What 700B can buy you.

[dhpar]

i do not think that all losses were socialized. look at BSC - stock holders lost (almost) everything, LEH everything, MER a lot etc. The point here is that these institutions could not lose more.
The rest of the losses had to be paid by somebody else anyway - the question is by who, how and what was the collateral damage.
After all the real problem was the lack of regulation especially in underwriting business for mortgages, i.e. political problem - therefore taxpayer suffers as usual...
Of course IBs has their (big) share of blame too - I happen to know this first hand. But even there political pressures (from inside/outside) played their role.

To make myself sure - i do not defend all actions taken during the last 6 months - you can see it easily from my posting here. I am just saying that answers are sometimes not as simple as they seem to be - especially in a charged environment like this one.

p.s. You can't be serious to compare financial sector with technology - that's like comparing cancer with flu.

 

[poyayan]

Quote from dhpar:

i do not think that all losses were socialized. look at BSC - stock holders lost (almost) everything, LEH everything, MER a lot etc. The point here is that these institutions could not lose more.
The rest of the losses had to be paid by somebody else anyway - the question is by who, how and what was the collateral damage.
After all the real problem was the lack of regulation especially in underwriting business for mortgages, i.e. political problem - therefore taxpayer suffers as usual...
Of course IBs has their (big) share of blame too - I happen to know this first hand. But even there political pressures (from inside/outside) played their role.

To make myself sure - i do not defend all actions taken during the last 6 months - you can see it easily from my posting here. I am just saying that answers are sometimes not as simple as they seem to be especially in a charged environment like this one.

Yes, you are correct that the answer is not simple and not ALL loses are socialized. I never said that. The 700B is in addition to private losses right now, and it is baling out bond holders and stockholders of companies that are currently holding toxic waste.

The fix is : separate banks role that government cares and let the rest float and sink.

Aka, regulate the credit lending bank role that are so vital to our economy or replace the credit lending part with something else that serve the same effect.

For example, create a government reserve that when credit crunch arrived, cut everyone's tax rate by 30%. Support the government using the reserve.

When credit getting loose, raise tax and replenish the reserve.

Make it so the total sum of credit is fixed at 0% inflation.

 

[Ticketwatcher]

700 billion does NOT buy ONE week of market stability. The global economy has been revealed for what it is. No ability to hold the private market responsible for coming up with or participating in the solutions to the problems that they created in the first place. Free and fair markets were pretty much dealt a death blow this week. It is NOT the bailout that brings me to this fact, but the fact that certain equities must be protected from two sided markets where people can take either side of a trade. Healthy and productive market activity will be replaced by politicians of the worst kind, the kind whose name NEVER appears on a ballot.

 

[peilthetraveler]

Quote from Digs:

$700 bn buys...

2.8 billion depositor accounts insured upto $250,000

So let the banks go bust, small banks will become big, big banks will become small or zero !

Your math is a little off there buddy. 700 billion buys 2.8 MILLION depositor accounts worth 250k...not billion.