminals get away with such crimes with only a slap on the wrist is ethically bad.  But that's nothing new; it's been that way for decades.

        •  Actually, I'm calling for the downfall of (2+ / 0-)
          Recommended by:
          Back In Blue, lotlizard

          these banks. And not picking agents of Government from the pool of failed bankers.

          "Downfall" would mean forced to present honest books (including mark-to-market 'assets'), subsequent bankruptcy, followed by takeover and reorganization.

          Finally, on the road to a real recovery.

          The point of the diary was to indicate the signs of can't-possibly-hid-it collapse are here. Without vigorous action immediately, a lot of people are going to experience pain: those already doing it, and many many many more.
          .


          Markos! Not only are the Gates Not Crashed, they've fallen on us. Actual Representatives are what we urgently need, because we have almost none.

          by Jim P on Wed Jan 16, 2013 at 05:35:59 PM PST

          [ Parent ]

          •  What "vigorus action" are you suggesting? n/t (0+ / 0-)

            The priest said, "Today's sermon is called 'Liars', but first I have a question. How many of you have read Chapter 66 in Matthew?" Nearly every hand went up. "You're just the group I need to speak to," the priest said. "There's no such chapter."

            by Back In Blue on Wed Jan 16, 2013 at 06:20:27 PM PST

            [ Parent ]

            •  Start with purging the Wall Street (1+ / 0-)
              Recommended by:
              Back In Blue

              insiders from Treasury and from any advisory positions, personal or official, and then put in somebody who predicted the last crisis and sees the next on the horizon. Say a Stiglitz. Then proceed according to their lights.


              Markos! Not only are the Gates Not Crashed, they've fallen on us. Actual Representatives are what we urgently need, because we have almost none.

              by Jim P on Thu Jan 17, 2013 at 10:13:19 AM PST

              [ Parent ]

              •  Sounds good to me. n/t (1+ / 0-)
                Recommended by:
                Jim P

                The priest said, "Today's sermon is called 'Liars', but first I have a question. How many of you have read Chapter 66 in Matthew?" Nearly every hand went up. "You're just the group I need to speak to," the priest said. "There's no such chapter."

                by Back In Blue on Thu Jan 17, 2013 at 03:11:21 PM PST

                [ Parent ]

    •  Helping the Criminal Class in 2008 (8+ / 0-)

      was done at the expense of actually fixing what was wrong. Instead of it being fixed, we've bought a few years where the Criminals running the show have access to cash which they can turn into assets.

      Now, these Corrupt Organizations are larger than ever, their behavior is as corrupt and reckless as ever, a larger collapse is certain. So say almost all non-Wall Street Establishment economists.

      So instead of being 4 or 5 years on the road to a sound economy, which would have happened if we had force bankruptcy, reorganization, selloffs, and the reinstitution of meaningful restraints on banking, we're 4 or 5 years of doubling-down on something that is so corrupt it is a mathematical certainty that a much much bigger pile of shit is going to hit the fan.

      What we can expect as prelude to that guaranteed-to-happen event of The Additional, Bigger, Collapse, is the widespread loss of confidence in our financial system.

      So we've not only lost 4 or 5 years -- and remember government figures said we'd start to see a real recover in 10 years back in 2009 -- when we actually begin to recover (not just little upticks on graphs, but people with money to circulate) it'll be from even a deeper hole than in 2008.

      So, what, 2030 or so before we have a healthy Real Economy? Instead of being a year or three from it if the fuckers had had their asses in jail and their Bankrupt institutions treated like any other bankrupt company?

      Hope this helps to clarify.
       


      Markos! Not only are the Gates Not Crashed, they've fallen on us. Actual Representatives are what we urgently need, because we have almost none.

      by Jim P on Wed Jan 16, 2013 at 09:00:39 AM PST

      [ Parent ]

      •  But the point of the article is that the TBTF (0+ / 0-)

        banks are no longer our financial system.  No one is investing, no one is borrowing from them, everyone knows they are dead men walking.  If they go under, I don't think that will cause any more of a widespread loss of confidence in our financial system than is there already.

        My point is it's NOT a mathematical certainty that a much much bigger pile of shit is going to hit the fan.  There has been a gradual crumbling, and everyone knows the TBTF banks are just a deck of cards waiting to be blown over.  The real economy won't be impacted much.

        •  Zombie banks as Krugman pointed out (3+ / 0-)
          Recommended by:
          cordgrass, 3goldens, lotlizard
        •  Wow, that's optimistic (1+ / 0-)
          Recommended by:
          3goldens
          ...everyone knows the TBTF banks are just a deck of cards waiting to be blown over.
          If that were true, then why would so many bajillion people still have accounts at BofA?

          Yes, yes, FDIC, but if they really understood how unstable the bank was, why would they have an account with it to begin with? If nothing else, if it went under, it would be a huge hassle for them.

        •  All the investors now, which includes (0+ / 0-)

          retirement fund investors, municipalities, states, other banks, TPTF employees... this will be tens of millions of people hurt, as the top four banks are the bulk of the economy.

          Yes, we're faking they're alive so far; but when the pretense can't be supported then all these people and more will lose what they have now. It's going to hurt, and hurt more than 2008.


          Markos! Not only are the Gates Not Crashed, they've fallen on us. Actual Representatives are what we urgently need, because we have almost none.

          by Jim P on Wed Jan 16, 2013 at 05:52:16 PM PST

          [ Parent ]

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