Looks like the US govt might actually make a profit on the money used to bail out the various big screw ups during 2008. Interesting...
Wow. The US government is so good at value investing we should do away with capital markets altogether and just allocate capital by government committee.
Wow. The US government is so good at value investing we should do away with capital markets altogether and just allocate capital by government committee.
Uh, I was making the point that maybe the US govt got away a bit easier than they thought they would...
Uh, I was making the point that maybe the US govt got away a bit easier than they thought they would...
Yes, capitalism is saved. I think the moral of the story is that if you are a large institution, there are no longer any risks, there is only upside. I'm ready to party, how about you?
Uh, I was making the point that maybe the US govt got away a bit easier than they thought they would...
The last couple of years, the US govt has been quietly racking up the fines on the banks for their various behaviours before, during and after the GFC and if anything it is accelerating. It's probably not in the hundreds of billions yet, but it is in the high tens of billions.
The truth will set you free. But first, it will piss you off. --Gloria Steinem AREPS™
Yes, capitalism is saved. I think the moral of the story is that if you are a large institution, there are no longer any risks, there is only upside. I'm ready to party, how about you?
Uh, I was making the point that maybe the US govt got away a bit easier than they thought they would...
Great post Stinkbug. Point is the U.S. government is creating a reality. And attempting to maintain it. It prints onto a pieces of paper a number with some nice pictures. People myself included carry out activity to acquire these pieces of paper or the Australian equivalent. If this can be maintained you have order, if you have order you have power. So maybe don't think of it as getting their money back or making a good investment. If they can maintain the system of order under a value belief system they control everything in that system. Think of it as religion if you can have everyone believe in say Catholicism you have order, a line of communication if you could think of it as such. If you would like me to go into this in more detail please let me know. Just replace every level and component of the financial system with it's religious equivalent and you will start to get the picture.
To nutshell this concept.
If the people stop believing in your financial system "assets and money are worth nothing" other than art or scrap value. If no one believes in Catholicism anymore the religious icons have no value other than their components for scrap or artistic value.
I am not Catholic and respect peoples right to believe in their religions. I used Catholicism because it is widely understood in our community. Peter from Perth
Allow me to expand then. The government can create as much money as it wants by issuing bonds. It doesn't need to get any of the TARP money back. Not one dollar. The success of capital markets is dependent on the best allocators of capital being rewarded, and the worst punished by going out of business. The governments role in capital markets is to regulate them to prevent cheating, so the aforementioned function of reward and failure can take it's course.
The bailout money, regardless of the amount, or whether or not it is paid back is irrelevant. The government failed to regulate the market, then compounded it's failure by allowing the cheats and the incompetent to remain in business. The damage to the government was never about how much of the bailout money they were going to get back, but who they gave it to in the first place. In fact, you could say that getting the bailout money back is an even worse outcome, because the government is the worst allocator of capital of all.
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