Can Banks Get Too Big To Save? Just Asking.

Northern Rock - by no means a giant - took the UK system to the limit - so what now with B of A?

Clear to me that we have to get at the roots of the failure of the system - the pay system is part of that I think - $39 billion paid to the top 5 IB's last year.

Wall Street has become a huge Crack Dealer = Crack being Easy Money. All its energies are focused in dealing vs financing or investing.

No amount of regulation will help if this point is not addressed. For again the big money is on the side of the lobby group. Like the Wire - the Police and the City can't resist.

The other Giant Pool of Money!

Sent by Robert Paterson | 10:14 AM | 9-22-2008

Apply your question about the US treasury. Is our economic system savable? I read that the US owes 70 trillion dollars in public and private debt. The gap between what we pay and owe is increasing. If true, it means a debt of nearly a million dollars for each family of four. We must remember that money itself has no value. It is the promise of something that we use money as a counter. With too many counters and to little promises the system breaks down. The current crisis is not enough promises, adding more counters doesn't fix the problem in itself. We have to live within or means, something we haven't done for a very long time. That is at the root of our promise gap. Look at the work you do, does it add real value to the economy. Wall Street has become a casino instead of a financial resource. Stocks could be traded once a week and provide the capital needed for business. All the rest is just entertainment. Nice to watch if you have the resources, but not worth feeding.

Sent by ray | 10:34 AM | 9-22-2008

I have a question: now that the remaining 2 big investment banks will be going the commercial banking route(Morgan Stanley, Goldman Sachs), how many other investment banks are there?

Sent by Tricia | 10:45 AM | 9-22-2008

The day after taking office in March 1933 FDR announced a week-long 'bank holiday' to give some cooling off time as banks were on the verge of collapse due to a lack of liquidity. Admittedly, a run on the banks by depositors is not quite what we have in 2008, but it strikes me that a similar multi-day halt to trading might give time for (1) a better government intervention plan to be devised (2) more sensible mergers/takeovers in the banking sector.

In the UK we've seen the shotgun wedding of Lloyds TSB with HBOS. Lloyds had been stalking HBOS for years but the competition authorities (what you in the US call anti-trust) had always ruled a takeover out because it would (and has) resulted in a retail bank with 30+% of the market. But last week the UK government has been praised for suddenly waiving the rules and allowing the takeover to go ahead.

Would a cooling off period where all stock trading was suspended for a week or so be a viable option in these days of globally integrated, multi-time zone financial flows? Might it have saved Lehman & Merrill Lynch averted the nationalisation of Fannie, Freddie and AIG?

Has anyone been arguing for this?

Sent by Jack Thurston | 8:57 PM | 9-22-2008

So much info and so many ideas. I think no one really knows what is going on. Shooting in the dark.

Sent by Nureet Cohen | 9:58 AM | 9-23-2008