Tracing the Bank Bailout
Oct. 14th, 2008 09:59 am![[personal profile]](https://www.dreamwidth.org/img/silk/identity/user.png){kind=small}
danalwynWe've now begun the long and lengthy process of recapitalizing American banks by buying up preferred stock, and injecting capital directly instead of merely buying up bad assets. This is probably a good thing, as nobody seems to have suggested a better plan (other then the Chicago people - whose plan requires a great deal of temporary wishful thinking). I'm not entirely happy with it, but I'll live with it.
But how did we arrive at this point when the most powerful man in America, Hank Paulson, claimed that he was in no way going to resort to this just a few weeks ago?
Now that the dust has settled, it becomes possible to trace back a bit of a trend. The Americans did it, of course, because the Europeans did it. And the Europeans did it because the British had already started out by introducing a massive bank rehabilitation package. And the British? Well, they did it because the Irish had already guaranteed 400 billion euros from their six largest banks.
Think about that. The Treasury Secretary of the United States of America, arguably the most powerful man in the most powerful country on Earth, was just forced to spend, against his will, hundreds of billions of dollars to recapitalize some of the largest financial lenders in the world, because of a decision made by a nation with the population of Alabama. That's kind of impressive.
Welcome to the new global economy.
But how did we arrive at this point when the most powerful man in America, Hank Paulson, claimed that he was in no way going to resort to this just a few weeks ago?
Now that the dust has settled, it becomes possible to trace back a bit of a trend. The Americans did it, of course, because the Europeans did it. And the Europeans did it because the British had already started out by introducing a massive bank rehabilitation package. And the British? Well, they did it because the Irish had already guaranteed 400 billion euros from their six largest banks.
Think about that. The Treasury Secretary of the United States of America, arguably the most powerful man in the most powerful country on Earth, was just forced to spend, against his will, hundreds of billions of dollars to recapitalize some of the largest financial lenders in the world, because of a decision made by a nation with the population of Alabama. That's kind of impressive.
Welcome to the new global economy.