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>It was mainly to prevent systemic collapse What systemic collapse ? When a tree is rotten to its core, you need to either let it collapse on it own, or if it
by ur-whale 5y ago
>It was mainly to prevent systemic collapse
What systemic collapse ?
When a tree is rotten to its core, you need to either let it collapse on it own, or if it risks damaging other things when crashing, you cut it down.
One thing you do not do is prop it up and pretend that all is well.
- refurb 5y agoWith regards to 2008, absolutely not. Caterpillar, which has nothing to do with the housing market had no market for its commercial paper which financed day to day operations. I agree 100% that the banks and housing industry should have been allowed to collapse but it had gone so far beyond that there was no choice but to bail out banks or suffer from decade long depression like the 1930’s.
- mindslight 5y ago> Caterpillar ... had no market for its commercial paper which financed day to day operations ... at the lowball prices they felt entitled to. Did they try offering bonds with real interest rates, say 7-10% ? I'm reminded of this recent narrative about the so-called "labor shortage".
- refurb 5y agoMarket was frozen. When the major banks were going under would you lend someone hundreds of millions? Even at 10% interest?
- mindslight 5y agoUnfortunately I don't have hundreds of millions of dollars, so the question is moot. But yes, loaning out cash to blue chips and receiving bonds with yields approaching that of stocks would be a prudent move at such a time. Also "market was frozen" is such a short period of time compared to the length of the Fed's stimulus.