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It’s interesting we hear the terms “bail out” when connected with how the US managed major institutional collapse. However from what I experienced on the street

It’s interesting we hear the terms “bail out” when connected with how the US managed major institutional collapse. However from what I experienced on the street during these “bail outs,” Lehman, Bear, SVB, First Republic no longer exist. Their assets were salvaged and remaining functional assets acquired. The fed, treasury, and other institutions involved in the bailout ended up making handsome profits from the reperformance of the distressed assets they pulled into their balance sheets. The only bail out was for the global participants, not just banks but everyone with an asset that depends on the orderly function of the financial system even during periods of distress. “Tax payers” paid nothing, and benefited from the recovery from the disorderly Lehman collapse and the credit squeeze that caused. There’s a lot of speculation that the relatively mild inflation the US experienced post pandemic was due to all the QE and other moves the government and governmental bodies did, as well as pandemic stimulus. I’ve yet to see the effects clearly disentangled from the systemic breakdown of logistics during the pandemic which have only fairly recently ironed out. Certainly all the cheap cash caused some inflation, but what a small price to pay compared to what everyone faced. I think the issue with the situation in China is the assets held by these investment vehicles are never going to reperform. They’re piles of paper and empty buildings rotting with no present or future purpose. They’ve sucked up immense amounts of public money passed through the system in various ways into fake investments, and their value will simply evaporate leaving behind a desperate situation - cities and town throughout China burdened with useless infrastructure. It’s been brewing since at least 2007. But it doesn’t start and end with real estate - there are enormous infrastructure projects and bad international loans sprawling the planet that under scrutiny won’t stand up. Chinese credit spreads, where they are priceable, will have to blow up, and where they aren’t the opaque risks will sew structural and systemic lack of confidence. I hope China can navigate whatever unwinding has to happen, and I sincerely hope it doesn’t devolve into political and social instability fueling geopolitical strawman conflicts to distract from domestic problems. While I really wish China could find a way to let its people be actually free, I don’t think a multipolar world is necessarily a bad thing. An ascendant China as more than a factory floor for the west provides a good opportunity for trade and competition, spurring growth and innovation everywhere.

geysersam 3y ago
> There’s a lot of speculation that the relatively mild inflation the US experienced post pandemic was due to all the QE and other moves the government and governmental bodies did, as well as pandemic stimulus. How would stimulus and QE help prevent inflation? Can you point to someone doing that speculation?
- fnordpiglet 3y ago
  I didn’t say it prevented inflation, I said inflation was mild given the amount of stimulus. IMO this is because as supply of money increased demand did too, and supply was sufficient to meet demand and the economy expanded rather than price inflation.
  - geysersam 3y ago
    I see, I misread you. You meant the inflation was due to the QE. I thought you meant the mildness was due to the QE.
johnnymorgan 3y ago
> Tax payers” paid nothing, and benefited from the recovery from the disorderly Lehman collapse and the credit squeeze that caused. There’s a lot of speculation that the relatively mild inflation the US experienced post pandemic was due to all the QE and other moves the government and governmental bodies did, as well as pandemic stimulus This is completely wrong and naive, please let us know what agency you work for. You say stuff like that with an references, for the record everytime the money printer is run the tax payers, aka bag holders, pay out the ass. Saying the inflation is mild is not agreed with, where are you getting that from?
- fnordpiglet 3y ago
  https://www.usinflationcalculator.com/inflation/historical-inflation-rates/ https://www.usinflationcalculator.com/inflation/historical-i... Let me be clear - the “bailouts” didn’t cost anything. They were never done with tax payer dollars, except for TARP, which was repaid in full plus interest. > On December 19, 2014, the U.S. Treasury sold its remaining holdings of Ally Financial, essentially ending the program. Through the Treasury, the US Government actually booked $15.3 billion in profit, as it earned $441.7 billion on the $426.4 billion invested.[2][3] https://en.m.wikipedia.org/wiki/Troubled_Asset_Relief_Program https://en.m.wikipedia.org/wiki/Troubled_Asset_Relief_Progra... Quantitative easing and other long term asset related balance sheet transfers materially reperformed as the assets were acquired during a stressed credit period and as credit improved the long term asset values increased, causing internal growth of the balance sheet value at the fed. Additionally, the additional money supply contributed modestly towards inflation, but overall relieved enormous market pressures and allowed the economy to stay on stable footing: > Several studies published in the aftermath of the crisis found that quantitative easing in the US has effectively contributed to lower long term interest rates on a variety of securities as well as lower credit risk. This boosted GDP growth and modestly increased inflation.[94][95][96][97][98][99] https://en.m.wikipedia.org/wiki/Quantitative_easing https://en.m.wikipedia.org/wiki/Quantitative_easing To answer your question, I don’t work anywhere right now as I’m taking a break between gigs. But I did used to be a fairly senior person at the mega banks and was a senior person in securities trading during the financial crisis and navigated my bank through it successfully (albeit we were never distressed, but all banks were treated as distressed to prevent further runs). I have no skin in any of these things though, but am always surprised by the populist hot takes from folks so far removed from the system and what actually transpired in real reality that I often wonder how wildly diverged most folks view of reality is from the actual history that I literally saw unfold around me.

geysersam 3y ago

> There’s a lot of speculation that the relatively mild inflation the US experienced post pandemic was due to all the QE and other moves the government and governmental bodies did, as well as pandemic stimulus. How would stimulus and QE help prevent inflation? Can you point to someone doing that speculation?

fnordpiglet 3y ago
I didn’t say it prevented inflation, I said inflation was mild given the amount of stimulus. IMO this is because as supply of money increased demand did too, and supply was sufficient to meet demand and the economy expanded rather than price inflation.
- geysersam 3y ago
  I see, I misread you. You meant the inflation was due to the QE. I thought you meant the mildness was due to the QE.

johnnymorgan 3y ago

> Tax payers” paid nothing, and benefited from the recovery from the disorderly Lehman collapse and the credit squeeze that caused. There’s a lot of speculation that the relatively mild inflation the US experienced post pandemic was due to all the QE and other moves the government and governmental bodies did, as well as pandemic stimulus This is completely wrong and naive, please let us know what agency you work for. You say stuff like that with an references, for the record everytime the money printer is run the tax payers, aka bag holders, pay out the ass. Saying the inflation is mild is not agreed with, where are you getting that from?

fnordpiglet 3y ago
https://www.usinflationcalculator.com/inflation/historical-inflation-rates/ https://www.usinflationcalculator.com/inflation/historical-i... Let me be clear - the “bailouts” didn’t cost anything. They were never done with tax payer dollars, except for TARP, which was repaid in full plus interest. > On December 19, 2014, the U.S. Treasury sold its remaining holdings of Ally Financial, essentially ending the program. Through the Treasury, the US Government actually booked $15.3 billion in profit, as it earned $441.7 billion on the $426.4 billion invested.[2][3] https://en.m.wikipedia.org/wiki/Troubled_Asset_Relief_Program https://en.m.wikipedia.org/wiki/Troubled_Asset_Relief_Progra... Quantitative easing and other long term asset related balance sheet transfers materially reperformed as the assets were acquired during a stressed credit period and as credit improved the long term asset values increased, causing internal growth of the balance sheet value at the fed. Additionally, the additional money supply contributed modestly towards inflation, but overall relieved enormous market pressures and allowed the economy to stay on stable footing: > Several studies published in the aftermath of the crisis found that quantitative easing in the US has effectively contributed to lower long term interest rates on a variety of securities as well as lower credit risk. This boosted GDP growth and modestly increased inflation.[94][95][96][97][98][99] https://en.m.wikipedia.org/wiki/Quantitative_easing https://en.m.wikipedia.org/wiki/Quantitative_easing To answer your question, I don’t work anywhere right now as I’m taking a break between gigs. But I did used to be a fairly senior person at the mega banks and was a senior person in securities trading during the financial crisis and navigated my bank through it successfully (albeit we were never distressed, but all banks were treated as distressed to prevent further runs). I have no skin in any of these things though, but am always surprised by the populist hot takes from folks so far removed from the system and what actually transpired in real reality that I often wonder how wildly diverged most folks view of reality is from the actual history that I literally saw unfold around me.