“If the credit markets seize and the MTM issue remains, how long before bank runs start?”
When the FDIC just took over WAMU and gave it to JPM then they wiped out all the bond holders. Even the preferred ones at the very top. This is not normal practice, but it saved the FDIC money. Bond holders in other banks are saying “Hey wait a minute”, and are now selling there bond holdings in other banks. This means banks are losing capital very fast right now. Besides depositor withdrawals.
Every move the government is making is the wrong move. And they have ensured that our economic system is most likely going down big time. The bail out bill would not stop it. Only transfer more pain onto the tax payer. It is another bad move.
Republicans are doing what should have been done a long time ago. But it is so late in the game. What they are fighting for now (I hope still) was the way out. It might be too late. But the Conservative Republicans will not be the blame for that if it is. But they will probably be blamed for it.
God will know the truth.
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I concur 100%. Absolutely. Everything the government is doing is completely wrong, and the effect will be to drive capital out of the US financial system. The steps taken to date have done nothing but shatter international trust of the US financial system, proving with every action that it is financial anarchy, made up on the fly, existing law be damned, no recrimination for the purveyors of fraud, run by and for the benefit of the banking elite. If we stay on this path, the economic and financial dislocations the POS bill are supposedly designed to stave will happen with violent certainty.
Thanks. I was not looking at bonds totally the right way. But the effect is the same. I have been doing a lot of learning.