A view into the mindset of a liberal

[B-Large]

Until you understand the difference between "companies" and "markets", you can't even discuss it intelligently.

 

Believe what you want, I would still have liked to hear your answer to my question.... perhaps you feel Government Bailouts are just fine....

 

The trite answer is that the public benefited for two decades from the financial party, and TARP was a temporary loan to prevent a panic.

 

The real answer is that without a global "TARP" you would have been screwed far worse. How many people can live without their next paycheck for two weeks and what would happen during those two weeks when there was no money to be had?

 

That is fine if we want to subsidize/ encourage bad behavior..... but if we want to be true capitlists, where bad business results in plummeting stock prices and failing firms are part of the consequence, then perhaps that is just the medicine we need?

 

So Government is good when Finance/Auto needs a bailout, but bad in all other cases... What happened to the brand of conservtism that stuck to the principles of free markets, free enterprise and did not selective choose when Big Uncle Sam was the perfect medicine to ease the ill of the circle of cronies....

[DC Tom]

Believe what you want, I would still have liked to hear your answer to my question.... perhaps you feel Government Bailouts are just fine....

 

Your question is loaded and idiotic. Now you're asking if bailouts in general are okay, generalized from bailouts being okay to make up for bad decision making, generalized from TARP being okay. and I already gave you the answer to the last: you don't know what you're talking about, you're asking a question from a context that isn't based in reality.

 

And the real problem here is that until you can make the distinction between "companies" and "markets," you couldn't even understand my answer.

[GG]

That is fine if we want to subsidize/ encourage bad behavior..... but if we want to be true capitlists, where bad business results in plummeting stock prices and failing firms are part of the consequence, then perhaps that is just the medicine we need?

 

In case you were asleep, that experiment was floated when US & UK allowed Lehman to fail, thinking that in the months following Bear Stearns' collapse, the financial markets could absorb a failed investment bank. They guessed wrong. You can't unwind twenty years' worth of financial systems overnight as the regulators quickly learned. Four years later they're still trying to find a formula to reduce the risk of an entire system collapsing. No such luck yet.

 

And if you think that you would have been fine if the financial collapse ran its course, then you are clueless.

[B-Large]

In case you were asleep, that experiment was floated when US & UK allowed Lehman to fail, thinking that in the months following Bear Stearns' collapse, the financial markets could absorb a failed investment bank. They guessed wrong. You can't unwind twenty years' worth of financial systems overnight as the regulators quickly learned. Four years later they're still trying to find a formula to reduce the risk of an entire system collapsing. No such luck yet.

 

And if you think that you would have been fine if the financial collapse ran its course, then you are clueless.

 

I guess is took over 2,000 pages in Dodd Frank?

 

We have a way to reduce risk, its called bankruptcy and liquidation... Isn't that what people fear most? Isn't that the natural order and consequence of bad business? Isn't not being able to petition Washington to get a loan reason enough? If there was no help from Uncle Sam, would firms still make outlandish loans and investments, or bundles them into derivities if THEY have to pay the piper in monetary losses and reputation losses when they bust? Would they keep enough cash or reserves around to cover the riskier pieces of their portfolio?

 

Heck, I certainly am afriad to get overexteneded, to take on too much... unless I could go for handout from my parents, then I would figure who cares, I am safe I can do whatever I want... to me that mentality is what will continue to get our country in trouble, the blief that consequence is managable, and very much so IF your dollars and contrubitions are in the right place.

 

Your question is loaded and idiotic. Now you're asking if bailouts in general are okay, generalized from bailouts being okay to make up for bad decision making, generalized from TARP being okay. and I already gave you the answer to the last: you don't know what you're talking about, you're asking a question from a context that isn't based in reality.

 

And the real problem here is that until you can make the distinction between "companies" and "markets," you couldn't even understand my answer.

 

I understand the difference. I don't understand why some compaines, or perhaps whole markets in which those companies particpiant/sells products/ do business get special consideration? All I keep hearing is "you don't understand, it would have been so awful".... would it? How would we know? Is it because we always come to the rescue of the Financial Industry when they do what they want? Isn't that as Entitled as it gets?

 

Until you understand the difference between "companies" and "markets", you can't even discuss it intelligently.

 

you keep saying that, I assume you just rather not answer, which is fine. Or perhaps you can unravel the great mystery of the differences?

Edited March 12, 2012 by B-Large

[GG]

It would greatly help the discussion if your understanding of the topic was more than a misreading Matt Taibbi's ignorance.

[B-Large]

It would greatly help the discussion if your understanding of the topic was more than a misreading Matt Taibbi's ignorance.

 

So you guys are just not going to repond, that is fine... I am sure it is so complex that you hold all the secrets and we should just trust you... I mean, what do us silly MBA's, Hospital Adminstrators and Investment Property owners know anyway... I am sure your explantion would be way over my head so thank you for being wise enough to save me from being embarassed....

 

Jesus, you guys sound like a couples of Nancy Pelosi's... and I know how you feel about her.... like Nancy would say, "you are too dumb to engage in this, I know better so just listen to me"

Edited March 12, 2012 by B-Large

[DC Tom]

In case you were asleep, that experiment was floated when US & UK allowed Lehman to fail, thinking that in the months following Bear Stearns' collapse, the financial markets could absorb a failed investment bank. They guessed wrong. You can't unwind twenty years' worth of financial systems overnight as the regulators quickly learned. Four years later they're still trying to find a formula to reduce the risk of an entire system collapsing. No such luck yet.

 

And if you think that you would have been fine if the financial collapse ran its course, then you are clueless.

 

And oh-by-the-way...the liquidation of Lehman's assets was a direct contributor to the liquidity issues in the capital markets over the following three weeks.

 

So you guys are just not going to repond, that is fine... I am sure it is so complex that you hold all the secrets and we should just trust you... I mean, what do us silly MBA's, Hospital Adminstrators and Investment Property owners know anyway... I am sure your explantion would be way over my head so thank you for being wise enough to save me from being embarassed....

 

 

I already did explain it, and it already did go over your head.

[B-Large]

And oh-by-the-way...the liquidation of Lehman's assets was a direct contributor to the liquidity issues in the capital markets over the following three weeks.

 

 

 

I already did explain it, and it already did go over your head.

 

this is going in circles, if you every decide to actually engage, I will look out for your repsonse.

[DC Tom]

this is going in circles, if you every decide to actually engage, I will look out for your repsonse.

 

I agree with emergency government action to maintain liquidity in the financial markets. But disagree with bailing out companies.

 

 

 

Told you that you wouldn't understand.

[B-Large]

I agree with emergency government action to maintain liquidity in the financial markets. But disagree with bailing out companies.

 

 

 

Told you that you wouldn't understand.

 

I understand perfectly.... why do financial markets, ie commercial paper have issues? is it magic? Or is it because companies who participant in those markets screwed them up with poor business practices, shaking the very trust in those supposedly efficient markets? Financial markets don't just "go bad", and you know that... so a bailout, aka emergency liquidity in the financial markets is nothing more that a bailout to people who made bad bets in various places, and you know darn well it will happen again...

 

Without emergency liquidity many big time financial instiution would have failed.... that is the consequence, and it maight have brought on some real changes, both in financial sector and in the US Government.... but now, instead we have that highyl suspect relationship between money, lobbying, representative Government and private industry... yuck

 

What is the worst that would habe happened with out Emergency Liquidity? Maybe the end of the world... my guess, short time hardship, bankruptcies and firm with cash and resources coming in to pick up bargain in the trash heap...

Edited March 12, 2012 by B-Large

[Joe Miner]

this is going in circles, if you every decide to actually engage, I will look out for your repsonse.

 

Yeah, it matters...if companies fail, it has little direct impact on the majority of people. If entire markets fail...that's a much, much bigger and qualitatively different problem.

 

 

There is a world of difference between companies like WaMu, Countrywide, Bear, Lehman, and such going bankrupt, and the entire market seizing up for lack of capital, which is what TARP was meant to prevent. The problem wasn't bad decisions, it was that the capital markets were so !@#$ed up that companies (FAR more than just financials) were losing the ability to move money around. When you're looking at a possibility of Fortune 500 companies missing payroll because they can't float corporate notes, the problem is much bigger than "bad trades".

 

 

The trite answer is that the public benefited for two decades from the financial party, and TARP was a temporary loan to prevent a panic.

 

The real answer is that without a global "TARP" you would have been screwed far worse. How many people can live without their next paycheck for two weeks and what would happen during those two weeks when there was no money to be had?

 

 

In case you were asleep, that experiment was floated when US & UK allowed Lehman to fail, thinking that in the months following Bear Stearns' collapse, the financial markets could absorb a failed investment bank. They guessed wrong. You can't unwind twenty years' worth of financial systems overnight as the regulators quickly learned. Four years later they're still trying to find a formula to reduce the risk of an entire system collapsing. No such luck yet.

 

And if you think that you would have been fine if the financial collapse ran its course, then you are clueless.

 

What are you missing from their responses?

 

Are you seriously asking for them to tell you every bad thing that would have happened had they let the financial industry fail?

 

Understand the gist of their responses and extrapolate some plausible outcomes.

 

The availability of money dries up.

Many companies can no longer pay bills.

Some Individuals that work for those companies no longer get paid.

Those people have no money to spend or pay bills.

The companies that rely on those people to spend and pay bills also suffer.

This causes more companies to not be able to pay bills.

Grandma dies

My dog gets hit by a car

Skynet takes over

Cats and Dogs start living together.

 

 

It's a devastating cycle with a list of casualties too long to list.

[GG]

So you guys are just not going to repond, that is fine... I am sure it is so complex that you hold all the secrets and we should just trust you... I mean, what do us silly MBA's, Hospital Adminstrators and Investment Property owners know anyway... I am sure your explantion would be way over my head so thank you for being wise enough to save me from being embarassed....

 

Jesus, you guys sound like a couples of Nancy Pelosi's

 

Do your own homework Sue. There are dozens of threads on this topic dating back to 2006. Yes, there were people concerned about real estate back then.

 

The short answer is that the financial markets are global and do not stop at US government supervision. I noticed that you didn't notice that Iceland needed a bailout and that the first banks to topple were in Europe. So until you understand the role that credit default swap that an AIG unit signed with Goldman Sachs & French banks in 2002, had on the crisis and what its securities lending unit did wrong, if you bother to understand what securities lending is, and why you think that this was a crisis that was limited to select US companies, when the largest concentration of finance is in London, and banks with names like DEUTSCHE BANK, UNION BANK OF SWITZERLAND, CREDIT SUISSE, BARCLAYS, ROYAL BANK OF SCOTLAND, ING, etc play dominant global roles, then we can have a real discussion of why entire markets seized up.

[jjamie12]

my guess, short time hardship, bankruptcies and firm with cash and resources coming in to pick up bargain in the trash heap...

That's your problem right there. Every and any institution that is/was large enough to do that couldn't. Because the short-term markets were no longer pricing 'risk'. Those markets stopped existing. Good company, bad company, good bank, bad bank -- Everyone was treated the same (no short-term credit) because no one had any idea who the "next Lehman" was. Gov't came in and said "Don't worry -- no more Lehman's" and gave liquidity and capital (at a very steep price) to most of the banks in the country. And it worked. Fed made money. Banks didn't die. People got their paychecks. Investors lost billions. What's the problem?

Edited March 12, 2012 by jjamie12

[DC Tom]

That's your problem right there. Every and any institution that is/was large enough to do that couldn't. Because the short-term markets were no longer pricing 'risk'. Those markets stopped existing. Good company, bad company, good bank, bad bank -- Everyone was treated the same (no short-term credit) because no one had any idea who the "next Lehman" was. Gov't came in and said "Don't worry -- no more Lehman's" and gave liquidity and capital (at a very steep price) to most of the banks in the country. And it worked. Fed made money. Banks didn't die. People got their paychecks. Investors lost billions. What's the problem?

 

Not without Pelosi and the House Republicans getting into a pissing match and throwing everyone under the bus first, though.

[B-Large]

What are you missing from their responses?

 

Are you seriously asking for them to tell you every bad thing that would have happened had they let the financial industry fail?

 

Understand the gist of their responses and extrapolate some plausible outcomes.

 

The availability of money dries up.

Many companies can no longer pay bills.

Some Individuals that work for those companies no longer get paid.

Those people have no money to spend or pay bills.

The companies that rely on those people to spend and pay bills also suffer.

This causes more companies to not be able to pay bills.

Grandma dies

My dog gets hit by a car

Skynet takes over

Cats and Dogs start living together.

 

 

It's a devastating cycle with a list of casualties too long to list.

 

But that happens everyday, to all sort of business, in many different sectors. Companies overextend, roll out bad products, etc. and they have to do the layoffs, which hurts familes, that kills grandma etc- then they enter protection and decide if they can survive, be purchased or liquidate....

 

I mean I suppose the are times when emergency capital is warranted, natural disaster, terrosit attack, etc... but risky behvior at the hands of people probably knew better, no.

[Joe Miner]

But that happens everyday, to all sort of business, in many different sectors. Companies overextend, roll out bad products, etc. and they have to do the layoffs, which hurts familes, that kills grandma etc- then they enter protection and decide if they can survive, be purchased or liquidate....

 

I mean I suppose the are times when emergency capital is warranted, natural disaster, terrosit attack, etc... but risky behvior at the hands of people probably knew better, no.

 

Nevermind

[GG]

I understand perfectly.... why do financial markets, ie commercial paper have issues? is it magic? Or is it because companies who participant in those markets screwed them up with poor business practices, shaking the very trust in those supposedly efficient markets? Financial markets don't just "go bad", and you know that... so a bailout, aka emergency liquidity in the financial markets is nothing more that a bailout to people who made bad bets in various places, and you know darn well it will happen again...

 

Without emergency liquidity many big time financial instiution would have failed.... that is the consequence, and it maight have brought on some real changes, both in financial sector and in the US Government.... but now, instead we have that highyl suspect relationship between money, lobbying, representative Government and private industry... yuck

 

What is the worst that would habe happened with out Emergency Liquidity? Maybe the end of the world... my guess, short time hardship, bankruptcies and firm with cash and resources coming in to pick up bargain in the trash heap...

 

Financial markets don't go bad? Do you not know anything about history of bubbles throughout mankind?

 

If there's one consistency across the recorded history of financial markets is that booms always, always go bust. And they go bust for one simple reason, the prized asset is worth far less than it was worth yesterday. Couple that with the understanding that banks or other financial companies never have a perfect match of hard assets and liabilities - meaning what they own and owe TODAY - their customers get nervous in times of trouble and pull their money ASAP. Now, magnify this phenomenon across the world, and imagine a scenario of a global run on every single bank.

 

In retrospect there were probably a bunch of things Treasury & Fed could have done to avoid the full crisis, without spending so much TARP money. But, once they decided to let Lehman go, the fate was sealed.

 

Not without Pelosi and the House Republicans getting into a pissing match and throwing everyone under the bus first, though.

 

Ah, remember the good times?

[DC Tom]

But that happens everyday, to all sort of business, in many different sectors. Companies overextend, roll out bad products, etc. and they have to do the layoffs, which hurts familes, that kills grandma etc- then they enter protection and decide if they can survive, be purchased or liquidate....

 

I mean I suppose the are times when emergency capital is warranted, natural disaster, terrosit attack, etc... but risky behvior at the hands of people probably knew better, no.

 

We're not talking about "companies". We're talking about markets.

 

Jesus...

[Jauronimo]

But that happens everyday, to all sort of business, in many different sectors. Companies overextend, roll out bad products, etc. and they have to do the layoffs, which hurts familes, that kills grandma etc- then they enter protection and decide if they can survive, be purchased or liquidate....

 

I mean I suppose the are times when emergency capital is warranted, natural disaster, terrosit attack, etc... but risky behvior at the hands of people probably knew better, no.

So our capital markets and entire system of credit should have been forced into bankruptcy to either restructure or cease to exist? I like the way you think. I'm sure corporate America and by extension the global economy would have had only minor growing pains transitioning to a zero credit environment.

[B-Large]

So our capital markets and entire system of credit should have been forced into bankruptcy to either restructure or cease to exist? I like the way you think. I'm sure corporate America and by extension the global economy would have had only minor growing pains transitioning to a zero credit environment.

 

Why shouldn't they have? Why do American Taxpayers have to subsidize the poor decisions of others? I guess we'll just line up the next time the financial markets crash because financial intitutions do whatever they want, essentially risk free....

[jjamie12]

Why shouldn't they have? Why do American Taxpayers have to subsidize the poor decisions of others? I guess we'll just line up the next time the financial markets crash because financial intitutions do whatever they want, essentially risk free....

You continue to inter-change 'markets' with 'institutions'. People keep trying to tell you the difference, but either through ignorance or stubbornness you continue to conflate the two. Please listen to them.

 

The short-term markets were completely gone. Good company, bad company, good bank, bad bank. All of them were treated equally --> no credit. The government stepped in and provided the liquidity the system needed (and that would have been there had the times been 'normal'), at a very steep price. The banks made it through that crisis and paid back their loans. The Fed made money. The banks didn't die. Taxpayers (citizens) got their paychecks every two weeks. Investors lost billions (at least). What, again, is the problem with this? Ideology?

[Adam]

Liberals are insane.

 

http://www.dailykos.com/story/2012/03/09/1072970/-Today-I-told-off-a-cashier-who-was-trashing-the-president

Anyone who is bitter about someone else having more than them is wasting energy that could be used productively. That goes for both sides of the aisle. And anyone who has an unbending ideology of any kind is insane.

[GG]

Why shouldn't they have? Why do American Taxpayers have to subsidize the poor decisions of others? I guess we'll just line up the next time the financial markets crash because financial intitutions do whatever they want, essentially risk free....

 

Since you refuse to do your own homework and understand the difference between financial firms and financial markets, you will be branded an "idiot" with every explanation.

 

Since you like to use industry terms, but without any comprehension of what they are, here's a little scenario.

 

Exhibit: Commercial Paper.

 

Presume that IBM (a technology services firm that is not a bank) issues $5 billion in commercial paper that is due September 30, 2008. IBM also had $20 billion in "cash & equivalents" stored in banks around the world (not under Palmisano's mattress). On September 15, Lehman collapses, causing a run on the global banks. The Fed, Treasury & international regulators throw a middle finger at Lehman, and throw its fate to the bankruptcy court. UK regulator doesn't approve the fast track transfer of Lehman's investment bank & market making operations to Barclays. Fed shuts down the borrowing window to anyone who is not a "bank." The first guy in Fidelity's Hong Kong office immediately sends a $10 billion withdrawal request to every institution that holds its funds. That request is followed a split second later by the guy at Vanguard. Lather, rinse, repeat by every single investment house which has funds in banks. (Think of this as a massive scene in Wonderful Life when people show up at the Bailey Savings & Loan requesting their deposits back). Of course, no bank has enough cash on hand to satisfy all the withdrawal demands. The regulators still say FU. Following Lehman, the rest of the big investment banks fail almost immediately - Merrill, Morgan Stanley, Goldman. No big deal, right? Except that trading and money movements completely stop, because you're trying to figure out who owns what and owes to whom. Since bankruptcy laws allow banks to net their holdings, everything is frozen in time.

 

Meanwhile, we're back to IBM. On Sept 30, its investors want that $5 billion in commercial paper back. No problem, IBM has $20 billion in cash .... that's locked away in a vault in banks around the world that are now bankrupt and won't release the cash. IBM also has a little payroll that needs to be funded on Sept 30, which they can't do because they can't access the cash. So, IBM employees go to their banks to withdraw cash to pay their mortgages and buy food. But lo & behold, their bank is closed, because that bank was cleaned out last week. So what do the employees do? They go to the FDIC to collect on the $100K insurance fund. But the FDIC insurance fund is only capitalized at 5% of the total obligation. So, FDIC runs to Fed & Treasury to get the money for deposit insurance.

 

And where are we after all this? The FDIC funding dwarfs the TARP payout. The global financial markets are obliterated. Businesses stop in their tracks until they figure out how to replace credit with cash. The Fed turns into a real bank, because nobody will do business with a private bank until the crisis is over. 30% of businesses default on their obligations and file bankruptcy. Unemployment immediately hits double digits, eventually hitting 20%-30%. The world dives into a massive depression.

 

But, a lesson was taught.

[Jauronimo]

Why shouldn't they have? Why do American Taxpayers have to subsidize the poor decisions of others? I guess we'll just line up the next time the financial markets crash because financial intitutions do whatever they want, essentially risk free....

Great point. Western civilization should have been allowed to collapse because AIG, Goldman, Bear, Lehman and company failed to model risk appropriately. Tax payers would have been much better off had the global economy failed in an event which would have made the so called Great Recession (which was already pretty miserable for the average tax payer) look like a picnic, than having the tax dollars which they already paid directed toward preserving their way of life.

[B-Large]

You continue to inter-change 'markets' with 'institutions'. People keep trying to tell you the difference, but either through ignorance or stubbornness you continue to conflate the two. Please listen to them.

 

The short-term markets were completely gone. Good company, bad company, good bank, bad bank. All of them were treated equally --> no credit. The government stepped in and provided the liquidity the system needed (and that would have been there had the times been 'normal'), at a very steep price. The banks made it through that crisis and paid back their loans. The Fed made money. The banks didn't die. Taxpayers (citizens) got their paychecks every two weeks. Investors lost billions (at least). What, again, is the problem with this? Ideology?

 

They're not mutually exclusive. You can't talk about credit market failure without discussing why systemic freezing in those markets occured... why did the credit markets fail? Was it because compaines who make up those markets have massive devalued assets on theie balance sheets? The point I am making is disruption is said "financial markets" were an effect of institutional practices.... It is the reason AIG, BOFA, Citigroup got huge influxes of capital through stock purchase so credit markets did not freeze... the point this whole argument is that TARP was a bank bailout so certain firms would not fail... my contention is if they to let fail, other banks and other finacial compaines would have picked up the pieces of those bigger firms and credit markets would have recovered. My stance on it is these too big to fail firms bring the global financial market to the brink, and skid out on the other side with alot of tax payers help... Ideology? certain companies ware continually protected and are so big they can bring finance to a hault.. how is that free enterprise, that sounds like financial terrorism....

 

Great point. Western civilization should have been allowed to collapse because AIG, Goldman, Bear, Lehman and company failed to model risk appropriately. Tax payers would have been much better off had the global economy failed in an event which would have made the so called Great Recession (which was already pretty miserable for the average tax payer) look like a picnic, than having the tax dollars which they already paid directed toward preserving their way of life.

 

But that is the problem, isn't it? In a true capitalist economy, there is a consequence with not valueing risk approriately.... like issuing defaults swaps for more than you could even pay out, or secutitizing high risk loans when chances are you knew alot of those loans would default... but did people care since they knew is it ever came down to it, they would not be left to fail?

 

Since you refuse to do your own homework and understand the difference between financial firms and financial markets, you will be branded an "idiot" with every explanation.

 

Since you like to use industry terms, but without any comprehension of what they are, here's a little scenario.

 

Exhibit: Commercial Paper.

 

Presume that IBM (a technology services firm that is not a bank) issues $5 billion in commercial paper that is due September 30, 2008. IBM also had $20 billion in "cash & equivalents" stored in banks around the world (not under Palmisano's mattress). On September 15, Lehman collapses, causing a run on the global banks. The Fed, Treasury & international regulators throw a middle finger at Lehman, and throw its fate to the bankruptcy court. UK regulator doesn't approve the fast track transfer of Lehman's investment bank & market making operations to Barclays. Fed shuts down the borrowing window to anyone who is not a "bank." The first guy in Fidelity's Hong Kong office immediately sends a $10 billion withdrawal request to every institution that holds its funds. That request is followed a split second later by the guy at Vanguard. Lather, rinse, repeat by every single investment house which has funds in banks. (Think of this as a massive scene in Wonderful Life when people show up at the Bailey Savings & Loan requesting their deposits back). Of course, no bank has enough cash on hand to satisfy all the withdrawal demands. The regulators still say FU. Following Lehman, the rest of the big investment banks fail almost immediately - Merrill, Morgan Stanley, Goldman. No big deal, right? Except that trading and money movements completely stop, because you're trying to figure out who owns what and owes to whom. Since bankruptcy laws allow banks to net their holdings, everything is frozen in time.

 

Meanwhile, we're back to IBM. On Sept 30, its investors want that $5 billion in commercial paper back. No problem, IBM has $20 billion in cash .... that's locked away in a vault in banks around the world that are now bankrupt and won't release the cash. IBM also has a little payroll that needs to be funded on Sept 30, which they can't do because they can't access the cash. So, IBM employees go to their banks to withdraw cash to pay their mortgages and buy food. But lo & behold, their bank is closed, because that bank was cleaned out last week. So what do the employees do? They go to the FDIC to collect on the $100K insurance fund. But the FDIC insurance fund is only capitalized at 5% of the total obligation. So, FDIC runs to Fed & Treasury to get the money for deposit insurance.

 

And where are we after all this? The FDIC funding dwarfs the TARP payout. The global financial markets are obliterated. Businesses stop in their tracks until they figure out how to replace credit with cash. The Fed turns into a real bank, because nobody will do business with a private bank until the crisis is over. 30% of businesses default on their obligations and file bankruptcy. Unemployment immediately hits double digits, eventually hitting 20%-30%. The world dives into a massive depression.

 

But, a lesson was taught.

 

Thank you for the well thought-out example. Do you believe, in your opinion, that a lesson was learned?

[Jauronimo]

They're not mutually exclusive. You can't talk about credit market failure without discussing why systemic freezing in those markets occured... why did the credit markets fail? Was it because compaines who make up those markets have massive devalued assets on theie balance sheets? The point I am making is disruption is said "financial markets" were an effect of institutional practices.... It is the reason AIG, BOFA, Citigroup got huge influxes of capital through stock purchase so credit markets did not freeze... the point this whole argument is that TARP was a bank bailout so certain firms would not fail... my contention is if they to let fail, other banks and other finacial compaines would have picked up the pieces of those bigger firms and credit markets would have recovered. My stance on it is these too big to fail firms bring the global financial market to the brink, and skid out on the other side with alot of tax payers help... Ideology? certain companies ware continually protected and are so big they can bring finance to a hault.. how is that free enterprise, that sounds like financial terrorism....

 

 

 

But that is the problem, isn't it? In a true capitalist economy, there is a consequence with not valueing risk approriately.... like issuing defaults swaps for more than you could even pay out, or secutitizing high risk loans when chances are you knew alot of those loans would default... but did people care since they knew is it ever came down to it, they would not be left to fail?

 

 

 

Thank you for the well thought-out example. Do you believe, in your opinion, that a lesson was learned?

Clearly we disagree on the magnitude of the situation which would have transpired if AIG, Merrill and Bear were allowed to fail. I'm less concerned with whether or not Wall Street learned anything from this debacle as long as our government, rating agencies and regulatory bodies learned the appropriate lessons.

[Joe Miner]

Clearly we disagree on the magnitude of the situation which would have transpired if AIG, Merrill and Bear were allowed to fail. I'm less concerned with whether or not Wall Street learned anything from this debacle as long as our government, rating agencies and regulatory bodies learned the appropriate lessons.

 

How could most of the idiots in Washington learn a lesson when they didn't understand the subject to begin with?

[DC Tom]

Thank you for the well thought-out example. Do you believe, in your opinion, that a lesson was learned?

 

Yes, GG, thank you for spoon-feeding the retard what we've been saying all along.

 

Now teach him the difference between markets and institutions.

[GG]

Yes, GG, thank you for spoon-feeding the retard what we've been saying all along.

 

Now teach him the difference between markets and institutions.

 

Sure.

 

This little piggy went to market.

This little piggy stayed home.

This little piggy had roast beef,

This little piggy had none.

And this little piggy went wee wee wee all the way home.

[IDBillzFan]

Sure.

 

This little piggy went to market.

This little piggy stayed home.

This little piggy had roast beef,

This little piggy had none.

And this little piggy went wee wee wee all the way home.

How many times does he need to explain this? The piggy who went to market and the piggy who stayed home are not mutually exclusive. You can't talk about the piggy-going-to-market failure without discussing why systemic freezing by the piggy who ultimately decided it best to not venture into the markets, but rather make an exerted effort to, in fact, stay home.

[OCinBuffalo]

So you guys are just not going to repond, that is fine... I am sure it is so complex that you hold all the secrets and we should just trust you... I mean, what do us silly MBA's, Hospital Adminstrators and Investment Property owners know anyway... I am sure your explantion would be way over my head so thank you for being wise enough to save me from being embarassed....

 

Jesus, you guys sound like a couples of Nancy Pelosi's... and I know how you feel about her.... like Nancy would say, "you are too dumb to engage in this, I know better so just listen to me"

They have responded. Jesus. I have never seen either GG or DC_Tom spend this much effort on a single poster. They tried multiple approaches even!

 

What else do you want? Here, I'll put it in your terms:

 

If HealthSouth suddenly went....south... and was about to go bankrupt, that would be no big deal. We wouldn't bail them out. Besides, it's not like they haven't had problems...

 

However, if they, and the other 9 of the top ten LTC/Rehab chains all screwed up their MDS's, or filed them improperly, or Medicare screwed up and told them to do it the wrong way, whatever....the end result being so bad, that it was going to make Medicare crash? No reimbursement for you, for at least 6 months, because, it will take at least that long to review and fix everything, because, as you know, Medicare has a hard enough time dealing with normal, and this is major crisis. (You know, now that I think about it, this is plausible) In the meantime, should your facility go without reimbursement?

 

We are talking prevention of Medicare, the system, crashing, by sending money to Medicare, so that can find a way to keep paying you, and, the top 10 chains, so that they can fix their MDS's and resubmit them, Medicare can review them, etc.

 

In this case, wouldn't it be right for us to make sure that the reimbursement system kept flowing, even though it's the big guy's/government agency's fault?