A view into the mindset of a liberal

[jjamie12]

Why shouldn't they have? Why do American Taxpayers have to subsidize the poor decisions of others? I guess we'll just line up the next time the financial markets crash because financial intitutions do whatever they want, essentially risk free....

You continue to inter-change 'markets' with 'institutions'. People keep trying to tell you the difference, but either through ignorance or stubbornness you continue to conflate the two. Please listen to them.

 

The short-term markets were completely gone. Good company, bad company, good bank, bad bank. All of them were treated equally --> no credit. The government stepped in and provided the liquidity the system needed (and that would have been there had the times been 'normal'), at a very steep price. The banks made it through that crisis and paid back their loans. The Fed made money. The banks didn't die. Taxpayers (citizens) got their paychecks every two weeks. Investors lost billions (at least). What, again, is the problem with this? Ideology?

[Adam]

Liberals are insane.

 

http://www.dailykos.com/story/2012/03/09/1072970/-Today-I-told-off-a-cashier-who-was-trashing-the-president

Anyone who is bitter about someone else having more than them is wasting energy that could be used productively. That goes for both sides of the aisle. And anyone who has an unbending ideology of any kind is insane.

[GG]

Why shouldn't they have? Why do American Taxpayers have to subsidize the poor decisions of others? I guess we'll just line up the next time the financial markets crash because financial intitutions do whatever they want, essentially risk free....

 

Since you refuse to do your own homework and understand the difference between financial firms and financial markets, you will be branded an "idiot" with every explanation.

 

Since you like to use industry terms, but without any comprehension of what they are, here's a little scenario.

 

Exhibit: Commercial Paper.

 

Presume that IBM (a technology services firm that is not a bank) issues $5 billion in commercial paper that is due September 30, 2008. IBM also had $20 billion in "cash & equivalents" stored in banks around the world (not under Palmisano's mattress). On September 15, Lehman collapses, causing a run on the global banks. The Fed, Treasury & international regulators throw a middle finger at Lehman, and throw its fate to the bankruptcy court. UK regulator doesn't approve the fast track transfer of Lehman's investment bank & market making operations to Barclays. Fed shuts down the borrowing window to anyone who is not a "bank." The first guy in Fidelity's Hong Kong office immediately sends a $10 billion withdrawal request to every institution that holds its funds. That request is followed a split second later by the guy at Vanguard. Lather, rinse, repeat by every single investment house which has funds in banks. (Think of this as a massive scene in Wonderful Life when people show up at the Bailey Savings & Loan requesting their deposits back). Of course, no bank has enough cash on hand to satisfy all the withdrawal demands. The regulators still say FU. Following Lehman, the rest of the big investment banks fail almost immediately - Merrill, Morgan Stanley, Goldman. No big deal, right? Except that trading and money movements completely stop, because you're trying to figure out who owns what and owes to whom. Since bankruptcy laws allow banks to net their holdings, everything is frozen in time.

 

Meanwhile, we're back to IBM. On Sept 30, its investors want that $5 billion in commercial paper back. No problem, IBM has $20 billion in cash .... that's locked away in a vault in banks around the world that are now bankrupt and won't release the cash. IBM also has a little payroll that needs to be funded on Sept 30, which they can't do because they can't access the cash. So, IBM employees go to their banks to withdraw cash to pay their mortgages and buy food. But lo & behold, their bank is closed, because that bank was cleaned out last week. So what do the employees do? They go to the FDIC to collect on the $100K insurance fund. But the FDIC insurance fund is only capitalized at 5% of the total obligation. So, FDIC runs to Fed & Treasury to get the money for deposit insurance.

 

And where are we after all this? The FDIC funding dwarfs the TARP payout. The global financial markets are obliterated. Businesses stop in their tracks until they figure out how to replace credit with cash. The Fed turns into a real bank, because nobody will do business with a private bank until the crisis is over. 30% of businesses default on their obligations and file bankruptcy. Unemployment immediately hits double digits, eventually hitting 20%-30%. The world dives into a massive depression.

 

But, a lesson was taught.

[Jauronimo]

Why shouldn't they have? Why do American Taxpayers have to subsidize the poor decisions of others? I guess we'll just line up the next time the financial markets crash because financial intitutions do whatever they want, essentially risk free....

Great point. Western civilization should have been allowed to collapse because AIG, Goldman, Bear, Lehman and company failed to model risk appropriately. Tax payers would have been much better off had the global economy failed in an event which would have made the so called Great Recession (which was already pretty miserable for the average tax payer) look like a picnic, than having the tax dollars which they already paid directed toward preserving their way of life.

[B-Large]

You continue to inter-change 'markets' with 'institutions'. People keep trying to tell you the difference, but either through ignorance or stubbornness you continue to conflate the two. Please listen to them.

 

The short-term markets were completely gone. Good company, bad company, good bank, bad bank. All of them were treated equally --> no credit. The government stepped in and provided the liquidity the system needed (and that would have been there had the times been 'normal'), at a very steep price. The banks made it through that crisis and paid back their loans. The Fed made money. The banks didn't die. Taxpayers (citizens) got their paychecks every two weeks. Investors lost billions (at least). What, again, is the problem with this? Ideology?

 

They're not mutually exclusive. You can't talk about credit market failure without discussing why systemic freezing in those markets occured... why did the credit markets fail? Was it because compaines who make up those markets have massive devalued assets on theie balance sheets? The point I am making is disruption is said "financial markets" were an effect of institutional practices.... It is the reason AIG, BOFA, Citigroup got huge influxes of capital through stock purchase so credit markets did not freeze... the point this whole argument is that TARP was a bank bailout so certain firms would not fail... my contention is if they to let fail, other banks and other finacial compaines would have picked up the pieces of those bigger firms and credit markets would have recovered. My stance on it is these too big to fail firms bring the global financial market to the brink, and skid out on the other side with alot of tax payers help... Ideology? certain companies ware continually protected and are so big they can bring finance to a hault.. how is that free enterprise, that sounds like financial terrorism....

 

Great point. Western civilization should have been allowed to collapse because AIG, Goldman, Bear, Lehman and company failed to model risk appropriately. Tax payers would have been much better off had the global economy failed in an event which would have made the so called Great Recession (which was already pretty miserable for the average tax payer) look like a picnic, than having the tax dollars which they already paid directed toward preserving their way of life.

 

But that is the problem, isn't it? In a true capitalist economy, there is a consequence with not valueing risk approriately.... like issuing defaults swaps for more than you could even pay out, or secutitizing high risk loans when chances are you knew alot of those loans would default... but did people care since they knew is it ever came down to it, they would not be left to fail?

 

Since you refuse to do your own homework and understand the difference between financial firms and financial markets, you will be branded an "idiot" with every explanation.

 

Since you like to use industry terms, but without any comprehension of what they are, here's a little scenario.

 

Exhibit: Commercial Paper.

 

Presume that IBM (a technology services firm that is not a bank) issues $5 billion in commercial paper that is due September 30, 2008. IBM also had $20 billion in "cash & equivalents" stored in banks around the world (not under Palmisano's mattress). On September 15, Lehman collapses, causing a run on the global banks. The Fed, Treasury & international regulators throw a middle finger at Lehman, and throw its fate to the bankruptcy court. UK regulator doesn't approve the fast track transfer of Lehman's investment bank & market making operations to Barclays. Fed shuts down the borrowing window to anyone who is not a "bank." The first guy in Fidelity's Hong Kong office immediately sends a $10 billion withdrawal request to every institution that holds its funds. That request is followed a split second later by the guy at Vanguard. Lather, rinse, repeat by every single investment house which has funds in banks. (Think of this as a massive scene in Wonderful Life when people show up at the Bailey Savings & Loan requesting their deposits back). Of course, no bank has enough cash on hand to satisfy all the withdrawal demands. The regulators still say FU. Following Lehman, the rest of the big investment banks fail almost immediately - Merrill, Morgan Stanley, Goldman. No big deal, right? Except that trading and money movements completely stop, because you're trying to figure out who owns what and owes to whom. Since bankruptcy laws allow banks to net their holdings, everything is frozen in time.

 

Meanwhile, we're back to IBM. On Sept 30, its investors want that $5 billion in commercial paper back. No problem, IBM has $20 billion in cash .... that's locked away in a vault in banks around the world that are now bankrupt and won't release the cash. IBM also has a little payroll that needs to be funded on Sept 30, which they can't do because they can't access the cash. So, IBM employees go to their banks to withdraw cash to pay their mortgages and buy food. But lo & behold, their bank is closed, because that bank was cleaned out last week. So what do the employees do? They go to the FDIC to collect on the $100K insurance fund. But the FDIC insurance fund is only capitalized at 5% of the total obligation. So, FDIC runs to Fed & Treasury to get the money for deposit insurance.

 

And where are we after all this? The FDIC funding dwarfs the TARP payout. The global financial markets are obliterated. Businesses stop in their tracks until they figure out how to replace credit with cash. The Fed turns into a real bank, because nobody will do business with a private bank until the crisis is over. 30% of businesses default on their obligations and file bankruptcy. Unemployment immediately hits double digits, eventually hitting 20%-30%. The world dives into a massive depression.

 

But, a lesson was taught.

 

Thank you for the well thought-out example. Do you believe, in your opinion, that a lesson was learned?

[Jauronimo]

They're not mutually exclusive. You can't talk about credit market failure without discussing why systemic freezing in those markets occured... why did the credit markets fail? Was it because compaines who make up those markets have massive devalued assets on theie balance sheets? The point I am making is disruption is said "financial markets" were an effect of institutional practices.... It is the reason AIG, BOFA, Citigroup got huge influxes of capital through stock purchase so credit markets did not freeze... the point this whole argument is that TARP was a bank bailout so certain firms would not fail... my contention is if they to let fail, other banks and other finacial compaines would have picked up the pieces of those bigger firms and credit markets would have recovered. My stance on it is these too big to fail firms bring the global financial market to the brink, and skid out on the other side with alot of tax payers help... Ideology? certain companies ware continually protected and are so big they can bring finance to a hault.. how is that free enterprise, that sounds like financial terrorism....

 

 

 

But that is the problem, isn't it? In a true capitalist economy, there is a consequence with not valueing risk approriately.... like issuing defaults swaps for more than you could even pay out, or secutitizing high risk loans when chances are you knew alot of those loans would default... but did people care since they knew is it ever came down to it, they would not be left to fail?

 

 

 

Thank you for the well thought-out example. Do you believe, in your opinion, that a lesson was learned?

Clearly we disagree on the magnitude of the situation which would have transpired if AIG, Merrill and Bear were allowed to fail. I'm less concerned with whether or not Wall Street learned anything from this debacle as long as our government, rating agencies and regulatory bodies learned the appropriate lessons.

[Joe Miner]

Clearly we disagree on the magnitude of the situation which would have transpired if AIG, Merrill and Bear were allowed to fail. I'm less concerned with whether or not Wall Street learned anything from this debacle as long as our government, rating agencies and regulatory bodies learned the appropriate lessons.

 

How could most of the idiots in Washington learn a lesson when they didn't understand the subject to begin with?

[DC Tom]

Thank you for the well thought-out example. Do you believe, in your opinion, that a lesson was learned?

 

Yes, GG, thank you for spoon-feeding the retard what we've been saying all along.

 

Now teach him the difference between markets and institutions.

[GG]

Yes, GG, thank you for spoon-feeding the retard what we've been saying all along.

 

Now teach him the difference between markets and institutions.

 

Sure.

 

This little piggy went to market.

This little piggy stayed home.

This little piggy had roast beef,

This little piggy had none.

And this little piggy went wee wee wee all the way home.

[IDBillzFan]

Sure.

 

This little piggy went to market.

This little piggy stayed home.

This little piggy had roast beef,

This little piggy had none.

And this little piggy went wee wee wee all the way home.

How many times does he need to explain this? The piggy who went to market and the piggy who stayed home are not mutually exclusive. You can't talk about the piggy-going-to-market failure without discussing why systemic freezing by the piggy who ultimately decided it best to not venture into the markets, but rather make an exerted effort to, in fact, stay home.

[OCinBuffalo]

So you guys are just not going to repond, that is fine... I am sure it is so complex that you hold all the secrets and we should just trust you... I mean, what do us silly MBA's, Hospital Adminstrators and Investment Property owners know anyway... I am sure your explantion would be way over my head so thank you for being wise enough to save me from being embarassed....

 

Jesus, you guys sound like a couples of Nancy Pelosi's... and I know how you feel about her.... like Nancy would say, "you are too dumb to engage in this, I know better so just listen to me"

They have responded. Jesus. I have never seen either GG or DC_Tom spend this much effort on a single poster. They tried multiple approaches even!

 

What else do you want? Here, I'll put it in your terms:

 

If HealthSouth suddenly went....south... and was about to go bankrupt, that would be no big deal. We wouldn't bail them out. Besides, it's not like they haven't had problems...

 

However, if they, and the other 9 of the top ten LTC/Rehab chains all screwed up their MDS's, or filed them improperly, or Medicare screwed up and told them to do it the wrong way, whatever....the end result being so bad, that it was going to make Medicare crash? No reimbursement for you, for at least 6 months, because, it will take at least that long to review and fix everything, because, as you know, Medicare has a hard enough time dealing with normal, and this is major crisis. (You know, now that I think about it, this is plausible) In the meantime, should your facility go without reimbursement?

 

We are talking prevention of Medicare, the system, crashing, by sending money to Medicare, so that can find a way to keep paying you, and, the top 10 chains, so that they can fix their MDS's and resubmit them, Medicare can review them, etc.

 

In this case, wouldn't it be right for us to make sure that the reimbursement system kept flowing, even though it's the big guy's/government agency's fault?