Question for the community…why are only some banks bailed out by the fed and not others? I realize the large wall street banks get bailed out but if the Fed is set up as the “lender of last resort” why do some banks fail?
They forgot to bribe the right people.
Why do you consider only some people as your friend?
The Federal Reserve is owned by 9 large commercial banks but operates under the law from Congress enforced by the President. So it really operates in the interest of those nine banks without. Consequently, everybody else, you, me, small commercial banks, most investment banks, etc are at their whim on being bailed out. There is also one investment bank: Goldman Sachs that seems to have permeated the power structure in the US Government and probably most states as well that the Federal Reserve will provide them as much cover as possible even to the point of aggravating Congress and the President.
So you can see a pecking order here:
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Organization needing bail out by any of 9 member banks get the money first.
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Organization needing bail out by President or significant congress get money second.
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Organization needing bail out by Goldman Sachs.
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Everybody else.
I think Lehman was politically connected, jet was not bailed out. Right after that they came out with the claim the crisis was caused by them failing to bail out all banks and therefore had reason to wow there will be more bailouts in the future.
Are they that clever?
Probably not, jet they somehow always manage to pull just the move as if they were.