Chris Butler_

81 Bank Failures So Far in 2009: But It's All Relative

I think John Lounsberry’s article makes two of my points regarding numbers of branches and % of GDP comparisons (along with a much needed inflation adjustement), I'd add two points that make this author's point seem even less convincing:

1) How many more banks would have failed from the 2008 fiasco had we actually allowed them to fail like we did in the Great Depression? Due to the difference in political will in the two timeframes, we're comparing apples to oranges.
2) What do you say we wait until the "all clear" signal is given in this crisis before we start adding up the damage for comparisons with the Great Depression? We just found out that the FDIC's list of troubled banks has exploded. Presumably, some of those banks are on their way to shutting their doors. Unless, of course, we allow them to mark their troubled loans to fantasy or simply bail them out.

Fed, Treasury Propose the Dissolution of Capitalism

notsosmart-

"Wall St. greed & fraud caused all this"? Really? How so? Bernie Madoff is one fraud I'm aware of. Are you holding out on us? What other frauds can you cite? And what's the total amount of loss/damage caused by each? I assume you're talking about investment banker fraud.

Greed? Nice one. That's such an amiguous term these days that all non-thinking people are swallowing it whole. Exactly what greed caused this? Profit-seeking? And exactly how has this decade's profit seeking been qualitatively different from the profit-seeking of generations before? Do you really want me to believe that people are greedier today than they were ten years ago? I don't even think profit-seeking *is* greed. Aren't profits good? If you've got a problem going after profit, you don't have a problem with wall street - you've got a problem with capitalism so just spit it out.

Come on man. Why is it so hard to believe that bankers made bad bets while going after profit? Isn't this the simplest answer? Oh, and dare I forget the bubbling up of our economy on credit? I wonder what greedy bastards caused that? Oh. Right. That was the consumer, which of course is us. And who was the enabler? Right. The Fed. Your government.

Get off the "wall street done us wrong bandwagon" unless you've got more ammo than "greed." Who gave you your talking points, anyway? Your Sunday school teacher?

Great article, Moon! Spot on, my friend.

Banks: Nationalize, Cleanse and Get It Over With

Number one, why is "stability" in any market so important? Markets are inherently unstable because the components of these markets - human beings - are not inherently in any kind of equilibrium! "Stability" is a pipe dream.

Number two, why is it so important to have a "comprehensive solution" at all? How about this comprehensive solution: bank that should fail, fail? What happens after that, happens. The system will rebuild and we will learn from previous mistakes.

Number three, if we're scared we'll lose trust in our banking system, the question should not be "how do we restore that trust in these poorly run banks?" but, rather, is the current lack of trust warranted? The answer is "yes." People learn, they move on. If they pull their money out of all banks, and all banks fail, perhaps there was a problem with the current banking model. I bet a better model would be borne from this collapse.

Finally, you state that "we risk a loss of confidence among the rank and file" if we don't go full-bore nationalization. I disagree. Complete nationalization of the banking industry would immediately result in a lack of confidence among the rank and file. Look at thow markets reacted from nationalization fears coming out of Europe yesterday.

Bottom line, if you think bureaucrats can run banks better than the free market, why not let these same bureaucrats run everything? The thing about free markets that people don't quite get is that "free" also means "free" to make mistakes. Either we retain the freedom and allow for the all-too-human propensity to err, and accept the pain that some of these mistakes lead to, or we allow our "mistake free" government to try their best to do a better job by usurping freedom and accept their mistakes that were never supposed to happen. How well do think a central planner can anticipate the next move in a complex adaptive system like our economy? We need only look to the success of economic forecasts in the past. Wethermen have better records.

Sorry, I'll take my mistakes with a heavy does of personal freedom, thank you very much.