How the banks ignored the lessons of the crash
theguardian.com
How the banks ignored the lessons of the crash
1–10 of 51 posts
Re: How the banks ignored the lessons of the crash
#2Ignored? 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.
Re: How the banks ignored the lessons of the crash
#3Ignored? 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.
You beat me to posting exactly the same comment...
Re: How the banks ignored the lessons of the crash
#4Ignored? 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.
I know it's a long read, but the last paragraph is literally this same point.
Re: How the banks ignored the lessons of the crash
#5Ignored? 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.
You beat me to posting exactly the same comment...
It's fairly humorous at this point.
Angry, ineffectual parent: You haven't learned your lesson son. You remember last time you messed up and got away with a bunch of stuff (stuff you made lot of money off of)?
Kid: (Smirking) yeah
Parent: You remember I almost punished you real bad?
Kid: (Smirking) yeah
Parent: Well, you fuck up again. I might almost punish you even worse. I might almost make you really sore. You understand?
Kid: (Smirking even more) yeah, I understand.
Re: How the banks ignored the lessons of the crash
#6Ignored? 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.
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".
Re: How the banks ignored the lessons of the crash
#7Ignored? 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.
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"
Re: How the banks ignored the lessons of the crash
#8Ignored? 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 and Merrill stockholders getting a small percent instead of zero. That was a necessity because an investment bank really can't operate through a traditional Chaper 11 bankruptcy.
So if you own a bank, you can't be confident that you'll get bailed out when you fuck up on a grand scale.
But there is an issue of industry wide fuck ups and their effect on everyone else. Banks have a very unique feature in that when their competitors falter, they falter with them. In 2008, you have banks with no exposure to the toxic assets having huge issues with liquidity.
The bail outs may cause moral hazard for that sort of counter-party risk. For example, if you are Goldman Sachs maybe you don't ask too many questions about AIG insurance because you figure the government will make good on it either way.
This is a very complicated issue.
Re: How the banks ignored the lessons of the crash
#9Ignored? 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…
Seemed like a net win for the surviving banks with all the reduced competition, cheap real estate in default, and near 0% Fed rate.
Re: How the banks ignored the lessons of the crash
#10The 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 next crash will not leave us behind with a blue eye only, because the western countries have nothing left, to back-up the gambling losses of the banks.
The wealth of our nations already have been wasted to those, which did not earn it and either a total crash will follow, or revolution or they (those that we let gamble with our money) will be the new aristocrats (or "oligarchs") of a new era of slavery.