I'm hearing over and over about how this bailout will let those in banking power off the hook...With the debates and modifications happening in Congress and The Senate right now, I really hope this is addressed.
One thing to remember is that a LOT of those in power are already gone...the more banks that either fail or get bought by one of the larger banks, the more of these "fat cats" get weeded out.
Something else to ponder...10 of the largest banks in the world came together and started a fund worth $70 billion as a cusion they could borrow against...here's the list...Ten of the world's largest banks will form a fund with a value of $70 billion, each putting in $7 billion. The banks are Bank of America (BAC), Barclays (BCS), Citigroup (C), Credit Suisse Group (CS), Deutsche Bank AG (DB), Goldman Sachs (GS), JPMorgan Chase (JPM), Merrill Lynch (MER), Morgan Stanley (MS) and UBS AG (UBS).
The idea is that any of the banks can borrow against the fund...but the reality is that this is a way for the larger, stronger banks to assist the smaller, weaker ones in times of crisis...the banks ALL realize that the health of the banking industry and the economy as a whole is dependant of ALL of them remaining in business.
What the gov't bailout is doing is essentially the same thing...by buying the undervalued debt (at a discount) off the balance sheets of the lenders, it makes the whole system stronger by allowing the banks to go back to banking, rather than dealing with this mess.
In the long run, if done properly, the gov't should be able to actually turn a profit while forcing significant regulation as a condition of the bailout.
Again,
this is all contingent on the gov't doing something properly!!
