BoilerUP
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- Joined
- Nov 11, 2003
- Posts
- 5,311
If a financial giant fails, the other financial giants that hold that failed giant's debt takes a massive hit...causing their rating to fall and a call on their debts, making them default...and the parade cascades down the line until most if not all the giants (who manage your 401k, are institutional traders, and provide credit for everybody from F100 companies to mom and pop shops to Average Joe Mainstreet for a mortgage) have fallen. And guess who provides credit to most if not all of the small local and regional banks...
Failures of that magnitude would collapse the US financial system and therefore the economy, and cause us all a REAL world of hurt.
If an airline, even one like UAL or AA fails tomorrow, within days and weeks there will be other airlines to fill in some (but not all) of that airline's capacity and routes. The employees without jobs will no doubt be hurt, but with less capacity and competition fares will rise, improving the profitability of the remaining airlines.
One can't reasonably make an argument that a bailout of Fannie/Freddie and a bailout of UAL or any other airline are even somewhat similar as to their effect on the national economy.
Failures of that magnitude would collapse the US financial system and therefore the economy, and cause us all a REAL world of hurt.
If an airline, even one like UAL or AA fails tomorrow, within days and weeks there will be other airlines to fill in some (but not all) of that airline's capacity and routes. The employees without jobs will no doubt be hurt, but with less capacity and competition fares will rise, improving the profitability of the remaining airlines.
One can't reasonably make an argument that a bailout of Fannie/Freddie and a bailout of UAL or any other airline are even somewhat similar as to their effect on the national economy.