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I don't even care that we didn't prosecute them. I just wish they weren't bailed out by the government (aka my tax money) when they went under. It's a free mar

I don't even care that we didn't prosecute them. I just wish they weren't bailed out by the government (aka my tax money) when they went under. It's a free market: you make mistakes, you lose.

mrweasel 11y ago
>It's a free market: you make mistakes, you lose. Precisely, if you invest money, you should be prepared to lose that money. Now we're in a situation where if the amount you lose is large enough, no worries, the tax payers will refund your investment. It was a large amount you lost after all. Here, in Denmark, we now have "systemic banks" aka "to big to fail", just like in the US. Not once have I hear someone suggest that MAYBE just fucking maybe, the issue is that the banks are to large. But no no, we'll have non of that. In fact let's make it an issue that to many people pick smaller, less well consolidated banks. How can a government not recognize that it's a problem if a country will be thrown in to chaos (apparently) should this private company fail.
- ktRolster 11y ago
  Not once have I hear someone suggest that MAYBE just fucking maybe, the issue is that the banks are to large. Smart people have said it. Here's Paul Volcker saying, "Any bank that is too big to fail is too big to exist." They should be broken up: http://www.wsj.com/articles/SB10001424052748704825504574586330960597134 http://www.wsj.com/articles/SB100014240527487048255045745863... Sheila Bair, the head of FDIC was also talking about breaking up banks that were too big. But you know, there were lobbyists, and also the regulators who want to regulate large things. Eventually it will happen, after the next crisis, or the one after that, because, as Volcker says, "it just makes sense."
delecti 11y ago
We didn't give them money, we invested in businesses that were in desperate need of investments. Those investments later paid back very good returns. You can argue that we shouldn't have interfered in the free market like that, and in fact I agree in principle, but the "rawr, my tax money" argument doesn't hold water.
- merpnderp 11y ago
  It does hold up. "rawr, my tax money was used to prop up a failed business distorting the market, damaging more successful players, and decreasing market efficiency, along with increasing real and perceived corruption of the government." It's not like those banks were protected with no external consequences. What would have been an industry wide boon to mid and small cap banks instead turned into the ugliest type of market intervention conceivable. The only reason those tax dollars were paid back with interest is because no one can compete with the 800 pound gorilla who when he falls out of the tree because he got drunk on his own power, the government picks him back up and places him back on top.
- ktRolster 11y ago
  >Those investments later paid back very good returns. Paid back with money printed by the federal reserve. Oh great, that makes me feel so much better. The whole thing was FUBAR.
emodendroket 11y ago
I think there was something to the argument that systemic risk made the collapse of big banks undesirable -- but to the extent that was true it was obviously an argument for breaking up the banks and probably even outright nationalizing the ones that were bailed out, not just handing them a bunch of money, not prosecuting anyone, and leaving the system unchanged otherwise.
cmrdporcupine 11y ago
Oh this is the ugliest part. When you spend 20 years convincing people that the right place to put their retirement nest egg is in mutual funds and stocks and that defined benefit pensions are not economically viable and that gov't run social security should be capped or cut... Well big surprise you now have a huge constituency demanding that 'the stock market' be bailed out.
limeyx 11y ago
Its only a free market until the rich people start losing money

I don't even care that we didn't prosecute them. I just wish they weren't bailed out by the government (aka my tax money) when they went under. It's a free market: you make mistakes, you lose.

mrweasel 11y ago

>It's a free market: you make mistakes, you lose. Precisely, if you invest money, you should be prepared to lose that money. Now we're in a situation where if the amount you lose is large enough, no worries, the tax payers will refund your investment. It was a large amount you lost after all. Here, in Denmark, we now have "systemic banks" aka "to big to fail", just like in the US. Not once have I hear someone suggest that MAYBE just fucking maybe, the issue is that the banks are to large. But no no, we'll have non of that. In fact let's make it an issue that to many people pick smaller, less well consolidated banks. How can a government not recognize that it's a problem if a country will be thrown in to chaos (apparently) should this private company fail.

ktRolster 11y ago
Not once have I hear someone suggest that MAYBE just fucking maybe, the issue is that the banks are to large. Smart people have said it. Here's Paul Volcker saying, "Any bank that is too big to fail is too big to exist." They should be broken up: http://www.wsj.com/articles/SB10001424052748704825504574586330960597134 http://www.wsj.com/articles/SB100014240527487048255045745863... Sheila Bair, the head of FDIC was also talking about breaking up banks that were too big. But you know, there were lobbyists, and also the regulators who want to regulate large things. Eventually it will happen, after the next crisis, or the one after that, because, as Volcker says, "it just makes sense."

delecti 11y ago

We didn't give them money, we invested in businesses that were in desperate need of investments. Those investments later paid back very good returns. You can argue that we shouldn't have interfered in the free market like that, and in fact I agree in principle, but the "rawr, my tax money" argument doesn't hold water.

merpnderp 11y ago
It does hold up. "rawr, my tax money was used to prop up a failed business distorting the market, damaging more successful players, and decreasing market efficiency, along with increasing real and perceived corruption of the government." It's not like those banks were protected with no external consequences. What would have been an industry wide boon to mid and small cap banks instead turned into the ugliest type of market intervention conceivable. The only reason those tax dollars were paid back with interest is because no one can compete with the 800 pound gorilla who when he falls out of the tree because he got drunk on his own power, the government picks him back up and places him back on top.
ktRolster 11y ago
>Those investments later paid back very good returns. Paid back with money printed by the federal reserve. Oh great, that makes me feel so much better. The whole thing was FUBAR.

emodendroket 11y ago

I think there was something to the argument that systemic risk made the collapse of big banks undesirable -- but to the extent that was true it was obviously an argument for breaking up the banks and probably even outright nationalizing the ones that were bailed out, not just handing them a bunch of money, not prosecuting anyone, and leaving the system unchanged otherwise.

cmrdporcupine 11y ago

Oh this is the ugliest part. When you spend 20 years convincing people that the right place to put their retirement nest egg is in mutual funds and stocks and that defined benefit pensions are not economically viable and that gov't run social security should be capped or cut... Well big surprise you now have a huge constituency demanding that 'the stock market' be bailed out.

limeyx 11y ago

Its only a free market until the rich people start losing money