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Author: FCorelli Big red star, 1000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 76420  
Subject: Re: Take my money and run Date: 9/23/2008 3:59 PM
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The bailout isn't "great", but necessary.

Banks were afraid to lend money -- even to each other. That's why the interest rate on the 3-month Treasury bill got all the way down to 0.05% (essentially zero.) People were forgoing the 4% they could get elsewhere to have the Treasury hold their money for safe keeping at no interest.

Banks would begin calling in loans, cancelling lines of credit, etc. if the process was allowed to play out. Businesses would then close and workers would be laid off. If you aren't a millionaire retiree with no debt and no need for employment, you'd be in rough shape.


But isnt this healthy for the free market to function properly? Chase out the nay sayers and nervous nellies etc?
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