Hey that TARP sure worked good. Let's not worry (or even discuss) the long term problems associated with printing $10 Trillion Dollars. Let talk like $150 B of TARP did the trick.
But I can see this happening again. A rash of bank failures, followed by the the big boyz snapping up some assets on the cheap. And another round of TARP because after all...the first one was proven to work well.
And by the way...all those toxic assets....well no one removed any from their balance sheet, they still fester.
How about the $650T of derivitives....still out there, somewhere, mostly unregulated. What if there were 20% losses associated with those? The margin calls would get very interesting.
Mortgage resets have been mild this summer, they are going to start in earnest again. 14% of people are behind on payment or defaulted. That is alot. That creates significant negative social mood.
Just saying, nothing has really been fixed. Perhaps even worse, a false sense of security that the old school playbook "works" has been built in.
Steveo
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Insightful and Useful Comment!