81–90 of 168 posts
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Money were made but not enough compared to the risk involved with lending them out. Thats the point.
Bot possibly, even probably, enough compared to the risk involved with not lending them out (i.e. another depression).
>“When the banks did well, their employees were paid well. When the banks did poorly, their employees were paid well,” Cuomo’s office said in the 22-page report. “When the banks did very poorly, they were bailed out by taxpayers and their employees were still paid well. Bonuses and overall compensation did not vary significantly as profits diminished.” Waaat. I think the government should stop bailing out businesses.…
>>Waaat. I think the government should stop bailing out businesses. Either you let the company go bankrupt or you nationalize. What, like General Motors?
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>the government actually made money on those loans (AFAIK). Nope. Explanation here: http://www.interfluidity.com/v2/2587.html Cash is not king in financial markets. Risk is. The government bailed out major banks by assuming the downside risk of major banks when those risks were very large, for minimal compensation. In particular, the government 1) offered regulatory forbearance and tolerated generous valuations; 2) l…
I don't believe making a profit was the government's intention. Stopping a credit freeze was. Would you have the US government behave as a payday loan lender? If not then what's your point?
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>the government actually made money on those loans (AFAIK). Nope. Explanation here: http://www.interfluidity.com/v2/2587.html Cash is not king in financial markets. Risk is. The government bailed out major banks by assuming the downside risk of major banks when those risks were very large, for minimal compensation. In particular, the government 1) offered regulatory forbearance and tolerated generous valuations; 2) l…
I don't believe making a profit was the government's intention. Stopping a credit freeze was. Would you have the US government behave as a payday loan lender? If not then what's your point?
Yeah, towards the big banks I definitely would.
OP here. Given the current story re HSBC's misbehaviour, I thought it worth reminding everyone of the scale of the theft that took place during the bank bailout.
appreciate the sentiment but HSBC didn't take a dollar, pound or Euro of bailout money.
http://www.businessweek.com/the_thread/economicsunbound/arch...
In other words taxpayers money was redistributed into the personal bank accounts of some of the richest people.
IIRC, The official narrative from politicians, news anchors and think-tanks was that: - If the bailouts didn't happen, it would be mayhem, "too big to fail", etc. - You got your money back with interest. It was all payed back (disregard economic theory and value of money in hand). - Why are you complaining, you banjo-playing hippie? You can't be in OWS if you have an iphone! (In Erin Burnett's voice) ------ Many peop…
http://en.wikipedia.org/wiki/Dodd%E2%80%93Frank_Wall_Street_...
In particular, the orderly liquidation authority created a legal framework to liquidate a broader range of financial institutions:
http://en.wikipedia.org/wiki/Dodd%E2%80%93Frank_Wall_Street_...
Dodd Frank is at least toothy enough that banks are constantly whining about it now (and working to dismantle it).
At the time these banks were claiming that they had to pay the bonuses to retain these employees ... I think this is logically false for two reasons: 1) Why do you want to retain the executive that helped run the business into the ground? 2) What other corporation in their right (collective?) mind would hire one of these executives (given their inflated salaries and poor performance). I still think the right way to f…
Unless I'm mistaken it is not like the people handing out bonuses and the people who screwed up are completely separate. Also it is safe to assume that any organization of a sufficiently large size will have a fixed amount of incompetent people at any level, simply as a matter of statistics. Maybe the percentage will be less where the people come from field with a (different/harder) selection process like the natural…
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> 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.
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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…
For the government's balance sheet, getting paid back 8.6% is a lot more reliable than your gut instinct of infrastructure or education or (especially!) health care.
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Bot possibly, even probably, enough compared to the risk involved with not lending them out (i.e. another depression).
Thats irrelevant to how you calculate what the return should be compared to the risk involved.