dagblog - Comments for "Bernie's Wall Street problem (and ours)"

Furthemore

Flavius — Fri, 20 May 2016 02:25:23 +0000

In reply to During one of her pregnancies

Furthemore

Let us assume your little group is on your way back from Everest but no Charlie

Leader

Where's Charlie?

Sherpas

150 feet down the last crevace cursing us

CHOOSE ONE

Leader

Go back and pull him out

Go back and pull him out but first I'm firing the Sherpa in chief and I fining the rest of you 50 rupees

During one of her pregnancies

Flavius — Thu, 19 May 2016 10:33:52 +0000

In reply to Flavius, you're the most

My wife had intended to implement "natural childbirth" during a pregnancy. Didn't happen. The baby came fast.And healthy.Before the gyno even arrived.

Later I was complaining to doctor friend who crossly and correctly said that the purpose of the whole enterprise had been achieved.

Paulson /Nancy Pelosi and then Obama/Geithner were focused on preventing the international financial system from entering an 8 year decline like 32's which was really only ended by the War (not a covert critique of FDR).

Rahm Emanuel's "never waste a crisis" was a reasonable input but my response would have been "how much do you suggest we allow the peak unemployment rate to rise so we're fully exploiting this crisis". A million unemployed is not just a number. It's a million people who drive sadly home and start to sell the house, take the children out of school and away from their friends, and look for someplace cheap to rent..

In 2008/09 the A item was to prevent another 32. That was also the B and C item. Any effort diverted to designing the appropriate punishment for the banks would have been...,let's just say, not useful.

Bernie and all of us could properly discuss whether Dodd/Frank was sufficiently onerous. Barney would certainly be willing to comment.

I was probably too hard on

Flavius — Thu, 19 May 2016 02:04:13 +0000

In reply to Bernie's Wall Street problem (and ours)

I was probably too hard on Bernie's NYT op ed. I let myself expect he'd take that opportunity for a serious critique of the Democratic Party's position on how to deal with a financial melt down. For shorthand let's call it Dodd/Frank.

Given Bernie's reputation I had great expectations and I overly reacted to the same old,same old of "Too big to fail" and Glass Steagal .Yawn.

But of course there was no reason whatsoever for him to drop another MEGO on the readers. He wasn't addressing a class at Cooper Union or UVM. He was driving a stake in the ground (block that metaphor!) at the start of Presidential run. Later for Dodd/Frank. Let's have something stirring.

In an analogous moment Candidate Trump threw his supporters some red meat: a 2000 mile fence over or maybe under which he would expell 12 million human beings.Tough act to follow. I should have been grateful Bernie contented himself with the ever fresh TBTF and Glass Steagal.

Sorry Hal.

Once the decision was made

CVille Dem — Wed, 18 May 2016 23:31:18 +0000

In reply to The fact that the 2008

Once the decision was made to make available tens, if not hundreds, of ~~trillions~~ billions of dollars to the managers of AIG, JP Morgan, and Citibank, it was not politically feasible to deny funds to smaller institutions.

Then why didn't they bail out the homeowners who lost all their equity, their homes, and whose neighborhoods went to pot because of boarded up houses? I have never understood this.

The way debt gets sold as a

moat — Wed, 18 May 2016 23:09:57 +0000

In reply to The fact that the 2008

The way debt gets sold as a product makes that product more important than any particular vendor. MM's point is that it is the size of the product that is more crucial to the shape of the market than the size of the vendors.

This is an international system of exchange. If one is going to change anything fundamental about how it works, it has to be done on that level.

The fact that the 2008

HSG — Wed, 18 May 2016 22:54:18 +0000

In reply to Hal, there were plenty of

The fact that the 2008 legislation included funds to "bail out" smaller institutions does not mean that Congress's motivation was other than to prevent the collapse of too big to fail institutions. Ben Bernanke and Hank Paulson told Congress the collapse of a small number of enormous banks would create a great depression. Once the decision was made to make available tens, if not hundreds, of ~~trillions~~ billions of dollars to the managers of AIG, JP Morgan, and Citibank, it was not politically feasible to deny funds to smaller institutions.

I can't imagine that anyone

Michael Maiello — Wed, 18 May 2016 18:31:00 +0000

In reply to Just a quick add on and then

I can't imagine that anyone thinks the banks don't wield outsize political influence. But at what size would they not? You could break them all up into little S&Ls, investment managers, boutique ibanks and trading firms and you would still have a massive financial services industry that could fund a group that would dwarf the NRA in terms of political influence. A "Big Bank Break-Up" would not actually change the size, importance or influence of the financial sector.

It's a four-fer

Oxy Mora — Wed, 18 May 2016 18:23:39 +0000

In reply to "Because Chris Dodd is a

It's a four-fer

damn democrat

damn black administration

let's get some of that banker money now going to Hillary

Frank is a homosexual

Just a quick add on and then

HSG — Wed, 18 May 2016 18:11:46 +0000

In reply to Hal, there were plenty of

Just a quick add on and then I'm moving on. There's a good New Yorker article published in 2014 about the 2008 crisis. Here are a couple of quotes from it:

Paulson’s appearance [at a civil trial stemming from the bailout] didn’t do much to help [Hank] Greenberg’s case, it did shed new light on other aspects of the 2008 crisis, and, especially, on the immense sway that too-big-to-fail banks, such as Citigroup and Bank of America, continue to have over politicians and regulators. If there are any folks left who still need persuading that these cosseted financial giants ought to be cut down to size, they should go and read Paulson’s testimony.

---------

The big banks . . . were virtually all neck deep in the mortgage sludge that they had been warehousing, packaging, and selling to investors. That changed things radically. When Citi’s financial problems got so serious that other banks wouldn’t lend to it and it had to be rescued, Paulson and his colleagues at the Fed feared that imposing harsh terms—eminently justified on moral-hazard grounds—would encourage short-sellers on Wall Street to attack the stocks of other big banks. And that, in turn, could have led to a generalized collapse.

Paulson didn’t say right out that the banks were untouchable, but that was clearly what he meant. Because of the risk of creating a domino effect, he and other regulators had to go easy on the likes of Citi and Bank of America. Paulson said that he advocated “fairness to the extent you can have fairness,” but “to me, stability trumped moral hazard.”

"Because Chris Dodd is a

Michael Maiello — Wed, 18 May 2016 18:11:42 +0000

In reply to It would be hilarious to ask

"Because Chris Dodd is a loser and Barney Frank is disgusting."