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The Wall Street bailout probably saved the financial system, ultimately made the government money, but was incredibly unpopular. The bailout of GM lost money, h
by yellowstuff 9y ago
The Wall Street bailout probably saved the financial system, ultimately made the government money, but was incredibly unpopular. The bailout of GM lost money, helped some politically connected groups, and was mostly popular and uncontroversial. Jobs are political capital, and neither finance nor tech have that many, so they make it up with cash.
- user5994461 9y agoWhat's the impact on American pensions and mortgages if the banks crash?
- bduerst 9y agoBut the lack of any major financial reform has left commercial banks open to continue making risky investments. As well as a lack of regulation on subprime lending, leading us to a now-growing subprime auto loan bubble. The bailouts treated the symptom, not the cause.
- yellowstuff 9y agoI don't have a ton of first hand knowledge on the risk appetite of banks or the effect of banking regulation. But I assert that Matt Levine is very knowledgeable about these things and he disagrees with you. His points are that multiple 10 figure fines, higher capital requirements, and a general culture shift have actually made banks less profitable and less risky, as was intended. EG: https://www.bloomberg.com/view/articles/2015-02-20/capital-rules-aren-t-the-only-reason-banking-is-boring https://www.bloomberg.com/view/articles/2015-02-20/capital-r... https://www.bloomberg.com/view/articles/2016-09-07/boring-banks-and-silly-cds https://www.bloomberg.com/view/articles/2016-09-07/boring-ba... https://www.bloomberg.com/view/articles/2017-11-16/deregulation-and-proxy-recounts https://www.bloomberg.com/view/articles/2017-11-16/deregulat... https://www.bloomberg.com/view/articles/2017-11-20/utilities-analysts-and-fines https://www.bloomberg.com/view/articles/2017-11-20/utilities...
- bduerst 9y agoRather than link dump his blog (which I read) can you quote the specific sections? His weekly opinion posts cover a large variety of non-related topics and nobody knows which one you're referencing. There also isn't anything there about the subprime auto loans, which even the esteemed Matt Levine acknowledges are an issue: https://www.bloomberg.com/view/articles/2017-04-19/fraud-satisfaction-and-bubbles https://www.bloomberg.com/view/articles/2017-04-19/fraud-sat... > Here's a story about subprime car loans that actually doesn't lean on the this-is-2008-all-over-again analogy; that was just me being cranky. That said though, it sounds like 2008 all over again!
- JumpCrisscross 9y ago> the lack of any major financial reform has left commercial banks open to continue making risky investments >>> Here's a story about subprime car loans Are the subprime auto loans being issued by commercial banks?
- bduerst 9y agoThey are both separate examples of the problems persisting. 2008 financial crises was more than just the Glass Steagall reform. Read my comment above.
- yellowstuff 9y agoAs I said I don't have a ton of first hand knowledge. The subprime auto loan story sounds bad, but I'm not in a great position to assess how bad it is, and the bank analysts I know don't seem that worked up about it. It could both be true that banks are systematically making bad subprime auto loans that will end poorly, and that banks are better capitalized, safer and more boring overall than they were pre-crisis.
- rrcaptain 9y agoUntil you start throwing executives in prison, nothing will change long term. 10 figure fines are nothing compared to how much many Americans lost in the housing market crash. Consider how many people got foreclosed upon improperly. The loss of quality of life (and actual life) due to Wall Street greed is unmeasurable, but surely more than 10 figures.
- intended 9y agoKudos for how succinctly that was packaged.