Comments on: Will Big Banks Ever Again be Allowed to Fail? http://www.ritholtz.com/blog/2009/02/will-big-banks-ever-again-be-allowed-to-fail/ Macro Perspective on the Capital Markets, Economy, Geopolitics, Technology, and Digital Media Tue, 14 Feb 2012 23:06:20 +0000 hourly 1 http://wordpress.org/?v=3.0.5 By: Jack McHugh http://www.ritholtz.com/blog/2009/02/will-big-banks-ever-again-be-allowed-to-fail/comment-page-1/#comment-144427 Jack McHugh Fri, 06 Feb 2009 23:27:10 +0000 http://www.ritholtz.com/blog/?p=18350#comment-144427 Agreed on Greenspan, Steve. History will show he not only induced moral hazard by keeping rates too low too long (trying to bail out the broken equity bubble with a housing bubble), but also that he was the person everyone in government turned to (from Bush 1, to Clinton, to Bush 2) for opinions on deregulation and financial innovation. His advice? Let 'er rip. His advice and low rates allowed everything to spin waaaaay out of control... Agreed on Greenspan, Steve. History will show he not only induced moral hazard by keeping rates too low too long (trying to bail out the broken equity bubble with a housing bubble), but also that he was the person everyone in government turned to (from Bush 1, to Clinton, to Bush 2) for opinions on deregulation and financial innovation. His advice? Let ‘er rip. His advice and low rates allowed everything to spin waaaaay out of control…

]]> By: Steve Barry http://www.ritholtz.com/blog/2009/02/will-big-banks-ever-again-be-allowed-to-fail/comment-page-1/#comment-144423 Steve Barry Fri, 06 Feb 2009 23:05:14 +0000 http://www.ritholtz.com/blog/?p=18350#comment-144423 Jack, I agree capitalism, unchecked, leads to concentration and abuses...we need a hybrid system of capitalism with proper regulation. We almost had it, until we deregulated too much, while Greenspan simultaneously induced the greatest moral hazard of all time. The result was the credit bubble that has now popped, crushing housing and now much more. Jack,

I agree capitalism, unchecked, leads to concentration and abuses…we need a hybrid system of capitalism with proper regulation. We almost had it, until we deregulated too much, while Greenspan simultaneously induced the greatest moral hazard of all time. The result was the credit bubble that has now popped, crushing housing and now much more.

]]> By: leftback http://www.ritholtz.com/blog/2009/02/will-big-banks-ever-again-be-allowed-to-fail/comment-page-1/#comment-144325 leftback Fri, 06 Feb 2009 17:03:25 +0000 http://www.ritholtz.com/blog/?p=18350#comment-144325 Nobody is ever going to fail again from now on - in the best of all possible worlds...... Except for a few Treasury auctions, of course. But that monster will appear later, much later. Nobody is ever going to fail again from now on – in the best of all possible worlds……
Except for a few Treasury auctions, of course. But that monster will appear later, much later.

]]> By: Jack McHugh http://www.ritholtz.com/blog/2009/02/will-big-banks-ever-again-be-allowed-to-fail/comment-page-1/#comment-144320 Jack McHugh Fri, 06 Feb 2009 16:53:40 +0000 http://www.ritholtz.com/blog/?p=18350#comment-144320 Actually, Steve, capitalism without any rules or checks and balances, would lead (and has led historically) to massive cocentration as the winners either buy competitors or use scale to hurt them. Trusts in many industries (Oil, Sugar, Steel, etc.) formed during the late 19th century and became very anti-competitive entities. Teddy Roosevelt busted them up and put in place the Sherman and Clayton acts to prevent this type of monopolistic concentration. Banking is probably too close to capitalism's heartbeat to be made into a utility. If we can't get the cable guy to come out, I can't imagine bankers doing much better inside such structure. Jack McHugh Actually, Steve, capitalism without any rules or checks and balances, would lead (and has led historically) to massive cocentration as the winners either buy competitors or use scale to hurt them. Trusts in many industries (Oil, Sugar, Steel, etc.) formed during the late 19th century and became very anti-competitive entities. Teddy Roosevelt busted them up and put in place the Sherman and Clayton acts to prevent this type of monopolistic concentration.

Banking is probably too close to capitalism’s heartbeat to be made into a utility. If we can’t get the cable guy to come out, I can’t imagine bankers doing much better inside such structure.

Jack McHugh

]]> By: Steve Barry http://www.ritholtz.com/blog/2009/02/will-big-banks-ever-again-be-allowed-to-fail/comment-page-1/#comment-144219 Steve Barry Fri, 06 Feb 2009 11:10:51 +0000 http://www.ritholtz.com/blog/?p=18350#comment-144219 If capitalism is working correctly, nobody would get to big to fail in the first place...High margins would bring in competitors. If that can't happen in banking, perhaps the barriers to entry are just too great and banks should be made like utilities that provide universal service like the old Ma Bell. If capitalism is working correctly, nobody would get to big to fail in the first place…High margins would bring in competitors. If that can’t happen in banking, perhaps the barriers to entry are just too great and banks should be made like utilities that provide universal service like the old Ma Bell.

]]> By: M.G. in Progress http://www.ritholtz.com/blog/2009/02/will-big-banks-ever-again-be-allowed-to-fail/comment-page-1/#comment-144216 M.G. in Progress Fri, 06 Feb 2009 06:56:36 +0000 http://www.ritholtz.com/blog/?p=18350#comment-144216 <a href="http://mgiannini.blogspot.com/2009/02/on-lemon-major-announcement-from.html" rel="nofollow">On the lemon banking theory</a>: are you squeezing lemon banks and products? On the lemon banking theory: are you squeezing lemon banks and products?

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