How the banks ignored the lessons of the crash • Hacker News Board

Re: How the banks ignored the lessons of the crash

#11

Post by nugget » Thu, Oct 01, 2015, 12:43 AM UTC

rhino369 wrote: post #8

duncan_bayne wrote: post #2

Ignored? The lesson was pretty clear: fuck up on a grand scale, and we'll soak the tax slaves to bail you out. I'd say they learned that lesson well.

It's a mistake to treat banks like a monolith. The banks making the worst choices really did pay the price. Three of the five biggest investment banks in the USA either went bankrupt or were sold off for pennies on their previous value. Fannie and Freddie were essentially bankrupted. These companies share holders were wiped out. That's exactly what happens with other businesses in bankruptcy. Well, other than Bear an…

Who went to jail for breaking the law?

Re: How the banks ignored the lessons of the crash

#12

Post by WalterBright » Thu, Oct 01, 2015, 1:05 AM UTC

PythonicAlpha wrote: post #10

The last sentence practically says it all: > The big banks have surely drawn a lesson from the crash and its aftermath: that in the end there is very little they will not get away with. and it tells the story of our societies failure and the total failure of our political systems. Maybe in the history books of the future, it will be written as the beginning of the downfall of our societies. But one thing is sure, the…

Much of what our government does is protect us against the consequences of our poor choices.

Re: How the banks ignored the lessons of the crash

#13

Post by AnimalMuppet » Thu, Oct 01, 2015, 1:13 AM UTC

nugget wrote: post #11

rhino369 wrote: post #8

Earlier quoted context omitted.

It's a mistake to treat banks like a monolith. The banks making the worst choices really did pay the price. Three of the five biggest investment banks in the USA either went bankrupt or were sold off for pennies on their previous value. Fannie and Freddie were essentially bankrupted. These companies share holders were wiped out. That's exactly what happens with other businesses in bankruptcy. Well, other than Bear an…

Who went to jail for breaking the law?

Well, start by giving us a list of who broke the law, and what laws they broke, and we can look up names to find out...

That is: Your post assumes that (unnamed) people broke the law. Let's not assume that. Let's either prove it, or not throw innuendo around.

Re: How the banks ignored the lessons of the crash

#14

Post by rdtsc » Thu, Oct 01, 2015, 1:27 AM UTC

nugget wrote: post #11

rhino369 wrote: post #8

Earlier quoted context omitted.

It's a mistake to treat banks like a monolith. The banks making the worst choices really did pay the price. Three of the five biggest investment banks in the USA either went bankrupt or were sold off for pennies on their previous value. Fannie and Freddie were essentially bankrupted. These companies share holders were wiped out. That's exactly what happens with other businesses in bankruptcy. Well, other than Bear an…

Who went to jail for breaking the law?

Those who control the laws, don't usually break the laws.

For example, when you write your own game, you can come up with any rules you want. You want goats to fly -- sure, you got flying goats. Some characters have more stamina than others? -- just tweak some config file.

Well, it is not dissimilar for those in power -- they are making the rules. If they stop liking the laws, they'll just lobby to change them. Therefore asking "but how many of them are in jail" doesn't make much sense. Why would they put themselves in jail?

Re: How the banks ignored the lessons of the crash

#15

Post by misiti3780 » Thu, Oct 01, 2015, 1:44 AM UTC

nugget wrote: post #11

rhino369 wrote: post #8

Earlier quoted context omitted.

It's a mistake to treat banks like a monolith. The banks making the worst choices really did pay the price. Three of the five biggest investment banks in the USA either went bankrupt or were sold off for pennies on their previous value. Fannie and Freddie were essentially bankrupted. These companies share holders were wiped out. That's exactly what happens with other businesses in bankruptcy. Well, other than Bear an…

Who went to jail for breaking the law?

As far as I know Madoff is the only one who went to jail, and he obviously didnt play a role in creating the crisis, he just was discovered because of it. The biggest offender that should absolutely be in jail in my opinion is Dick Fuld. If you dont know anything about it, read about REPO 105[2]. It is mind boggling to me that that guy didnt get 1 day behind bars, and from what I have read - he actually got to keep all his money made during years before when he was leveraged ???:1.

Matt Taibbi has written a lot of good stuff about this, as is Yves Smith, the blogger behind Naked Capitalism.

[1] https://en.wikipedia.org/wiki/Richard_S._Fuld,_Jr. [2] https://en.wikipedia.org/wiki/Repo_105

Re: How the banks ignored the lessons of the crash

#16

Post by duncan_bayne » Thu, Oct 01, 2015, 1:56 AM UTC

joe_the_user wrote: post #7

gutnor wrote: post #6

Earlier quoted context omitted.

The article was calling for that kind of comment. However, there is still a good point in there. Since last time the general public have taken the brunt of the crisis, what kind of lesson did we want the bank to remember ? The article should really be titled, "7 years after the crisis, how the public and politicians ignored the lesson of the crash".

It's like an Onion headline: "Banks ignore lessons politicians tell voters that the banks should have learned, while remembering the lessons the politicians actually taught them"

Or at a meta level: "Politicians ignore lessons citizens tell politicians that they should learn, while observing that the citizens continue to vote for them."

Re: How the banks ignored the lessons of the crash

#17

Post by retrogradeorbit » Thu, Oct 01, 2015, 2:02 AM UTC

AnimalMuppet wrote: post #13

nugget wrote: post #11

Earlier quoted context omitted.

Who went to jail for breaking the law?

Well, start by giving us a list of who broke the law, and what laws they broke, and we can look up names to find out... That is: Your post assumes that (unnamed) people broke the law. Let's not assume that. Let's either prove it, or not throw innuendo around.

In order to find evidence an investigation needs to be conducted. So, if there is no investigation, there is no evidence, and thus no law breaking.

Re: How the banks ignored the lessons of the crash

#18

Post by mhuffman » Thu, Oct 01, 2015, 2:04 AM UTC

rhino369 wrote: post #8

duncan_bayne wrote: post #2

Ignored? The lesson was pretty clear: fuck up on a grand scale, and we'll soak the tax slaves to bail you out. I'd say they learned that lesson well.

It's a mistake to treat banks like a monolith. The banks making the worst choices really did pay the price. Three of the five biggest investment banks in the USA either went bankrupt or were sold off for pennies on their previous value. Fannie and Freddie were essentially bankrupted. These companies share holders were wiped out. That's exactly what happens with other businesses in bankruptcy. Well, other than Bear an…

If you worked for the banking industry, on the other hand, things worked out pretty ok!

Re: How the banks ignored the lessons of the crash

#19

Post by liamconnell » Thu, Oct 01, 2015, 2:06 AM UTC

Great article. At the risk of fear mongering, the point about supermarkets was very powerful. "Greed is good" is fine until the money controls the entire infrastructure of society.

I live in Argentina, where so many factories were abandoned in our 2001 crisis that workers decided to re-open many of them. Would American workers have it in them if there were a serious liquidity crisis?

Re: How the banks ignored the lessons of the crash

#20

Post by retrogradeorbit » Thu, Oct 01, 2015, 2:06 AM UTC

PythonicAlpha wrote: post #10

The last sentence practically says it all: > The big banks have surely drawn a lesson from the crash and its aftermath: that in the end there is very little they will not get away with. and it tells the story of our societies failure and the total failure of our political systems. Maybe in the history books of the future, it will be written as the beginning of the downfall of our societies. But one thing is sure, the…

And when the big crash comes, there will be enough time between the 2008 crisis and the next one for the general public to have no understanding of the context and causes. They will be unable to connect the dots. And in their confusion they will give the politicians carte blanche to solve it. The politicians will turn to those who gave them the most money, the banks and their lobbyists, the very people who are behind the crisis, and give them complete power. Then these people will squeeze even more wealth from the system to line their pockets. Rinse and repeat.