unseen on December 12, 2012 at 1:38 PM

how much you wanna bet we see a Track Palin post soon?

The government did well, and so did Goldman Sacs, of course the tax payers will never see the cash. This is what Bastiat called “The fallacy of the broken window”.

ReformedDeceptiCon on December 12, 2012 at 6:20 AM

Goldman Sachs didn’t want the money (they had already sold preferred stock to Warren Buffet) and repaid it within several months.

So, how did they do “well”?

Still, it’s hard to argue with success. AIG has bounced back, its clients and investors haven’t lost their capital, and taxpayers even made a profit off of the investment,

this is a good thing? Capitalism required them to lose thier capital. they made stupid mistakes the entire concept of AIG needed to be wiped out so others will no longer try these types of insurance contracts. AIG needed to be gone as a company as a lesson to others not to insure the types of finacial obligations that AIG insured. No insurance and the types of finical instruments that pushed us in the 2008 meltdown will never again get off the floor.

Ed, I guess you are totally fine with crony capitalism here and then “conservatives” wonder why more and more people are gaming the system to get three hundered bucks a month for food stamps.

For capitalism to function it needs the complete cycle rags to riches and riches to rags. The heads of AIG needed to be out on the street penniless, the investors in AIG needed to lose their capital, the employees of AIG needed to be let go so that the reallocation of resources could function correctly and those that didn’t take risks were rewarded.

The population has now seen the politcal class abandon capitalism so why should they not get thiers if AIG got a bail out.

Does this even cover the losses from the insane department of energy grants and loan guarantees?

The profit to the government is what is seen.

What is not seen are the millions of jobs not created by the “great recession” and the enormous debt of the US government.

What is not seen are the inflationary effects of money printing by the fed which enabled the AIG bailout in the first place.

What is not seen is that the bailout has simply continued a loose money policy where consumers and banks have continued to be highly leveraged instead de-leveraging like we are told they are doing.

What is not seen are the 1 million people who fell below the poverty line last month because of an economy not growing.

What is not seen are the record 47 million people on food stamps thanks to these policies.

The list goes on and on . . .

We’ve got to knock it off with the nonsense that we have to bash Bush before criticizing Obama’s performance, and especially saying idiotic things like there’s no difference between the two on spending, when Obama is worse by a factor of 5x.

We need to take every opportunity to correct the record and support a fair reading of Bush’s performance (higher spending than we’d like, but overall a pretty strong economic record up until the Fed + Dem/Fannie/Freddie caused financial crisis). If conservatives had pointed out the true cause of the 2008 crisis at every step for the last 4 years, it would have made a big difference in how many people still blamed Bush for today’s economic woes. Instead, people try to act like 2008 never happened because they believe that is not going to be a political winner, and in doing so they are so nearsighted they don’t realize that when you don’t protect the legacy of your party’s last president, it hurts the entire party. We surrendered the battle of ideas on this 4 years ago, and then politicians (such as Romney) are allergic to trying to educate the public and change public opinion on topics where they fear they may not be able to succeed in swaying public opinion.

Surprised it increased it’s market share??

Surprised it’s stock went up.

Shuckey darn about GM.

whenever Gubrmint “invests” billions …that’s billions less that the private sector don’t have to invest themselves…. i guess we all know what great economic whizes da gubrmint is and da wealth it creates.

roflmmfao

They should be subtracted from the deficit for 2008, because Bush promised us they would be paid back, not to create a continual spending spree for the new administration.

Fleuries on December 11, 2012 at 5:47 PM

OK, well even if they did that with THIS money, then they would simply spend OTHER money. So, it really doesn’t matter.

So Bush is charged with the spending and Obama gets credit for the revenue.

HumpBot Salvation on December 11, 2012 at 12:10 PM

That’s pretty much how it got booked, which makes Teh SCOAMF’s 4 years of trillion-dollar deficits all that more unconsciable.

Does the profit justify the bailout?

I know most disagree, but to me, the profit means this wasn’t a bailout. It was an investment. We’re broke. The government should be looking for ways to make money.

just like the department of the bank that set libor never talked with the brokerage side? don’t be naive.

nathor on December 11, 2012 at 4:40 PM

1. Why would they talk to the brokerage side? Obviously, you don’t know much about big banks. They were much more likely to be influenced by other areas of the bank.

2. No single bank set LIBOR. Do you even understand this issue?

3. I’ve never claimed that LIBOR wasn’t be influenced by other areas of banks. Regardless, those that allowed themselves to be exposed to LIBOR rates KNEW (or should have known) how LIBOR was set. It would be like you wanting sympathy because you agreed to allow an association of auto dealers to set the price of your car payment increases.

4. Reread everything I’ve written in this thread. It’s quite obvious that I’m not naive about banks, and I certainly wasn’t naive about anything related to real estate debt (and related derivative) products (or for that matter – real estate equity products).

5. Keep in mind that salesman are always going to try to sell. That’s their job. A phone salesman will try to sell you a phone even if one of their engineers doesn’t necessarily think it’s a very good product. Btw, that doesn’t make the engineer right.

The creators of CDS’s didn’t think they were crap. CDS’s are still an excellent financial innovation if used properly and priced correctly.

Just like internet IPO’s. Internet IPOs can still be good as long as they are used and priced properly. The 2000 tech meltdown didn’t mean that Internet IPOs were all stupid and that they should be outlawed.

Also, just because certain individuals at Goldman that didn’t like what was happening with CDS’s and were betting against them in other areas of the bank, doesn’t man that all of Goldman thought all CDS’s were crap. There were differences between the investment banking side of a bank, the hedge fund side of a bank, the market-making side of a bank, and the brokerage side of a bank.

This is what the Senators were all too stupid to understanding during the GS hearings.
blink on December 11, 2012 at 3:42 PM

just like the department of the bank that set libor never talked with the brokerage side? don’t be naive.

blink on December 11, 2012 at 3:42 PM

I think the conservative line is all regulations are bad or something.

nathor

Obama thanks you for your ignorance.

i have been suckered by some HA commenters

nathor

Lester, Bayam, Drywall and Ernesto by the sounds of it.

Hank Paulson used to be the head at Goldman Sachs?

Joey24007 on December 11, 2012 at 4:04 PM

Yes

Again, TARP I was a success.

blink on December 11, 2012 at 3:30 PM

nobody is buying what your selling dude. keep choking that chicken LOL!

renalin on December 11, 2012 at 3:38 PM

If you disagree, then feel free to explain why you disagree.

Don’t take comfort in the fact that 80% of Americans oppose “the bail outs.” Be brave, research the issue, and articulate your case.

blink: So Paulson had to distort the markets even more to prevent the inevitable market reaction to the distortion he already made in the market.

Scott H on December 11, 2012 at 2:58 PM

No, Paulson didn’t distort any markets. He merely threatened that holdouts would have a very difficult time via regulation.

But please realize that this makes sense. What Paulson was saying was that banks needed the amount of capital that he was giving them. I believe that Paulson truly believed that the banks needed this capital in order to have sufficient liquidity given the current crisis.

Now, if a bank refuses to take the capital that Treasury thinks it needs, then it makes sense that Treasury will think that a bank has insufficient liquidity.

Now, if a bank has insufficient liquidity, then FDIC will need to step in, right?

So, while Paulson was being aggressive with his tactics, the logic/justification he was using is perfectly sound.

blink: Exactly. ‘Take the money or we’ll take FDIC away from you,’ which if I understand those markets correctly would trigger a run on the bank?

Scott H on December 11, 2012 at 2:54 PM

More like, “Take the money or we will make the regulatory environment very difficult for you.”

Again, Paulson was out on a limb here, and I’m sure he knew it. Frankly, I admire the leadership he demonstrated in personally taking such a risk. Too many in government wouldn’t have dared.

So, please explain to me what stops the federal government from telling banks to stop giving loans to , or face bankruptcy through regulatory action?

I’m not sure what you’re asking here. I’m not being a smart a$$. I really don’t understand the question.

blink: The government does not control AIG’s stock price, correct. However, you act like it _cannot_, and that is not true. Certainly there are regulations that must be done to be registered on the stock market, yes?

Scott H on December 11, 2012 at 2:47 PM

Yes, securities laws exist – obviously. And I know quite a bit about such securities laws.

And that gives the government an ability to remove, at the cost of political capital, anyone they desire from the stock markets.

Well, the power certainly exists to make things difficult for any company regardless of whether it’s public or private.

You seem to trust the government a lot more than I do. I will no longer put _anything_ past the federal government where their own power is concerned.

I don’t know where this is coming from. I never trust the federal government to do the right thing or to do a good job. But that doesn’t mean that it doesn’t happen sometimes. Paulson’s TARP I is a good example of this.

I never blindly trusted that Paulson or Treasury would do the right thing. I merely watched what he/they did and was convinced that it was the right thing as it was happening.

You believe that real estate professionals believed that they couldn’t lose that much money on any given mortgage.

That was very much a widespread belief prior to 2008, and strangely, many continued to think this for a year or so afterwards. I think now people realize the stupidity of this belief.

However, have you considered that this might be institutional wisdom on the whole valid until the federal government decided to distort the lending practices on which this wisdom was predicated?

I think the government started the ball rolling, and maybe the whole “sub-prime” thing would never have taken off on the massive scale that it did if it hadn’t been started by the federal government. BUT I honestly can’t blame the federal government for the real estate bubble that occurred. The bubble occurred because far too many Americans erroneously (and stupidly) believed that real estate couldn’t depreciate and the capital providers erroneously (and stupidly) believed that they had developed a low risk method of funding real estate purchases.

From a systems perspective, I have seen the inertia of institutional wisdom destroy many more than outright wrong thinking.

Absolutely, far too many people get more aggressive with their decision making because they feel a false sense of comfort knowing that “everyone” thinks the same way. They can’t believe that so many people could be wrong.

See Catastrophic Anthropogenic Global Warming as a perfect example of this.