WASHINGTON (CNN) â?? The banking system today may be in a more precarious position than it was a year ago, the man charged with overseeing a $700 billion bailout program said Wednesday.
Neil Barofsky, the special inspector general managing the Troubled Asset Relief Program, told CNN’s Wolf Blitzer on Wednesday that the government’s decision to support bank mergers over the past year may have put the U.S. economy more at risk.
“These banks that were too big to fail are now bigger,” Barofsky said. "Government has sponsored and supported several mergers that made them larger and that guarantee, that implicit guarantee of moral hazard, the idea that the government is not going to let these banks fail, which was implicit a year ago, is now explicit, we’ve said it. So if anything, not only have there not been any meaningful regulatory reform to make it less likely, in a lot of ways, the government has made such problems more likely.
“Potentially we could be in more danger now than we were a year ago,” he added.
Earlier in the day, Barofsky issued a scathing report criticizing the Treasury Department for not being transparent enough about how bailout money was being spent. He warned that this could have lasting effects.
“I think this cynicism, this anger, this distrust of government that’s born in part from a lack of transparency could have far-reaching ramifications, whether there’s a next crisis or when anytime the government is going to call on the American people, the taxpayer, to support necessary programs,” Barofsky said.
[quote]Sloth wrote:
Maybe it’s time to say these banks are too big to not be allowed to fail. [/quote]
Maybe it’s time to quit trying to tightrope some preposterous line between capitalism and socialism and just go ahead and admit we want to become a socialist nation. The unfair playing field being created by the arbitrary regulations and incentives that we are seeing will destroy us long before a full-fledged socialist government would. I’m just saying, let’s be honest here and at least stick to a legitimate standard.
[quote]tedro wrote:
Sloth wrote:
Maybe it’s time to say these banks are too big to not be allowed to fail.
Maybe it’s time to quit trying to tightrope some preposterous line between capitalism and socialism and just go ahead and admit we want to become a socialist nation. The unfair playing field being created by the arbitrary regulations and incentives that we are seeing will destroy us long before a full-fledged socialist government would. I’m just saying, let’s be honest here and at least stick to a legitimate standard.[/quote]
I think serious talk of nationalized banks are going to come out of this. So, you won’t have to wait for too long. At least that’s how I see this going down. Though maybe fascist is more specific? I don’t know which label is really the more accurate.
[i]"Potentially we could be in more danger now than we were a year ago,"
“These banks that were too big to fail are now bigger,” Barofsky said. "Government has sponsored and supported several mergers that made them larger and that guarantee, that implicit guarantee of moral hazard, the idea that the government is not going to let these banks fail, which was implicit a year ago, is now explicit, we’ve said it. So if anything, not only have there not been any meaningful regulatory reform to make it less likely, in a lot of ways, the government has made such problems more likely.[/i]
This is accurate. We need regulatory reform.
Now when (if?) the president goes for reform, will you support it or cry about government getting bigger, scream about how we need less regulation, not more, and cry socialism?
However, politicians succeed in manipulating the public by calling whatever they do “reform.”
Thus, Barney Frank is yet again working to have more mortgages given to those that can’t pay for them. I am sure he calls this “reform.”
And those wanting government healthcare – while having no intention of getting rid of the various ways in which government is interfering with cost-effective healthcare and health insurance – call this “reform.”
I’m sure Obama calls whatever his czars do “reform” as well.
[quote]Gambit_Lost wrote:
Bill Roberts wrote:
Not all “reform” is good.
True.
I’m sure Obama calls whatever his czars do “reform” as well.
I’m sure you call whatever Obama’s czars do “socialist” as well. [/quote]
No: only those which involve government ownership of the means of production.
Those which involve government control of the means of production, while private ownership is retained, I call fascist.
So which do you favor – “reforms” in the socialist direction, “reforms” in the fascist direction, or “reforms” to the opposite of either of those directions?
[quote]Gambit_Lost wrote:
[i]"Potentially we could be in more danger now than we were a year ago,"
“These banks that were too big to fail are now bigger,” Barofsky said. "Government has sponsored and supported several mergers that made them larger and that guarantee, that implicit guarantee of moral hazard, the idea that the government is not going to let these banks fail, which was implicit a year ago, is now explicit, we’ve said it. So if anything, not only have there not been any meaningful regulatory reform to make it less likely, in a lot of ways, the government has made such problems more likely.[/i]
This is accurate. We need regulatory reform.
Now when (if?) the president goes for reform, will you support it or cry about government getting bigger, scream about how we need less regulation, not more, and cry socialism?
[/quote]
Banking is the most heavily regulated industry in the country, and see how well that has worked out for us? How about the gov’t stop bailing these clowns out, let them go bankrupt, than someone who can actually run a business will step into the void. Get the gov’t out of private industry!
[quote]Bill Roberts wrote:
Gambit_Lost wrote:
Bill Roberts wrote:
Not all “reform” is good.
True.
I’m sure Obama calls whatever his czars do “reform” as well.
I’m sure you call whatever Obama’s czars do “socialist” as well.
No: only those which involve government ownership of the means of production.
Those which involve government control of the means of production, while private ownership is retained, I call fascist.
So which do you favor – “reforms” in the socialist direction, “reforms” in the fascist direction, or “reforms” to the opposite of either of those directions?[/quote]
Well given the government caused this problem by creating Fannie Mae and Freddie Mac to underwrite all loans and then idioits like JFK encouraged banks to give out unsecured loans to poor credit risks and penalised those lending institutions who didn’t…don’t you think the government has done enough damage?
Governments and central banks are preparing to remove stimulus measures after spending a total of $12 trillion, by International Monetary Fund estimates, to haul economies out of the recession. Economists forecast Norway may raise its benchmark rate a quarter-point. A report tomorrow may show U.S. gross domestic product grew an annualized 3.2 percent in the third quarter, the fastest pace in two years, according to the median of 79 economistsâ?? estimates in a Bloomberg News survey."
After the collapse last year, governments stepped in, to take the place of consumer spending. That is now ending and it HAS NOT WORKED. No one will spend, as they are terrified of losing their jobs.
Now the real outright GREATEST DEPRESSION can begin. Capitalism will end and voting will be some funny thing that we did ‘long ago’.
To paraphrase from ‘The Heart of Darkness’…“The collapse…the collapse…”
[quote]Sloth wrote:
Maybe it’s time to say these banks are too big to not be allowed to fail. [/quote]
Seven banks failed over the weekend. The total now sits at 106. The next â??reality checkâ?? looms just around the corner. Official unemployment numbers are slated for next Friday. Thereâ??s no one on Wall Street or in the government left who doesnâ??t believe official unemployment is going to 10%.
[quote]Bill Roberts wrote:
Gambit_Lost wrote:
Bill Roberts wrote:
Not all “reform” is good.
True.
I’m sure Obama calls whatever his czars do “reform” as well.
I’m sure you call whatever Obama’s czars do “socialist” as well.
No: only those which involve government ownership of the means of production.
Those which involve government control of the means of production, while private ownership is retained, I call fascist.
So which do you favor – “reforms” in the socialist direction, “reforms” in the fascist direction, or “reforms” to the opposite of either of those directions?[/quote]
Some quick questions first: What is “to the opposite of either of those directions?” Where are we now? On what issue? …And of course, are these my only options?
[quote]reddog6376 wrote:
Gambit_Lost wrote:
[i]"Potentially we could be in more danger now than we were a year ago,"
“These banks that were too big to fail are now bigger,” Barofsky said. "Government has sponsored and supported several mergers that made them larger and that guarantee, that implicit guarantee of moral hazard, the idea that the government is not going to let these banks fail, which was implicit a year ago, is now explicit, we’ve said it. So if anything, not only have there not been any meaningful regulatory reform to make it less likely, in a lot of ways, the government has made such problems more likely.[/i]
This is accurate. We need regulatory reform.
Now when (if?) the president goes for reform, will you support it or cry about government getting bigger, scream about how we need less regulation, not more, and cry socialism?
Banking is the most heavily regulated industry in the country, and see how well that has worked out for us? How about the gov’t stop bailing these clowns out, let them go bankrupt, than someone who can actually run a business will step into the void. Get the gov’t out of private industry!
[/quote]
Agreed. Isn’t this what the initial post quoted here was about?
I have a serious question. What if one of these large banks does eventually go bankrupt. I mean say I owe 15 years left on my MRTG, I pay on time and whatever and eventually the bank I have my loan with has so many bad loans out they go under? So what happens to the 15 years I owe them? Do I just now own my house clear and free and they stop sending me payment requests? I mean the government was saying how bad this would be but in reality, wouldn’t a whole shitload of people benefit if a large bank went under? I mean the check they wrote to the previous owner is already cashed. They can’t take my home because I am paying according to the terms. Do I still have to pay a bankrupt company? Don’t they just close the doors?
[quote]Vegita wrote:
I have a serious question. What if one of these large banks does eventually go bankrupt. I mean say I owe 15 years left on my MRTG, I pay on time and whatever and eventually the bank I have my loan with has so many bad loans out they go under? So what happens to the 15 years I owe them? Do I just now own my house clear and free and they stop sending me payment requests? I mean the government was saying how bad this would be but in reality, wouldn’t a whole shitload of people benefit if a large bank went under? I mean the check they wrote to the previous owner is already cashed. They can’t take my home because I am paying according to the terms. Do I still have to pay a bankrupt company? Don’t they just close the doors?
V[/quote]
Eh, you’ll just end up owing the bank who eventually buys the bank you are indebted to. You will get a letter in the mail when/if it happens.