BUSH'S ESCAPE
It looks like the Bush Administration will just miss out on yet another crowning achievement of the Reagan Devolution ("government is not the solution"): a bailout of the FDIC, which may run to $150 billion or more.
Great news that investments banks are now "backed" by insured depositors, eh? [Heck, you can even commit quasi insurance fraud on the FDIC, and the Congress doesn't appear to give a hoot, do they? Right out in the open, in the beltway, even.]
I mean seriously, given Merrill Lynch's history of screw-ups, would you put your deposit money with BOA? I'm not saying it certainly is more risky. I'm just saying that some consumers may ... not be asymmetrically informed. If Goldman buys a bank "for deposits", would that make you more or less likely to keep your deposits there?
As for the joys of "universal banking", how do you feel about consumer credit availability, now in the hands of three or four players in this country, largely, to be dictated by the ups and downs of the underwriting and M&A cycles?
Today, ordinary, work-a-day people who have had no change in their circumstances are having their credit terms changed, simply because of changes in their bank's balance sheet, ups and downs that are unrelated to changes in the real economy, for the most part.
Thursday, September 25, 2008
The Next Bailout
