Short-term or long-term? The immediate issue, of course, is the way or ways in which the various national authorities will support their banking systems - but ultimately the more important matter will be the effect banking stress has on the real economy. Because the rebuilding of trust in banking has been botched, the recovery of the banking system will be slower that it need be. As a result most of the developed world will experience recession.
That, I am afraid, is a done deal. So the next issue is how long and how deep those recessions may be. That is still very much to play for, but it creates a political difficulty. If voters want the banks to be punished this will inhibit the recovery and increase the pain they inflict upon themselves. It is not an easy "sell", as politicians everywhere have found.
The ship has hit the rocks, has been holed below the waterline and is now shipping dangerous amounts of water. Yes, first let us plug the hole and head for a safe haven. Then, hang the captain.
Posted by: Mariner | Wednesday, 01 October 2008 at 12:57 PM
Feeling angry at the banks, the banking system and the politicians, each of whom contributed significantly to the current mess is a natural and healthy reaction.
I have seen virtually no effort to discover the underlying causes of the current financial and economic failure. Nobody stands back from the crisis and looks outside the box.
Most of our politicians, bankers and economists think in nice old-fashioned linear ways. They are not able to grasp the complex, dynamic, non-linear nature of the systems with which they are faced.
I see no reason to rebuild trust in people who do not understand what they are doing. I see no benefit in supporting a banking system which manifestly does not work.
To say that we have no choice is simply nonsense. Until we look with a fresh eye, learn from our mistakes and use our highest intelligence, we have no idea about the consequences of the various choices available.
Posted by: Nicholas Moore | Wednesday, 01 October 2008 at 01:14 PM
It'll be a redux of the Titanic all over again. Women and children (in firstclass) first. Steerage can fend for themselves!
Posted by: flipped | Wednesday, 01 October 2008 at 01:52 PM
If the powers that be,want 'Main Street support' for another 'Wall Street baleout', then any forthcoming financial support must have stringent and tighter strings attached. This has to include not only tighter regulation and greater transparency of the financial system itself, but there needs to be an independent agency; not only composed of politicians, legislators, financiers and academics, but one that also includes representatives of the 'Ordinary Joe' such as trade unionists,social and community workers. And it has to have some legislative teeth.
However, to gain public approval,it needs to appoint an independent body of financial investigators,whose remit should be to expose, prove and convict anybody that made millions if not billions prior to this economic crash, and sequestrate any financial assets that they've acquired, tax havens being first port of call and a legitamite target.
Not only should the judiciay punish these greedy arrogant bastards by hurting them in the pocket, but bang 'em up in the clink, as well, with all the other so-called common robbers and thieves. These investigations should go right to the top, no holds barred, because the stench of corruption is so overwhelming, and because robbery, greed and corruption is just what this is, but on a much grander scale; much grander than robbing Fort Knox, itself.
Posted by: mark | Wednesday, 01 October 2008 at 05:10 PM
A complete reformation of the banking system is required. Banks should not be in charge of the money supply. Money should serve the people and not the other way around.
The banksters, having manipulated a Stock Market collapse after Congress rejected Paulson's Bankers Bill, and then flooded the media with "Oh, look, you rejected our bill and look what happened. Joe average has seen his 401K go down by so much overnight and it is all your fault. You must vote for the 700 billion bail out", must be taken on.
Posted by: scousekraut | Wednesday, 01 October 2008 at 06:48 PM
Bring back bartering & close banks. Thank you.
Posted by: Property Pro | Wednesday, 01 October 2008 at 09:44 PM
Nicholas Moore posted - '' I see no reason to rebuild trust in people who do not understand what they are doing. I see no benefit in supporting a banking system which manifestly does not work.''
Unfortunately those people knew exactly what they were doing without remorse - making obscene amounts of money for themselves as a collective and hoping the underlying problems would not materialise, and to that end the banking system did work - for them and their profits but not for the country and its population. And what makes you think the banking system is there to work for anyone but the banking system.
I do truly hope that out of this will come an independant enquiry re the setup of the whole banking, money market and financial institutions. To even consider that the present systems could possibly continue is unthinkable.
Posted by: JohnL | Thursday, 09 October 2008 at 04:48 PM
feldman Law center has scammed me out of 4,000.00 dollars and my bank(CHASE) is not helping me either!!!What can I do?
Posted by: Scott Wood | Saturday, 14 November 2009 at 08:35 AM