patrick.net

Horrible, horrible analogy.

Thinking about it correctly, the bartender wouldhave served the first scotch, which the bank may have drank or may not have. However, before he ordered his next drink from the bartender, he returned the exact same brand of scotch, plus a small amount more, that the bartender was able to serve to someone else.

He then ordered his next drink. Rinse, repeat, And so on...

Dan you are better than this.

Maybe it's time for that Trillion Dollar Coin.

david1 says

Horrible, horrible analogy.

Thinking about it correctly, the bartender wouldhave served the first scotch, which the bank may have drank or may not have. However, before he ordered his next drink from the bartender, he returned the exact same brand of scotch, plus a small amount more, that the bartender was able to serve to someone else.

He then ordered his next drink. Rinse, repeat, And so on...

Dan you are better than this.

Tell you what, when I get to create $29 trillion out of thin air, lend it to the government for one year at 1% interest, pocketing the $290 billion in interest for that year, profit for doing absolutely fucking nothing and producing absolutely nothing, then I'll concede that no one has a legitimate complaint about these shenanigans. Till then, it's a massive rip-off of the American people.

errc says

By printing "money" and changing the rules of the game for the politically privileged, they in effect robbed working folk of some serious fucking increases in the purchasing power of our labor.

Exactly. When financial games are played that produce no wealth, yet bestow upon the few massive amounts of wealth, that wealth has to come from somewhere, and that somewhere is ordinary people including you and me.

By stealing the purchasing power of our savings and wages, they are stealing our savings and wages. Trickery does not change the truth.

There is no mathematically possible way to bail out the gamblers when things go wrong for them except by fucking over the non-gamblers.

Dan8267 says

There is no mathematically possible way to bail out the gamblers when things go wrong for them except by fucking over the non-gamblers.

That's right, and that's the beauty about math, it just is.

Dan8267 says

Let me repeat that. You, personally, lost over quarter of a million dollars bailing out a scumbag banker who looks down at you like you are subhuman.

no... we bailed out people who overpaid overborrowed ... overvalued homes.

and they are still doing it today... bankers were not party to peoples irrational

behavior over homes prices.

You try to explain to some twit in SFBA that some shack which sold for $150-200K really cannot be

anywhere near $1m or more .... where did that come from ?

thomaswong.1986 says

Dan8267 says

Let me repeat that. You, personally, lost over quarter of a million dollars bailing out a scumbag banker who looks down at you like you are subhuman.

no... we bailed out people who overpaid overborrowed ... overvalued homes.

and they are still doing it today... bankers were not party to peoples irrational

behavior over homes prices.

I'd say we did both, not just in the spirit of compromise ;)

mell says

I'd say we did both, not just in the spirit of compromise ;)

Then both it is.. if you want to fix the problem.. then fix both !
But that other hasnt been addressed yet..

thomaswong.1986 says

bankers were not party to peoples irrational

behavior over homes prices.

Really? Did they HAVE to loan out their money to people who were buying overvalued homes?? How in the hell can you even write that banks were not party to it??

mell says

I'd say we did both, not just in the spirit of compromise ;)

Exactly. But the bank bailout wasn't for the sake of the borrowers.

If you owe the bank a thousand dollars, it's your problem. If you owe the bank a billion dollars, it's their problem.

thomaswong.1986 says

mell says

I'd say we did both, not just in the spirit of compromise ;)

Then both it is.. if you want to fix the problem.. then fix both !

But that other hasnt been addressed yet..

Um, that's because this thread's OP is about the bank bailout.

Reality says

Likewise, if the old existing banks with too much debt went bankrupt, new banks would emerge so long as banking is a service that people want, just like people still need/want roofs over their heads and twinkies.

I guarantee you that the thousands of small banks and credit unions would be immensely better off had the old dinosaurs been allowed to die. It would have created a renaissance in banking much like the Black Death caused the actual Renaissance.

The whole economic Darwinism thing and the invisible hand of the market doesn't work if government prevents big, terrible corporations from dying from fatal mistakes. And without death, there can be no growth, no change, no progress.

Our banking system is one giant sham. And I have no love for the banks.

“It is well enough that people of the nation do not understand our banking and money system, for if they did, I believe there would be a revolution before tomorrow morning.” Henry Ford, founder of the Ford Motor Company.

“Money is a new form of slavery, and distinguishable from the old simply by the fact that it is impersonal – that there is no human relation between master and slave.” Leo Tolstoy, Russian writer.

Back to the original topic. The WSJ had a good article this past weekend titled Cost of Bailouts Continues to Decline.
The combined costs of the Fannie, Freddie and TARP programs, at $78.5 billion, fall far short of the trillions of dollars of losses feared during the worst days of the crisis...The costs of these programs are expected to keep falling as Fannie and Freddie and other surviving companies make more payments to the Treasury and as the government sells shares in many of the firms into which it put money. (Fannie and Freddie's payments to Treasury are technically dividends that don't count as repayment of their bailouts.) As part of the bailout of Fannie and Freddie, the government got preferred shares which are now paying out most of their profits as dividends to "the people" (err, government). They had previously only been paying out 10%. Fannie and Freddie still need to be dealt with...
"The payment of these dividends is not putting private capital in front of the government's current backing of the market," Mr. Mayopoulos said. Private capital would "not return in large scale" to the mortgage market "until it has some confidence about what the future system will look like," he added.

bob2356 says

If the bad banks had to operate in chapter 11 and be broken up the world would not have ended. The sun would rise, people would eat, sleep, and shit. The only result would have been lots of incompetent banksters rightfully in the unemployment line while responsible banks took over their former employers business.

Correct.

Dan8267 says

Exactly. When financial games are played that produce no wealth, yet bestow upon the few massive amounts of wealth, that wealth has to come from somewhere, and that somewhere is ordinary people including you and me.

By stealing the purchasing power of our savings and wages, they are stealing our savings and wages. Trickery does not change the truth.

There is no mathematically possible way to bail out the gamblers when things go wrong for them except by fucking over the non-gamblers.

I hear what you mean. They bailed out the banks, free money for the gamblers. But it doesn't trickle down to an average American, we are left to slave away until we die in order to get a tiny fraction of that wealth.

New Renter says

After (Cromwell's) death in 1658 he was buried in Westminster Abbey, but after the Royalists returned to power in 1660 they had his corpse dug up, hung in chains, and beheaded.

And the British still put up with their royal family. You'd think they come to their senses and just put the whole lot in the Tower of London and throw away the key.

Dan8267 says

New Renter says

After (Cromwell's) death in 1658 he was buried in Westminster Abbey, but after the Royalists returned to power in 1660 they had his corpse dug up, hung in chains, and beheaded.

And the British still put up with their royal family. You'd think they come to their senses and just put the whole lot in the Tower of London and throw away the key.

The tower wasn't so bad if you had money.

bob2356 says

The only result would have been lots of incompetent banksters rightfully in the unemployment line while responsible banks took over their former employers business.

thats 100% right.. as it happens everyday in other industries.

tatupu70 says

I think that's a bit naive and very easy to say after the fact. It you'll remember, GE was afraid it wouldn't be able to make payroll at the height of the panic.

This wasn't everyday. To pretend it was is just wrong.

What makes you so confident it's after the fact? If banks truly had to be bailed out (doubtful) to save the financial system then they should have been nationalized, broken up, and sold off just like the savings & loans with the RTC. With people going to jail like the savings & loans. Many people said so in 2007 including me. Rewarding failure will only result in bigger failures. The TBTF banks are larger and more vulnerable now than 2007. Good job fixing the system for both the bush & obama teams (that's sarcasm in case you missed it).

The housing bubble, ponzi financing schemes, and associated MBS, and CDS were giant Malinvestments.

Stated before - instead of creating easy financing associated with unsustainable bubbles, should have invested in education, manufacturing, small business, and US self reliance.

Its all Malinvestment from being allowed to overturn key securities laws made possible by "buying" Senators and Congressmen.

bob2356 says

What makes you so confident it's after the fact? If banks truly had to be
bailed out (doubtful) to save the financial system then they should have been
nationalized, broken up, and sold off just like the savings & loans with the
RTC. With people going to jail like the savings & loans. Many people said so
in 2007 including me. Rewarding failure will only result in bigger failures. The
TBTF banks are larger and more vulnerable now than 2007. Good job fixing the
system for both the bush & obama teams (that's sarcasm in case you missed
it).

Don't misunderstand--I agree 100% that something should have been done prior to 2007, I'm all for people being held accountable, and I concur that the TBTF banks need to be broken up immediately. You're right--the system wasn't fixed.

And your solution of nationalizing the banks, while probably impossible poilitcally, would have likely been better.

Entitlemented says

Its all Malinvestment from being allowed to overturn key securities laws made
possible by "buying" Senators and Congressmen.

So you're in favor of campaign finance reform, right?

That's all dancing around the real issue - no regulation will get you anywhere as long as a crime is not a crime when wall street does it and/or politicians are involved. Restore the rule of law which has been out of order for quite a while now. Instead of criminal money printing and bailout for the cronies, just orderly bankruptcy for the banks and some serious jail time and claw-backs for the fraudsters would have done trick. The TBTFs would have been gone by now and made room for smaller banks who lent responsibly. No voodoo crony economics needed ;)

http://market-ticker.org/akcs-www?post=220915

We should create rules where the Senator recievings funds has to disolve themself of voting.

They have rules like this but not enforced.

Nearly impossible?