In other words taxpayers money was redistributed into the personal bank accounts of some of the richest people.
Well, we all gave it to them. :/
Banks Paid $32.6B in Bonuses Amid U.S. Bailout (2009)
61–70 of 168 posts
Re: Banks Paid $32.6B in Bonuses Amid U.S. Bailout (2009)
#62Earlier quoted context omitted.
I don't mean to detract from your point, but you have to keep in mind the fact that those were loans, and the government actually made money on those loans (AFAIK). Also, if the damage to the economy would be greater than the taxpayer loss of the bail-outs, they still make sense, as long as they are accompanied by legislation that makes hem less likely in the future (which, sadly, hasn't happened yet). > Also I clear…
On the fallacy that the U.S. taxpayers made money on the bailouts, note that in finance deals get judged by how much money they make given the risk that had to be assumed to make it. In the case of the bailouts: $614 billion was disbursed $667 billion was recouped For a difference of $53.1 billion, i.e. 8.6%. [1] 8.6% is insultingly low compensation to use taxpayer money that, by the way, could have been spent on mor…
> On the fallacy that the U.S. taxpayers made money on the bailouts
> 8.6% is insultingly low compensation to use taxpayer money
So, money was made?
> could have been spent on more beneficial investments (infrastructure, education, healthcare) to bail out private companies who were the victims of their own greed and poor governance.
Why couldn't it still be used on infrastructure, education, or healthcare?
Re: Banks Paid $32.6B in Bonuses Amid U.S. Bailout (2009)
#63Earlier quoted context omitted.
This is an excellent point. I would put a system in place that makes it clear that banks have a choice of a) Splitting before they get to big to fail or b) Accepting that if they grow larger, they can always be nationalized if they make a mistake that would cause them to go bankrupt. The problem is, that currently nationalization is only possible in most countries, if you fully pay the owner. Changing this would in s…
Calomiris and Haber ("Fragile By Design") have run the natural experiment between the U.S. and Canada over the 2008 bubble period. The conclusion is the opposite of yours - Canada really just has the one bank, and sailed right through the crisis because they didn't hold as many rotten mortgages. And in a way, the big banks are effectively nationalized in the U.S. We do maintain parallel governance structures because…
> Canada really just has the one bank
Is this supposed to be a figure of speech suggesting Canadian banks policies are so similar they are essentially the same bank? The three largest of the Big Five (RBC, TD and Scotia) are so similar in size none of them can even be said to lead the market.
Re: Banks Paid $32.6B in Bonuses Amid U.S. Bailout (2009)
#64Earlier quoted context omitted.
California's three-strikes law was supported by a 72-28 vote in a public referendum. At the time of the vote, nation-wide, the public supported keeping marijuana illegal by an over 70-30 margin: http://www.people-press.org/2013/04/04/majority-now-supports... . Our drug and sentencing laws are the result of democracy, not oligarchy.
But we don't live in a democracy, and expect better from the Republic bound by the Constitution, which is pretty clear about unjust punishment. If a democracy and majority rule were the true rule of the land, we may still have segregation, slavery, illegal mixed-race marriages, and so on, and so on... Now look at what class our electorate is largely made up of. Mix that with a little Citizens United and it becomes cl…
You're trying to tie-together two narratives that make no sense in conjunction. Do we have the drug war because of tyranny of the majority, or Citizens United money overriding the will of the majority? I'd posit the evidence shows that the majority strongly supported making drugs illegal and meting out harsh sentences, at least at the time the laws were put into place. If that's the case, the whole "oligarchy" narrative is superfluous.
Re: Banks Paid $32.6B in Bonuses Amid U.S. Bailout (2009)
#65Earlier quoted context omitted.
I work in banking as just another cog. We suffered wage stagnation and no bonuses. The executives on the other hand still got at least a 10% bonus each year, because they had contracts. So, please keep that in mind when it says 'employees'.
Still happening. Especially people working in IT in banks are getting almost nothing in bonus and no pay increase for many years. The number of jobs is significantly reduced also.
That may be, but in Charlotte at least, IT jobs at the banks tend to be on the high end of our local salary range.
Re: Banks Paid $32.6B in Bonuses Amid U.S. Bailout (2009)
#66Earlier quoted context omitted.
On the fallacy that the U.S. taxpayers made money on the bailouts, note that in finance deals get judged by how much money they make given the risk that had to be assumed to make it. In the case of the bailouts: $614 billion was disbursed $667 billion was recouped For a difference of $53.1 billion, i.e. 8.6%. [1] 8.6% is insultingly low compensation to use taxpayer money that, by the way, could have been spent on mor…
> On the fallacy that the U.S. taxpayers made money on the bailouts > 8.6% is insultingly low compensation to use taxpayer money So, money was made? > could have been spent on more beneficial investments (infrastructure, education, healthcare) to bail out private companies who were the victims of their own greed and poor governance. Why couldn't it still be used on infrastructure, education, or healthcare?
Money were made but not enough compared to the risk involved with lending them out. Thats the point.
Re: Banks Paid $32.6B in Bonuses Amid U.S. Bailout (2009)
#67Earlier quoted context omitted.
Are you referring to investment banking/trading/PE or what? This is definitely not true in IB or trading. Your bonus is a direct function of what you make. This is particularly true for even more senior partners in IB/trading firms. The rainmakers make significantly more money than 'operating' or 'non-money-making' partners.
> Your bonus is a direct function of what you make Isn't the point of the article that this is demonstrably untrue?
A bank might make a $20M loss on trader A's strategy but a $10M gain on trader B's strategy, for a net loss of $10M. Then trader B gets a bonus and the company that lost money is giving out bonuses.
Re: Banks Paid $32.6B in Bonuses Amid U.S. Bailout (2009)
#68Earlier quoted context omitted.
I don't mean to detract from your point, but you have to keep in mind the fact that those were loans, and the government actually made money on those loans (AFAIK). Also, if the damage to the economy would be greater than the taxpayer loss of the bail-outs, they still make sense, as long as they are accompanied by legislation that makes hem less likely in the future (which, sadly, hasn't happened yet). > Also I clear…
On the fallacy that the U.S. taxpayers made money on the bailouts, note that in finance deals get judged by how much money they make given the risk that had to be assumed to make it. In the case of the bailouts: $614 billion was disbursed $667 billion was recouped For a difference of $53.1 billion, i.e. 8.6%. [1] 8.6% is insultingly low compensation to use taxpayer money that, by the way, could have been spent on mor…
If the state got its money back, it means that money wasn't paid away in bonuses.
Re: Banks Paid $32.6B in Bonuses Amid U.S. Bailout (2009)
#69Earlier quoted context omitted.
If the company/bank goes bankrupt, the value of the company is by definition zero. What is there to pay the owners?
What the taxpayers have payed to keep the bank profitable. Just, you know, the taxpayers are not the owners, because . Hm, maybe it doesnt really matter if taxpayers would have become the owners, because in any case they would have payed for their losses but the profits would not magically find their way into taxpayers pockets, instead it would be some new term instead of owners like "facilitators" "workers". In the…
The point is that in the situations where nationalisation - or near nationalisation - to prevent bankruptcy is worthwhile, the effective price is going to be low, however you structure it.
For starters, the government can go to the banks shareholders and tell their shares are going to be worth $X or they won't put money in and the business will go bankrupt.
If the shareholders manage to find another investor, then great.
In the UK, this happened with e.g. Royal Bank of Scotland, where the government gradually acquired a larger proportion of the bank as it provided capital until it owned the vast majority (in 2012 it owned about 82% - I don't know what it stands at now). While nationalisation of RBS was certainly not cheap in terms of pounds, it was firesale prices in terms of the size and turnover of the business, because the government took on massive risk as well.
But the key part is that by providing the cash infusion in return for shares, the government is also participating in the upside if they manage to turn the bank around, and shareholders took a substantial hit in the form of massive dilution (though they are set to recover quite a bit as the bank recovers).
Re: Banks Paid $32.6B in Bonuses Amid U.S. Bailout (2009)
#70Earlier quoted context omitted.
This, HSBC lending money to rouge nations and drug cartels, the LIBOR scandal, and not a single person is in jail. Not to mention that the Fed made available and lent up to $7T to banks (without telling Congress) right before TARP was rushed through. Smoke some weed, go to jail. Do it three times, go to jail for life in CA. MANDATORY. Especially if you're black. If these and other ongoing similar "crimes" don't convi…
California's three-strikes law was supported by a 72-28 vote in a public referendum. At the time of the vote, nation-wide, the public supported keeping marijuana illegal by an over 70-30 margin: http://www.people-press.org/2013/04/04/majority-now-supports... . Our drug and sentencing laws are the result of democracy, not oligarchy.
That doesn't follow. All the oligarchs have to do is carefully pick the referendum topics to achieve their agenda. You sure didn't see any referendum on whether to bail out the banks.