What if the 2008 Bank Bailout had not occurred

What it says on the tin. I'm interested to hear what people think may have happened. Would a second Great Depression occur.

What reasons could the bailouts have not occurred, could elements of the Republican Party have pushed President Bush to not issue the bailouts.

If a Second Great Depression occurred what would be the impact it would have on other countries such as Europe, Canada, Russia, China and the Middle-East?
 

Deleted member 1487

The 1st Great Depression would look like a recession in comparison. The entire global finance system would implode and with it the entire world economy. It would pretty much be the end of civilization as we know it and I don't think global government could put Humpty Dumpty back together again.
 
Wh
The 1st Great Depression would look like a recession in comparison. The entire global finance system would implode and with it the entire world economy. It would pretty much be the end of civilization as we know it and I don't think global government could put Humpty Dumpty back together again.[/QUOTE
Why would this second Great Depression be so much worse?
 
The 1st Great Depression would look like a recession in comparison. The entire global finance system would implode and with it the entire world economy. It would pretty much be the end of civilization as we know it and I don't think global government could put Humpty Dumpty back together again.
Why would this second Great Depression be so much worse?
 

Deleted member 1487

Why would this second Great Depression be so much worse?
Without the bailout the core of the world financial system would implode and with it all the other banks interconnected with it. Once global finance dies so too does all business.
 
Frankly speaking, the bank bailouts in 2008 were necessary as it undoubtedly averted greater economic catastrophe. It halted the collapse of the US banking system and may have prevented a second Great Depression.
It also prevented an even deeper recession. A study done by Zandi and Alan Blinder of Princeton determined that without The bank bailouts and the Federal Reserve’s monetary easing, GDP growth would have been 4.7 percentage points lower and unemployment would have been 4.0 percentage points higher in 2010.
 
Frankly speaking, the bank bailouts in 2008 were necessary as it undoubtedly averted greater economic catastrophe. It halted the collapse of the US banking system and may have prevented a second Great Depression.
It also prevented an even deeper recession. A study done by Zandi and Alan Blinder of Princeton determined that without The bank bailouts and the Federal Reserve’s monetary easing, GDP growth would have been 4.7 percentage points lower and unemployment would have been 4.0 percentage points higher in 2010.
Thankyou, hard numbers is what I wanted.
 
As said Global Financial collapse, the Euro would most likely have collapsed under the total weight of bank collapses (remember it wasn't just the big crashes in Ireland and Spain, banks throughout the EU had to be bailed out.
Also isn't there a thread on this subject in Chat already?
 
What it says on the tin. I'm interested to hear what people think may have happened. Would a second Great Depression occur.

What reasons could the bailouts have not occurred, could elements of the Republican Party have pushed President Bush to not issue the bailouts.

If a Second Great Depression occurred what would be the impact it would have on other countries such as Europe, Canada, Russia, China and the Middle-East?

I could see the Republican's sitting out on the issue and waiting until Obama took control so the lame duck congress could claim it didn't support spending huge amount's of tax payers money on bailing out the elite bankers. But really they likely knew the risk of doing nothing was too great and the professionals didn't really want to offer other options. Mostly because for most of those disconnected people they didn't know anything was wrong until it suddenly crashed and banks were screaming for help every other day.

If nothing was done at all, a second Great Depression isn't even close to what would have happened. Numbers would be useless as nearly all of the money in the world would become worthless. People would likely start burning the fiat currency to keep warm and the whole system would have shut down. It's more like a first total world wide fiat currency and economic failure would have happened.

If they had chosen to bail out the depositors with more than 100k along with those with under 100k and left the large banks hung on there bad paper then things would have been worse but in my personal view better over the long term. The total cost of the bail out isn't just the 700 Billion or so they did in 2008, but also the fed buying up much of the bad mortgage backed securities and Q.E that may as well be called more welfare for the banks likely made the real cost around 7 trillion when including all actions taken. No one really seems to agree on every point though, but it seems understood that the Federal reserve has $4.5 trillion to $7 trillion in bad mortgages on there books right now that helped save the banks from there own highly risky game that has margins going 100 to 1 or even 200 to 1.
 
... No one really seems to agree on every point though, but it seems understood that the Federal reserve has $4.5 trillion to $7 trillion in bad mortgages on there books right now ...

Are those bad mortages now represented by 'paper', or are there actual properties still directly connected to them? I still see what appears to be a larger than previous (1980s - 90s number of residential & commercial properties going on the market as former forclosures. Is my perception correct on this or wrong?
 
Remember that at first the House rejected the bailout bill--*then the Dow lost 777 points in one day.* http://www.cnbc.com/id/26945972 After that, there was no doubt it would pass. If they rejected it a second time the market would go down still further until the bill did pass.

I once compared the situation with Trotsky's justification for initially opposing Brest-Litovsk. True, he said, doing so led to Germany driving deeper into Russia and making the terms of peace even harsher. But it was necessary to reject it at first just to show the Russian people how disastrous rejection would be and how helpless Russia would be if it stayed in the war; without this demonstration the Bolsheviks would have been denounced as German agents. (Actually, Lenin and his party *had* gotten money from the Germans, but that's another story.) In September 2008, tanking stocks had the same effect German tanks had in 1918: they showed that resistance was futile.

One reason the bailout was inevitable is that hatred of banks and Wall Street and bailouts was *not* the predominant popular emotion in September 2008. That mostly came later, after the situation had stabilized somewhat. In September 2008 the predominant public emotion was simply *fear.*
 
Are those bad mortages now represented by 'paper', or are there actual properties still directly connected to them? I still see what appears to be a larger than previous (1980s - 90s number of residential & commercial properties going on the market as former forclosures. Is my perception correct on this or wrong?

1.8 Trillion of it according to there latest numbers from the FED is in Mortgage backed security's. Those are based in real actual properties. There other holdings though seem like pure junk to me. They would have offloaded all of this by now if they could have. Yes the number is really large due to how much fraud there was. What we have now is a fed full of junk holdings totaling $4.4 trillion as of there latest public release, a near zero interest rate and other central banks going for negative interest rates to force banks to loan out money. The 7 trillion number I have read includes the Q.E programs and that is a harder matter to understand.
 
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