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by t3rmi
1193 days ago
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This is incorrect. The correct analogy would be if I set the speed of my automated truck to 20mph over the speed limit causing me to earn 10% more income for 10 years. Then the truck crashes and burns and my neighbors pay for it. |
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I’d agree that’s what happens with the big rescue loans that save businesses. But, that’s not what’s happening here. There just such extreme hyperbole about how this removes all risk for banks.
I guess where I can meet you in the middle is that in this crash from excessive speed (not over the speed limit, but only because they lobbied to have the speed limit raised) the customers are getting taken care of, the business owner loses his business and his competitors have to pay for the cleanup.
I’m curious how the banks feel about this. I really don’t believe that doubt about the banking industry is in their favor, even if it could be a differentiator in theory. The amount they’ll pay is a tiny fraction compared to the market cap lost this week.