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The Real Cost of the 2008 Financial Crisis

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Re: The Real Cost of the 2008 Financial Crisis

#141

Post by cjg »

imtringued wrote: post #22
nafey wrote: post #2

But what was the alternative to the bailouts? Another depression? I feel we made it across fairly well.

If there was no bailout then even people who were paying their mortgages on time would be affected. The bank needs money now so it will have to sell some of it's assets such as the house you're living in but 5 years later it is probably swimming in money.The government effectively acts as a very large insurance company by giving the bank a loan.

The bank doesn't own your house. The asset it has is the mortgage on your house. The bank could could sell the mortgage, but the only impact to you is that your mortgage payments go to someone else.

Re: The Real Cost of the 2008 Financial Crisis

#142

Post by rwmj »

ThomPete wrote: post #70

The best explanation I have heard of the financial crisis was in the book "The End of Alchemy: Money, Banking and the Future of the Global Economy" by the former head of Bank of England. It makes the convincing case that there is no real single place to point fingers and that the crash was the logical consequence of people all doing the "right thing" I can highly recommend it as it also takes a historical view of mon…

Unlike the other replies, I did read this book based on an HN recommendation, and it's pretty terrible. If you know anything at all about economics you'll find it very dull, like a secondary-school level introduction to the subject. I found his analysis was either simplistic and obvious, or in a few places I recall it being obviously wrong.

Also (and I didn't know this while reading the book) the author is a nutty Brexiteer.

Re: The Real Cost of the 2008 Financial Crisis

#143

Post by 21 »

netsharc wrote: post #66
nicktelford wrote: post #39

While a generally fascinating piece that connects together the events in the American and European financial and political systems, it shouldn't be understated how much of an effect the refugee crisis is having on European politics, which can be attributed largely to the "Arab Spring"; itself largely a consequence of the 2008 financial crisis.

I can't help but believe that if the common folk of Europe of the last, say 10 years, was doing economically better, they would have been more generous with people fleeing warzones looking for help...

The common folk in Sweeden are doing very well, yet the far-right party had a huge rise due to the refugees.

Re: The Real Cost of the 2008 Financial Crisis

#144

Post by nostrademons »

dhimes wrote: post #90
ThomPete wrote: post #70

The best explanation I have heard of the financial crisis was in the book "The End of Alchemy: Money, Banking and the Future of the Global Economy" by the former head of Bank of England. It makes the convincing case that there is no real single place to point fingers and that the crash was the logical consequence of people all doing the "right thing" I can highly recommend it as it also takes a historical view of mon…

Without reading the book or even TFA, I'll comment on the concept of everybody doing the "right thing" leading to bad outcomes. I have a hunch that this is a pretty universal law, and the only way to mitigate it is through regulations that ban some of those "right things." I think that honest, moral players welcome good regulations because it keeps them from having to go down a slippery slope.

The other way to mitigate it is to incentivize some of the players in the system to ferret out and report wrongdoing on the part of other players. Think of short-sellers in a market: they can profit handsomely by identifying fraud or irrational exuberance, taking a position opposite it, and then loudly reporting the fraud so everyone knows about it. The legal system is also setup like this, as is the U.S. government: there's no one entity that regulates the U.S. government, but the government itself consists of a set of interlocking institutions, each of which has leverage to prevent the others from becoming too powerful.

Re: The Real Cost of the 2008 Financial Crisis

#145

Post by bitxbit »

shshhdhs wrote: post #136
rwc wrote: post #102

Earlier quoted context omitted.

Wow I don’t remember this kneeling down on camera. Can you link?

I don’t recall him kneeling. I think the commentator was exaggerating

No, I am not exaggerating.

https://www.nytimes.com/2008/09/26/business/26bailout.html

[“I didn’t know I was going to be the referee for an internal G.O.P. ideological civil war,” Mr. Frank said, according to The A.P.Thursday, in the Roosevelt Room after the session, the Treasury secretary, Henry M. Paulson Jr., literally bent down on one knee as he pleaded with Nancy Pelosi, the House Speaker, not to “blow it up” by withdrawing her party’s support for the package over what Ms. Pelosi derided as a Republican betrayal.]

There are some pictures of it as well but appears most of them have been taken down over the years.

Re: The Real Cost of the 2008 Financial Crisis

#146

Post by bitxbit »

pas wrote: post #115
bitxbit wrote: post #68

I experienced the financial crisis first hand on Wall Street, a place fraught with people who pretended to know the ins and outs of risks. It was also a brutally honest place when it came to winners and losers. But that changed when Hank Paulson, then the Secretary of Treasury, knelt down on camera and begged Nancy Pelosi for what was effectively a blank check. Wall Street could not face reality when it was its turn…

Finiteness (scarcity) of resources is the essence of capitalism, and thus the effective counterparty risk is also finite. The banking sector converged on this state via the bad incentives of under-regulation. The problem is that the counterparty was (and still is) the whole host economy, the country, the world, etc. And similarly the economy would have stopped without the bailout. There is no bigger fish when it come…

Very well put.

Re: The Real Cost of the 2008 Financial Crisis

#147

Post by mercurysmessage »

claydavisss wrote: post #137
mercurysmessage wrote: post #131

Earlier quoted context omitted.

"Mixed with that and the liberal social welfare system in Europe and PC culture which claimed any critical voice was facist, racist etc. That's why the antiestablishment came about not because of 2008 and wallstreet." Oh come on, this is ridiculous. Pointing out fascism and racism doesn't turn people fascist or racist. If you think there aren't some problems with racism and fascists I don't know what to tell you, bec…

how do you "point out fascism"? in today's culture, this term is used so broadly it has become meaningless. Can you point out some fascist behavior in the news? more inane is the related accusation "literal Nazi"....ugh, no unless you were a member of the Nazi Party of Germany between 1933 and 1945, you are not a "literal Nazi"

"how do you "point out fascism"?"

By recognizing euphemisms/dog whistles, and rhetoric used by fascists.

"in today's culture, this term is used so broadly it has become meaningless."

It's not, as has been pointed out in the article, and by commenters here, there is a rise in far right political groups.

"Can you point out some fascist behavior in the news?"

Sure, news figures such as Tucker Carlson use white nationalist talking points, for one. The president calling human subhuman is troubling, and attacking the free press is also not a good sign.

"more inane is the related accusation "literal Nazi"....ugh, no unless you were a member of the Nazi Party of Germany between 1933 and 1945, you are not a "literal Nazi""

This is a very bad take, and is used by neo-nazis to protect their views. The term is neo-nazi for a reason.

Re: The Real Cost of the 2008 Financial Crisis

#148

Post by claydavisss »

mercurysmessage wrote: post #147
claydavisss wrote: post #137

Earlier quoted context omitted.

how do you "point out fascism"? in today's culture, this term is used so broadly it has become meaningless. Can you point out some fascist behavior in the news? more inane is the related accusation "literal Nazi"....ugh, no unless you were a member of the Nazi Party of Germany between 1933 and 1945, you are not a "literal Nazi"

"how do you "point out fascism"?" By recognizing euphemisms/dog whistles, and rhetoric used by fascists. "in today's culture, this term is used so broadly it has become meaningless." It's not, as has been pointed out in the article, and by commenters here, there is a rise in far right political groups. "Can you point out some fascist behavior in the news?" Sure, news figures such as Tucker Carlson use white nationali…

> By recognizing euphemisms/dog whistles, and rhetoric used by fascists.

Wait, your serious definition of "fascism" is "things said by fascists"???

This is circular. Try a definition that doesn't reference itself.

> news figures such as Tucker Carlson use white nationalist talking points

So being a fascist means quoting people who are protecgted by the First Amendment?

> The president calling human subhuman

So being a fascist means being an insulting jerk?

Sounds like you fit the present mold perfectly - you find something that offends you, slap "fascist" on it, and move on.

(and for bonus points you apparently brigade and downvote opposing views)

Re: The Real Cost of the 2008 Financial Crisis

#149

Post by josefresco »

pc86 wrote: post #140
josefresco wrote: post #83

Earlier quoted context omitted.

Confidence in the market , and preventing panic was the highest priority, which is why no bank executive was punished in any meaningful way. Frontline did a great piece on this, which I watched years ago. Not sure if this is it: https://www.pbs.org/wgbh/frontline/film/meltdown/ I believe it also explains why the election hacking of 2016 wasn't and isn't being addressed fully. If the US were to admit actual votes were…

When people who know what they're talking about talk about "election hacking," they know that no actual hacking took place. They were Facebook ads. That's it.

"They were Facebook ads. That's it."

If you think Russian "election interference" (does that term make you feel better?) was limited to "Facebook ads" you either haven't been paying attention, or are just trolling. I'm going to guess the latter.

Re: The Real Cost of the 2008 Financial Crisis

#150

Post by bradleyjg »

brainwad wrote: post #138
brobdingnagians wrote: post #3

Earlier quoted context omitted.

We haven't escaped the depression; the bailouts and quantitative easing simply delayed it for a bit, and the more it is delayed, the worse it will be. It would be far better to have economic corrections along the way with little dips than to keep the house of cards going on worse and worse foundations until it all falls apart in a large depression. Little distortions can be corrected in the short term, but keeping th…

The banks paid back their bailout loans, with interest. There was no way the borrowers who got those no-doc loans in the mid-00s could have ever paid off those loans. Bailing out the borrowers would have actually cost money, and would have created enormous moral hazard.

How about the moral hazard of teaching an entire generation of bankers that picking up nickels in front of a steamroller is a great career move with virtually no risk of personal consequences?
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