Cost of TARP (i.e. the Bailout) only 29 billion. Yes, only 29 billion.

[Darwin333]

The houses would have been there, but they would have lost even more of their value.

They are still going to lose even more of their value.

Look at Detroit. There are houses all over the place, but they are worthless because no one wants to buy them or no one can come up with the money to buy them. Now imagine if our entire country became Detroit.

That sounds like a combination of supply/demand and overpriced housing (if no one can come up with the funds to buy them as you argue). Since the .gov has been backing virtually ALL new home loans in the last few years, why exactly would no one be able to get a loan if not for the big banks? I assume that my local bank can sell loans to Frannie just as easily as they can and if they can't that would be an easy fix.

We can get into the actual problems that might have been created if you wish but the above is a very bad example.

BTW the solution to the problem is to prevent it from happening again, but our government seems to avoid such a solution and instead just creates tons of agencies in charge of making sure it doesn't happen again.

That has been my entire point. Not only did we avoid a solution but thanks in part to TARP and a shitload of other .gov assistance the too big to fail assholes got even bigger by purchasing their competition for pennies on the dollar. Will that still be a success the next time they put a gun to our heads? Seeing how well it worked for them this time (seriously, could it have possibly worked any better for them?) there will be a next time and now instead of a rifle they have a bazooka. Good job.


OR as I have stated, you give them 2 choices when they are in dire need. Choice 1: We give you the money and you MUST do X,Y,Z that will prevent this from happening again and no you do not get to not to profit off of all that bullshit paper at the taxpayers expense. You will survive but you will take a large haircut and sorry but you can forget about your fat ass bonuses. Choice 2: We nationalize your ass and sell your companies off piece by piece. Since we ended up purchasing most of their worthless paper at FACE FUCKING VALUE anyway, I don't see how this would have been worse.

Oh yeah, we are ordering a full investigation of your organizations and any and all fraudulent and illegal activity will be prosecuted with extreme prejudice.

Instead we did the exact opposite, we still ended up with most of their trash paper while they got even bigger and started making record profits within a year or two of them being on the brink of bringing the entire financial system down. We legalized accounting fraud which allows them to hide the fact that they might be getting into trouble again among other things. Not only have we not imposed any sort of meaningful new reforms on them (Glass-Steagall anyone?) but we continue to allow them to commit blatant fraud and even more blatantly illegal activities such as front running and market manipulation.

Hell, we now have proof that banks have foreclosed on peoples homes that the bank had NO FINANCIAL INTEREST IN. Someone who did not own the house nor had any financial interest in was allowed to kick people out of their homes and foreclose on them. Betcha no one goes to jail for this bullshit either but of course you HAVE to agree that they should be allowed to continue. If they aren't then the banks go boom-boom because they, in a lot of cases, intentionally shredded the wet ink documents required by black letter law in most states to foreclose on someones house. If they can't foreclose on all of those houses the paper the banks are holding are literally worth zero. If that happens then we are back to financial Armageddon right? So I can't see how you could have any other opinion than "let the banks break black letter law and take assets they can not prove they have an interest in". That is the only other option if the documents required by law no longer exist and since they are even bigger now, thank you very much, the risk is even greater, right?

Yup, bang up job there buddy.

 

[Darwin333]

Yeah, we really had them by the balls.

Do you realize how horrible the Great Depression was? Do you realize that THAT'S the type of catastrophic failure everyone was worried about?

Seriously, I don't see how anybody in the right mind could say, "nah, let's let the entire country go to shit so that we can reform the banks. It might takes us ten years to get out of it, but who cares about all the unemployment, lost wealth, and suffering... we got those bankers good!"

I said we had them by the balls. That doesn't mean you cut them off it means you squeeze until they do what is in OUR best interests while we ensure that we don't nuke the system. This is business 101, hell this is life 101, when you have all the cards the other guy doesn't get to call the shots.

Personally, I would have given them the choice to take the deal WE offered not the one they asked for or we would nationalize their asses. Even without the threat of nationalizing them though, a simple take it or leave it would have been more than sufficient. Is your argument really that some executive assholes are willing to allow the entire financial system to get nuked and throw us into a great depression as you insist simply to save his own bonus? They would have said "fuck it, no deal"? If that is the case then I refuse to believe the problem was that bad in the first place and even if it was, the threat of putting his ass on CNN and the front page of every paper in the country saying "This asshole is going to nuke our financial system if he doesn't get $100B". Even better, that kinda sounds like blackmail or economic terrorism or fucking treason to me. We are at war aren't we? Threatening to throw our country into a great depression unless you personally profit sounds like treason to me and during a time of war isn't treason punishable by death?

Naw, I got a better idea! Lets help them get even bigger so the next time they threaten us the consequences are even worse! Oooh, lets also let them commit fraud and break black letter law on a daily basis, not to mention forgetting about all that fraud they committed to bring us to the brink of a great depression! Damn, another great idea, lets buy all of their worthless bets at FACE VALUE so that they profit off of them and we are on the hook for the losses! Brilliant!

You have got to be fucking kidding me.