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amateurs like Coinbase might speculate, but pros like GS use the Federal Reserve as their backstop its one of those "heads I win, tails you lose" scenarios...G

by junkscience2017 9y ago

amateurs like Coinbase might speculate, but pros like GS use the Federal Reserve as their backstop its one of those "heads I win, tails you lose" scenarios...GS will keep the profits but if things go south, their losses can just be taken out of your local school budget

m777z 9y ago
Explain for those not in the know, like me. I thought Goldman repaid their TARP bailout money?
- tootie 9y ago
  It is complete baloney and has nothing to do with crypto.
- acchow 9y ago
  You're not supposed to bail out the failures in capitalism (i.e. so-called "crony capitalism"). Of course the companies getting billions in government support will win big and easily pay back their loans. If they didn't get TARP bailout, they would fail and better competitors would replace them.
- junkscience2017 9y ago
  it changes the risk profile when insolvency is not a potential outcome I'm not damning GS...any entity that has officially crossed over into too-big-to-fail should take as many crazy risks as possible...why not?
- etr-strike 9y ago
  The TARP money was just a small fraction of the actual bailout. The Federal Reserve also drove the interest rate on your savings account below the rate of inflation (robbing you of your wealth). Artificially suppressing interest rates also propped up asset prices -- assets such as houses which all the banks own. TARP was the tip of the iceberg.
  - tootie 9y ago
    That's like blaming firemen for making my house wet when it was on fire. The Fed likely prevented a deflationary spiral with it's relentless QE and never suffered the ill effects of high inflation that the anti-Fed faction insisted would happen.
    - etr-strike 9y ago
      House prices needed to fall. Bad debt needed to be written off. Investors making risky loans needed to lose. None of these things happened, and look where we are. I vehemently disagree with everything you said in your post.

m777z 9y ago

Explain for those not in the know, like me. I thought Goldman repaid their TARP bailout money?

tootie 9y ago
It is complete baloney and has nothing to do with crypto.
acchow 9y ago
You're not supposed to bail out the failures in capitalism (i.e. so-called "crony capitalism"). Of course the companies getting billions in government support will win big and easily pay back their loans. If they didn't get TARP bailout, they would fail and better competitors would replace them.
junkscience2017 9y ago
it changes the risk profile when insolvency is not a potential outcome I'm not damning GS...any entity that has officially crossed over into too-big-to-fail should take as many crazy risks as possible...why not?
etr-strike 9y ago
The TARP money was just a small fraction of the actual bailout. The Federal Reserve also drove the interest rate on your savings account below the rate of inflation (robbing you of your wealth). Artificially suppressing interest rates also propped up asset prices -- assets such as houses which all the banks own. TARP was the tip of the iceberg.
- tootie 9y ago
  That's like blaming firemen for making my house wet when it was on fire. The Fed likely prevented a deflationary spiral with it's relentless QE and never suffered the ill effects of high inflation that the anti-Fed faction insisted would happen.
  - etr-strike 9y ago
    House prices needed to fall. Bad debt needed to be written off. Investors making risky loans needed to lose. None of these things happened, and look where we are. I vehemently disagree with everything you said in your post.