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So after a couple years of the money gun from federal governments to keep companies afloat, a record number of them are cashing out at what they must think is t

by jlos 5y ago

So after a couple years of the money gun from federal governments to keep companies afloat, a record number of them are cashing out at what they must think is the top? Am I wrong in being completely cynical in thinking that our governments spent two years shoveling money (paid for by us through inflation and taxes) to these people?

throwawaysea 5y ago
I don’t think the “companies” are cashing out. Individuals are cashing out because of pending legislation that raises capital gains taxes. The effect of taxes is to discourage activities that generate taxes to some extent, and this is the effect in action. These people believe they have other, better ways to make money. Or maybe they will simply reinvest back into the same stocks but not have their past gains subject to this new tax rate as a result. I don’t think it is some purposeful funneling of money in the malicious way you’re hinting at.
bshipp 5y ago
the only thing you are wrong about is the "couple of years". this orgy of cheap money started under Greenspan in 2001 and went nuclear under Bernanke in 2008. The tap has barely slowed ever since. It is, without a doubt, the largest transfer of resources from citizens to the upper class in human history, all designed to keep Wall Street afloat. It'd be hilarious if it wasn't so tragic.
- complianceowl 5y ago
  You get it.
systemvoltage 5y ago
Remember, you would have been downvoted/flagged just 8 months ago on HN for mentioning inflation or criticizing gov spending, covid checks and the money printing that happened. Let this be a lesson that whatever the current zeitgeist is on HN, truth can possibly be very different. I remember this extremely clearly, my own comments were getting slaughtered here.
ChrisLomont 5y ago
Trillions were spent on everyday people, without which there'd be much more economic disaster.
- legolas2412 5y ago
  The government backs up assets overvalued by the banks and corrupt rating agencies. They make out like bandits, nobody goes to jail, housing becomes ever more unaffordable, but it somehow is "for the people". I'm sure the wealth distribution in real estate is pretty skewed too, with top 10% owning most of it, but it is "for the people". The wealthy get all the money, but somehow the working class is told that this is all done for them.
  - ChrisLomont 5y ago
    The majority of the money by total value in the whole housing crisis was taken by the people that took loans, i.e., got money, and did not repay them, causing the crisis. Lehman didn't crash, wiping out investors, because investors took money and didn't repay it. The system crashed because everyday people took out loans and didn't repay them. Sum up the values and then tell me who made out like bandits.
    - lowkey 5y ago
      Yes but the majority of the fraud that led to the financial crisis was due to the way the banks fraudulently combined sub-prime mortgages into mortgage backed securities and the ratings agencies looked the other way. There was rampant fraud in the mis-representation of assets used to back asset-backed loans. The system didn’t crash because everyday people took out loans. It crashed because of the incredible amount of fraud that went into baking a mortgage backed security. TL;DR: It wasn’t the regular people applying for loans that caused the whole thing to collapse. It was all the fraud used by bankers to justify lending to people who probably shouldn’t have been given mortgages in the first place.
      - ChrisLomont 5y ago

by jlos 5y ago

throwawaysea 5y ago

I don’t think the “companies” are cashing out. Individuals are cashing out because of pending legislation that raises capital gains taxes. The effect of taxes is to discourage activities that generate taxes to some extent, and this is the effect in action. These people believe they have other, better ways to make money. Or maybe they will simply reinvest back into the same stocks but not have their past gains subject to this new tax rate as a result. I don’t think it is some purposeful funneling of money in the malicious way you’re hinting at.

bshipp 5y ago

the only thing you are wrong about is the "couple of years". this orgy of cheap money started under Greenspan in 2001 and went nuclear under Bernanke in 2008. The tap has barely slowed ever since. It is, without a doubt, the largest transfer of resources from citizens to the upper class in human history, all designed to keep Wall Street afloat. It'd be hilarious if it wasn't so tragic.

complianceowl 5y ago
You get it.

systemvoltage 5y ago

Remember, you would have been downvoted/flagged just 8 months ago on HN for mentioning inflation or criticizing gov spending, covid checks and the money printing that happened. Let this be a lesson that whatever the current zeitgeist is on HN, truth can possibly be very different. I remember this extremely clearly, my own comments were getting slaughtered here.

ChrisLomont 5y ago

Trillions were spent on everyday people, without which there'd be much more economic disaster.

legolas2412 5y ago
The government backs up assets overvalued by the banks and corrupt rating agencies. They make out like bandits, nobody goes to jail, housing becomes ever more unaffordable, but it somehow is "for the people". I'm sure the wealth distribution in real estate is pretty skewed too, with top 10% owning most of it, but it is "for the people". The wealthy get all the money, but somehow the working class is told that this is all done for them.
- ChrisLomont 5y ago
  The majority of the money by total value in the whole housing crisis was taken by the people that took loans, i.e., got money, and did not repay them, causing the crisis. Lehman didn't crash, wiping out investors, because investors took money and didn't repay it. The system crashed because everyday people took out loans and didn't repay them. Sum up the values and then tell me who made out like bandits.
  - lowkey 5y ago
    Yes but the majority of the fraud that led to the financial crisis was due to the way the banks fraudulently combined sub-prime mortgages into mortgage backed securities and the ratings agencies looked the other way. There was rampant fraud in the mis-representation of assets used to back asset-backed loans. The system didn’t crash because everyday people took out loans. It crashed because of the incredible amount of fraud that went into baking a mortgage backed security. TL;DR: It wasn’t the regular people applying for loans that caused the whole thing to collapse. It was all the fraud used by bankers to justify lending to people who probably shouldn’t have been given mortgages in the first place.
    - ChrisLomont 5y ago