Daniel Gross that we'll be all be out a few hundred billion dollars from the bailouts of the financial system. But what's a few hundred billion dollars among friends? At least, according to this column a lot of money has been collected from the banks in the form of fees and charges based on the amounts the Federal government guaranteed for them. Bank of America, for example, paid $425 million as a fee for a guarantee of $118 billion in loans, which it has now dropped as no longer needed.
I suppose that's the real good news: The banks are doing well enough that they no longer need some of these guarantees. Until the next time.
Glenn A Knight
In my study
Monday, October 5, 2009
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2 comments:
Glenn:
The "until the next time" thing is the issue. The implicit guarantee of government intervention is still there.
Rgds,
Zabeli
True enough. Just as there was no explicit guarantee of Fannie Mae and Freddie Mac (or Ginnie Mae or Sallie Mae, either), everyone's assumption that the government would not let them go under proved to be a good assumption.
I just read Chapter 05 of Naill Ferguson's The Ascent of Money, which was written at the beginning of the crisis. This is a very good book, and it covers a lot of issues in some detail.
That's why I said "until the next time," and why I think that the government needs to put some effective regulations in place (in some cases, back in place to reduce the chance of another repeat. After reading Ferguson, one wonders why the S&L crisis of the 80s led to the financial crisis of 2008, instead of to measures that might have prevented it.
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