ObamaRama 8

[ScoobyDoo]

Re: ObamaRama 8

There was no guarantee of a bailout, decisions were not made 'knowing' the gov't would bail them out. Strategies that were employed 3-5-7 years ago were not implemented because companies knew they couldn't fail.

You forgot the most important part.

The really really smart rich finance guys who caused this already had their money out (including the CEO's of these companies) before the collapse.

They never cared if we let them fail or not. The strategies were implemented because it made them a lot of money and stuck it to the middle class. That's what they do.

[mookie1995]

Re: ObamaRama 8

There was no guarantee of a bailout, decisions were not made 'knowing' the gov't would bail them out. Strategies that were employed 3-5-7 years ago were not implemented because companies knew they couldn't fail.

hmmm.

ok, a decade ago all the ltcm trades were guaranteed to settle. last year aic was covered to pay off gs.

what were the 'risk' departments of all these IB's doing?!?

[Plante26]

Re: ObamaRama 8

That's revisionist history. Lots of people on both sides opposed the bailout - one of the best speeches I heard against the bailout came from Democrat Marcy Kaptur. The leadership of both parties supported the bailout, as did President Bush and both major party candidates. No political party can look back now and say they opposed the bailout.

It couldn't have passed without Democrat support. In the House, almost 75% of Dem representatives voted for it; over half of Republican reps opposed it. In the Senate, only 9 Dems opposed it. I never said that either the Republicans or Democrats overwhelming opposed it, but you don't hear the complaining coming from Republicans as much as the Dem base. Just pointing out that the Dems could have stopped it if it was such a bad thing. And if it is so bad, why aren't people hanging it on Obama as he was a supporter of the bailout? Seems like a double standard--it's bad, but we're not going to be mad at those who passed it.

And I noticed your lack of defending the Dems (such as Dodd and Conrad) that have been suckling at the banking industry teet.

[Plante26]

Re: ObamaRama 8

Yeah this wasn't a D vs. R fight...it was "Too Big to Fail Kool Aid Drinkers" vs "Let Them Burn".

At first I drank the kool aid because as I always say I am not well versed on econ...then I did some research and listened and spit out the kool aid and lit the torches.

But no matter what they aint MY democrats

If you'll go back and see what I wrote at the time, you'll see that I was fully and ready to let these guys go under, and not bail them out.

So suck it. And take 'my democrats' along with you.

rufus: If they aren't your Dems, then start criticizing them instead of spouting their ideological mantras.

Handy: Never meant to say they were your Dems. You actually DO criticize them, which is a breath of fresh air from an independent's perspective.

[pirate]

Re: ObamaRama 8

hmmm.

ok, a decade ago all the ltcm trades were guaranteed to settle. last year aic was covered to pay off gs.

what were the 'risk' departments of all these IB's doing?!?

I'm not saying they were right, not saying they didn't take risks that proved to be near fatal, not saying the regulators were on top of things...but many have connected those acts to the resultant government action and assume decisions were made knowing there would be a bailout...that simply isn't the case.

Each company had its risk models, none of which, to my knowledge, had a scenario in which the dominoes start tumbling all around. That is different than what I frequently read on here regarding companies knowingly making bad decisions to generate huge profits planning that if it blew up the government would bail them out.

If somebody were to say that they didn't invest any money directly or through a fund that was invested in one of the large banks or investment companies because they knew that the growth of the last xx years was due to a poorly planned model that was bound to contribute to an economic meltdown then I'm cool with that.

No company was going to say "we're going to get out of this business or give up market share because we have a model that says the whole this is going to pop"...that management team would have been fired before the ink dried. It wouldn't have been such a mess if companies saw it coming. Could they have interpreted the data to portend something bad, yes. But that would have been true for several years running.

The short-term pressure on CEO's doesn't come because they need some dough to buy their daughter a used car. The cycle of having to show 10-15% growth every quarter or be bashed by the analysts and/or fired by the stockholders wasn't cooked up by senior management alone.

We can try to blame this whole thing on 100 people but it took a hell of lot more than that to create this debacle.

[gregg729]

Re: ObamaRama 8

After taking a couple weeks off from these threads, I've realized that the drumbeat of the crowd the left has shifted in the past year or two from parroting the lurking threat of an evil government with too much power to the new mantra of parroting the lurking threat of evil big business and evil capitalism with too much power. The same social agenda is driving ever further to the left, but the justification comes from the most appropriate threat. I read a story that had something to do with that once...

"Four legs good, two legs bad." Or: "Four legs good, two legs better." Whichever shoe fits the occasion....

Just remember that it was your Democrats that endorsed and passed all of this garbage. I don't hear you complaining about that, which is rich considering numerous Dems are the biggest whores of the banking industry.

Can you say Barney FWank?

Although truth be told, both parties are equally corrupted. Giving Goldman Sachs keys to the front door might be a new precedent though.

They never cared if we let them fail or not. The strategies were implemented because it made them a lot of money and stuck it to the middle class. That's what they do.

It's all true. Buffett and Trump and the whole lot of billionaires in their books say something to the effect that it's not enough to be wildly successful, you're not a real man until you destroy the middle class - themse like that are required reading in any reputable business school. Tool.

Well he's an idiot, so I wouldn't put so much stock in what he said! He was trying to bluster his way toward accomplishing his agenda rather than doing it through political acumen (like I mentioned earlier).

It almost makes me nostalgic to the of the days when our leaders would bluster their way to an agenda, rather than bully Congress into an agenda and tell the average American to "shut up and get out of my way."

Ya know?

[Patman]

Re: ObamaRama 8

It's all true. Buffett and Trump and the whole lot of billionaires in their books say something to the effect that it's not enough to be wildly successful, you're not a real man until you destroy the middle class - themse like that are required reading in any reputable business school. Tool.

Stuff like that drives me nuts. The only people who would seek to destroy the middle class are those with a pathological hatred of the middle-class. The fact of the matter is that these guys don't care. They're interested in making their fortunes off of the backs of whomever will do it... and often enough fleecing the upper-class is useful enough. Most of the bank stuff is because some banks screwed over other banks. Remember all that bank stuff... for everybody that lost on a trade somebody else won... the only problem was that their market was self-inflating due to borrowed money. Nevertheless, every bank that failed failed because they had to pay out to somebody else.

The fact is the middle-class is only a bystander to games played at higher levels of power that are played without regard for the middle-class... after all those business guys aren't battling the middle-class they are battling each other. The problem is when the system breaks it affects the middle class.

If society loses its middle class then it doesn't benefit the upper class... sure their numeric value of money might be higher... but it won't buy a higher standard of living that's spurred on by tech advances of products targeted at the masses.

The only person who has something to gain, via ideology, at harming the middle class is George Soros who made gains while everybody else was losing their pants. Very few people really give a **** enough to try to affect society due to their own ideology... Soros is one of them. By and large, however, they could care less if the middle class grows bigger or smaller. They are too busy playing the game.

[5mn_Major]

Re: ObamaRama 8

Very few people really give a **** enough to try to affect society due to their own ideology... Soros is one of them.

Murdoch is the other. If Soros messes with economics...Murdoch messes with democracy by misleading those who are addicted to his fear/hate.

[unofan]

Re: ObamaRama 8

It's all true. Buffett and Trump and the whole lot of billionaires in their books say something to the effect that it's not enough to be wildly successful, you're not a real man until you destroy the middle class - themse like that are required reading in any reputable business school. Tool.

Cite to Buffett saying that, please. Buffet is a long-term investor, he invests in well-run companies and leaves management (and workers) in place.

[SPIN CONTROL]

Re: ObamaRama 8

Murdoch is the other. If Soros messes with economics...Murdoch messes with democracy by misleading those who are addicted to his fear/hate.

LOL. You are too funny.

[LynahFan]

Re: ObamaRama 8

Whatever happens in MA, it's going to be verrrry interesting to hear Obama's SOTU address on the 27th.

The room will still be nominally friendly, but the nation is not. It has a bit of the feel of an undefeated team facing its first real road test of the season against a top team... I think he'll really have to tone down the ideological rhetoric and lofty goals and "get under the hood" to get a positive response.

[mookie1995]

Re: ObamaRama 8

Whatever happens in MA, it's going to be verrrry interesting to hear Obama's SOTU address on the 27th.

The room will still be nominally friendly, but the nation is not. It has a bit of the feel of an undefeated team facing its first real road test of the season against a top team... I think he'll really have to tone down the ideological rhetoric and lofty goals and "get under the hood" to get a positive response.

things are more interesting with "YOU LIE" than polite silence.

[MinnFan]

Re: ObamaRama 8

things are more interesting with "YOU LIE" than polite silence.

I'm waiting waiting for someone to hold up a "you lie" sign so they won't get in trouble for an outburst.

[ScottM]

Re: ObamaRama 8

Cite to Buffett saying that, please. Buffet is a long-term investor, he invests in well-run companies and leaves management (and workers) in place.

Agreed. And including Trump in the same breath as Buffet is like comparing apples and oranges.

[SteveF]

Re: ObamaRama 8

So short term greed trumps any thought of long term company viability? They'd run their company into the ground if it meant just a little more cash for them this quarter? They need some external watchdog to prevent them from destroying their own company in the pursuit of ever more money?

in short, yes. at least ever since the tech boom. the stock market rewards paper profits - the end goal of all companies is to meet analyst expectations at all costs.

obviously every company has long term goals; but the day to day decisions are based on meeting quarterly numbers. in that sense, you deal with things one quarter at a time and postpone potential problems as long as you can. and in those later quarters when those problems arise, you lobby for the govt to change the regulations or accounting rules to make the problems go away.

it gets back to the basic principle of aligning employee goals with those of the shareholder. what is the incentive for management to create long term wealth if they wont survive the short term to enjoy it?

I guess that's possible if they know the government will always bail them out when they fail.

this is true, but blame doesnt fall solely on the govt. the govt only bailed out the banks because of what the impact to you and me would have been if they let them go under.

the concept of reward for failure has gone on for years. look at the golden paracutes and buyout clauses for CEO's who got fired (even long before the economy collapsed). where is the accountability is exactly right. all of these guys are brought into companies time and time again and just paid exorbitant sums regardless of performance. their goal is to turn the company around in the shortest time possible.

now a lot of my ranting is more enron-based than subprime mtg crisis. but there were a lot of similarities in the two events. namely, regulators asleep at the wheel because everyone and their mother was making sums of money and no one wanted to be the person to rock the boat.