4 ms·

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.

calebgilbert 11y ago
You beat me to posting exactly the same comment...
- joe_the_user 11y ago
  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.
n4r9 11y ago
I know it's a long read, but the last paragraph is literally this same point.
gutnor 11y ago
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".
- joe_the_user 11y ago
  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"
  - duncan_bayne 11y ago
    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."
rhino369 11y ago
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.
- nosuchthing 11y ago
  Seemed like a net win for the surviving banks with all the reduced competition, cheap real estate in default, and near 0% Fed rate. https://www.fdic.gov/bank/individual/failed/banklist.html https://www.fdic.gov/bank/individual/failed/banklist.html
  - mikeyouse 11y ago
    The banks loathe low rates.. They make most of their profits on interest margin which is greatly compressed in ZIRP environments.. Their margin is literally the lowest it's been since at least the early 1980's. [1] It's no surprise then that bankers are the ones clamoring loudest for interest rate hikes. Bill Gross, Lloyd Blankfein, Robert Shiller, insurance & pension execs are all begging Yellen to raise rates while the people in charge of companies that actually sell physical goods are telling her to hold off. [1] - https://research.stlouisfed.org/fred2/series/USNIM https://research.stlouisfed.org/fred2/series/USNIM
clay_to_n 11y ago
The last sentence of the article: "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."

calebgilbert 11y ago

You beat me to posting exactly the same comment...

joe_the_user 11y ago
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.

n4r9 11y ago

I know it's a long read, but the last paragraph is literally this same point.

gutnor 11y ago

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".

joe_the_user 11y ago
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"
- duncan_bayne 11y ago
  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."

rhino369 11y ago

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.

nosuchthing 11y ago
Seemed like a net win for the surviving banks with all the reduced competition, cheap real estate in default, and near 0% Fed rate. https://www.fdic.gov/bank/individual/failed/banklist.html https://www.fdic.gov/bank/individual/failed/banklist.html
- mikeyouse 11y ago
  The banks loathe low rates.. They make most of their profits on interest margin which is greatly compressed in ZIRP environments.. Their margin is literally the lowest it's been since at least the early 1980's. [1] It's no surprise then that bankers are the ones clamoring loudest for interest rate hikes. Bill Gross, Lloyd Blankfein, Robert Shiller, insurance & pension execs are all begging Yellen to raise rates while the people in charge of companies that actually sell physical goods are telling her to hold off. [1] - https://research.stlouisfed.org/fred2/series/USNIM https://research.stlouisfed.org/fred2/series/USNIM

clay_to_n 11y ago

The last sentence of the article: "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."