Posted on 02/19/2010 5:54:35 PM PST by Kaslin
If the taxpayers are going to be liable for the risks taken by banks when they risks go bad, then the taxpayers have the right to limit the amount of risk that the banks are taking.
“If the taxpayers are going to be liable for the risks taken by banks when they risks go bad, then the taxpayers have the right to limit the amount of risk that the banks are taking.”
You are correct.
How are taxpayers liable?
then the taxpayers have the right to limit the amount of risk that the banks are taking.
Those darn banks wrote too many mortgages. We need to limit the mortgages the government forces them to write.
You might recall a little event last year where the taxpayers bailed out the banks because they took too much risk.
You mean those loans that were paid back with interest? Yeah, I remember. So how are taxpayers liable again?
Old saying!
If you borrow $10,000, the bank owns you.
If you borrow $10,000,000, you own the bank.
You just became... too big to fail!
I am not sure I understand, were there loans or not? If you cosgin my mortgage and I pay the mortgage on time, does that mean that you were not liable?
Yes, there were loans.
If you cosgin my mortgage and I pay the mortgage on time, does that mean that you were not liable?
I'm liable if you don't pay.
The banks paid back the loans. The Treasury will actually see a profit on the bank loans.
So how are taxpayers liable?
If the taxpayers are going to...regulate, control, order, politicize banks and interest rates... then when risks go bad, then taxpayers have the right duty to be liable.
Did anybody bail out a private, unregulated hedge fund? Not a single one. Zero. Zip. Nada. That kind of tells you something. Unregulated, free actors survived ( or didn't) but were not burdens to others. But the massively regulated, controlled banks got bailed out. Kind of like...oh GM. Or AMTRACK. Or Chrysler, or farmers...
Right, and if you co-sign my mortgage, you are running the risk that I won't pay, which is why if I asked you to co-sign my mortgage you would say no. The fact that the banks were able to pay back the loans this time does not mean that they will next time. In fact, they will likely be even more reckless in the future because now they know for sure that there are people like you out there who are happy with them all making a fortune taking excess risks and then running to you when things go bad.
If your position is to take away all regulation from the banks, and let them fail if they go bad, then I agree with you. That includes getting rid of the FDIC, by the way.
Banks fail all the time and the taxpayers aren't liable for a dime.
In fact, they will likely be even more reckless in the future
Yeah, banks just can't wait to make mortgage loans to deadbeats now. It's all over the news. LOL!
Yes, banks that were not "too big to fail" were allowed to fail. Citi would have failed but the taxpayers backstopped it. You claim to believe in free markets, but you have no problem with that.
Yeah, banks just can't wait to make mortgage loans to deadbeats now. It's all over the news. LOL!
They did it once. And no, they won't do that again, they will do it somewhere else.
I'd love to know your overall theory on free markets. Is it that markets should be free except for really, really big companies that should get taxpayer support when threatened?
And they didn't cost the taxpayer a dime?
Citi would have failed but the taxpayers backstopped it.
Why was Citibank going to fail?
They did it once. And no, they won't do that again,
But you said they would, and worse even.
they will do it somewhere else.
Yeah, they're making all kinds of questionable non-home loans right now. Loan volume is thru the roof. LOL!
Yes. And Fannie Mae/Freddy Mac ( They were suppose to at one time...compete.. with each other! )
But try to get the real estate industry, and local government, businessmen, homeowners.. that depend upon ever inflated prices to get off the junk. Believe me, once the dust settles down, they’ll all be back to shoot some good ol’ government smack. Like the Aztecs, it’s our thing and we are going to ride this racket into the ground.
It didn’t cast the taxpayer a dime this time, it might next time. Citi was going to fail because it took too much risk. They won’t do it in home loans, they will do it in another kind of loan.. like Argentina in the 80’s, Mexico in the 90’s. Etc.
Now, please, I’d like to know your philosophy on governments role in the economy. Am I correct that it is to stay out of the economy, except to back stop really big companies?
Excellent!
Am I correct that it is to stay out of the economy
Yes, as much as possible.
except to back stop really big companies?
I don't think they should back stop really big companies.
I don't understand. Aren't you hear arguing that the Federal Government was right to backstop citibank?
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