Bitcoin Forum

1989 - savings and loans bailout
2008 - banks bailout
2020 - covid19 bailout aka wall street bailout

bailouts get bigger every time. But will they become more frequent?? Do we need more bailouts to bailout the aftermath of the previous bailouts?

With every bailout imo strengthens the control the government have on the banks and other institutions and heightens regulations.

I think we will soon just start to see government ownership of financial institutions instead.

2008 brought lots of market consolidation---USA giants like washington mutual, merrill lynch, and bear stearns were absorbed by the biggest banks, jpmorgan chase and bank of america. if a crisis hits, they'll get TARP-like bailouts while acquiring failing banks IMO, further consolidating the industry.

citibank actually did get partially nationalized after that crisis. i assume the government will sell their stake ASAP (like they did with citi in 2010) but i guess things could play out differently if the banks don't return to profitability.

Bailout will continue to happen as long as the conditions at the moment demands it. In 2008 during the recession a lot of families would have been further thrown into agony with government offering the bailout. In the current pandemic, without government intervention to families and the economy as a whole, there would be massive poverty in the land with companies out of business which further tank economic indices, any reasonable government needs to do everything needed for restoration.

I could see it being run as a committee type system where the best people that apply are put in charge of running it but then ultimate decision lies with the government - and shares aren't distributed (this might be how bulling societies were meant to work)?

That succession of smaller banks being absorbed by bigger ones, can't end well imo. You're going to end up with too much market dominance.

Three data points is hardly enough data to make a point, let alone extrapolate it into anything meaningful.  Bailouts are generally bad because they take the consequences for irresponsible behavior out of the equation.  They also skew the economics of investment and risk/reward.  The people who want bailouts are those who have a lot to lose, so bailouts invariably favor the richest people in the economy while destabilizing the currency for the rest of us.  Bailouts should be a measure of last resort, but "too big to fail" is now a permanent part of our lexicon to the detriment of us all (except the billionaire class).

i think 2030 next bail out :D 

 ;D....   or war lol :D 

Or maybe we're just not going to save anyone next time? Why if no one appreciates it? And why if then there will still be a crash? Let it take its course and just see what happens in the end. Maybe this is the Golden path that we all need?

When the economy is growing the companies are whining about government regulations and taxes.
When the economy is in a recession/depression all the companies want the government to save them.
That's the hypocrisy of capitalism right there.
After several decades,the US economy will reach a point,where the companies will not be able to exist without constant bailouts.
This will be a government controlled economy,pretty similar to the communist centralized plan economy.

I don't think the banks are the problem at the moment. Bailing out Wall street again at the moment doesn't seem very likely. We probably will see more support for real economy rather than for financial services. The problem is that demand and consumption dropped in the real economy. People are losing their jobs and have less money to spend, the ones that still have a job and get a regular paycheck rather save then spend their money. Didn't most banks in 2008 paid back there bailout money? I think the government even made profits on some of the loans.

For now. Banks were well capitalized heading into this. Staying that way is dependent on mortgagees (including landlords, who are dependent on rent being paid) staying solvent. This is why it was so important to immediately bail out homeowners with expanded forbearance and deferral options. I can't figure out exactly how these programs are being funded. Most likely the government is or will be taking on toxic mortgage assets from the banks, when all is said and done.

Related to OP's list is Long Term Capital Management (https://en.wikipedia.org/wiki/Long-Term_Capital_Management) in 1998, which almost caused a huge financial disaster but has been pretty much forgotten about today.  The US government didn't bail them out, but a consortium of banks did--and I'm sure if those banks hadn't been willing or able to, the taxpayers would have come to the rescue.

Then there was the bailout of GM (https://en.wikipedia.org/wiki/General_Motors_Chapter_11_reorganization#Bailouts) under the TARP program in 2009.

But the question is whether bailouts are going to become more frequent, and I don't think anyone has the answer to that.  You'd think that after each financial meltdown, Wall Street and the government regulators would learn some lessons, but they apparently don't.  So if I had to take a guess, I'd say they might not become more frequent but they're still going to keep happening.  Moral hazard.  It's something the government really needs to learn about and should let the concept drive its actions.

IMO, the government depends on the source that is circulating in a certain time, monthly or annually based on the nations economic growth, but when you say about ownership it only is available in a communist country, Instead of owning a financial Institution it is also a part of the government to take action by helping that specific institution to grow and produce. The government should bail out the businesses that are the bloodline of their economy.

The "myth" is that the US experiences an economic crisis every ten years. So the next bailout event would be around ten years from now. As long as the "too big to fail (https://en.wikipedia.org/wiki/Too_big_to_fail)" thing still exists, there will be bailouts at every economic crisis.

And they can just justify bailouts as it already set a precedence. And the "more the better", and 'there's not much danger" attitude from US. And its obvious that the meltdown today is far greater than 2008-09, specially the unemployment rate. So in the next ten years, and if we are going to see another bail out, it will be bigger than we have seen today. And we don't know how much it is going to cost, trillion dollars at least.

Certainly that would be the reality. As long as there is in need or a demand calling for the concerns of having bailout to save up businesses for the benefit of the good, this will frequently came out to be a necessity that is needed to support the restoration. The frequency on how bailouts came will depend on the economic situation which will result on how much is the needed bailout to be spent to resolve the financial crisis. At this time of pandemic, it becomes more tragic and have bring out a very large scale of economic deflation that calls out for the need to spend a very large amount of bailouts.


Let's just all see what will happen after 10 years if the "myth" would be cut down that the US was always experiencing an economic crisis that is calling for bailouts. Hope to see no further damage in the economy that is very costly that in need to spend millions and trillions to support the needy.

Lol, that's not "capitalism".  In a capitalist system, bad companies that haven't planned for adverse situations are allowed to go bankrupt.  Bailouts are anti-capitalist.  What you're actually describing is just greed, and it doesn't exist solely in capitalism. Greed is human nature, and no matter what economic system you have, greed is the motivating factor for it.  That's why in even "socialist" economic systems, wealth concentrates at the top.  The rulers of those systems are motivated by greed. 

There's a middle ground too, it's not just capitalism or communism.  Countries like Sweden have a pretty solid system where the economy is not centrally planned but there are strong social programs.

Absolutely. And those bailouts mean the government picking winners and losers. They bail out some companies, while forcing others into receivership and mergers with the chosen winners. We saw it in 2008 with the banks. For instance, JP Morgan pocketed huge TARP bailout funds and huge loans from the Fed so it could swallow up competitors like Wamu (biggest savings and loan in the country at the time) among others.

These types of moves reinforce a cartel dynamic where markets are controlled by increasingly few but extremely powerful companies. It's all very insidious, especially because this dynamic makes "too big to fail" companies bigger and bigger over time.

We can't be sure we need a bailout after this, because we can't predict what will happen in the future. in this case a bailout could occur because there were unexpected events such as the Covid 19 pandemic. The hope is that in the future everything will be resolved so that no more bailout is needed. or at least it doesn't happen frequently.

I guess it all depends on what industries are the government going to rescue through this bailouts. And agree with @exstasie, government are going to simply pick in the last bailout it was the banks and later the automobile industry if I'm not mistaken. So what will be the case in this years bailout? Is there something different? Or should the bailouts goes directly to one sector or should it be to the people (which obviously is what the US government with their stimulus package).

How about the airline industries, do you think it needed help at this point? or the US will just stick to the banks as they have been doing for years.

I hope all the institutes won't go under government rule since it will create huge chaos in terms of how they run it. At least in the private sector you get few demands fulfilled because these private banks needs actual "business" and they don't have big fat wallets to fullfil any worsening condition around them. They serve the customers like a God, otherwise they might run out business.

Govt controlled banks are just treated as safety deposits, since they do not run out of business "virtually" and provide security of lifetime funds.

With every bailout comes a new set of protocols banks have to follow. Notice I said "government control" and not "government dictation" there are schemes the government could put in place similar to how the rail networks in Wales and London work with a similar structure to now but without private shareholders. In the best case they could run it a bit like some more charitable companies are run and have someone's share of a vote equivelant to the amount of profit they've brought the company (either by savings or lending) - you'd still pay your ceos and your staff a competitive rate but the onus is on the collective to make it run.

Bailout will continue as long we have unforeseen circumstances that altered the economy of a nation or continent but the frequency is not something that easy to determine.

See bailouts only happen when there is very unforeseen circumstances plus the problem cannot be solved in any way. I don't think they will become much frequent since, now we have an idea of what we are into and therefore it can be controlled, the government is asking banks to issue time for the people who have to work towards their company's financial situation. Stimulus bills are now being distributed, I do think we won't see them so frequently.

Plus I do think the government controlled banks can print as much money as they want but they are just pushing the balloon to its boundary, soon enough the value of the currency of that particular country will go down which would cause the whole economy to die from the inside.

Right now we need to focus on the new normal. How these things can be prevented and how these situations can be changed.

The bailout packages will be more frequent than for sure. Currently, businesses and people tend to borrow to maintain their business and reinvest. They have a habit of borrowing and they will continue to borrow. If diseases and natural disasters become more prevalent in the face of climate change, further relief packages will continue to be rolled out.

I feel like this 12 year difference should be disregarded while also realizing that it was needed. It should be disregarded because this is a global pandemic that actually went better than 2008. Think about it, there were maybe couple thousand at most wall street people who got too greedy and they insanely leveraged house mortgages because they thought every single house mortgage will be paid no matter what (which was a lie, some people failed and got their houses seized) and because of those few bankers, the whole world got upside down and everything sucked for years.

Now we had a pandemic that literally stopped the whole worlds economy for few months, but we are back on earth again and things do not look like it was as bad as back in 2008 if you ask me, which is a good thing.

if in future we see condition like at this moment or even better i see bailout still be the solution. we will face difficult condition in future, not only economic condition but nature condition which is not balance again . bailout in the past due economy case, and now due virus pandemic and maybe if happen again caused by nature disaster, but deeply i am not hoping bailout will not happen again.

It would be very sad for the world economy that bailouts became more frequent already.

If you ask me the best thing about the current situation of our economy is the fact that rich can't get any more richer, they can try but the more they try the more economy will fail, there is a limited amount of wealth that you can have and after that there are no more customers and when those wealthy people do not have customers they will get poorer and poorer.

Do you know why people like Jeff Bezos and Mark Zuckerberg and Bill Gates are top people? Jeff sells cheap stuff to you and sends directly to home versus going to a shop and buying for more expensive, Mark doesn't charge the user anything and Bill has almost all the computer market, so at the end of the day we are talking about some wealthy people who are not a "must" product creators getting lesser and lesser money.

It's interesting to see that during my lifetime I've seen of the three big bailouts in the United States history, not that that is something I am proud of , but an interesting point in history to be living in. I think depending on the type of bailout, or how the bailout is set up, determines if it is a good idea for a country or a bad idea.  Personally I think it's a good idea when the bailout does have strings attached, i.e. "you take this bailout, and we will become part owners of the company going forward".  The U.S. government has already showed it's too inept to run businesses ( US postal service for example ).

Apples and oranges, that.

The USPS is run as a government service, not a private for-profit business. They keep mail delivery affordable as a service to residents. This is completely different than the government loaning and taking a stake in a for-profit business and then selling their stake ASAP. The government profited from the TARP bailout loans in 2008.

The USPS's situation is also rather unfair and not comparable to any other government agency. No other government agency has ever been forced to do this:


https://defazio.house.gov/media-center/press-releases/defazio-authored-bill-to-help-us-postal-service-maintain-sustainability

As it turns out, 2006 was the last year the Post Office broke even:


https://www.washingtonpost.com/business/2020/06/25/postal-service-packages-coronavirus/

It shouldn't come as a surprise they are now bankrupt.

I have realized that maybe if done correctly bailouts could be something super awesome, we just need to change everything about them but keep the main premise same.

So, let's say companies do not pay too much tax because they keep getting tax cuts and so forth, and sometimes they just crash and need bail outs and they get paid billions total and sometimes pay it back, sometimes they do not even pay it back and get more bailouts instead.

What a government can do is, give them bailouts but require them to pay a certain interest rate depending on their past, if it is a company that got bailouts before they should have a higher interest rate, something like 20% rate yearly, or even higher, make them feel what college loans feel like, and if they fail? Government takes a part of that company in return, becomes a share holder of that company, if they keep doing this for a long time, government will take control over.

You have to eleborate , how was wall street bailed out?

Some companies were bailed out , some stimulus checks were given to pepole. I dont see how this is wall street bailout. In general bailouts should be considered carefully , were company are located, how much people would lose their jobs and etc

Based on the data in the opening post, it certainly proves that bailout has become more frequent. Actually the government is implementing
this policy because of the urgent economic situation, such as the wall street bailout that occurred in 2020 due to the COVID19 pandemic.
Hopefully after this we will not experience another economic crisis, so the bailout doesn't need to be done or at least it doesn't happen
frequently. But the problem is no one can guess what will happen in the future.

It wasn't, not yet. Banks were well capitalized heading into this, sitting on record amounts of cash. However, there are millions of people currently missing mortgage payments and defaulting on credit cards and other loans as we speak. It's hard to say how quickly those cash reserves will be eaten through in some of the darker economic scenarios.

Remember, when the housing crisis hit in 2007, it took a year before the bottom completely fell out and Congress passed the TARP bailout. The same thing could happen this time around. Maybe 2021 will be the year of the bank bailouts.

If the markets rise, it takes more money to save them when they collapse. So yes, they are getting bigger and bigger until the current system collapses all together. Or changes direction to something else.

Also, the government decides to print out more money too. Bank's interest rate also changed to lower compare to before in some countries. People put all their savings to gold or stock as they consider it was a safe channel to hide over this time. Definitely something in the recipe for disaster. My prediction is the real estate crash will trigger the start.

QE and low interest are always side by side and are usually used as a weapon to re-setup the economy because it is overvalued because the money is printed dozens of times compared to the existing underlying project. The way of resetting is for capitalists to discard overvalued paper by allowing the stock market to crash. Because the losers are small investors, while large investors like Berkshire Hathway have left first and are holding cash.

When the economy, social and politics of the global world are disrupted by corona for several months and even the effects could be several years in the future, the FED will print money so that capitalists and oligarchs can buy everything in the world. And the wars that are used to legitimize the use of weapons are propaganda wars, media wars and wars on social media and biotechnology wars.

So printing money, aka QE, has always been the savior of the US from the habit of printing excessive money because of overconfidence, the majority of dollars circulating abroad, not domestically, and dollars circulating abroad are mostly controlled by Wall Street. Besides that, the procamp language likes the US because the US created the system.

The bailing out during the corona crisis happened much fast than the 2007/2008 housing crisis because the lock down hit the real economy immediately. Almost all major governments injected billions into their economy. Some of this money came in form as loans, others as equity and some as substitute for keeping on workers. In Europe for example national governmente became stock holder in all of the big airlines over night. Also pharmaceutical companies received state aid to try and avoid selling out of corona vaccines.

In general that's true, it's retail investors who have the most to lose and thus can't hold through corrections. They end up selling near the bottom and the big boys swallow up their liquidity.

Funny enough, it looks like Warren Buffett sold the bottom, at least in airline stocks. They liquidated everything in early Q2. I think they (as well as many other institutional investors) underestimated the buying power of retail investors, who have at least doubled their trading activity since before the pandemic began and are clearly affecting the market more than ever: Retail traders make up nearly 25% of the stock market following COVID-driven volatility, Citadel Securities says (https://markets.businessinsider.com/news/stocks/retail-investors-quarter-of-stock-market-coronavirus-volatility-trading-citadel-2020-7-1029382035#)

Now it's interesting to see Berkshire Hathway has been selling off lots and lots of bank stocks, paring down on at least a half dozen positions including big banks like Wells Fargo and JPMorgan Chase. A sign of things to come, or just a sign that there are better returns elsewhere?

18 Stocks Warren Buffett Is Selling (And 6 He's Buying) (https://www.kiplinger.com/investing/stocks/601222/stocks-warren-buffett-buying-selling-q2-2020)

It depends, the covid19 crisis has exposed the weakness of governments and the economy in general just to deal with something that should not have been that difficult to overcome, it is true many people died but it is not like we were affected by the bubonic plague or anything remotely close to that, and the worst part is that this really scared people so I do not think the consumer spending will recover soon making even more businesses risk bankruptcy in the future and at that point more bailouts will not solve the problem.

If unforeseen circumstances continue to happen frequently, then bailout will resurface more than usual to save the economy from a total collapse. 

People are really not seeing the big picture if they think that wall street got some money and people got some money and it is not wall street bail out. 2 trillion were given to companies versus only 400 billion were given to people. We are talking about a situation where companies are not making a loss at all and they are actually doing very well while the general public can't even find work, things are not looking good for the Joe's and Jane's of USA, so it was definitely a bail out for wall street.

If you invest into keeping the financial sector alive so that you would look better while you do not invest into people's life as much, you are not helping the nation, you are helping the rich. This was a full blown wall street bail out with some such money to people so they wouldn't get mad.

This is an interesting perspective, it's entirely possible that the US government learned from what happened in 2008 that if they just gave money to the rich and saved them from the economic crisis that they themselves caused people will be very upset about it and that is never a good thing especially when the elections are so close, so they decided to give part of that money to the people so they were happy and they did not saw that the majority of the money went to Wall Street anyway.

The USPS doesn't operate in a free market so it's not a suitable example "government bad" strawman.  It is mandated by law to charge rates below cost in order to subsidize mail delivery in rural parts of the country.  They are mandated by law to make pension payments to a pension plan years in advance of needing to and without an ability to raise rates to compensate for the costs that are saddled on them by law and not because it's the normal cost of doing business.

About bailout, is going to keep being there as long the system requires it for life to continue. This is one big role that government play which makes it relevant. They print and regulate money in the country by doing that.. Series of bailouts have come even before covid-19 that came as bailout for some government, palliatives and economic support for different government.


I think the government already own the banking institutions or has a great control of it because the government regulate it.  The the government do this through the central bank that directly guilds, regulate the policies of banking in general at least in some system. They appoint the governor of the central bank who can be fired out of appointment before tenure expires. The government also has influence in some banking decision like mass retrenchment, loan percentage, merger.

As we know, the dollar circulating outside America is three times than the dollar circulating domestically. The majority of dollars circulating abroad are controlled through wall street. Wall street is a representation of "real money owner" and not a representation of the American government. Thus, the view of the American government, because of the large amount and scope of Wall Street wealth, the destructive effect would be greater if Wall Street collapsed, in other words the United States financial corporation has gone global and must be saved.

If the United States recovers, the world will recover. The bailout policy is always a high-stake drama negotiation, between several parties, as currently there are negotiations between Trump, Bidden, the finance minister, the FED and the senate. Congressional approval is required for the bailout package to go down. Saving the wall street means the economy will rotate while providing a stimulus to the community means to boost demand without being followed by an increase in production.

The thing is, Germany had pandemic as well, all over the world there was pandemic and something you wouldn't expect from German people because we all think of them as smart and hard working people but they even had a rally about how they do not want government to force them anything, which is an idiotic move you would expect from Americans for example but even with that they had low death count and they managed it perfectly and right now they have 0% inflation for example, which by the way is not awesome because inflation is growth but still it is better than having 10%+ for example.

I am saying this because I want to show the world that it is possible to have negative debt (no idea what it is called because it is not profit) and have zero inflation and protect your people from dying, all perfect things and it is already being done right now.

But based on the data in the opening post, the distance between 1989 and 2008 bailouts was 19 years. Then the distance of the next
bailouts in 2008 and 2020 is 12 years, this can be concluded that the distance of the occurrence of bailouts is getting closer. This means
indeed bailouts become more frequent, my prediction is that the next bailouts distance could be around 5 years. This means that the next
bailouts can occur in 2025. Bailouts usually occur in the world economic crisis. Therefore it will be very dangerous if the COVID-19 vaccine
is not found immediately, so according to my predictions the next bailouts could occur 5 years from now.

I do understand the bank ones because in anywhere but USA banks who needed money actually sold some of their shares to recollect that capital and get out of it. That actually makes 100% sense, a company that needs money?

They either take out a loan or they just sell their shares and they will be back to square one. If somehow they are strong again, they could buy those shares back from the market once again, doesn't matter if it s cheaper or more expensive because they were saved from bankruptcy.

Now USA on the other hand, USA loves to save rich people, no idea why and how they are capable of keep saving those companies over and over again without ever requesting anything back, "2008 was a loan, 750 billion was paid and 780 billion was received" is not really a good explanation, you could have given ME 750 billion and I could have given you 780 back, its not that hard when the amount is so large.

every of these you've mentioned are not as connected as they seem to be from your list.
there are a lot of information between the lines is missing.
so there is no way for us to make a proper conclusion from information you've provided.
but if I take into account all info I have on myself I'd say no or rather hope no - bailouts won't become more frequent