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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

#381

Post by chiefalchemist »

kingaillas wrote: post #275
chiefalchemist wrote: post #40

Earlier quoted context omitted.

At the very least the WS power structure should have been redistributed. Prior to the crisis there were eight major WS "banks." After there were seven. We were told by many elected officials that less was not a positive for the rest of us. Ten years later, after eight years of a "liberal" POTUS, there's still seven. Editorial: In the context of such history, DJT is the least of my worries.

>after eight years of a "liberal" POTUS 6 of those 8 years fighting a conservative Congress in both houses. Only 4 months of those other 2 years did he have enough Senate votes to bypass conservative filibusters. He spent that time/capital/effort squeezing ACA through.

My understanding is the Obama DOJ was "guided" to turn their backs on any prosecution of WS and WS execs.

The bottomline, zero effort was put into it. None. Given the magnitude that's not acceptable. I'm pretty sure DJT sent BHO a thank you card.

Re: The Real Cost of the 2008 Financial Crisis

#382

Post by chimeracoder »

hndamien wrote: post #365
chimeracoder wrote: post #357

Earlier quoted context omitted.

> Why would any rational investor purchase dog crap knowingly for the good of society, by spending that society's money on dog crap. Instead, buy the dog, discounted by the amount of dog crap it has, and squeezed by how desperate the seller is of what is left. I don't think you understand how TARP worked if you think that's even remotely applicable as an analogy > This is how capitalism is supposed to work. Maybe you…

Since you are so wise, maybe you could enlighten me rather than responding with a response that amounts to - you know nothing, please learn more. This is supposed to be a forum for intelligent discussion. I literally quoted investopedia for how TARP works - so don't pretend that isn't how it worked. "Purchasing illiquid Mortgage Backed Securities" aka "Toxic Assets" aka "Dog Crap".

> This is supposed to be a forum for intelligent discussion

And yet you began with a sarcastic quip, followed by comparing TARP - a program that has generally been considered a successful part of mitigating the 2008 financial crisis by all mainstream economists, to different degrees - to passing around a bag of "dog crap".

That's not what a good-faith intellectual discussion looks like, so don't expect replies to exceed the level of effort and discourse that you yourself are presenting.

Re: The Real Cost of the 2008 Financial Crisis

#383

Post by chillacy »

moate wrote: post #331
chillacy wrote: post #325

Earlier quoted context omitted.

China’s system is probably better characterized as “State Capitalism” than communism, since the workers don’t own the means of production.

We could just go with "Russian Communism" as well and call it a day. Your point is valid, it's not proper Communism as Marx envisioned.

For sure, Russian Communism after capitalist reforms of the 80s. There's definitely still a lot of top-down planning in China, but there also aren't people lining up for allocated food.

Re: The Real Cost of the 2008 Financial Crisis

#384

Post by smogcutter »

taurath wrote: post #353
smogcutter wrote: post #280

Earlier quoted context omitted.

A similar thing is happening with auto loans. There's a ton of bad car debt out there, and easy credit has inflated car prices and (I believe) helped disincentivize auto makers from building cars that are actually affordable. There's no market for simple and cheap if you can get something nicer on credit and not look poor. There's a reason the Dodge Journey retails for 4k+ off msrp. With the inflated mspr they can ge…

To be fair though, safety regulations requiring heavier vehicles on top of requirements for better fuel economies have cut the margins a bit, but the prices have not raised much if at all. The 1995 Honda Civic LX was $14,160 in MSRP, which is ~$22k in 2018 dollars. There are plenty of vehicles for less than that. You might be referring to the higher margins that SUVs get, which are getting more and more popular in th…

This got me to dig into historical prices a little, and turns out I was even more wrong than that. Looks like car prices were pegged to inflation until about 1997, where they level off while overall CPI keeps growing:

https://fred.stlouisfed.org/series/CPIAUCNS

https://fred.stlouisfed.org/series/CUUR0000SETA01?utm_source...

That said, loan terms are lengthening and subprime loans are a large and growing part of the market. That has to be buttressing prices. I really can't back this up, but my suspicion is that over the long term, available credit has helped discourage auto makers from simply making cheaper cars.

Today you can buy a cheap appliance computer for a price that would've been unimaginable in 1995. And you can buy a cheap appliance car... for about the same price as in 1995. Obviously the two markets don't work the same way, but there's still something odd about that.

Re: The Real Cost of the 2008 Financial Crisis

#385

Post by dba7dba » 

  The aftermath produced a lost decade for European economies
  and helped lead to the rise of anti-establishment political
  movements here and abroad.
I was visiting family in Hawaii during the 1st Christmas after the financial crisis started. Guess what? The beach chairs around the pools at the Waikiki area hotels were packed with guests. Every single one of them. Note I went because family is there, and stayed with them.

Granted, some guests were probably there because they already had reservations made before the shtf moment came. Or maybe some there were just vacationing at Waikiki as they downgraded their vacation plan to more moderate level, instead of going to Maldives or something.

But the point is the rich were far less impacted by the crisis. And when the crisis slowly faded away, the rich swooped in and accumulated more wealth. Like all the foreclosed homes in US being bought up by rich folks to be flipped, or worse, bought to be rented out.

The rich were barely impacted by the crisis, and the crisis just turned into an opportunity for the rich to accumulate more wealth more easily.

Re: The Real Cost of the 2008 Financial Crisis

#388

Post by hndamien »

chimeracoder wrote: post #382
hndamien wrote: post #365

Earlier quoted context omitted.

Since you are so wise, maybe you could enlighten me rather than responding with a response that amounts to - you know nothing, please learn more. This is supposed to be a forum for intelligent discussion. I literally quoted investopedia for how TARP works - so don't pretend that isn't how it worked. "Purchasing illiquid Mortgage Backed Securities" aka "Toxic Assets" aka "Dog Crap".

> This is supposed to be a forum for intelligent discussion And yet you began with a sarcastic quip, followed by comparing TARP - a program that has generally been considered a successful part of mitigating the 2008 financial crisis by all mainstream economists, to different degrees - to passing around a bag of "dog crap". That's not what a good-faith intellectual discussion looks like, so don't expect replies to exc…

That isn't sarcasm, it is metaphor. You are looking for a pretty cheap out if you think using metaphor reduces discussion such that you can just respond by calling somebody dumb.

I'm going to stop here because you have set this discussion on a path towards unhelpful negativity. I hope any moderator/ reader reading this can see that you side railed this and not me. None of my discussion was about you, but was about the issue. Your response might as well breach the name calling rules of this forum.

Re: The Real Cost of the 2008 Financial Crisis

#389

Post by brainwad »

bradleyjg wrote: post #150
brainwad wrote: post #138

Earlier quoted context omitted.

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?

It's bad, which is why after the crisis the Dodd-Frank act was passed to reduce the chances of too-big-to-fail entities failing. So while we taught them they'd be bailed out, it's much less likely they can get themselves into that situation again.

Re: The Real Cost of the 2008 Financial Crisis

#390

Post by bradleyjg »

brainwad wrote: post #389
bradleyjg wrote: post #150

Earlier quoted context omitted.

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?

It's bad, which is why after the crisis the Dodd-Frank act was passed to reduce the chances of too-big-to-fail entities failing. So while we taught them they'd be bailed out, it's much less likely they can get themselves into that situation again.

Do you really believe that? Because I certainly don’t.
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