JohnAl

Major Banks Now Much Too Big to Fail

The question for investors is "what now?"

This should be unwound, but there seems to be little sentiment for that - at least not right now - and it would also be exceedingly difficult to do. So this seems unlikely to happen any time soon.

The current consensus is for additional government regulation and oversight. If we're lucky, the government will mismanage this to the point of regulating the too bigs out of existence, or at least to the extent that less regulated competitors can gain a foothold and in time can drive them out of business. But that's if we're lucky. More likely that the too bigs will plod along, hampered by the regulation but holding on, always complaining about over regulation while the government regulatory bureaucracies continue to expand.

A third alternative is status quo. Essentially, economic rule by the too big oligarchy. Economic fascism, where the too bigs enjoy private profits and losses continue to be socialized.