No wonder there's a deficit....

[Keukasmallies]

Wall Street housewives makes interesting reading. Where can I get in on this gig?

 

My link

Edited April 13, 2011 by Keukasmallies

[Rob's House]

Wall Street housewives makes interesting reading. Where can I get in on this gig?

 

My link

I can't believe that guy gets paid to write. He uses 1000 words where 10 would suffice, always seems to have just the faintest grasp on his topic, and can put me to sleep in less than 2 pages.

[Gene Frenkle]

I can't believe that guy gets paid to write. He uses 1000 words where 10 would suffice, always seems to have just the faintest grasp on his topic, and can put me to sleep in less than 2 pages.

Separated at birth from OCinBuffalo?

[DC Tom]

I can't believe that guy gets paid to write. He uses 1000 words where 10 would suffice, always seems to have just the faintest grasp on his topic, and can put me to sleep in less than 2 pages.

 

That's giving him a hell of a lot of credit. The only thing that separates Taibbi from joe_the_6_pack is video clips from obscure Russian news sources.

[jjamie12]

He's not exactly *wrong*, though, is he? I mean -- in general what he says is true (it's too bad he doesn't understand the difference between the Fed and the budget, but hey-- who's perfect?)

 

The really big problem I have with him is that he's not one to follow this to its logical conclusion -- he's one to argue for MORE government oversight. For MORE unintended consequences, for MORE of the exact thing he claims to be upset about. I mean, really -- this whole article is about how the *government* is screwing over the little guy. The response to that? More government. It's too bad he doesn't seem to get it, because he really is the only person (I've seen) writing about this stuff...

[DC Tom]

He's not exactly *wrong*, though, is he? I mean -- in general what he says is true (it's too bad he doesn't understand the difference between the Fed and the budget, but hey-- who's perfect?)

 

In general, what he says is so divorced from reality that there's little point reading his nonsense.

 

I mean, he really, really, really doesn't understand what he's talking about, and tries to cover his ignorance with moral outrage. That makes him little better than a conspiracy theorist.

[GG]

$2 trillion in loans to Citi & Morgan Stanley? Wow that's a lot of zeros for someone who doesn't understand bank funding. But over what period? That $2 trillion over one year means under $8 billion/day - which is probably a lot less than the total cash that each moves through their doors on a daily basis. But hey, the number is really really f-ing big.

 

Can't be a Taibbi story without the gratuitous f-bomb thrown in for good measure.

[Keukasmallies]

So, in the message vs messenger view of most of the above posters, the idea of the bailout entities being duped, screwed and not even kissed, appears OK since it was reported by someone they don't like....?

[whateverdude]

The first paragraph said it all about this writer. He's a twenty something maybe just 30 liberal kool-aid drinker whos mind, particularly the prefrontal cortex, has not yet fully matured.

Edited April 14, 2011 by whateverdude

[GG]

So, in the message vs messenger view of most of the above posters, the idea of the bailout entities being duped, screwed and not even kissed, appears OK since it was reported by someone they don't like....?

 

This is the story about the messenger, not the message. In his zeal to get the story out, Taibbi blatantly misrepresents the program. So the big scandal is that two Wall Street wives "set up" a new partnership to buy deadbeat assets with government backing? What he doesn't report is that the program called Private Public Patnership was set up specifically for the government to take most of the financial risk to start moving those stuck assets. Absent that program, nobody would touch the assets and you would deeply prolong the financial sector rebound. Governments' choices at the time were:

 

Let the system work itself out, which would cause more banks to collapse and economies to sink before you even got a hint of stability (worst outcome)

Nationalize the entire financial sector (worst outcome)

Pump in fresh capital into the financial system to restore confidence and provide needed liquidity for day to day operations. (best of bad outcomes)

 

So, if the Wall Street wives didn't set up these partnerships, it would have been another Wall Street insider because they are the only ones who understand the assets. And when I use the term Wall Street insider, I mean any sophisticated or institutional investor, not the baby on ETrade commercials.

 

So please stop being naive. You had trillions of stuck assets that were on the verge of taking the global financial system down, and Taibbi gets up in arms about a $200 million deal. All he has to do is scream class warfare, throw in a few f-bombs and toss in a $2 trillion here and there, and he's hooked a few million readers. The reality is far more complex. It may not be pretty to outsiders, but neither is a sausage factory.

[RkFast]

This is the story about the messenger, not the message. In his zeal to get the story out, Taibbi blatantly misrepresents the program. So the big scandal is that two Wall Street wives "set up" a new partnership to buy deadbeat assets with government backing? What he doesn't report is that the program called Private Public Patnership was set up specifically for the government to take most of the financial risk to start moving those stuck assets. Absent that program, nobody would touch the assets and you would deeply prolong the financial sector rebound. Governments' choices at the time were:

 

Let the system work itself out, which would cause more banks to collapse and economies to sink before you even got a hint of stability (worst outcome)

Nationalize the entire financial sector (worst outcome)

Pump in fresh capital into the financial system to restore confidence and provide needed liquidity for day to day operations. (best of bad outcomes)

 

So, if the Wall Street wives didn't set up these partnerships, it would have been another Wall Street insider because they are the only ones who understand the assets. And when I use the term Wall Street insider, I mean any sophisticated or institutional investor, not the baby on ETrade commercials.

 

So please stop being naive. You had trillions of stuck assets that were on the verge of taking the global financial system down, and Taibbi gets up in arms about a $200 million deal. All he has to do is scream class warfare, throw in a few f-bombs and toss in a $2 trillion here and there, and he's hooked a few million readers. The reality is far more complex. It may not be pretty to outsiders, but neither is a sausage factory.

 

Spoken like a guy who works south of Canal Street.

[GG]

Spoken like a guy who works south of Canal Street.

 

Thus, I'm entitled to my share of the stimulus and the 9/11 health bill.

[jjamie12]

I'm going to go ahead and play Devil's Advocate here.

 

A couple of things:

 

1- Giving Taibbi just a little bit of credit yields the following -- Perhaps Taibbi is using the most egregious of things (the Mack and Karches wives Club) to illuminate the absurdity of the situation. The very same people (often literally as GG explained above) who packaged, structured and sold our way into the crisis are the ones profiting from the programs created to solve the problem!

 

2- We put taxpayer dollars at risk (or more precisely, we gave banks liquidity for awhile -- and at a steep price, I have to add; there was always a good chance we'd make money on that part of the deal) and didn't do any real reform. If anything, we codified the idea that if any of these large institutions fails (or is in danger of failing) we'll take care of them! Not only that, but we do lend them all sorts of money (at near-zero interest rates -- hopefully to spur commercial and consumer lending) and what do they do with it? They sit on it, lend it back to the gov't and take a risk-free 3% -- with the magic of leverage, banks are now back to making big $$ and paying out huge bonuses to the same people (remember - there were no real reforms here) who put the rest of the economy into the tank in the first place!

 

 

Whether he explains the purpose of TALF or not, whether or not there were any other choices that the government could make is beside the point. The result is: The very same people who created the mess (save for a few folks at Bear and Lehman) are the ones making bank off the programs designed to fix that mess. Again, whether or not there were better options out there is somewhat beside the point of the narrative. Taibbi leaves the larger macro-economic reasoning and discussion to those who are more able to really understand the ripple-effects of Fed and Treasury policy and explores a few absurdities of the results of those policy initiatives. Frankly, I find it a compelling narrative as more people should have a firmer grasp on what, why, and how this whole thing went down.

 

One of my best friends created ~30 2nd lien mortgage deals that have all (every single one) blown up. He got financial backing to get in on TALF and is making a ton of money to do so. Is that right? wrong? A good outcome? bad? I don't know, and I don't much care... The big guys said this was the best option, so I tend to side with them, however I recognize that there's a chance they were wrong and that we're enriching people on the backs of the taxpayers and can understand that there are many people out there who find it wrong.

 

Anyway -- that's my Devil's Advocate view. Tom and GG need to be challenged around here more often by people who aren't morons or ego-maniacs.

[DC Tom]

So, in the message vs messenger view of most of the above posters, the idea of the bailout entities being duped, screwed and not even kissed, appears OK since it was reported by someone they don't like....?

 

I'm perfectly comfortable shooting the messenger, because he routinely and wilfully misrepresents the facts in his message, just so he can argue from a sense of moral outrage. For example: the bonehead doesn't know what a "toxic asset" is, doesn't know why it's toxic, doesn't know why it caused trouble for banks, doesn't know why TARP was set up to buy them, and doesn't understand how the lending markets work...but he knows "toxic = bad", from which extends his ENTIRE misguided belief system of Treasury's policy during the financial market crisis, and all his resulting "news" articles.

 

There's a reason he writes for Rolling Stone, and not Barron's or The Economist: he can only write outrage, not facts, because he's got the business and financial knowledge of a hamster.

[Magox]

 

There's a reason he writes for Rolling Stone, and not Barron's or The Economist: he can only write outrage, not facts, because he's got the business and financial knowledge of a hamster.

Right up Billy Bob's allie.

[Rob's House]

 

1- Giving Taibbi just a little bit of credit yields the following -- Perhaps Taibbi is using the most egregious of things (the Mack and Karches wives Club) to illuminate the absurdity of the situation. The very same people (often literally as GG explained above) who packaged, structured and sold our way into the crisis are the ones profiting from the programs created to solve the problem!

If you're talking about Barney Frank and Chris Dodd, then yes, I think Taibbi is fine with letting them "solve" the problem.

[jjamie12]

If you're talking about Barney Frank and Chris Dodd, then yes, I think Taibbi is fine with letting them "solve" the problem.

Just so I understand: What kind of expertise do you have in the mortgage markets?

[Rob's House]

Just so I understand: What kind of expertise do you have in the mortgage markets?

Care to attack my position, or just me?

[3rdnlng]

Just so I understand: What kind of expertise do you have in the mortgage markets?

 

I would think more than lyrbob.

[Keukasmallies]

OK, from the premise above that I'm dumber than a stone; again, please s'plain why it is a good thing for the country to permit these folks to "get" $ from the gov't at 0.zip interest, then use than $ to buy bonds from the gov't that pay 2++% ? The only people that assume any risk are the taxpayers.

 

They didn't put the amount of the loan in circulation to stimulate anything; they used it to repay the loan after they had the milk from the cow.

Edited April 14, 2011 by Keukasmallies