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If you're a bank, you make money before, during and after the meltdowns that you create. And if it looks like youre ever in trouble, you get bailed out by the s
by fartcannon 4y ago
If you're a bank, you make money before, during and after the meltdowns that you create. And if it looks like youre ever in trouble, you get bailed out by the same people whose money you gambled away. It's dark.
- streetcat1 4y agoActually, if you read Nissim Taleb, banks are the most fragile companies. They have capped upside (basically interest rate) , and indefinite downside.
- 55555 4y agoWhich of his books is this from?
- streetcat1 4y agoThe Black Swan, Second Edition. he added a chapter.
- fartcannon 4y agoIn reality, they get bailed out. So there is no downside? They can literally do whatever the they want, get small fines, and if it all falls apart, we just give them more. How many bonuses got paid out of the bailout money?
- thelamest 4y agoIt’s not that dark: >When the Federal Reserve propped up A.I.G. in September 2008, unlike its approach with most of the big banks, it threw out the company’s chief executive and took control of 79.9 percent of the company, nearly wiping out many of its shareholders. Taxpayers got all of their money back, and then some, receiving a profit of more than $20 billion. (https://www.nytimes.com/2015/06/16/business/dealbook/surprise-ruling-finds-bailout-shorted-aig.html https://www.nytimes.com/2015/06/16/business/dealbook/surpris...) Enacted since then, Title II of the Dodd-Frank Act sets up bailouts to be “forcing shareholders and creditors to bear the losses of the failed financial company, removing management that was responsible for the financial condition of the company (…)”.
- lmm 4y agoAIG was not a bank; notice from your own quote how its treatment contrasted with how the banks were treated.