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posts about #bailout more →
AIG Only Wanted to Give Goldman Sachs 40 60 Cents on the Dollar, Then Geithner Stepped In
Govt's Phony Optimism Doomed Us All!
Fed Nets $14 Billion on Bailout
Steven Rattner Is Basically an Asshole
Everyone Privately Loved Neel Kashkari, Neel Kashkari Claims
Andrew Cuomo Wimps Out on AIG Names
British Con Men Exempt From AIG Tax
Obama Now Faces Terrifying Threat of 'Populism'
Yelling At Bankers: The Movie
The $37 Million Park Ave. Apartment Your Bailout Bought

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meechybee
10/27/09

In reply to AIG Only Wanted to Give Goldman Sachs 40 60 Cents on the Dollar, Then Geithner Stepped In
The only good that can come out of this mess is the death of the "kill Social Security and let Wall Street run it" movement. Then again, (collective) we have very short memories. #goldmansachs
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nowimpissed
10/27/09

In reply to AIG Only Wanted to Give Goldman Sachs 40 60 Cents on the Dollar, Then Geithner Stepped In
I don't understand the proposed solution that the government could have given Goldman Sachs a haircut on their insurance without giving the troubled banks one as well. Goldman had legally binding contracts with AIG for the full amount. Goldman owes their shareholders a fiduciary duty to get as much as possible for those contracts. Once the government stepped in to prevent AIG's bankruptcy, the government did not have a legal leg to stand on to pay some contracts but not others, so Goldman could not have taken less than the full contract amount without their shareholders (e.g. your 401K) rightly being up in arms over it. Yes, everyone was willing to negotiate for less when they thought AIG might go bankrupt, but once AIG was not in danger of bankruptcy, the negotiations effectively ended. Cook seems to accept that the failing banks would not have been able to take a substantial loss on the contracts and thus would have forced AIG into bankruptcy (or gone bankrupt themselves), which means the AIG bailout was necessary. Once that happens, why negotiate for less than your contract when the counter-party (now the government) can afford to pay 100% and has no legally valid reason not to? I don't know where the idea comes from that Geithner could have just unilaterally decided to not pay Goldman on its contracts while at the same time paying other banks. It's not a matter of Geithner favoring Goldman, it's just basic contract law and the reality of having a deep pocket behind AIG's legal obligations. #goldmansachs
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Novaload
10/27/09

In reply to AIG Only Wanted to Give Goldman Sachs 40 60 Cents on the Dollar, Then Geithner Stepped In
Geithner (and Summers) will go down as two huge Obama mistakes. The favoritism, the secrecy, the cozy Wall St. relationship---just disgusting. #goldmansachs
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lackadaisical
10/27/09

In reply to AIG Only Wanted to Give Goldman Sachs 40 60 Cents on the Dollar, Then Geithner Stepped In
Have we all forgotten the fact that Goldman has already repaid the gov't money - that they never wanted - plus interest?

If Goldman were losing money like every other bank, would we like them better? #goldmansachs
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registered
10/27/09

@lackadaisical: The AIG payment to GS is a separate matter from the TARP money that GS returned to the government.

"If Goldman were losing money like every other bank, would we like them better?" I’d hope not, but you have a point. I think the problem is not that GS is minting money this year, it’s the fact that it is proposing astronomical bonuses this year. Lloyd B could have been a bit more sensitive to how this would be perceived. It’s not written in stone that compensation has to be 50% of revenues. It would have been more prudent to add $10 billion to reserves to cushion the blow should another 2008 happen. Believe me, everyone at GS would still be more than adequately compensated. #goldmansachs
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charliebabbles
10/28/09

@registered: Well, that's only part of the problem. The real problem is two-fold: number one, Goldman most certainly DID need the TARP money. Technically they may not have actually needed the dollar amount, but they needed the gov guarantee which it represented. And number two, the main reason they're minting money now is because the gov has tilted the field in their favor. The gov stood by and allowed Lehman to fail, one of Goldman's major competitors, so Goldman is now eating Lehman's lunch. Additionally, the favorable funding rates which the gov is providing to GS (and others) makes it nearly impossible to not make money. So yeah, they're taking advantage of the opportunities presented to them (and good for them), but those opportunities exist due to gov largesse, not due to GS creating them. #goldmansachs
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registered
10/28/09

@charliebabbles: I don't disagree that every financial institution probably needed some sort of guarantee during the worst days of the crisis. Did I say they didn't?

I also agree with you that GS benefitted from Lehman's collapse, and the subsequent capital raising efforts of other financial institutions. Did I say they didn't? I just said they were minting money (w/o saying what was helping) and had no need to pay 50% of their windfall revenues to employees.

Please re-read my comment. I don't think we disagree. #goldmansachs
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Crucifictorius
10/27/09

In reply to AIG Only Wanted to Give Goldman Sachs 40 60 Cents on the Dollar, Then Geithner Stepped In
Dark pools are a bit overhyped thanks to a terrible name. The only real problem with them is that they run counter to the ECMH. If you can trade against a dark pool, then you can buy and sell shares based on your knowledge of the firm without that knowledge becoming built into the exchange price that everyone else sees. That's the whole thing about executing at the right price. Without the pool, major buyers and sellers end up front running themselves as they can't get all the shares they want at the same price. Supply tightens and the price goes up as a result of illiquidity. If enough people use dark pools, the ECMH is unequivocally false in practice regardless of whether it is true in theory. If you trade against the pool, no one sees your trade and you avoid the short term liquidity crunch but you also get away with making the transaction without 'showing your cards' to the broader market. So the issue of dark pools really comes down to whether you think that ma and pa shareholder are entitled to rely on a stock's price as a reflection of everyone's valuations, or if you are ok with saying that share prices are just a function of what people on the exchange are willing to pay today - if you want a valuation go do it yourself. #goldmansachs
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friend_of_a_friend
10/27/09

In reply to AIG Only Wanted to Give Goldman Sachs 40 60 Cents on the Dollar, Then Geithner Stepped In
One of his goals was to persuade the banks to accept discounts of as much as 40 cents on the dollar...

That means they wanted to pay 60 cents on the dollar. #goldmansachs
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John Cook
10/27/09

@friend_of_a_friend: You are correct. It's fixed. #goldmansachs
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Unsolicited Advice
10/27/09

In reply to AIG Only Wanted to Give Goldman Sachs 40 60 Cents on the Dollar, Then Geithner Stepped In
Dark pools were established so institutional and UHNW clients could set market orders to transact extremely large amounts of shares without disclosing them to day-traders and other entities that would bid those positions up or down. Do you know what actually happened when Blue Horseshoe loved Anacott Steel, John? Dark pools were established strictly because of scenarios like that scene in Gekko's office where the foreign banker implores him to stop screwing up his acquisition of a controlling stake by convincing other buyers to jump into an otherwise-moribund investment. This only benefits Goldman insofar as it makes them able to service their clients better. The real victim in a world without dark pools would be institutional buyers and sellers. #goldmansachs
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DahlELama
10/27/09

In reply to AIG Only Wanted to Give Goldman Sachs 40 60 Cents on the Dollar, Then Geithner Stepped In
Sorry, can't help you--the only guy I know at Goldman is currently on a beautiful cross-country trip in the Middle East... Oh, wait. #goldmansachs
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Swifter
10/05/09

In reply to Govt's Phony Optimism Doomed Us All!
Never trust the government. It's full of liars who want to flush your hard earned money.

This is the truest sentence that has ever appeared on this website.
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BooWahBabe
10/05/09

In reply to Govt's Phony Optimism Doomed Us All!
Alll my credit cards, ahead of reg changes, have moved to raise my interest rates.
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If_I_Had_a_Poodle
10/05/09

@BooWahBabe: they're doing it to everyone, deadbeats and best customers. they are vile pigs.
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unclevanya
10/05/09

In reply to Govt's Phony Optimism Doomed Us All!
What Repub staffer wrote that Reuters article? Seems like the actual point of the report was buried on page 2 of the article, which is that they found no evidence/indication that the gov't influenced BOA over the ML merger.

So, government bad for publicly stating its hopes while putting a plan in motion? OK, from now on they will preface everything they do with "Not that this is gonna do squat or anything..." just to cover their asses.
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quantrail
10/05/09

In reply to Govt's Phony Optimism Doomed Us All!
The Fed's true das Es is Walter Sobchak. They threw out a ringer for a ringer and all we ended up with is their dirty undies, the fucking whites.
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Uncle_Billy_Slumming
10/05/09

@quantrail:

You're hired.
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quantrail
10/05/09

@Uncle_Billy_Slumming:

As if I would even DREAM of taking your bullshit money.
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Uncle_Billy_Slumming
10/05/09

@quantrail:

Look, pal, there never was any money
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saya
10/05/09

In reply to Govt's Phony Optimism Doomed Us All!
Never trust the government. Unless you, you know, want them to fix healthcare.
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braak
10/05/09

@saya: Hahah, or you need them to uphold basic property rights, or something.
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morninggloria
08/31/09

In reply to Fed Nets $14 Billion on Bailout
I've decided to rechannel my rage into the fucking over of others. Much more profitable, and better for the ol' chest ticker.
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MrInBetween
08/31/09

In reply to Fed Nets $14 Billion on Bailout
When you've got $10 trillion in debt -- and the bailouts and stimulus cost you a combined $1 trillion-plus -- getting back $14 billion is like finding two quarters buried between the couch cushions.
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skt.smth
08/31/09

@MrInBetween: Well, the idea is that this might happen more and more as debts are repaid. If we make enough in interest and fees from those who repay, that will help to defray the losses from those who end up not being able to, or possibly (in some magical Americaland where even horrible shit always has a silver lining) turn a profit.

I'm thinking that the end result will be something more in line with the former rather than the latter. In which case, many of the individual loans we gave out will end up having been subsidized by those who took loans to begin with. Not such a horrible outcome, all told.
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Edited by skt.smth at 08/31/09 10:30 AM skt.smth was starred skt.smth was unstarred

MrInBetween
08/31/09

@skt.smth: I'll be stunned if the US Government makes enough in interest and fees to make up for the losses of those who can't repay. Has there been a single government bailout in US history that ended up benefitting taxpayers?
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Edited by MrInBetween at 08/31/09 10:50 AM MrInBetween was starred MrInBetween was unstarred

skt.smth
08/31/09

@MrInBetween: Well, any returns in the form of interest and fees necessarily defrays those losses, at least to some extent. It may not be much, but it's better than nothing.
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