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    • MILW posted
    Posted in The Lounge » It's the economy, stupid!

    MILW! Not familiar with Glass-Steagall arrangement. Will google. Without the bank guarantee, could you just imagine the run on the banks, if thinss went totally tits up? I seriously considered taking my cash and hiding it under the bed, it was, repeat was at that time substantially more than 250K.
    Donald, yeah the banks will pass on the price, cost of doing business. They have been provided with a service/product from the tax payer they nave not paid for.
    michaelgm

    Yes, I can imagine the mayhem that would ensue. However, I think there is always supposed to be some risk associated with money and the markets. The idea of government guaranteed investment banks just encourages the banks to take bigger risks than they otherwise would have, because they know big daddy corporate fascist state will come to the resuce, courtesy of "John Q. Taxpayer".

    If the government is on the hook for so many billions, it should split the banks under Glass -Steagall and create a new state-owned institution into which we can deposit our savings - a new Commonwealth Savings Bank of Australia. The private investment banks could then go off and take as much risk as they want in the stock markets, with derivatives and god knows what other financial products they can get their hands on, but they would not be covered by any sort of government insurance, and there would be no bail outs by the taxpayers.

    I think it's very interesting that the guarantee was reduced from $1M to $250k, and some time ago, too. To me, it suggests that the risk of actually having to pay out on that insurance policy has gone up. It was fine to say a million when they didn't think they'd have to use it, but we see an air of caution slowly creeping in.

    Edit history

    Edited 28 Aug 2017 15:21, 4 years ago, edited by MILW

    MILW! Not familiar with Glass-Steagall arrangement. Will google. Without the bank guarantee, could you just imagine the run on the banks, if thinss went totally tits up? I seriously considered taking my cash and hiding it under the bed, it was, repeat was at that time substantially more than 250K.
    Donald, yeah the banks will pass on the price, cost of doing business. They have been provided with a service/product from the tax payer they nave not paid for.
    michaelgm

    Yes, I can imagine the mayhem that would ensue. However, I think there is always supposed to be some risk associated with money and the markets. The idea of government guaranteed investment banks just encourages the banks to take bigger risks than they otherwise would have, because they know big daddy corporate fascist state will come to the resuce, courtesy of "John Q. Taxpayer". If the government is on the hook for that much, it should split the banks under Glass -Steagall and create a new state-owned institution into which we can deposit our savings - a new Commonwealth Savings Bank of Australia. The private investment banks could then go off and take as much risk as they want in the stock markets, with derivatives and god knows what other financial products they can get their hands on.

    I think it's very interesting that the guarantee was reduced from $1M to $250k, and some time ago, too. To me, it suggests that the risk of actually having to pay out on that insurance policy has gone up. It was fine to say a million when they didn't think they'd have to use it, but we see an air of caution slowly creeping in.

    Edited 28 Aug 2017 15:19, 4 years ago, edited by MILW

    MILW! Not familiar with Glass-Steagall arrangement. Will google. Without the bank guarantee, could you just imagine the run on the banks, if thinss went totally tits up? I seriously considered taking my cash and hiding it under the bed, it was, repeat was at that time substantially more than 250K.
    Donald, yeah the banks will pass on the price, cost of doing business. They have been provided with a service/product from the tax payer they nave not paid for.
    michaelgm

    Yes, I can imagine the mayhem that would ensue. However, I think there is always supposed to be some risk associated with money and the markets. The idea of government guaranteed investment banks just encourages the banks to take bigger risks than they otherwise would have, because they know big daddy corporate fascist state will come to the resuce, courtesy of "John Q. Taxpayer". If the government is on the hook for that much, it should split the banks under Glass -Steagall and create a new state-owned institution into which we can deposit our savings - a new Commonwealth Savings Bank of Australia. The private investment banks could then go off and take as much risk as they want in the stock markets, with derivates and god knows what other financial products they can get their hands on.

    I think it's very interesting that the guarantee was reduced from $1M to $250k, and some time ago, too. To me, it suggests that the risk of actually having to pay out on that insurance policy has gone up. It was fine to say a million when they didn't think they'd have to use it, but we see an air of caution slowly creeping in.