Jon Stewart - Scott Walker tells teachers the gravy train is over

[CupCak3]

Full Episode

Jon Stewart, I love you.

 

[soundforbjt]

This shows the hypocrisy of Faux News soooo much...

 

[Phokus]

It amazes me how government can willingly hand over an ungodly amount of taxpayer money to bailout wall street and preserve their profits without much resistance, but teachers salaries? They live like royalty!

The cognitive dissonance is amazing.

 

[ProfJohn]

TARP cost about $25 billion which is just over double what the automotive bailouts are expected to cost.

In the long run both look to have been good investments for the government.

For $34 billion we saved both the banking and automotive industries in this country.


BTW Medicare fraud exceeds the cost of BOTH TARP and the auto bailouts...

 

[glenn1]

Nothing is stopping anyone from opening their checkbook and paying more in taxes to support a teacher, or giving directly to a school for that matter. It seems that there's plenty of rich folks asking for the Bush tax cuts to be rescinded, that still refuse to pay a bigger share unless they are forced to by law. Here's the address for all those who are calling for higher tax rates:

You can write a check payable to the Bureau of the Public Debt, and in the memo section, notate that it's a Gift to reduce the Debt Held by the Public. Mail your check to:

Attn Dept G
Bureau of the Public Debt
P. O. Box 2188
Parkersburg, WV 26106-2188

 

[Phokus]

TARP cost about $25 billion which is just over double what the automotive bailouts are expected to cost.

In the long run both look to have been good investments for the government.

For $34 billion we saved both the banking and automotive industries in this country.


BTW Medicare fraud exceeds the cost of BOTH TARP and the auto bailouts...

LMAO, do you know ANYTHING about the bailouts at ALL? First of all, TARP wasn't the ONLY thing that was given.

http://nomiprins.squarespace.com/storage/bailouttallyoct2010.pdf

edit: "announced" bailouts are even higher: http://nomiprins.squarespace.com/storage/anniversary102010.pdf

We're talking TRILLIONS of dollars in bailouts through various programs. The so-called AIG 'bailout' for $100 billion was actually a bailout of AIG's counterparties in their credit defaults swaps (i.e. payment of AIG actually goes to Goldman Sachs), of which we won't see anything back.

Stop posting, you illiterate nincompoop. I'd like to see your fellow conservatives actually defend what you just posted.

LMAO, you actually think it was only $25 billion involved.

edit: AIG by itself:

Record losses
On March 2, 2009, AIG reported a fourth quarter loss of $61.7bn (£43bn) and revenue of −$23.7bn (−£16.2bn) for the final three months of 2008. This was the largest quarterly loss in corporate history at that time.[77] The announcement of the loss had an impact on morning trading in Europe and Asia, with the FTSE100, DAX and Nikkei all suffering sharp falls. In the US the Dow Jones Industrial Average fell to below 7000 points, a twelve-year low.[78][79] The news of the loss came the day after the U.S. Treasury Department had confirmed that AIG was to get an additional $30 billion in aid, on top of the $150 billion it has already received.[80] The Treasury Department suggested that the potential losses to the US and global economy would be 'extremely high' if it were to collapse[81] and has suggested that if in future there is no improvement, it will invest more money into the company, as it is unwilling to allow it to fail.[82] The firm's position as not just a domestic insurer, but also one for small businesses and many listed firms, has prompted US officials to suggest its demise could be 'disastrous' and the Federal Reserve said that AIG posed a 'systemic risk' to the global economy.[77] The fourth quarter result meant the company made a $99.29 billion loss for the whole of 2008,[81] with five consecutive quarters of losses costing the company well over $100 billion.[82] In a testimony before the Senate Budget Committee on March 3, 2009, the Federal Reserve Chairman Ben Bernanke stated that "AIG exploited a huge gap in the regulatory system," ... and "to nobody's surprise, made irresponsible bets and took huge losses".[83]

[edit]

Edit 2: Also, the federal government let these bloodsucking vampires borrow at 0% and the banks turned around and use that money to lend out to make profit on the money... the government lent goldman sachs 600 BILLION at rock bottom interest rates and goldman used that money to lend out to others to make a profit, it wasn't about recapitalizaiton or any other bullshit. That's how they were making a profit during the downturn.

 

[Phokus]

And seriously, ProfJohn, how can you even defend the AIG bailout (Oh wait, you can't, because you left it out of your post):

Counterparty Controversy
AIG was required to post additional collateral with many creditors and counter-parties, touching off controversy when over $100 billion was paid out to major global financial institutions that had previously received TARP money. While this money was legally owed to the banks by AIG (under agreements made via credit default swaps purchased from AIG by the institutions), a number of Congressmen and media members expressed outrage that taxpayer money was going to these banks through AIG.[53] In January, 2010, a document known as "Schedule A – List of Derivative Transactions" was released to the public, against the wishes of the New York Fed. It listed many of the insurance deals that AIG had with various other parties, such as Goldman Sachs, Société Générale, Deutsche Bank, and Merrill Lynch.[54][55]

Had AIG been allowed to fail in a controlled manner through bankruptcy, bondholders and derivative counterparties (major banks) would have suffered significant losses, limiting the amount of taxpayer funds directly used. Fed Chairman Ben Bernanke argued: "If a federal agency had [appropriate authority] on September 16 [2008], they could have been used to put AIG into conservatorship or receivership, unwind it slowly, protect policyholders, and impose haircuts on creditors and counterparties as appropriate. That outcome would have been far preferable to the situation we find ourselves in now."[56] The "situation" to which he is referring is that the claims of bondholders and counterparties were paid at 100 cents on the dollar by taxpayers, without giving taxpayers the rights to the future profits of these institutions. In other words, the benefits went to the banks while the taxpayers suffered the costs.

You don't bailout AIG (meaning AIG's CDS counterparties), you don't loan out hundreds of billions/trillions of 0% interest funds to the investment banks to invest, you don't see SHIT from TARP.

 

[HomerJS]

TARP cost about $25 billion which is just over double what the automotive bailouts are expected to cost.

In the long run both look to have been good investments for the government.

For $34 billion we saved both the banking and automotive industries in this country.


BTW Medicare fraud exceeds the cost of BOTH TARP and the auto bailouts...

While I don't have proof I'd be willing to bet you were against those bailouts when they occurred.

I love how comedy can so easily point out how your side is so full of shit.

 

[The-Noid]

And seriously, ProfJohn, how can you even defend the AIG bailout (Oh wait, you can't, because you left it out of your post):




You don't bailout AIG (meaning AIG's CDS counterparties), you don't loan out hundreds of billions/trillions of 0% interest funds to the investment banks to invest, you don't see SHIT from TARP.

I can defend the AIG bailout. The CDS contracts are obviously OTC, when banks, PENSIONS, etc. took out the contracts no one had any idea AIG was running a one-sided book and only a seller of CDS. The idea in any OTC contract is there is obvious counterparty risk however if AIG had any risk management procedures in place there wouldn't have been a need for a bailout. An AIG bankruptcy would have caused an even higher loss of confidence, this time in the insurance system which as history has shown us can be as detrimental to the economy as a loss in confidence in the banking system.

Many of the counterparties would have still been paid from AIG, they would have been creditors to the firm in the bankruptcy process for the amount owed. ISDA had a paper out saying even by selling a one-sided book AIG would have paid out 80%, however the timing of the settlements would have been years down the road and arguably the financial system needed it quicker, hence the reason for mark to market contracts and collateral settlements prior to maturity exist.

AIG should be unwound and the government should extract a pound of flesh but AIG's risk management was the one at fault, not the banks (in this case).

 

[Phokus]

I can defend the AIG bailout. The CDS contracts are obviously OTC, when banks, PENSIONS, etc. took out the contracts no one had any idea AIG was running a one-sided book and only a seller of CDS. The idea in any OTC contract is there is obvious counterparty risk however if AIG had any risk management procedures in place there wouldn't have been a need for a bailout. An AIG bankruptcy would have caused an even higher loss of confidence, this time in the insurance system which as history has shown us can be as detrimental to the economy as a loss in confidence in the banking system.

Many of the counterparties would have still been paid from AIG, they would have been creditors to the firm in the bankruptcy process for the amount owed. ISDA had a paper out saying even by selling a one-sided book AIG would have paid out 80%, however the timing of the settlements would have been years down the road and arguably the financial system needed it quicker, hence the reason for mark to market contracts and collateral settlements prior to maturity exist.

AIG should be unwound and the government should extract a pound of flesh but AIG's risk management was the one at fault, not the banks (in this case).

That's a very poor defense.

"AIG made bad business decisions and took on too much risk, therefore, we should bailout their creditors"

That makes absolutely no sense. We paid 100 cents on the dollar to their counterparties, that's completely indefensible and the very reason why the bailouts were a terrible idea in the first place. The government had leverage here because a) AIG couldn't pay the counterparties on their own and would have had to take a haircut in bankrupcy and b) they were also directly bailing out the counterparties in other bailout programs AND they were helping them make money hand over fist with 0% interest loans (like $600 billion to Goldman Sachs alone). They should have taken a SIGNIFICANT haircut. And they should have temporarily nationalized these institutions instead.

 

[The-Noid]

That's a very poor defense.

"AIG made bad business decisions and took on too much risk, therefore, we should bailout their creditors"

That makes absolutely no sense. We paid 100 cents on the dollar to their counterparties, that's completely indefensible and the very reason why the bailouts were a terrible idea in the first place. The government had leverage here because a) AIG couldn't pay the counterparties on their own and would have had to take a haircut in bankrupcy and b) they were also directly bailing out the counterparties in other bailout programs AND they were helping them make money hand over fist with 0% interest loans (like $600 billion to Goldman Sachs alone). They should have taken a SIGNIFICANT haircut. And they should have temporarily nationalized these institutions instead.

We didn't pay anywhere near 100 cents on the dollar for the contracts. We paid 100 cents on the collateral arrangement or WHAT WAS OWED. The contracts didn't magically have a credit event. The credit event was that as AIG's balance sheet became lower rated by a rating agency it had to produce more collateral as it was seen as a higher risk to default on the contract.

Let's take a CDS on MSFT as it has no chance of default we will simply let the contract move and not be settled to either side until a credit event happens on MSFT (they miss an interest payment or default) as I know you are a reputable seller and have a strong balance sheet (AAA) I won't even make you post collateral at a custodian bank as long as you maintain a rating of AAA in your derivatives entity or AA on the balance sheet as a whole. If you get downgraded you will have to pay me either the moneyness of the contract or a specified amount. The seller now gets downgraded to A and I am in the money on the contract, the seller now owes the moneyness or a specified amount as collateral because I fear should a credit event happen on the contract WHICH I HAVE BEEN PAYING YOU FOR (in some cases for years), you may not make good on your end and pay me should a credit event materialize.

This is what happened, however AIG still had the assets to pay the contract they were simply illiquid (which is why AIG is still in business after all this and is close to being even). AIG would have been forced into bankruptcy and a firesale would have happened with the majority of their assets such as commercial real estate and airplanes which would have depressed prices even more.

It's not as if the government said oh pay the banks the full notional principal of the contract, assuming a 0-percent recovery rate because that is a great idea. AIG simply paid what was owed.

As for the loans, the loans are overnight loans that are rolled. That is like saying that on a 30-year mortgage you borrowed 30*365*daily average value over 30 years.

Please also find me a 0% loan that the Fed made, because there wasn't one. A lot of the loans had hair cuts and were at "market rates," however when you set the rates that is somewhat an oxymoron, I agree.

Last time I looked we did nationalize AIG...and the warrants in many of these companies was a quasi nationalization.

 

[Macamus Prime]

Can we bring in Chinese teachers instead? If the manual labor is cheap, so should the educational services - we'll save hundreds of thousands!!

 

[Phokus]

We didn't pay anywhere near 100 cents on the dollar for the contracts. We paid 100 cents on the collateral arrangement or WHAT WAS OWED. The contracts didn't magically have a credit event. The credit event was that as AIG's balance sheet became lower rated by a rating agency it had to produce more collateral as it was seen as a higher risk to default on the contract.

As for the loans, the loans are overnight loans that are rolled. That is like saying that on a 30-year mortgage you borrowed 30*365*daily average value over 30 years.

Please also find me a 0% loan that the Fed made.

Last time I looked we did nationalize AIG...and the warrants in many of these companies was a quasi nationalization.

That's what i meant, just didn't type it clearly But that's still exactly the same principle. Why should the taxpayers give billions of dollars to AIG's creditors when in a normal bankruptcy they would have taken a haircut (a huge one at that)? That makes no fucking sense whatsoever, why should the taxpayer be on the hook for 100% of what was owed when in a NORMAL business the creditors wouldn't get anything near that when the business is so far underwater?

Matt Taibbi mentions the loan program here:

Another typical method of bailing out companies without direct cash injections was to allow firms to borrow money against a state guarantee. What programs like the TLGP (Temporary Liquidity Guarantee Program) allowed the banks to do was borrow against the government’s charge card instead of against their own more risky profiles. That way, the banks were able to spend billions less in finance costs on the money they borrowed. Goldman, for instance, borrowed at least $19 billion against the TLGP. How much more would they have had to pay to borrow $19 billion on the open market, without the government guarantee? Hard to say, but the figure is surely in the hundreds of millions.

There were other bailout methods that included getting the state to absorb investment losses (in programs like the PPIP, you kept your investment gains when you bought risky assets, but the state took the losses) and opening facilities that allowed the state to buy crappy assets from banks at above market value. Banks also got to post worthless assets as collateral to the Fed in exchange for cash. None of these things were direct cash injections; they were all sneaky ways to give the banks risk-free “profits” using government guarantees and loans.

The biggest bailout mechanism was the banks’ ability to go to the Fed and borrow hundreds of billions in emergency loans at rock-bottom interest rates, or sometimes at zero. Goldman, for instance, borrowed $600 billion in emergency loans during the crisis period, which makes the $10 billion TARP payment look meager.

Your friend would say that the banks ultimately paid those loans back, which is true, but put it this way: If a bank can go to the Fed, borrow $100 billion at 0% interest, lend it out on the market to all of us suckers as 4% mortgages and 11% credit cards and so on, what does it mean when it “returns” that money to the Fed later on? Are the profits they make in the meantime “earned” money, or is that subsidy? You and I don’t have the ability to borrow at 0%, but Goldman and JP Morgan Chase do.

http://www.rollingstone.com/politic...-greenspan-david-brooks-and-bailouts-20110307

This was a big part of the reason why some banks were making money hand over fist and were able to give out huge bonuses shortly after the crisis started.

He has a whole article devoted to this somewhere as well, forgot which one. In any case, since you're totally cool with these types of loans, i'd like to start my own bank, get these rock bottom interest rate loans for billions of dollars, and make bank. Seriously, if i could get a 0% or near 0% loan, i only need a return of a percentage or two, risk free or near risk free, to be filthy rich.

Edit: Dear Government, i just need a 1 billion dollar 0 interest loan. at just 1 percent of risk free return, i'd get $10,000,000.

 

[Phokus]

Saw your edit yoxxy:

You call what we did nationlization? When banks aren't required to do shit by the government, what use is that? This is what temporary nationalization should LOOK like:

http://www.nytimes.com/2008/09/23/business/worldbusiness/23krona.html

In many cases, the banks used those loans to make money (as pointed out by matt taibbi), NOT clean up their balance sheets. The banks are using bullshit accounting rules so they don't have to recognize their losses from the toxic assets.

But Sweden took a different course than the one now being proposed by the United States Treasury. And Swedish officials say there are lessons from their own nightmare that Washington may be missing.

Sweden did not just bail out its financial institutions by having the government take over the bad debts. It extracted pounds of flesh from bank shareholders before writing checks. Banks had to write down losses and issue warrants to the government.

That strategy held banks responsible and turned the government into an owner. When distressed assets were sold, the profits flowed to taxpayers, and the government was able to recoup more money later by selling its shares in the companies as well.

Instead we let Wall Street make fortunes during the bailout. Absolutely sickening.

 

[The-Noid]

That's what i meant, just didn't type it clearly But that's still exactly the same principle. Why should the taxpayers give billions of dollars to AIG's creditors when in a normal bankruptcy they would have taken a haircut (a huge one at that)? That makes no fucking sense whatsoever, why should the taxpayer be on the hook for 100% of what was owed when in a NORMAL business the creditors wouldn't get anything near that when the business is so far underwater?

Matt Taibbi mentions the loan program here:



http://www.rollingstone.com/politic...-greenspan-david-brooks-and-bailouts-20110307

This was a big part of the reason why some banks were making money hand over fist and were able to give out huge bonuses shortly after the crisis started.

He has a whole article devoted to this somewhere as well, forgot which one. In any case, since you're totally cool with these types of loans, i'd like to start my own bank, get these rock bottom interest rate loans for billions of dollars, and make bank. Seriously, if i could get a 0% or near 0% loan, i only need a return of a percentage or two, risk free or near risk free, to be filthy rich.

A guy from Rolling Stone is a "reputable source"

Here's the actual list. http://www.federalreserve.gov/newsevents/reform_pdcf.htm
Find me the one at 0.

AIG counterparties should have gotten 80% as that is what they would have gotten through the bankruptcy process, having said that I am OK paying more as we will extract the money from both the warrants and accrued interest on many of the loans. The death of AIG from a confidence standpoint had people thought they weren't going to be paid on their annuitizations and insurance policies would have been it for the country.

The major TARP losses are going to come from the smaller banks not the big banks.

 

[The-Noid]

Saw your edit yoxxy:

You call what we did nationlization? When banks aren't required to do shit by the government, what use is that? This is what temporary nationalization should LOOK like:

http://www.nytimes.com/2008/09/23/business/worldbusiness/23krona.html

In many cases, the banks used those loans to make money (as pointed out by matt taibbi), NOT clean up their balance sheets. The banks are using bullshit accounting rules so they don't have to recognize their losses from the toxic assets.

FTA: But the final cost to Sweden ended up being less than 2 percent of its G.D.P.

2% of GDP is ~300B.

TARP losses ex autos are estimated at $15B. Seems like a really stupid idea you have, no?

 

[Thump553]

TARP cost about $25 billion which is just over double what the automotive bailouts are expected to cost.

In the long run both look to have been good investments for the government.

For $34 billion we saved both the banking and automotive industries in this country.


BTW Medicare fraud exceeds the cost of BOTH TARP and the auto bailouts...

Most intelligent post you've made in years, especially the bolded part. (Although the jury is still out on whether Chrsyler is saved,, but at least they have a good ad campaign now. Fiat was an excellent match for Chrysler-both companies stink).

 

[Phokus]

FTA: But the final cost to Sweden ended up being less than 2 percent of its G.D.P.

2% of GDP is ~300B.

TARP losses ex autos are estimated at $15B. Seems like a really stupid idea you have, no?

1. Please don't selectively quote:

But the final cost to Sweden ended up being less than 2 percent of its G.D.P. Some officials say they believe it was closer to zero, depending on how certain rates of return are calculated.

2. We're still in the shit. Sweden wrote down their toxic assets right away.


3. TARP wasn't the only bailout program.

 

[The-Noid]

1. Please don't selectively quote:



2. We're still in the shit. Sweden wrote down their toxic assets right away.


3. TARP wasn't the only bailout program.

1.) 2% is the figure most often quoted outside the article in research papers.
2.) From your own article this doesn't sound like a country that "wrote down their toxic assets right away." They tried numerous plans over 2.5 years AD-Hoc before resulting to nationalization. Costs of many of those plans are not published. Including the 500% they paid on overnight deposits.

Property prices imploded. The bubble deflated fast in 1991 and 1992. A vain effort to defend Sweden’s currency, the krona, caused overnight interest rates to spike at one point to 500 percent. The Swedish economy contracted for two consecutive years after a long expansion, and unemployment, at 3 percent in 1990, quadrupled in three years.

3.) TARP is the only bailout we were discussing. Fannie and Freddie are ridiculous institutions that should have never been invented. The idea of a 30 year mortgage is preposterous. Banks should go to a covered bond model and 5-7 year mortgage. 10 on the high end for VERY credit worthy borrowers.

Of the solutions that we had TARP worked out well, now is however the time to clean up FNMA/FRE and all of TBTF, 2008 was not that time without a complete implosion in lifestyle. These changes do need to be made long-term however.

 

[Phokus]

A guy from Rolling Stone is a "reputable source"

Here's the actual list. http://www.federalreserve.gov/newsevents/reform_pdcf.htm
Find me the one at 0.

AIG counterparties should have gotten 80% as that is what they would have gotten through the bankruptcy process, having said that I am OK paying more as we will extract the money from both the warrants and accrued interest on many of the loans. The death of AIG from a confidence standpoint had people thought they weren't going to be paid on their annuitizations and insurance policies would have been it for the country.

The major TARP losses are going to come from the smaller banks not the big banks.

Haha, attack the source. Matt Taibbi/rolling stone has been the only one to really cover the story with any accuracy or regularity. That's one of the reasons why so many people only talk about TARP when there were other loan programs. Like i said, Matt had an article devoted to it, i'll try to find it. I'd like to see if that list encompasses ALL the loans.

In any case, what you're talking about is a BET on AIG which is ridiculous. No, that's just dumb, many of those counterparties received bailouts themselves, there was absolutely no reason NOT to negotiate a haircut. You'd still get the warrants.

 

[thraashman]

Can we bring in Chinese teachers instead? If the manual labor is cheap, so should the educational services - we'll save hundreds of thousands!!

If you wanna learn Chinese to be able to communicate with the youth of tomorrow. I think certain lawmakers are doing their best to hurt education in order to keep people ignorant. They realize that their main voter base are the most ignorant. I'm fairly sure not a single Tea Party congress person would have been elected if the country were all highly educated.

 

[Moonbeam]

The R in Republican is for Rot.

 

[rudder]

It amazes me how government can willingly hand over an ungodly amount of taxpayer money to bailout wall street and preserve their profits without much resistance, but teachers salaries? They live like royalty!

The cognitive dissonance is amazing.

This involves more than just teachers in Wisconsin. It covers all public employees. And the State of Wisconsin government is a totally different entity than the Federal government.

By reducing the budget and not having to rely on federal bailouts... the Wisconsin state government can govern the way they want to and the people can be governed locally.

 

[fskimospy]

This involves more than just teachers in Wisconsin. It covers all public employees. And the State of Wisconsin government is a totally different entity than the Federal government.

By reducing the budget and not having to rely on federal bailouts... the Wisconsin state government can govern the way they want to and the people can be governed locally.

It most certainly does not cover all public employees.

 

[Phokus]

1.) 2% is the figure most often quoted outside the article in research papers.
2.) From your own article this doesn't sound like a country that "wrote down their toxic assets right away." They tried numerous plans over 2.5 years AD-Hoc before resulting to nationalization. Costs of many of those plans are not published. Including the 500% they paid on overnight deposits.

Property prices imploded. The bubble deflated fast in 1991 and 1992. A vain effort to defend Sweden’s currency, the krona, caused overnight interest rates to spike at one point to 500 percent. The Swedish economy contracted for two consecutive years after a long expansion, and unemployment, at 3 percent in 1990, quadrupled in three years.

WHEN THEY NATIONALIZED. That's actually an interesting question as to whether the years prior are counted in the 2% that you're quoting. They also took warrants, but unlike America, they unwound their assets (see suspension of mark-to-market rules and FASB's attempt to modify the rules afterwards, rather than writing off toxic assets in one fell swoop
http://en.wikipedia.org/wiki/Mark_t..._Emergency_Economic_Stabilization_Act_of_2008)

3.) TARP is the only bailout we were discussing. Fannie and Freddie are ridiculous institutions that should have never been invented. The idea of a 30 year mortgage is preposterous. Banks should go to a covered bond model and 5-7 year mortgage. 10 on the high end for VERY credit worthy borrowers.

Of the solutions that we had TARP worked out well, now is however the time to clean up FNMA/FRE and all of TBTF, 2008 was not that time without a complete implosion in lifestyle. These changes do need to be made long-term however.

TARP isn't the ONLY thing we're discussing because the person who originally brought it up was saying what a great thing the bailouts were vs. what we were doing to the teachers when in reality the bailout encompassed more than TARP.