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lord_casek

Dear Wall Street: We're Sorry

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Dear Wall Street: We're Sorry

 

 

Sorry always seems the hardest thing to say.

But isn't a big apology exactly what we owe Wall Street today?

We've foolishly given the financial industry a trillion dollars in support of its balance sheets and markets. We did so even though the big banks and brokerages clearly didn't need or want our help. Things were just fine in September 2008, but then we had to go and stick our noses into the world of high finance.

Now, we're making matters worse by trying to tell them how much to pay their people, how much risk they can take and what businesses are kosher. Suddenly, we feel we're better bankers than the bankers. We know to whom they should be lending. We have strong opinions about what they do with our money.

 

 

We're sorry about that.

 

We're sorry that we want strong control of our money supply. We regret that we want to have government protection of our deposits, our checking accounts, mortgages and credit cards. Maybe it's our simpleton ways. We get nervous when we lose our jobs and have to sell our homes at a discount to eat.

That's our bad.

The fact is Wall Street has done as masterful job of handling these accounts. And we should acknowledge that the overdraft fees, escalating interest rates and calamity in the mortgage market are really our fault, not the banks'.

It's funny that Lloyd Blankfein, the chief executive of Goldman Sachs Group (GS) should have to keep apologizing for his firm's success. He said that given hindsight Goldman would have done things a lot differently. Goldman engaged in "improper" behavior, he said. But when he made those comments Jan. 14, he wasn't talking about the bets Goldman made against toxic mortgage securities it was selling clients. That's the lord's work after all.

I think I speak for everyone when I write, sorry Lloyd, I don't know how we got that one confused. I guess that's why they pay you the big bucks ($68.5 million in 2007).

But please understand, we only had the best of intentions with our meddling.

Taxpayer Help

When your balance sheets looked like they were in trouble we forced the $700 billion Troubled Asset Relief Program on you.

We only wanted to prop you up with the Term Asset-Backed Securities Loan Facility, a program designed to give the industry $200 billion in loans against "top-rated" credit-card, small business, student and auto loan debt.

The $30 billion Public-Private Investment Program was intended to only lighten the load of bad assets on your books. When that program didn't look promising we just tried to let you wipe it away yourselves by eliminating accounting rules that made you value the junk for what it's worth.

When you couldn't issue debt, we told the Federal Deposit Insurance Corp., the institution in charge of our nest eggs, to back your bonds. Reluctantly you took us up on it. Eighty-four bond issues for $309 billion were made under the program. Citigroup (C) issued $64 billion. Goldman issued $21 billion. Bank of America (BAC) issued $44 billion.

We know, you did it just to make us feel better.

And when all of that didn't work, we simply told the Federal Reserve to step up to buy an unlimited amount of mortgages and hand one of your trading partners, American International Group (AIG) a $182 billion lifeline.

How any of this stuff would be interpreted as backing banks while they continued to take bets "with their own money" on proprietary trading desks, hedge funds and private equity, is a mystery.

Bonus Bungle

Compared to our squeeze on your bonuses, this stuff was just kids' play. At Goldman, the average bonus worked out to just $460,000 per employee -- just a little more than nine-times the U.S. median income. Sorry, there's no way anyone can buy a Bugatti Veyron, even used, for those peanuts. So much for stimulating the auto industry.

In retrospect, all of that bailout money should have been earmarked for Wall Street bonuses. Without deep cash, your bankers are probably considering jumping to more lucrative jobs elsewhere, perhaps in Major League Baseball or playing the lottery. They're not focused on stabilizing the financial system, and the resulting problems are our fault for questioning you. Understand that we don't get paid the big bucks for a reason.

No, we just have our shrinking 401(k)s, our individual retirement accounts and maybe, if we're lucky, our homes. We're too dense to see how bulletproof the financial system is and really no amount of taxpayer support could ever pay you back for all of the good times we've had during the last two years.

So, Wall Street, forgive us for our meddlesome ways. Forgive us, and Paul Volcker, for wanting a return to boring old banking. Forgive us for the sarcasm.

Most of all, forgive us for ever trusting you in the first place.

 

http://finance.yahoo.com/banking-budgeting/article/108672/dear-wall-street-were-sorry

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If you dont like banks, this is a great market because you can buy one cheap.

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Casek you always post the longest shit.

 

And I still read it 90% of the time anyway cause its good stuff

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I try to provide good information. I gotta keep the delusions of a grande conspiracy

to loot the U.S. of our wealth up and in front.

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And I'll try to provide reality.

Cliffnotes version:

 

-The government was afraid that more people would stop paying loans, so they gave the banks that were doing well a fuck-ton of money in the form of a loan with about 4.5% interest and a few other agreements.

 

-The well-doing companies said "fuck that" and are repaying that money as quick as possible, or they're looking at failed banks for sale and buying them because they're cheap.

 

-Goldman sachs payed all the government money back with interest, plus the millions of dollars they had [been forced] to give just to recieve the loan.

 

-The record profits set by goldman sachs are result of a booming bond market which is typical in recessions when more people trust bonds than wallstreet.

 

-There are no conspiracies.

 

-Obama has no friends in the banking industry, and the stimulus package that he pushed on banks was not necessarily in the interest of banks, but he was afraid of America's banking industry totally collapsing and wanted Americans to see how mighty our banking industry really is.

 

-Tax payers dont foot the bill for failed banks. The FDIC bails out americans who lost their money when banks failed, then turns around and quadruples the insurance premiums of the banks who havent failed (talking about going from 9 to 40 million dollars for CNB ). In short: successful banks bail out the failed ones.

 

-No the federal government didnt cause any of the recession by raising or lowering interest rates. If you google the Prime Rate History you can see that the key remained the same during the recession. The federal government also doesn't control the value of the dollar. They can try to put more money into circulation by lowering the key interest rate, but they dont control how much money goes in and out of circulation, nor does circulation control the dollar's value. In 2007 at the height of the recession I was in Europe when 2 bucks got 1 GBP. Now it's $1.50 for 1 pound. The economy and the value of the dollar is controlled by the market and unpredictable human behaviors, not Obama or the banks.

 

Anything anyone would like me to elaborate on pls let me know.

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"Unpredictable human behaviors" would be like a laborworker taking a variable interest loan out on a house twenty times more than his annual salary, then buying a bunch of shit he doesn't need using that house as collateral because he assumed he would get a fuck-ton of raises for no reason.

 

That's the gist of what started this recession.

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"Unpredictable human behaviors" would be like a laborworker taking a variable interest loan out on a house twenty times more than his annual salary, then buying a bunch of shit he doesn't need using that house as collateral because he assumed he would get a fuck-ton of raises for no reason.

 

That's the gist of what started this recession.

 

That's a story I keep hearing. It seems like a scenario of bad decision making, but I don't believe that bad decisions are unpredictable. Personally, I feel like the individual borrower idea you've presented has been highlighted simply to cause guilt on the behalf of the public, as to not stop the process in motion.

 

The only thing I would consider an unpredictable human behavior was the "bailout" itself.

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And I'll try to provide reality.

Cliffnotes version:

 

-The government was afraid that more people would stop paying loans, so they gave the banks that were doing well a fuck-ton of money in the form of a loan with about 4.5% interest and a few other agreements.

 

-The well-doing companies said "fuck that" and are repaying that money as quick as possible, or they're looking at failed banks for sale and buying them because they're cheap.

 

-Goldman sachs payed all the government money back with interest, plus the millions of dollars they had [been forced] to give just to recieve the loan.

 

-The record profits set by goldman sachs are result of a booming bond market which is typical in recessions when more people trust bonds than wallstreet.

 

-There are no conspiracies.

 

-Obama has no friends in the banking industry, and the stimulus package that he pushed on banks was not necessarily in the interest of banks, but he was afraid of America's banking industry totally collapsing and wanted Americans to see how mighty our banking industry really is.

 

-Tax payers dont foot the bill for failed banks. The FDIC bails out americans who lost their money when banks failed, then turns around and quadruples the insurance premiums of the banks who havent failed (talking about going from 9 to 40 million dollars for CNB ). In short: successful banks bail out the failed ones.

 

-No the federal government didnt cause any of the recession by raising or lowering interest rates. If you google the Prime Rate History you can see that the key remained the same during the recession. The federal government also doesn't control the value of the dollar. They can try to put more money into circulation by lowering the key interest rate, but they dont control how much money goes in and out of circulation, nor does circulation control the dollar's value. In 2007 at the height of the recession I was in Europe when 2 bucks got 1 GBP. Now it's $1.50 for 1 pound. The economy and the value of the dollar is controlled by the market and unpredictable human behaviors, not Obama or the banks.

 

Anything anyone would like me to elaborate on pls let me know.

 

sounds like you were reading economist and fed propagandist press releases....

the same people who said that anyone talking about an eminent crash of the housing market was a kook, conspiracy nut, doomsayer and straight up liar.

 

sure. im going to still listen to the guys who stated that the economy was sound and never would crash. im really going to believe THEIR reasons for why the economy tanked.

 

its like believing the bush propaganda machine about WMD's after he was disproven many times over.

 

but whatever.

people can think what want i guess and go skip through meadows with obama holding lollipops basking in the sunshine.

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And I'll try to provide reality.

Cliffnotes version:

 

-The government was afraid that more people would stop paying loans, so they gave the banks that were doing well a fuck-ton of money in the form of a loan with about 4.5% interest and a few other agreements.

 

-The well-doing companies said "fuck that" and are repaying that money as quick as possible, or they're looking at failed banks for sale and buying them because they're cheap.

 

-Goldman sachs payed all the government money back with interest, plus the millions of dollars they had [been forced] to give just to recieve the loan.

 

-The record profits set by goldman sachs are result of a booming bond market which is typical in recessions when more people trust bonds than wallstreet.

 

-There are no conspiracies.

 

-Obama has no friends in the banking industry, and the stimulus package that he pushed on banks was not necessarily in the interest of banks, but he was afraid of America's banking industry totally collapsing and wanted Americans to see how mighty our banking industry really is.

 

-Tax payers dont foot the bill for failed banks. The FDIC bails out americans who lost their money when banks failed, then turns around and quadruples the insurance premiums of the banks who havent failed (talking about going from 9 to 40 million dollars for CNB ). In short: successful banks bail out the failed ones.

 

-No the federal government didnt cause any of the recession by raising or lowering interest rates. If you google the Prime Rate History you can see that the key remained the same during the recession. The federal government also doesn't control the value of the dollar. They can try to put more money into circulation by lowering the key interest rate, but they dont control how much money goes in and out of circulation, nor does circulation control the dollar's value. In 2007 at the height of the recession I was in Europe when 2 bucks got 1 GBP. Now it's $1.50 for 1 pound. The economy and the value of the dollar is controlled by the market and unpredictable human behaviors, not Obama or the banks.

 

Anything anyone would like me to elaborate on pls let me know.

 

Anything like this will never go down well in crossfire Soup, While I don't agree with all of it, I certainly don't disagree with it either. Basically as far as I am concerned the truth is somewhere between the opposing views that are promoted in crossfire. Some people will unwaveringly follow the Obama is the devil line, and everything he does is a consipacy, while others are the opposite.

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Hahah I think what i said made too much sense so everyone's really upset. I'll give you all some time to come up with questions and check back later.

 

In response to casek's link:

 

-If Goldman Sachs wanted those billions of dollars from the government, why would they give it back with interest in less than a year after they were literally forced to buy it? No major publicly traded corporation wants to be under the government's thumb.

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You know how I know you're full of shit? Because history is ripe with conspiracies.

 

You know how else I know you're full of shit?

 

http://www.bloomberg.com/apps/news?pid=20601039&sid=aaIuE.W8RAuU

 

"After this week’s congressional hearing into the bailout of American International Group Inc., you have to wonder if those folks are crazy after all. "

 

Hardly a ringing endorsement.

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And I'll try to provide reality.

Cliffnotes version:

 

-Tax payers dont foot the bill for failed banks. The FDIC bails out americans who lost their money when banks failed, then turns around and quadruples the insurance premiums of the banks who havent failed (talking about going from 9 to 40 million dollars for CNB ). In short: successful banks bail out the failed ones.

 

 

Anything anyone would like me to elaborate on pls let me know.

 

Troubled Asset Relief Program?

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Hahah I think what i said made too much sense so everyone's really upset. I'll give you all some time to come up with questions and check back later.

 

Yah, this is what just happened. Your story holds water. No need for continued investigation.

sgspwn.jpg

Right, right.

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Yes Boner, what about it?

 

I basically agree with all your points, including that particular one. However, it's my understanding that TARP funds came from the Treasury and were used to bolster many different banks that could have gone bust if not for TARP and other Fed lending programs. Sure, FDIC insures deposits up to $250k, but the big investment banks are mainly dealing with huge business and governmental accounts in excess of 250k; hence the reason they applied to become holding companies before receiving bailout money..Really a minor discrepancy to what you were saying, but nonetheless banks did get money from the Treasury....

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And I'll try to provide reality.

Cliffnotes version:

 

 

-No the federal government didnt cause any of the recession by raising or lowering interest rates. If you google the Prime Rate History you can see that the key remained the same during the recession.

 

Anything anyone would like me to elaborate on pls let me know.

 

You could also argue that the Fed (not gov't) lowered interest rates after 9/11 which helped fuel the asset bubble leading to the crash. I googled the fed funds rate too:

 

2000, 6.24

2001, 3.88

2002, 1.67

2003, 1.13

2004, 1.35

2005, 3.22

2006, 4.97

2007, 5.02

2008, 1.92

2009, 0.16

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to believe the federal reserve played no part in the housing crash is just sheer ignorance.

 

 

It would appear that ignorance is what Soup is dealing in these days.

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