Argument against Universal Bank.

Recently, we have been hearing about how Goldman Sachs ("GS") and Morgan Stanley ("MS") should merge or acquire a commercial bank. That is bullshit. Sure, the experts say that it helps the banks liquidity and lessens the losses from crisises like this one we're experiencing now. It couldn't be further from the truth. Merging with a commercial bank is the last thing GS or MS want to do. People say the standalone investment bank is dead. All lies. Here's why:

1.Hypocricy- Hank Paulson says that big institutions shouldn't be allowed to fail. Well.. ummm it commercial banks merge with investment banks, they get BIGGER, not SMALLER. The government says it wants smaller companies, to avoid ripple-effect catastrophes in the financial world. The why did they help broker and finance the acquisition of Bear Stearns by JP Morgan?

2.It's just retarded- So, I think that if GS or MS merges with a commercial bank, investors will be happy, because they think that because the investment bank is merged with a commercial one, all their liqudity problems are solved because they heard on Bloomberg that "if an Investment Bank merges w/ a commercial bank, the losses will be stemmed if the investment banking half comes under fire or makes bad bets". Bullshit. If retail investors really believe this (they do), they'll start pumping money into banks again. And guess what the banks do with all that money? They make retarded bets in the markets again. This time, they feel more confident because they think the commercial bank will help immunize themselves against losses. But it doesn't. And soon, they start making bigger, more riskier bets. This time, the commercial bank's consumer deposits, and thus people's savings are at risk. If investment banks were all standalone, the crisis would only be at half strength, people's savings, IRAs, and 401(K)s wouldn't be at risk, because the INDEPENDENT investment banks would isolate the losses, and thus the shit wouldn't trickle down to the middle class.

So before you go and praise the idiots that came up with the Universal Bank, think about it.