It’s official! The bank bailout has not worked.
-Peter Morichi, University of Maryland
If policymakers think that adding extra liquidity is going to solve the credit crunch on its own, they are going to be sorely disappointed. This is because upward pressure on interbank rates is a consequence, not a cause, of the crisis.
It is a shortfall of bank capital that has made financial institutions reluctant to lend to one another. Boosting liquidity is therefore only a necessary, but not a sufficient, condition for stabilising the financial sector. In fact, until banks are adequately recapitalised, funding pressures may even get worse.
-John Higgins, Capital Economics
Quick! Let's throw several more trillions down the drain before we have any idea what is really going on. The market needs to finish "correcting," then we can look for solutions. We deregulated and encouraged massive bubbles, and the bill came due. We planted the bulbs, and our tulips are blooming.
All you bushy-tailed optimists that insisted the bailout had to go through, or else: Fuck you! Running around half-decapitated has only made the hole bigger. Bet that last trillion we wasted still goes into bonuses.