It says this...
But the truth is, we just don't know. Larger credit problems or a severe downturn still could threaten these banks, especially regional banks that own a lot of risky mortgages. If the banks go down, the government may have to spend more money forcing them to merge — and that could set off a whole new cycle of uncertainty.
Q: Does that mean we're staying on the bailout train?
A: For the foreseeable future. Regulators have decided these banks are "too big to fail." In other words, their failures could wreak havoc on the financial system, like what happened last fall when Lehman Bros. declared bankruptcy. By all indications, the Fed is ready to do whatever it takes to make sure that doesn't happen again.
So let me get this straight, these banks are too big to fail, but if one or more is unable to weather the economy, they will have to merge with other big banks too big to fail? Aren't we exacerbating the problem? Shouldn't they broken down into smaller banks instead?
Geez, the way smart people think sometimes is beyond my reasoning.
