Will bailouts become more frequent?

[so98nn]

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.

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.

[jackg]

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.

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.

[gbrendeh]

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.

[fiulpro]

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?

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.

[wack slacker]

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.

[el kaka22]

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.

[jambul_kribo]

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?

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.

[beerlover]

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.

[ChiBitCTy]

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 ).

[exstasie]

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:

In 2006, Congress passed a law to require the USPS to prefund 75 years worth of retiree health benefits in the span of ten years—a cost of approximately $110 billion. Although the money is intended to be set aside for future Post Office retirees, the funds are instead being diverted to help pay down the national debt.

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:

The Postal Service hasn’t broken even since 2006 and has racked up $160.9 billion in debt. The bulk of that, $119.3 billion, stems from its annual obligation to prepay retiree health benefits, according to the Government Accountability Office.

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

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

[bitgolden]

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.

[prehisto]

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

[Shasha80]

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.

[exstasie]

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.

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.

[cryptoperkele]

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?

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.

[AbNewton]

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.

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.

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.

[abhiseshakana]

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.

[Mauser]

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.

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.

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.

[exstasie]

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.

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

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)

[South Park]

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?

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.