4 ms·

It's astonishing how banks (saved with your money) can go home scotch-free, and hedge funds (that will die for their recklessness) get all the blame. You see t

It's astonishing how banks (saved with your money) can go home scotch-free, and hedge funds (that will die for their recklessness) get all the blame. You see this through policy. Why ban short selling? It's really dumb if you ask me. The banker investors that are used to taking risk and not caring precisely becuase they get their comission and the bank is saved (too big to fail) are the irresponsible people here. A hedge fund manager will ride or die with their risk tolerance.

TuringNYC 5y ago
>> It's astonishing how banks (saved with your money) can go home scotch-free, and hedge funds (that will die for their recklessness) get all the blame. The rationale is (not saying I agree with it) that broker dealers' and banks' can cause systemic risk and cause a domino effect. Note that one hedge fund was indeed saved -- AIG-FP, and was given a record $180 billion dollar bailout, albiet on initially punitive terms. Incidentally they were so large (1Trillion USD of exposures, much of it leveraged) that they fell under the category of systemic risk. https://en.wikipedia.org/wiki/American_International_Group#2008_Liquidity_crisis_and_government_bailout https://en.wikipedia.org/wiki/American_International_Group#2... That $180B wasn't all though, one could argue that the QE buy-back program purchasing securities at arguably inflated prices was also an additional bailout, but the amount for that is difficult to quantify and difficult to segment beneficiaries for.
kasey_junk 5y ago
Lehman Brothers, a bank founded in 1847 and the very epitome of investment bank, went out of business and was not bailed out due to the 2008 events.
- cm2187 5y ago
  Nor was it a bank. It was a broker dealer, no banking license.
  - missedthecue 5y ago
    Wachovia went under. So did Bear Stearns and WaMu.
paulpauper 5y ago
but income taxes have continued to fall in spite of such bailouts, suggesting that no one actually had to pay for it. It was not anyone's money but rather printed off with 0 percent yielding bonds. The huge post-2009 bull market and economic expansion in hindsight makes the bailouts one of the most successful govt. programs ever even if maligned.
- TuringNYC 5y ago
  >> but income taxes have continued to fall in spite of such bailouts, suggesting that no one actually had to pay for it. I would strongly disagree with this. Taxes would go up with fiscal bailouts, not directly with monetary bailouts. A huge amount of the bailout was via monetary policy -- i.e. "print money and buy bonds to drive bond prices up and rates down." We all feel it in the form of asset bubbles. Some people benefit (asset holders) while others lose out (young people, those without assets, renters, fixed-income retirees with almost no yields on their 401ks. Taxes are a very simplistic way of judging payment.

TuringNYC 5y ago

>> It's astonishing how banks (saved with your money) can go home scotch-free, and hedge funds (that will die for their recklessness) get all the blame. The rationale is (not saying I agree with it) that broker dealers' and banks' can cause systemic risk and cause a domino effect. Note that one hedge fund was indeed saved -- AIG-FP, and was given a record $180 billion dollar bailout, albiet on initially punitive terms. Incidentally they were so large (1Trillion USD of exposures, much of it leveraged) that they fell under the category of systemic risk. https://en.wikipedia.org/wiki/American_International_Group#2008_Liquidity_crisis_and_government_bailout https://en.wikipedia.org/wiki/American_International_Group#2... That $180B wasn't all though, one could argue that the QE buy-back program purchasing securities at arguably inflated prices was also an additional bailout, but the amount for that is difficult to quantify and difficult to segment beneficiaries for.

kasey_junk 5y ago

Lehman Brothers, a bank founded in 1847 and the very epitome of investment bank, went out of business and was not bailed out due to the 2008 events.

cm2187 5y ago
Nor was it a bank. It was a broker dealer, no banking license.
- missedthecue 5y ago
  Wachovia went under. So did Bear Stearns and WaMu.

paulpauper 5y ago

but income taxes have continued to fall in spite of such bailouts, suggesting that no one actually had to pay for it. It was not anyone's money but rather printed off with 0 percent yielding bonds. The huge post-2009 bull market and economic expansion in hindsight makes the bailouts one of the most successful govt. programs ever even if maligned.

TuringNYC 5y ago
>> but income taxes have continued to fall in spite of such bailouts, suggesting that no one actually had to pay for it. I would strongly disagree with this. Taxes would go up with fiscal bailouts, not directly with monetary bailouts. A huge amount of the bailout was via monetary policy -- i.e. "print money and buy bonds to drive bond prices up and rates down." We all feel it in the form of asset bubbles. Some people benefit (asset holders) while others lose out (young people, those without assets, renters, fixed-income retirees with almost no yields on their 401ks. Taxes are a very simplistic way of judging payment.