4 ms·

This may be a gross oversimplification, but I don't get it: First the government bails out the large banks to the tune of 600 billion (give or take a few billio

by victoro 15y ago

This may be a gross oversimplification, but I don't get it: First the government bails out the large banks to the tune of 600 billion (give or take a few billion), 3 years ago. Now they realize that the banks were perpetrating fraud in the first place and decide to spend potentially millions (or maybe even hundreds of millions) along with the precious time of the already over-booked and underfunded federal court system to sue them. All to get some small fraction of the money that they gave to the banks back. And the banks will probably be using money the government gave them (some of that 600 billion had to last until now right?) to pay for their defense. Is this all basically an elaborate money laundering scheme for government lawyers, or just an expensive case of the US government being indian givers?

RuadhanMc 15y ago
I think people tend to forget that the banks were bailed out because if they weren't then the world's financial system would have shriveled up and died -- remember the credit markets had actually ceased to function and as a result no one could borrow money. Credit markets and the shadow banking system http://en.wikipedia.org/wiki/Late-2000s_financial_crisis#Credit_markets_and_the_shadow_banking_system http://en.wikipedia.org/wiki/Late-2000s_financial_crisis#Cre... I haven't seen any credible arguments against bailing out the bank which would have ensured that the financial system didn't completely collapse. Some argue that we should have let the crisis take its own course, let the banks fail and deal with the consequences. But this would have guaranteed a second great depression and the vast majority of the world would have been negatively affected in a very bad way. Now without congress actually doing anything against the banks there aren't too many options left, but hopefully the banks being sued can keep this issue in the spotlight longer to encourage public rage, so that Congress is actually forced to do something of significance.
- giardini 15y ago
  >But this would have guaranteed a second great depression and the vast majority of the world would have been negatively affected in a very bad way. But we are in a recession as deep as the Great Depression! And there are obvious undeserving winners (Wall Street) and losers (everyone who worked hard, paid their bills on time, invested conservatively, and saved money).
omouse 15y ago
You don't get it because you don't get how the system works. This is how it works; the rich get richer, the poor get poorer. This is about image; if they don't sue, they'll look bad. If they sue, then they can at least say "hey, we tried!"

by victoro 15y ago

RuadhanMc 15y ago

I think people tend to forget that the banks were bailed out because if they weren't then the world's financial system would have shriveled up and died -- remember the credit markets had actually ceased to function and as a result no one could borrow money. Credit markets and the shadow banking system http://en.wikipedia.org/wiki/Late-2000s_financial_crisis#Credit_markets_and_the_shadow_banking_system http://en.wikipedia.org/wiki/Late-2000s_financial_crisis#Cre... I haven't seen any credible arguments against bailing out the bank which would have ensured that the financial system didn't completely collapse. Some argue that we should have let the crisis take its own course, let the banks fail and deal with the consequences. But this would have guaranteed a second great depression and the vast majority of the world would have been negatively affected in a very bad way. Now without congress actually doing anything against the banks there aren't too many options left, but hopefully the banks being sued can keep this issue in the spotlight longer to encourage public rage, so that Congress is actually forced to do something of significance.

giardini 15y ago
>But this would have guaranteed a second great depression and the vast majority of the world would have been negatively affected in a very bad way. But we are in a recession as deep as the Great Depression! And there are obvious undeserving winners (Wall Street) and losers (everyone who worked hard, paid their bills on time, invested conservatively, and saved money).

omouse 15y ago

You don't get it because you don't get how the system works. This is how it works; the rich get richer, the poor get poorer. This is about image; if they don't sue, they'll look bad. If they sue, then they can at least say "hey, we tried!"