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March 29, 2024, 09:11:20 am
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Author Topic: Tulsa's Tea Party...  (Read 17716 times)
nathanm
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« Reply #30 on: March 05, 2009, 01:37:49 pm »

Why is it that other, smaller banks couldn't come in and pick up the pieces?
Where do you propose the smaller banks come up with the capital to do so?

I saw a claim the other day that Citi, JP Morgan, and Bank of America hold over 60% of all US banking assets.

Besides, the worst thing to happen would be to let them fail and then make the mistake of spawning more megabanks. We need more small and mid-sized institutions, not enormous ones. Sadly, Treasury, FDIC, the Federal Reserve, and OCC seem to disagree, what with pawning off huge institutions on even larger ones.

The Bush Administration handled things incredibly poorly (although to the advantage of certain cronies), and the Obama Administration has done little better, although at least so far without any obvious crony "capitalism."
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"Labor is prior to and independent of capital. Capital is only the fruit of labor, and could never have existed if labor had not first existed. Labor is the superior of capital, and deserves much the higher consideration" --Abraham Lincoln
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« Reply #31 on: March 05, 2009, 01:39:03 pm »

Why is it that other, smaller banks couldn't come in and pick up the pieces?

Banks that used sounder lending practices to begin with. These banks would become the next giants, and deservingly so.

Is this not how capitalism is supposed to work? This would cause short-term pain for many, but in the end, we would have rebuilt our house on a solid footing. Right now we are just patching up the old home around the edges, but the foundation is still cracking.

I don't think the smaller banks would be ready to take on all the extra clients and it would take time to gear up.  Its a really crappy situation.  Companies have credit lines with these companies.  The bank goes under, that line is gone, business struggles with financing.  Or you throw money at a bank that is in a hole, fill the hole a little, try to get things moving in the right direction, throw some more money in.  But, what you are suggesting is the way capitalism is supposed to work.  I think if all the larger banks failed you would have a lot of businesses failing as well.  Maybe not..
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nathanm
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« Reply #32 on: March 05, 2009, 01:48:16 pm »

 I think if all the larger banks failed you would have a lot of businesses failing as well.  Maybe not..
It's not a maybe. It's already happening as banks are getting tighter on credit even with companies that are low risk.
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"Labor is prior to and independent of capital. Capital is only the fruit of labor, and could never have existed if labor had not first existed. Labor is the superior of capital, and deserves much the higher consideration" --Abraham Lincoln
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