"cavelamb" wrote in message
news
Timothy Geithner's interview (thanks John) was most interesting.

Rethinking the way things ought to work...

One thing he said that I thought made sense was "the only reason
that one penny was given to these banks is to keep the people who
depend on them from (going under).

But in the end it's a "confidence game" (maybe in BOTH senses).

But mostly...

Do you have confidence in this recovery?
Do you have confidence in this economy?

George said:

The "stress test" results are out, but the single most important
comment/observation IMNSHO is that "Together, the 19 firms that
took the test hold two-thirds of the assets and half the loans in
the U.S. banking system."

All my emerging confidence just evaporated again...


Too bad about that. But does this information finally allow you to see the
wisdom of what the government did in bailing out these firms? When you
consider how much the country's financial health depends upon good
functioning by these giant firms it quickly becomes very clear why the
government stepped in to prevent a catastrophe. Without the intervention
some of these giants would have fallen. If they did the problems we have
experienced would have seemed puny compared to what might have happened. So
it may have been a mistake for the government to have allowed firms to
become "too big to fail" it was clearly the right decision to prevent those
firms from falling and by doing so take the rest of us down with them.

Hawke