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re: Would We Have Been Better Off If The Gov't Let The Banks Bottom Out, Not Bailing Em Out?
Posted on 5/16/17 at 8:42 am to LSURussian
Posted on 5/16/17 at 8:42 am to LSURussian
quote:
No. The banks all repaid the loans they received plus paid interest.
They also had no interest loans, the proceeds of which they invested in government bonds which earned interest, so they were being paid by the government to borrow the government's money and lend it back to the government.
quote:
Enough banks failed to maintain market discipline, including Lehman Brothers
And anybody with a brain knew they wouldn't voluntarily exercise market discipline, which is why there needed to be regulation on what they could do with money (both their own and other people's), but certain people decided that deregulating banks was a good idea. Iceland made the same mistake and practically collapsed their economy.
quote:
A large part of the bad home loans were at the behest of the federal government which is probably why your dad wisely got pissed at Barney Frank.
The government encouraged banks to lend the money, but it was the financial firms that came up with the ridiculous securities schemes that caused the crisis, which is why your dad was a moron to blame Barney Frank.
Posted on 5/16/17 at 8:51 am to Nuts4LSU
Wait, so you mean to tell me that Barney Frank wasn't a key proponent for the banks to lend money to people that could never afford to pay it back so they all defaulted?
Posted on 5/16/17 at 9:13 am to Nuts4LSU
quote:
The government encouraged banks to lend the money, but it was the financial firms that came up with the ridiculous securities schemes that caused the crisis, which is why your dad was a moron to blame Barney Frank.
quote:
"I want to roll the dice a little bit more in this situation toward subsidized housing."
The moron is you.
Except dishonest moron would be more accurate.
Posted on 5/16/17 at 9:31 am to Nuts4LSU
quote:
And anybody with a brain knew they wouldn't voluntarily exercise market discipline, which is why there needed to be regulation on what they could do with money (both their own and other people's), but certain people decided that deregulating banks was a good idea. Iceland made the same mistake and practically collapsed their economy.
Wait, so we're for heavy government regulation but against government intervention?
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