Quote:
Originally Posted by legion
That's the root of the problem. We have all of our eggs in just a few, huge baskets. We should be breaking up the huge banks so that the consequences of stupid decisions are more isolated.
The problem we have now is that one mega-bank does something stupid, all of the other mega-banks follow for fear of missing out on profit before the stupidity is fully realized.
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Yep, we have wells buying out wachovia, other big names taking over smaller names. We're raising the bar for "too big to fail."
Smaller institutions that played it safe are basically subsidizing the dumbass big shots who whipped it out at will.
That said, I favor capital injections like the $250B equity deal. Don't buy their bad deals. Give them support so they can suffer through their bad debts.
Let's get rid of this stupid "financial innovation," and get back to credit with reasonable boundaries and a common sense approach. If it means we suffer for a few decades, so be it, particularly, if it means we don't have these absurd twice per decade boom-bust cycles.