Some interesting things are said in this video:
“Either we close the loopholes [in our economy], or this problem will happen again”
“The American taxpayer understands that their money has gone to the banks, no new regulation has been put on the books and a new regulation with loopholes is just going to have the same kind of house of cards built up again”
So we are not changing the banks and not getting rid of ‘too big to fail’?
Harvey Pitt: “The whole concept [too big to fail] is a complete disaster for our economy going forward”
Fact is that during this crisis the big banks got even bigger because they bought troubled banks. Bank of America bought Merill Lynch for example and Countrywide Financial and Well Fargo bought Wachovia.
Tim Geithner, whose position is clearly being questioned in this video, has a new proposal in which bailouts can happen in the future without the need of congres’ permission. What is he trying to do?
To make it even more crazy: Geithner has made a list of banks he sees as ‘too big to fail’. That’s like telling banks to take infinite risks; what would you do if you got the ability to spend 100 billion on the stock market, knowing that if you lose all you would get it back, and if you double you can keep everything? I’d go for a risky approach.
And risky it is: “The market we’re discussing is now worth 590 trillion dollars (…) 20 dollars in the swap market for every dollar in the real economy. “
Yet Geithner doesn’t think there isn’t enough risk being taken by banks: “The big risk we face now is that banks are going to overcorrect and not taking enough risk.”
Where are we heading?..
0 comments:
Post a Comment