NationStates Jolt Archive

Turn a profit. Or more to the point, how dare they propose to pay back the government loan!

Anyhow, that's what Matt Lauer, host of the Today Show seems to think.
The transcript (http://newsbusters.org/blogs/geoffrey-dickens/2009/04/14/matt-lauer-worried-government-wont-be-able-dictate-business-any-mo) is in the second or third screen of the page...

LAUER: Let, let me ask you about this report on Monday from Goldman Sachs. They, they beat investors' expectations, reported a profit for the first three months of this year of $1.66 billion. And some people at Goldman are starting to talk about the possibility of paying off the bailout money ahead of schedule and I'm worried if you think if that's a good thing. Are they doing this because of financial stability or might they be talking about that, simply to get out from under the thumb of the federal government and be allowed to go back to running the business the way they want to run it as opposed to the way the government wants them to run it?

Pretty scary stuff from our unbiased(not Fox) news media, huh? I mean, how dare a business think that it can do a better job with its own affairs than the federal government.
Fortunately, the Obama representative, Christina Romer, has allowed that it's good to make a profit.

So they're playing by the rules the government laid down and they turned a larger than expected profit.

Given that before the government stepped in, the business was in need of help and now it is turning a profit, wouldn't it be beneficial to keep playing by the same rules even if they don't have to (i.e. if they've paid off their loan)? I mean, on their own, they ran a business into the ground. With the new rules, they've turned a profit. Maybe the new rules are better.

So, Goldman Sachs runs themselves into the ground. Government steps in and starts telling them what to do, and they run a profit.

Big bad government!


Also Matt Lauer is an idiot.

lol

OHMYGOD what did we give them money for? so they could make a profit? i dont think so! it was all a plan to take over the banking industry for a really big price. and now the bastards want to reneg on our secret plan!

matt may not be the smartest guy.

i get the impression (vain hope really) that sometimes those morning people are told to ask the stupid question that some producer thinks the public might want to ask so as to give the interviewee a chance to disspell it.

or something.

we'll know how good the bank regulation proposals are by how loudly the bankers scream. the louder the better. if they just "go along" with new regulations without protest, the fix is in.

and i hope they all pay us back very very soon.

So, Goldman Sachs runs themselves into the ground. Government steps in and starts telling them what to do, and they run a profit.

Big bad government!


Also Matt Lauer is an idiot.

Closer to they hedged against AIG and the government Bailed out of AIG and ruined their hedges so they expected the government to cover their loses.
Goldman Sachs was the bank that turned record profits while everyone else was in the sub prime mortgage crisis.
http://online.wsj.com/article/SB123967007321015621.html

So more like the government messed up their investments and were expected to fix it.

Turn a profit. Or more to the point, how dare they propose to pay back the government loan!

Anyhow, that's what Matt Lauer, host of the Today Show seems to think.
The transcript (http://newsbusters.org/blogs/geoffrey-dickens/2009/04/14/matt-lauer-worried-government-wont-be-able-dictate-business-any-mo) is in the second or third screen of the page...

LAUER: Let, let me ask you about this report on Monday from Goldman Sachs. They, they beat investors' expectations, reported a profit for the first three months of this year of $1.66 billion. And some people at Goldman are starting to talk about the possibility of paying off the bailout money ahead of schedule and I'm worried if you think if that's a good thing. Are they doing this because of financial stability or might they be talking about that, simply to get out from under the thumb of the federal government and be allowed to go back to running the business the way they want to run it as opposed to the way the government wants them to run it?

Pretty scary stuff from our unbiased(not Fox) news media, huh? I mean, how dare a business think that it can do a better job with its own affairs than the federal government.
Fortunately, the Obama representative, Christina Romer, has allowed that it's good to make a profit.

I'm not sure if you noticed before, but I think it might help ease your strife if I point out that Matt Lauer is a nincompoop. *nod*

Closer to they hedged against AIG and the government Bailed out of AIG and ruined their hedges so they expected the government to cover their loses.
Goldman Sachs was the bank that turned record profits while everyone else was in the sub prime mortgage crisis.
http://online.wsj.com/article/SB123967007321015621.html

So more like the government messed up their investments and were expected to fix it.

That's just weird. Why take government money with the involved added rules if they didn't have to have it.

Anyhow, that's what Matt Lauer, host of the Today Show seems to think.
The above seems to be the most salient point in your OP.

That's just weird. Why take government money with the involved added rules if they didn't have to have it.

because then their share holders would lose money.
You see they worked with AIG, but also took out insurance and other hedges against them. If the loans paid off they wouldn't need the insurance, If the loans didn't pay off AIG would default and the insurance would cover it.
What happen was the loans didn't succeed, but the government prevented AIG from defaulting.
No default no insurance money(sort of like life insurance your not dead no pay out).
However they still didn't get returns on their investments.
So their investors would have taken a loss. So they naturally let the government temporarily cover that loss, since it was the entity that screwed up its insurance.

Not to mention looking at the AIG bonus issue I really doubt their is serious government control. I bet the controls are just for show to the public and each clause has its own loop hole.

Matt Lauer has it backwards. The government is under the thumb of Goldman Sachs, not the other way round.

They want to pay the TARP back, because even GS realizes that it might have gone too far this time given the public backlash. But TARP is just a fraction of the government 'help' GS has had over the past 24 months.

Also, they aren't nearly as profitable as they claim. They decided not to include december (changed from Nov. quarter end to calander yr). If you add in Dec. picture isn't nearly so good.

Further, a lot of that came from trading one time gains. It's pretty clear that their core business is really suffering if you look closely.

Nor have they begun to address the crap on their asset side. Of course they'll probably never have to, since the taxpayers are going to end up taking it off their hands and eating the loss.

I firmly believe that dismembering GS would instantly improve economic growth.

So they're playing by the rules the government laid down and they turned a larger than expected profit.

Given that before the government stepped in, the business was in need of help and now it is turning a profit, wouldn't it be beneficial to keep playing by the same rules even if they don't have to (i.e. if they've paid off their loan)? I mean, on their own, they ran a business into the ground. With the new rules, they've turned a profit. Maybe the new rules are better.


Government running business is never better. All government can do is muddle things up, and churn out inefficiency.

Matt Lauer has it backwards. The government is under the thumb of Goldman Sachs, not the other way round.

They want to pay the TARP back, because even GS realizes that it might have gone too far this time given the public backlash. But TARP is just a fraction of the government 'help' GS has had over the past 24 months.

Also, they aren't nearly as profitable as they claim. They decided not to include december (changed from Nov. quarter end to calander yr). If you add in Dec. picture isn't nearly so good.

Further, a lot of that came from trading one time gains. It's pretty clear that their core business is really suffering if you look closely.

Nor have they begun to address the crap on their asset side. Of course they'll probably never have to, since the taxpayers are going to end up taking it off their hands and eating the loss.

I firmly believe that dismembering GS would instantly improve economic growth.


Sorry, Communism doesn't work. Soviet Union died, is dead, and always will be dead. Every socialist country thats ever existed has failed, will fail, and shall never work. Get used to the idea that capitalism is the way to go. There isn't any other way.

Sorry, Communism doesn't work. Soviet Union died, is dead, and always will be dead. Every socialist country thats ever existed has failed, will fail, and shall never work. Get used to the idea that capitalism is the way to go. There isn't any other way.

Goldman Sachs has more to do with Banana Republicanism than capitalism. I've no problem with free market capitalism. But these clowns aren't it.

Sorry, Communism doesn't work. Soviet Union died, is dead, and always will be dead. Every socialist country thats ever existed has failed, will fail, and shall never work. Get used to the idea that capitalism is the way to go. There isn't any other way.
Could you use your prophetic skills to tell me next week's lottery numbers?

Sorry, Communism doesn't work. Soviet Union died, is dead, and always will be dead. Every socialist country thats ever existed has failed, will fail, and shall never work. Get used to the idea that capitalism is the way to go. There isn't any other way.

Which part of capitalism was the enormous government bailout to sustain an unviable company? I must've missed the chapter of The Wealth of Nations that talked about enormous government subsidies to prop up failing businesses.

Anyhow, that's what Matt Lauer, host of the Today Show seems to think.

The two bolded parts do not belong in the same sentence. That pretty much explains away the whole issue.


lol

OHMYGOD what did we give them money for? so they could make a profit? i dont think so! it was all a plan to take over the banking industry for a really big price. and now the bastards want to reneg on our secret plan!

matt may not be the smartest guy.

i get the impression (vain hope really) that sometimes those morning people are told to ask the stupid question that some producer thinks the public might want to ask so as to give the interviewee a chance to disspell it.

or something.
I often cling to the same desperate hope, but I know it's just cockeyed optimism. On the whole (with just a few exceptions), the media really are that stupid.

we'll know how good the bank regulation proposals are by how loudly the bankers scream. the louder the better. if they just "go along" with new regulations without protest, the fix is in.

and i hope they all pay us back very very soon.

Hear hear. The faster they start trying to pay it back, the more we can know the regulations are not just another give-away in sheep's clothing.

Government running business is never better. All government can do is muddle things up, and churn out inefficiency.

Which is why, now that the government has stepped in and told Goldman what to do, said business is now turning a profit and will be able to pay back those loans, right?

You are, as usual, full of shit.

Which is why, now that the government has stepped in and told Goldman what to do, said business is now turning a profit and will be able to pay back those loans, right?

You are, as usual, full of shit.

You are so wrong. It's hilarious.

You are so wrong. It's hilarious.

Clearly I am refuted!

Tell me, why is it then that Goldman, who needed a bailout, is now turning a profit after the government got involved, if the government just messes up every business?


Or are you going to be one of those one time poster hit and run trolls? I suspect so.

i get the impression (vain hope really) that sometimes those morning people are told to ask the stupid question that some producer thinks the public might want to ask so as to give the interviewee a chance to disspell it.

or something.


It's clinging to that vain hope that helps me sleep at night.

Clearly I am refuted!

Tell me, why is it then that Goldman, who needed a bailout, is now turning a profit after the government got involved, if the government just messes up every business?

They would not have needed the bail out if AIG had not been bailed out.
They had invested with AIG, but had hedged their investment with insurance in the even AIG went insolvent. So goldman-sach was either in a position where AIG would make good on the investments and turn a profit. Or AIG would not make good the investments and default, the the hedges would let Goldman Sachs break even. The default is what triggers the hedge pay outs. The government intervention in the economy created something that was not possible before. It let AIG screw up but not default, so no profit from Goldman Sachs and no insurance payout. If the government had let AIG go through bankruptcy Goldman Sachs would have been fine, but sense the government screwed up their books it becomes only natural that they for them to expect the government to give them money.

If the government had let AIG go through bankruptcy Goldman Sachs would have been fine

Which is why they were going bankrupt before the AIG bailout, right?

The crux of your arguement relies on me believing you can read the future.

Which is why they were going bankrupt before the AIG bailout, right?

The crux of your arguement relies on me believing you can read the future.

http://online.wsj.com/article/SB123967007321015621.html

http://online.wsj.com/article/SB123967007321015621.html

OMG the CEO of Goldman said his company would have been fine if AIG collapsed!

Shocking!
EDIT: Besides, this doesnt disprove my original claim. Goldman was bankrupt. They are now turning a profit after the Government stepped in and told them what to do.

The mere fact that they are turning a profit disproves the claim that the government will only make businesses worse.

Turn a profit. Or more to the point, how dare they propose to pay back the government loan!

Anyhow, that's what Matt Lauer, host of the Today Show seems to think.
The transcript (http://newsbusters.org/blogs/geoffrey-dickens/2009/04/14/matt-lauer-worried-government-wont-be-able-dictate-business-any-mo) is in the second or third screen of the page...

LAUER: Let, let me ask you about this report on Monday from Goldman Sachs. They, they beat investors' expectations, reported a profit for the first three months of this year of $1.66 billion. And some people at Goldman are starting to talk about the possibility of paying off the bailout money ahead of schedule and I'm worried if you think if that's a good thing. Are they doing this because of financial stability or might they be talking about that, simply to get out from under the thumb of the federal government and be allowed to go back to running the business the way they want to run it as opposed to the way the government wants them to run it?

Pretty scary stuff from our unbiased(not Fox) news media, huh? I mean, how dare a business think that it can do a better job with its own affairs than the federal government.
Fortunately, the Obama representative, Christina Romer, has allowed that it's good to make a profit.

How is that in any way "scary"? It's not a terribly bright question, but it's a legitimate one. Let me attempt to break it down for you. Matt (who, as has already been pointed out, isn't the brightest bulb out there) is wondering if G-S is hurrying to pay back TARP funds in order to be free of the onus of government intervention, thus having their cake and eating it, too.

Like I said, not brilliant, but not worthless, as questions go. There are far better ones, and far more pointed ones, but asking it seems to point to a potential further line of questions. Such as how responsible is it of the government to give bailout funds if those receiving them are going to rush back into doing the same shit that got them in trouble in the first place?

Sometimes I think you deliberately search for the angle on news stories that represent the worst possible interpretation, just to make yourself feel better. Other times, I'm sure of it. This is one of the latter.

Which is why, now that the government has stepped in and told Goldman what to do, said business is now turning a profit and will be able to pay back those loans, right?

You are, as usual, full of shit.
Somehow the idea of the government being able to solve any problem in less than three months leaves me in a fit of laughter.

If anything, this is probably just proof that the government should have stayed out of it and let the financial industry pull itself together -- much like what happened after the events of 9/11/2001.

Somehow the idea of the government being able to solve any problem in less than three months leaves me in a fit of laughter.

If anything, this is probably just proof that the government should have stayed out of it and let the financial industry pull itself together -- much like what happened after the events of 9/11/2001.

Sure, its 'proof' if you ignore the definition of what 'proof' is.

Sometimes I think you deliberately search for the angle on news stories that represent the worst possible interpretation, just to make yourself feel better. Other times, I'm sure of it. This is one of the latter.
Don't you believe in having fun? Ever? Especially at Matt Lauer's expense?

If anything, this is probably just proof that the government should have stayed out of it and let the financial industry pull itself together -- much like what happened after the events of 9/11/2001.

Are you saying that the government let the financial industry pull itself after 9/11, which is laughable given all the interest rates cuts that Greenspan pulled out his ass, or that the government should have let the financial industry pull itself together, but didn't, after 9/11?

They would not have needed the bail out if AIG had not been bailed out.
They had invested with AIG, but had hedged their investment with insurance in the even AIG went insolvent. So goldman-sach was either in a position where AIG would make good on the investments and turn a profit. Or AIG would not make good the investments and default, the the hedges would let Goldman Sachs break even. The default is what triggers the hedge pay outs. The government intervention in the economy created something that was not possible before. It let AIG screw up but not default, so no profit from Goldman Sachs and no insurance payout. If the government had let AIG go through bankruptcy Goldman Sachs would have been fine, but sense the government screwed up their books it becomes only natural that they for them to expect the government to give them money.

Goldman Sachs made a bet that AIG would default. AIG did not default. Goldman Sachs lost the bet. Its only natural for a firm that's having hard times to want corporate welfare.

I have no idea why they should have anything to fear from government regulators in the first place.

Isn't Treasury heavily larded with Goldman-Sachs alums?

I have no idea why they should have anything to fear from government regulators in the first place.

Isn't Treasury heavily larded with Goldman-Sachs alums?

OR they just say screw America and go to Italy. They pretty much own Italy.

Goldman Sachs made a bet that AIG would default. AIG did not default. Goldman Sachs lost the bet. Its only natural for a firm that's having hard times to want corporate welfare.

They lost the bet because the government bailed out AIG. so it would only be natural the government correct the issues caused by their market interference.


Goldman Sachs is no angel. They pretty much squeezed California into a budget crisis by shorting the bonds and encouraging others to do the same. But, making profit they do well, they were able to get out of most of the sub prime mortgages literally a matter of months before the crisis hit in 2007, making billions in profit.

They lost the bet because the government bailed out AIG. so it would only be natural the government correct the issues caused by their market interference.

How is it natural? If they wanted to correct the issues they cause by intervening in the market they would have not intervened at all.

How is it natural? If they wanted to correct the issues they cause by intervening in the market they would have not intervened at all.

which would have been preferable.
I don't think AIG deserved to be Bailed out, and I think most of your intelligent institutions were betting on its failure.
It is natural if you screw something up to fix it.

which would have been preferable.
I don't think AIG deserved to be Bailed out, and I think most of your intelligent institutions were betting on its failure.

I agree with NeuLeonstein in thinking it should have been nationalized and any valuable assets should have been sold off.


It is natural if you screw something up to fix it.

It's natural to ignore the problem, avoid admitting there was a screw up, and blaming the problem on someone else, too. Possibly more prevalent when it comes to the government.

Which part of capitalism was the enormous government bailout to sustain an unviable company? I must've missed the chapter of The Wealth of Nations that talked about enormous government subsidies to prop up failing businesses.

I believe there was a footnote somewhere.

I agree with NeuLeonstein in thinking it should have been nationalized and any valuable assets should have been sold off.



No need. Bankruptcy the banks like Goldman Sachs were lined up ready to carve up AIG for profit.
The ones AIG owed money would have gotten between 25 cents to 75 cents on the Dollar.

Besides, this doesnt disprove my original claim. Goldman was bankrupt. They are now turning a profit after the Government stepped in and told them what to do.
You original claim has a few flaws.

1) Goldman Sachs wasn't bankrupt. At worst it was insolvent, which is different in this case. And I haven't crunched the numbers on that, I'm not sure that GS actually was/is.

2) Which leads me to my second point: GS at least would probably have gotten by without the actual government money. The other help, which Lacadaemon pointed out, maybe not. But that wasn't about the bailout anyways, that's just business as usual. They were asked to take the government money by Paulson along with all the other banks, in the form of an ultimatum, with systemic rather than firm-centric priorities in mind.

3) The government isn't actually telling GS very much at all. I'm not aware of any particularly meaningful restrictions, with the exception of executive pay perhaps. Hell, if the government had any say in these matters, they probably would've had something to say about GS selling a bunch of shares in itself just as Obama is trying to sell a story about seeing hope on the horizon.

4) An insolvent company can make profits. Quite big ones, if you time the period in which you're counting it just right, which they did.

So, they're making money and want to repay their obligations to end government oversight...wasn't that the entire point of this bailout in the first place? Give them money, assume an oversight role and then once the company has returned to profitability return it to full private control?

The last thing I'd want is the government to have a long-term stake in these companies. That would create such a massive conflict of interest that it would rapidly undo any of the benefits of short-term government oversight and likely lead to a level of mismanagement far beyond that which happened during the housing bubble. Considering the blundering and downright fraudulent actions of the GSEs played a critical role in this whole mess, it would be pretty detrimental for the government to hold any long-term stake in these companies.

The government is most effective when it does its job and relinquishes control back to the private sector. Continued meddling beyond proper restructuring will do nothing but promote the same kind of socialized-risk atmosphere that led to this mess in the first place.

1) Goldman Sachs wasn't bankrupt. At worst it was insolvent, which is different in this case. And I haven't crunched the numbers on that, I'm not sure that GS actually was/is.

I'm looking at their balance sheet right now; it doesn't look like they ever became insolvent. They came close a couple of times, but never actually dipped in to insolvency. In fact, they've had a sizable amount of cash on hand and pretty good performance as far as banks go; this probably explains why their stock bottomed out at around $70-80 per share rather than $0.70-$0.80 like the others.

(This assumes insolvency in the finance/accounting sense, i.e. net assets being less than net liabilities)

I'm looking at their balance sheet right now; it doesn't look like they ever became insolvent. They came close a couple of times, but never actually dipped in to insolvency. In fact, they've had a sizable amount of cash on hand and pretty good performance as far as banks go; this probably explains why their stock bottomed out at around $70-80 per share rather than $0.70-$0.80 like the others.

(This assumes insolvency in the finance/accounting sense, i.e. net assets being less than net liabilities)

To be honest I think they just claimed it to get the low interest government loan.
I would say the State of California is closer to insolvency then they were.

To be honest I think they just claimed it to get the low interest government loan.
I would say the State of California is closer to insolvency then they were.

Just going to say duh here. I don't think GS gave out IOU's. Money they owed like they have for state income tax refunds. It's an awesome time we live in.

http://digg.com/d1iqOj

Just going to say duh here. I don't think GS gave out IOU's money they owed like they have for state income tax refunds. It's an awesome time we live in.

http://digg.com/d1iqOj

I don't know about the tax refunds. I am supposed to get a little back. If I get one, I will post it here.

Which is why, now that the government has stepped in and told Goldman what to do, , and gave it a fuckton of money...

Sorry, Communism doesn't work. Soviet Union died, is dead, and always will be dead. Every socialist country thats ever existed has failed, will fail, and shall never work. Get used to the idea that capitalism is the way to go. There isn't any other way.
Which is why Cuba and China, which have both been quite thoroughly ruled by Communist parties since over a half century ago, don't exist. North Korea has merged back with South Korea peacefully, and Laos and Vietnam have invited the French to regain control of Southeast Asia. In fact, twenty percent of the population of the world doesn't exist. They're a myth invented by their respective single-party Communist apparatuses to help ex-KGB agents scam capitalists in the West.

Further, all those largely socialist European states - Scandanavia, I'm looking at you - are a fabrication of NPR. The NPR journalist who invented Sweden is in fact sucking down a serious scam involving licensing out the Ikea and Volvo logos to manufacturers in Mexico.

And those other countries with democratically elected socialist governments, that aren't part of the Old World? They must not be socialist. Chavez is actually a far-right wingnut.

Heck, we just have to look at what happened to old Imperial Russia to see what happens when a state turns Communist. They go from being a third-rate power regularly pushed around by the second-rate powers (as Japan was, back in that era) to one of two global superpowers in the space of a single generation. I mean, they finally got around to abolishing serfdom in 1861; duh they were going to be in space in less than a hundred years!

Obviously Communism didn't work, not even that centralized, non-democratic, authoritarian, and corrupt version practiced in the Soviet Union. Which everybody knows is the best kind of Communism.

/sarcasm

little green pieces of paper have no more conscience then a stiffy.

as long as this automatic mechanism for congregating them (otherwise known as corporate capitalism) is in the driver's seat, nothing human or even intelligent is in control.

No you can't turn a profit! You need to rely on handouts from the government, that's how you run a business in today's world!

I'm looking at their balance sheet right now; it doesn't look like they ever became insolvent. They came close a couple of times, but never actually dipped in to insolvency. In fact, they've had a sizable amount of cash on hand and pretty good performance as far as banks go; this probably explains why their stock bottomed out at around $70-80 per share rather than $0.70-$0.80 like the others.

(This assumes insolvency in the finance/accounting sense, i.e. net assets being less than net liabilities)

Thing is, are the level III assets really worth 70 odd billion? That's the $123 pps question.

And I can't stand the attitude from people who've issued $25b in FDIC backed bonds. If they retire those, convert back to an IB from a bank holding company, pay off the tarp and refuse to sell into the PPIP, then we can talk about a private company. Until then, I remain skeptical of any claims of independence or trading nous. I mean, BBH doesn't have these problems.

Frankly, if the government hadn't given them permission to pretend they were a bank holding company last fall they'd be out of business right now. (The same sort of permission that was denied to Lehman just a month or so earlier by the way).

Which is why Cuba and China, which have both been quite thoroughly ruled by Communist parties since over a half century ago, don't exist. North Korea has merged back with South Korea peacefully, and Laos and Vietnam have invited the French to regain control of Southeast Asia. In fact, twenty percent of the population of the world doesn't exist. They're a myth invented by their respective single-party Communist apparatuses to help ex-KGB agents scam capitalists in the West.

Of course, every single Communist country was still an oppressive shithole that offered nowhere near the same quality of life or personal and political freedom as the developed capitalist states. They literally had nobody at all that could even come close to being on the same level as the US, Canada, or Western Europe.

Just going to say duh here. I don't think GS gave out IOU's. Money they owed like they have for state income tax refunds. It's an awesome time we live in.

http://digg.com/d1iqOj

I also have my doubts about the solvency of the federal government.

Somehow the idea of the government being able to solve any problem in less than three months leaves me in a fit of laughter.

If anything, this is probably just proof that the government should have stayed out of it and let the financial industry pull itself together -- much like what happened after the events of 9/11/2001.

!!!

Really? So...allowing carte blanche to the financial industry from 2001-2008 has brought us a halving of the Dow, the housing collapse (which I think was inevitable, but was certainly hastened by using houses as gambling chits), credit default swaps and the rest of it is your idea of "pulling itself together"? Are you high?

Don't you believe in having fun? Ever? Especially at Matt Lauer's expense?

Uh...the very post you quoted acknowledges Lauer's lack of skill. You only serve to make my point when you choose to answer the least substantive part of others' posts. The question, therefore, remains: what's actually scary about anything in your OP, and where's your answer to the substance of the post you quoted?

Of course, every single Communist country was still an oppressive shithole that offered nowhere near the same quality of life or personal and political freedom as the developed capitalist states. They literally had nobody at all that could even come close to being on the same level as the US, Canada, or Western Europe.
Many countries have been oppressive holes in the ground over the years.

The quality of life for the typical Russian peasant pre-Revolution was one of the leading causes of the Russian Revolution, and please talk about political freedom under the czar... the quality of life in the years following the fall of the Soviet Union has been a mixed bag for former Soviet states, to say the least. In terms of personal freedoms, political freedoms, or health.

It's not even clear that the former Soviet bloc is even wealthier now to show for the introduction of capitalism. Some states are - a few are doing quite well in all ways - but it's hard to say that the second world as a whole has gained all that much from the switch from centrally planned economies to free market enterprise.

And many of the states with a high quality of life are at least a little bit socialist - not exactly state communism in the Soviet style - but there are degrees and measures.

Yet another "surprise". More financial institutions are coming out of the woods and starting to look healthy. Yes, if the Federal government had just stayed in its place, I bet we would have seen the same results. A few banks fail, a few struggle, and a few shine by helping out the struggling ones.


It was one of the first signals that the banking industry might not be as sick as many believed. Earlier that month, fears that banks would need to be nationalized sent stocks plunging to 12-year lows.

Citigroup's better-than-expected results on Friday come after surprisingly solid earnings from JPMorgan Chase & Co., Goldman Sachs Group Inc., and Wells Fargo & Co. over the past several days.


But in the mind of liberals and Democrats, NOTHING positive can be done without the aid of government. The next two years is going to suck.

Snip

Bankruptcy for a business isn't a bad thing either.
The stuff that is making profit gets put on one side.
The stuff that is not making profit gets put on the other.
The stuff that isn't making profit is sold off to try and pay the debts and the stuff making a profit is protected.

To be honest many of the large Us businesses are about due for a bankruptcy to trim the fat. Most certainly the AUTO industry.

Bankruptcy for a business isn't a bad thing either.
The stuff that is making profit gets put on one side.
The stuff that is not making profit gets put on the other.
The stuff that isn't making profit is sold off to try and pay the debts and the stuff making a profit is protected.

To be honest many of the large Us businesses are about due for a bankruptcy to trim the fat. Most certainly the AUTO industry.
I guess I'm preaching to the choir, here, but all the government does when it prevents a bankruptcy is to allow the company to continue mismanaging resources. It's so damned simple...When a firm routinely fails to turn a profit, there are bankruptcy pressures. The firm's resources, workers, building and capital should become available to someone else who might put them to better use.

Government prevents that and tops it off by trying to regulate a business that they know absolutely nothing about.

Government prevents that and tops it off by trying to regulate a business that they know absolutely nothing about.

Evidently ignorance is for the best. Didn't you just say that many of them are now making a profit again?

I guess I'm preaching to the choir, here, but all the government does when it prevents a bankruptcy is to allow the company to continue mismanaging resources. It's so damned simple...When a firm routinely fails to turn a profit, there are bankruptcy pressures. The firm's resources, workers, building and capital should become available to someone else who might put them to better use.

Government prevents that and tops it off by trying to regulate a business that they know absolutely nothing about.

The auto industry bailout will come back and bite us in the ass within the next 4-8 years i think. They simply have to become a smaller more flexible companies before they can become profitable again.
The bank bailouts will take longer I think.

Evidently ignorance is for the best. Didn't you just say that many of them are now making a profit again?

I'm sure that's in spite of, rather than because of any government involvement. It's because of government that the financial and banking industry is in a mess. And they have no idea what to do about it. Take the auto bailouts, for an example. Just look at the idiotic focus of congressmen when the three auto company chief executives appeared before them. They questioned whether the executives should have driven to Congress rather than flown in on corporate jets. They focused on executive pay, which is a tiny fraction of costs compared to $73 hourly compensation to 250,000 autoworkers.

No, Congressmen and federal bureaucrats, including those at the Federal Reserve Board, don't know anymore about business than they know about the Constitution.

I'm sure that's in spite of, rather than because of any government involvement. It's because of government that the financial and banking industry is in a mess. And they have no idea what to do about it. Take the auto bailouts, for an example. Just look at the idiotic focus of congressmen when the three auto company chief executives appeared before them. They questioned whether the executives should have driven to Congress rather than flown in on corporate jets. They focused on executive pay, which is a tiny fraction of costs compared to $73 hourly compensation to 250,000 autoworkers.

No, Congressmen and federal bureaucrats, including those at the Federal Reserve Board, don't know anymore about business than they know about the Constitution.

No, it's totally because of. How profitable do you think these clowns would be if they couldn't issue FDIC backed debt, couldn't raise money at the short end for free, didn't have access to TALF, hadn't got congress to change the accounting rules, weren't allowed to gamble with taxpayer money in the fixed income market, and hadn't been handed 100c on the dollar thru AIG, while simultaneously picking up on AIG hedges.

I'll tell you. The answer is not very. And certainly, in the case of WFC and JPM, there is plenty of reasons to be skeptical.

Moreover, most of the programs that keep these mismanaged zombies lumbering around can only be operated by the fed under "unusual and exigent circumstances". Now given we are all 'profitable' again, shouldn't they be shut down? (Won't happen, banking system would start collapsing again).

I'm all for private enterprise. But this ain't it. So while it's fair to say that the government doesn't know anything about business, I wouldn't say bank management is any better at it either. All the government has done is engineered a way for the same clowns to stay in charge. I don't think that's a very good plan. Do you?

No, it's totally because of. How profitable do you think these clowns would be if they couldn't issue FDIC backed debt, couldn't raise money at the short end for free, didn't have access to TALF, hadn't got congress to change the accounting rules, weren't allowed to gamble with taxpayer money in the fixed income market, and hadn't been handed 100c on the dollar thru AIG, while simultaneously picking up on AIG hedges.

I'll tell you. The answer is not very. And certainly, in the case of WFC and JPM, there is plenty of reasons to be skeptical.

Moreover, most of the programs that keep these mismanaged zombies lumbering around can only be operated by the fed under "unusual and exigent circumstances". Now given we are all 'profitable' again, shouldn't they be shut down? (Won't happen, banking system would start collapsing again).

I'm all for private enterprise. But this ain't it. So while it's fair to say that the government doesn't know anything about business, I wouldn't say bank management is any better at it either. All the government has done is engineered a way for the same clowns to stay in charge. I don't think that's a very good plan. Do you?
Congress did set up the rules that these companies are playing by -- finance and banking, that is -- when they let the two industries share products. So this mess is, indeed their fault and they are the least qualified to figure it out.

Second, bankruptcy is the answer to the question about how to change who's in charge. Not bailouts, not government backing, just plain old bankruptcy. See my earlier post. That releases resources to someone that can do a better job.

Last, with the rapidly recovering financial and banking institutions, all talk about 'managing' them should end. In fact, we would have probably gotten to this point a little later than sooner if the government hadn't stepped in, but it would have naturally discarded all the chaff in the industry.

Congress did set up the rules that these companies are playing by -- finance and banking, that is -- when they let the two industries share products. So this mess is, indeed their fault and they are the least qualified to figure it out.

Yeah, look, when the FDIC is abolished, I think that would be a fair point. But up until then, the taxpayer is on the hook for a portion of BHC risk, so someone in the government ought to be in the risk prevention business with respect to these companies. (Because they can't do it themselves).

Though I agree right now the government is doing a shit job too. We are at the point where the regulatory agencies are working to save the entities the are supposed to regulate from a situation caused by the regulatory agencies lack of oversight in the first place. This instead of protecting taxpayer interests, which is why they were supposed to be there in the first place.

There is too much regulatory capture. Now, if the FDIC was abolished, I might agree that a hands off approach was indicated (of course if that happened there wouldn't be an american bank in existence within the week). But until then, as long as the taxpayer is a risk, it shouldn't be treated as a blank check.

Banking is not a free market, and it hasn't been since at least the 1930s. I wish people would stop pretending that it is.

Second, bankruptcy is the answer to the question about how to change who's in charge. Not bailouts, not government backing, just plain old bankruptcy. See my earlier post. That releases resources to someone that can do a better job.

Last, with the rapidly recovering financial and banking institutions, all talk about 'managing' them should end. In fact, we would have probably gotten to this point a little later than sooner if the government hadn't stepped in, but it would have naturally discarded all the chaff in the industry.

If the government hadn't intervened last fall the entire western banking system would have collapsed. We would never have gotten to this point. It would be all chasing each other around the desert and fighting over dog food.

I think if you look at the behavior of the banking industry since jan 2007, they have shown - in general - a complete lack of interest in doing the right thing on their own. They had several opportunities to extricate themselves from this mess and chose instead to go gambling in the commodities space or such. You have to appreciate how fundamentally broken the industry is. It makes GM look like a world class company.

I'm not suggesting that the government micro manage the banking sector. But I am suggesting the broad regulatory changes need to be made, things need to be broken up to sizes where they can be allowed to fail, the types of securities that can be traded need to be limited and people need to be prosecuted.

All the extraordinary actions taken over the past twenty four months weren't free. Mostly the taxpayer is on the hook. (See maiden lane). It's irresponsible to suggest we should let these guys go back to the status quo ante.