Healthy banks rejecting TARP funds, restrictions

Makes sense to me. The question that’s running around in my mind ( lots of room to run around there, alas) is, why bail out these bad boys at all? They fail, they fail. If I understand the bailout proponents’ argument, there’s plenty of money out there ready to resume refinancing the world economy, but it’s being held out of the game because of uncertainty over the soundness of banks. So let the banks go bust. Wouldn’t the toxic portfolios then be reset to zero, just as Obama is apparently planning, and wouldn’t new investors then come in to take over the banks, knowing they’d no longer had any liability for their stupid loans? It would wipe out existing shareholders, but I’ve never understood capital to care who owns it – the stuff just shifts. I’m sure I’m being simplistic but if the choice is between shareholders paying the price for their companies’ bone headed moves and me and my kids doing so, I say wave goodbye to the shareholders.

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2 responses to “Healthy banks rejecting TARP funds, restrictions

  1. anonymous

    Lots of people “talking their book”, pleading for bail-outs and raising alarmist fears…and politicians and their staffs tend not to be well-versed in world of finance or business…and need to “do something” in face of public fears of meltdown and need to be re-elected

    Agree, let the weak fail and strong prosper

    After all, a few smart hedgies like John Paulson were able to predict this disaster; place bets; and he personally earned a >$3Bn paycheck last yr as well-deserved reward for astute financial sense (Darwinian selection, no?)…would rather hear what smart guys like Paulson would recommend

  2. Towny

    investors? what investors?