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So will every struggling bank get a bailout from now on? How long is this sustainable?
by Reason077 4y ago
So will every struggling bank get a bailout from now on? How long is this sustainable?
- tekla 4y agoHow is this a bailout?
- FollowingTheDao 4y agoA bailout is the provision of financial help to a corporation or country which otherwise would be on the brink of bankruptcy.
- ceejayoz 4y agoI know that's the Wikipedia top-line definition, but further in https://en.wikipedia.org/wiki/Bailout https://en.wikipedia.org/wiki/Bailout: > However, the common use of the phrase occurs where government resources are used to support a failing company typically to prevent a greater problem or financial contagion to other parts of the economy. This is not what's happening in this case.
- colinmorelli 4y agoThis is a very technical definition that effectively makes the word meaningless. Under this definition, most early VC equity rounds are bailouts, initial stock purchases in new companies are bailouts, etc. It is, technically, true. But it’s not very helpful in understanding why these things happen and which are good vs bad.
- FollowingTheDao 4y ago> not very helpful Not very helpful to who? It is very helpful to the average Joe in explaining why they are getting screwed over.
- govg 4y agoIn that case it isn't helpful to the average Joe, since the word's usage for them isn't the same as that of the technical definition. When someone says bailout in media, they mean a government funded action to get someone out of bankruptcy, not a private action to provide liquidity.
- colinmorelli 4y agoNo average joe is getting screwed over by private companies investing money in other private companies, any more today than they were on any previous day where the same things happen. This is not news, and is only relevant because of the crisis. No public dollars are funding this.
- sharemywin 4y agoit should be a loan(with highest interest rate their charged they customers) and then some kind of insurance/loan.
- pjc50 4y agoIt is a loan! Well, a deposit.
- FollowingTheDao 4y agoAnd a high priced loan! And how will that loan eventually get paid back? Wait and see!
- ceejayoz 4y ago> And a high priced loan! The statement describes it as a deposit, not a loan. Where are you getting this information?
- ceejayoz 4y agoIt's pretty sustainable as long as it's banks having liquidity crises instead of solvency ones.
- pjc50 4y agoThis is not a bailout. This is just what it says: deposits. An anti-bank-run by the other banks.
- samstave 4y ago>>An anti-bank-run by the other banks This is actually pretty terrifying when you think about it... Its indicative of just how much a shell game fractional reserve banking truly is.
- Eumenes 4y agoAs long as the money printer goes BRRRRRRRR