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Should "Too Big to Fail" be "Too big to exist" regarding banks and other companies?

Should "Too Big to Fail" be "Too big to exist" regarding banks and other compani

  • Total voters
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Re: Should "Too Big to Fail" be "Too big to exist" regarding banks and other companie

eohrnberger said:
True. So you have to keep them smaller, and not be able to cause systemic risk. Something Dodd-Frank totally fails at.
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Yeah well it would have been easier and may have had more teeth if the GOP wasn't bought and paid for by Wall Street. Them putting all the blame for the 2008 crash on the home owners and borrowers, while excusing Wall Street's role in the crash pretty much gave the WS banks a free pass, AGAIN!
 
Re: Should "Too Big to Fail" be "Too big to exist" regarding banks and other companie

jamesrage said:
Should "Too Big to Fail" be "Too big to exist" regarding banks and other companies?

Yes
No
Maybe



https://en.wikipedia.org/wiki/Too_big_to_fail


I say yes too big to fail should be too big to exist. No company should receive tax payer dollars to bail them out.Nor should a company be so large that it's downfall can ruin a country's economy.
Click to expand...

With banks, the federal reserve was created as the lender of last resort.
That's what they're supposed to do, bailout banks.

Other businesses it's arguable and dependent.
 
Re: Should "Too Big to Fail" be "Too big to exist" regarding banks and other companie

i vote yes. i'm not anti-corporation by default, even big ones, but no community would authorize rickety skyscrapers that reach so high that they could bring down the whole town if they fell, much less the entire country.
 
Re: Should "Too Big to Fail" be "Too big to exist" regarding banks and other companie

Psychoclown said:
That's a simple solution, but its not one that I think many, if any, politicians would have the backbone to stand by. How many politicians do you think would risk a economic depression by letting a handful of major financial companies fold? How many people in the public would want that? Honestly if my choice is a second Great Depression or another round of bailouts, even I would probably go for bailouts in that situation as much as I loathe them.
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Well, you essentially have two choices with regards to recession/depression:

1. Don't do anything. It'll hurt like hell, but it'll be short compared to option two.

2. Do something. You can dampen the pain, but it'll last longer.

Kinda of damned if you do, damned if you don't situation.

However, I'd argue that its better just to not bail them out or anything of the sort because then they wouldn't be doing all this stupid crap (hopefully).
 
Re: Should "Too Big to Fail" be "Too big to exist" regarding banks and other companie

If their failure presents a significant systemic risk to the US economy, then yes they are too big to exist. However, such criteria should be very narrowly construed.
 
Re: Should "Too Big to Fail" be "Too big to exist" regarding banks and other companie

Misclicked; wish I could change my vote from No to Yes.
 
Re: Should "Too Big to Fail" be "Too big to exist" regarding banks and other companie

SenorXm/Sirius said:
Yeah well it would have been easier and may have had more teeth if the GOP wasn't bought and paid for by Wall Street. Them putting all the blame for the 2008 crash on the home owners and borrowers, while excusing Wall Street's role in the crash pretty much gave the WS banks a free pass, AGAIN!
Click to expand...

While I agree that the blame for the mortgage bubble building and popping is most appropriately laid on not only the Wall Street banksters, and in addition:
  • their re-insurers (AIG) who didn't know what they were insuring
  • the investment rating companies who didn't either
  • but also both political parties in that they both had ample occasions to mitigate the bubble popping as well as preventing the bubble from popping
  • but also the shady mortgage originators and their 'No Doc' and NINJA mortgages
  • as well as all the home owners who looked at this as a quick flip get rich quick scheme
  • as well as home owners using their houses and mortgages as a cash machine (multiple re-motrages per year for an ever increasing value)

Lots of blame to go around for lots of people and lots of organizations.

The failure of the Dodd-Frank legislation and regulation falls squarely on the two names associated with it and the Democratic party who had both houses of congress at the time of its writing, having been purchased by the big banks, which, rather than ending too big to fail and distributing the systemic risk across many smaller and local banks, has done little more than drive the consolidation of these smaller local banks into even larger banks, the direct antithesis of what it was claimed to do, sold to the electorate as doing, and actually increasing the concentration of systemic risk with failed and faulty regulations.

Dodd-Frank is a complete and utter FUBAR.
 
Re: Should "Too Big to Fail" be "Too big to exist" regarding banks and other companie

eohrnberger said:
While I agree that the blame for the mortgage bubble building and popping is most appropriately laid on not only the Wall Street banksters, and in addition:
  • their re-insurers (AIG) who didn't know what they were insuring
  • the investment rating companies who didn't either
  • but also both political parties in that they both had ample occasions to mitigate the bubble popping as well as preventing the bubble from popping
  • but also the shady mortgage originators and their 'No Doc' and NINJA mortgages
  • as well as all the home owners who looked at this as a quick flip get rich quick scheme
  • as well as home owners using their houses and mortgages as a cash machine (multiple re-motrages per year for an ever increasing value)

Lots of blame to go around for lots of people and lots of organizations.
Click to expand...

I agree 100%. And it is refreshing to hear a conservative spread the blame around. Not that you, or anyone here should give a crap but the Republican reaction to the crash of putting 99% of the blame on the borrowers and home owners is the main reason I am no longer a Republican. I was or 35 yeas, and there are other reasons too. But what the GOP(and con pundits, talking heads, etc.) did and said after the crash pushed me over the edge.

The only quibble I have with your analysis is the rating agencies. IMO they KNEW, but they didn't care. They were making money hand over fist too.

The 2nd part of your post, I don't agree with. The Dems wanted more, but the GOP resisted. Does that put all of the blame on the GOP? God no. The Dems could have pushed harder, but they didn't. They put on a show about being tougher, but they really didn't want to be to tough because they too get plenty of money from the WS lobbyists. But we can't just blame the Dems, because the GOP didn't want tougher regulations either. Hell many of their politicians ran their campaigns promising to lessen WS regulations.
 
Re: Should "Too Big to Fail" be "Too big to exist" regarding banks and other companie

SenorXm/Sirius said:
I agree 100%. And it is refreshing to hear a conservative spread the blame around. Not that you, or anyone here should give a crap but the Republican reaction to the crash of putting 99% of the blame on the borrowers and home owners is the main reason I am no longer a Republican. I was or 35 yeas, and there are other reasons too. But what the GOP(and con pundits, talking heads, etc.) did and said after the crash pushed me over the edge.

The only quibble I have with your analysis is the rating agencies. IMO they KNEW, but they didn't care. They were making money hand over fist too.

The 2nd part of your post, I don't agree with. The Dems wanted more, but the GOP resisted. Does that put all of the blame on the GOP? God no. The Dems could have pushed harder, but they didn't. They put on a show about being tougher, but they really didn't want to be to tough because they too get plenty of money from the WS lobbyists. But we can't just blame the Dems, because the GOP didn't want tougher regulations either. Hell many of their politicians ran their campaigns promising to lessen WS regulations.
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The DEMS had majority in both houses as well as the WH, and could ram through any sort of legislation they wanted to, as witnessed by ObamaCare.

And now you want to blame the GOP for resisting on Dodd-Frank? :lamo

Err. Sorry no. Dodd-Frank is 100% on the Dems, as is ObamaCare.
 
Re: Should "Too Big to Fail" be "Too big to exist" regarding banks and other companie

Grand Mal said:
There's never been a bank failure in Canada. There were 8 in the US last year and that was low for the past decade.
In a few cases, regulation is a good thing.
Click to expand...

Canada is also an economic ant.

When things are scaled so large, it's a bit of a different dynamic.
 
Re: Should "Too Big to Fail" be "Too big to exist" regarding banks and other companie

eohrnberger said:
The DEMS had majority in both houses as well as the WH, and could ram through any sort of legislation they wanted to, as witnessed by ObamaCare.

And now you want to blame the GOP for resisting on Dodd-Frank? :lamo

Err. Sorry no. Dodd-Frank is 100% on the Dems, as is ObamaCare.
Click to expand...

Nope. Again, many Republicans didn't just campaign on repealing/resisting D-F, they campaigned on reducing regulations on WS. They don't just say they want to repeal D-F, but even after repeal they'll take deregulation further. There's a reason why in 2012 and in this campaign season the GOP candidates are far outpacing the Dems in WS money. The fact that they are taking in more money than even Hillary speaks VOLUMES!!

by the end of the 2012 campaign, Wall Street donors had given $64.3 million to Mitt Romney and $19.3 million to the same man they had poured money into just four years before and who was running as the sitting president.
Click to expand...



Republicans beating Clinton, Dems in Wall Street donations | TheHill
 
Re: Should "Too Big to Fail" be "Too big to exist" regarding banks and other companie

Psychoclown said:
Yes. This is one of those places where I buck libertarian orthodoxy. I believe strongly in the free market, but companies that are too big to fail no longer have to operate by market principles. They have the security of knowing any risk in their investments or decisions is subsidized by the public. It encourages them to seek out high risk/high reward opportunities because if it works out, the substantial rewards are theirs to keep, but it things don't work out, they don't have to suffer the consequences - the public that finances their latest bail out is the one to suffer.
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If it can be busted under current anti trust laws, then I dont think any libertarian would have a huge issue with it.
 
Re: Should "Too Big to Fail" be "Too big to exist" regarding banks and other companie

jamesrage said:
Should "Too Big to Fail" be "Too big to exist" regarding banks and other companies?

Yes
No
Maybe

I say yes too big to fail should be too big to exist. No company should receive tax payer dollars to bail them out.Nor should a company be so large that it's downfall can ruin a country's economy.
Click to expand...
I've been doing a lot of thinking on this lately, and I say 'yes'.

Does "too big to fail" equal "virtual monopoly"? I'm thinking so. If a company, or very small collection of companies, has reached a level that they have become "too big to fail" then they are at the same negative status level that literal monopolies were 100+ years ago and we should be looking at breaking them up same as we did the old trusts.

For over three decades I have been vocally uncomfortable with all the government-approved large corporate mergers... some of which allowed companies to "re-merge" after they were purposely and forcefully broken up earlier... and now I feel we are paying the price for it.
 
Re: Should "Too Big to Fail" be "Too big to exist" regarding banks and other companie

eohrnberger said:
While I agree that the blame for the mortgage bubble building and popping is most appropriately laid on not only the Wall Street banksters, and in addition:
  • their re-insurers (AIG) who didn't know what they were insuring
  • the investment rating companies who didn't either
  • but also both political parties in that they both had ample occasions to mitigate the bubble popping as well as preventing the bubble from popping
  • but also the shady mortgage originators and their 'No Doc' and NINJA mortgages
    [*]as well as all the home owners who looked at this as a quick flip get rich quick scheme
    [*]as well as home owners using their houses and mortgages as a cash machine (multiple re-motrages per year for an ever increasing value)

Lots of blame to go around for lots of people and lots of organizations.

The failure of the Dodd-Frank legislation and regulation falls squarely on the two names associated with it and the Democratic party who had both houses of congress at the time of its writing, having been purchased by the big banks, which, rather than ending too big to fail and distributing the systemic risk across many smaller and local banks, has done little more than drive the consolidation of these smaller local banks into even larger banks, the direct antithesis of what it was claimed to do, sold to the electorate as doing, and actually increasing the concentration of systemic risk with failed and faulty regulations.

Dodd-Frank is a complete and utter FUBAR.
Click to expand...
Irresponsible homeowners played a bigger part than many people want to admit. Not the sole part, but they were (collectively) a significant contributor.
 
Re: Should "Too Big to Fail" be "Too big to exist" regarding banks and other companie

radcen said:
Irresponsible homeowners played a bigger part than many people want to admit. Not the sole part, but they were (collectively) a significant contributor.
Click to expand...

No argument with that.
 
Re: Should "Too Big to Fail" be "Too big to exist" regarding banks and other companie

SenorXm/Sirius said:
Nope. Again, many Republicans didn't just campaign on repealing/resisting D-F, they campaigned on reducing regulations on WS. They don't just say they want to repeal D-F, but even after repeal they'll take deregulation further. There's a reason why in 2012 and in this campaign season the GOP candidates are far outpacing the Dems in WS money. The fact that they are taking in more money than even Hillary speaks VOLUMES!!





Republicans beating Clinton, Dems in Wall Street donations | TheHill
Click to expand...

Speaking specifically about the FUBAR Dodd-Frank, it's all on the Dems for that piece of **** legislation / regulation.

As to decreasing regulations on WS, they've proven themselves incapable of operating without greater regulation without putting the entire financial system at risk. That being said, the regulations should be clear, simple, and easy to comply with so as not to overload on compliance costs, which is what's driving the banking consolidations, and concentrating the systemic risks.
 
Re: Should "Too Big to Fail" be "Too big to exist" regarding banks and other companie

eohrnberger said:
Speaking specifically about the FUBAR Dodd-Frank, it's all on the Dems for that piece of **** legislation / regulation.
Click to expand...

No..The crash wasn't just 1 party's fault, and letting WS off the hook wasn't 1 party's fault either. Regulationwise after 2008 WS should have taken to the woodshed, but neither side wanted that, especially the GOP. D-F isn't nearly tough enough. But we'll agree to disagree.

As to decreasing regulations on WS, they've proven themselves incapable of operating without greater regulation without putting the entire financial system at risk. That being said, the regulations should be clear, simple, and easy to comply with so as not to overload on compliance costs, which is what's driving the banking consolidations, and concentrating the systemic risks.
Click to expand...

Agreed. But in my last post I pointed out how many millions WS is, and has pumped into the elections/candidates. There's a reason for it. WS wants less and less regulation, and too many people in the government agree with them thanks to the lobbyists money. So WS doesn't even want easy and simple regulations. So it won't happen.
 
Re: Should "Too Big to Fail" be "Too big to exist" regarding banks and other companie

Luftwaffe said:
Canada is also an economic ant.

When things are scaled so large, it's a bit of a different dynamic.
Click to expand...

Ya figure?
Betcha any banking CEO in the US agrees with you, too. Obviously, that 'different dynamic' makes regulation unworkable, right?
 
Re: Should "Too Big to Fail" be "Too big to exist" regarding banks and other companie

SenorXm/Sirius said:
No..The crash wasn't just 1 party's fault, and letting WS off the hook wasn't 1 party's fault either. Regulationwise after 2008 WS should have taken to the woodshed, but neither side wanted that, especially the GOP. D-F isn't nearly tough enough. But we'll agree to disagree.
Click to expand...

Nothing I said negates tough regulation of Wall Street nor banks. Just that those tough regulations are simple, easy to understand, and cheap to comply with. These are not mutually exclusive.

SenorXm/Sirius said:
Agreed. But in my last post I pointed out how many millions WS is, and has pumped into the elections/candidates. There's a reason for it. WS wants less and less regulation, and too many people in the government agree with them thanks to the lobbyists money. So WS doesn't even want easy and simple regulations. So it won't happen.
Click to expand...

Well that's just tough **** for Wall Street. They've demonstrated their incapacity not to put the entire system at risk, forcing the fed. gov., i.e. Main Street, to bail their asses out, they are just going to have to eat it, even if it has to go down sideways (or up their asses sideways).

If the electorate would have a clue about what's good for them, they'd be poking their elected legislators in the back with a knife insisting on it.

But nooo. It's just far too distracting to get all caught up about how much tit Kim Kardashian is showing off. <shaking head>
 
Re: Should "Too Big to Fail" be "Too big to exist" regarding banks and other companie

Psychoclown said:
That's a simple solution, but its not one that I think many, if any, politicians would have the backbone to stand by. How many politicians do you think would risk a economic depression by letting a handful of major financial companies fold? How many people in the public would want that? Honestly if my choice is a second Great Depression or another round of bailouts, even I would probably go for bailouts in that situation as much as I loathe them.
Click to expand...

My point is that it doubtfully would be another economic depression for the reasons I stated the first time. Those are just fears spread to support throwing the tax payers money at the problem.
 
Re: Should "Too Big to Fail" be "Too big to exist" regarding banks and other companie

SenorXm/Sirius said:
If AIG was allowed to fail in 2008-2009 the ripples from them failing would have went on for years, maybe decades. It would have crippled the world's economy much more than it was.

It's too easy and simple to say don't bail anyone out. Like most things it's not black and white.
Click to expand...

I guess a few of you are reading don't bail them out but failing to read the another company will buy them out or emerge as a replacement part.
There are a number of very large insurance companies ( that have done much better than AIG ) that could have done a merger and reorganized them without the bail out.
 
Re: Should "Too Big to Fail" be "Too big to exist" regarding banks and other companie

SocialD said:
The solution is simple. Don't bail them out. another company will buy them out or emerge as a replacement.
Click to expand...

True. At the time of the federal bank bailout, there were approximately 16,000 banks in the US. The market was capable of absorbing the big bank customer base.
 
Re: Should "Too Big to Fail" be "Too big to exist" regarding banks and other companie

SocialD said:
I guess a few of you are reading don't bail them out but failing to read the another company will buy them out or emerge as a replacement part.
There are a number of very large insurance companies ( that have done much better than AIG ) that could have done a merger and reorganized them without the bail out.
Click to expand...

At the time of the insurance company bailout, there were 14,000 insurance companies. Same rules as the banks should apply.
 
Re: Should "Too Big to Fail" be "Too big to exist" regarding banks and other companie

SocialD said:
I guess a few of you are reading don't bail them out but failing to read the another company will buy them out or emerge as a replacement part.
There are a number of very large insurance companies ( that have done much better than AIG ) that could have done a merger and reorganized them without the bail out.
Click to expand...

Yeah, no. The only 'company' that could have bought AIG was the US government. It was a $185 BILLION bailout. No company in their right mind would take on that kind of debt. If AIG didn't get the money, and soon, the entire global financial system would be put at risk of collapse. THE ENTIRE system! Hoping and waiting for other companies to possibly, maybe, buy them up, maybe merge? And again, at a $185 bill. price tag? Nope.

It sounds good, and tough. 'Let them fail'. We'll show them!! But no, realistically in the case of AIG, it wasn't possible. I know now politicians are running around saying 'elect me and I won't bail out WS'. That' Bullcrap'. Given the same circumstances any of them will again. In a NY minute.
 
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Re: Should "Too Big to Fail" be "Too big to exist" regarding banks and other companie

SenorXm/Sirius said:
Yeah, no. The only 'company' that could have bought AIG was the US government. It was a $185 BILLION bailout. No company in their right mind would take on that kind of debt. If AIG didn't get the money, and soon, the entire global financial system would be put at risk of collapse. THE ENTIRE system! Hoping and waiting for other companies to possibly, maybe, buy them up, maybe merge? And again, at a $185 bill. price tag? Nope.

It sounds good, and tough. 'Let them fail'. We'll show them!! But no, realistically in the case of AIG, it wasn't possible. I know now politicians are running around saying 'elect me and I won't bail out WS'. That' Bullcrap'. Given the same circumstances any of them will again. In a NY minute.
Click to expand...

There are at least 25 insurance companies that are worth significantly more than that and a company like MetLife or Prudential , just to name a couple could have done it. they were both worth about 500 billion at the time of the bailout. and they were not the largest.
A company like Axa Sa was worth more than AIG and could have easily done it.
 
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