Bankers have discovered the dirty secret of modern finance. If one guy loses a little money he gets fired. If a firm loses a lot of money its position suffers and, if the loss is great enough, the desks and property get sold off piecemeal. But if enough firms make shitty investments and lose enough money, the government has to give out money so everyone can start over!
It really does boil down to something like a hostage crisis. If we don’t fix the regulatory framework to the point that “too big to fail” becomes an anachronism then we will deserve it when it happens again.
Chuck
Pajamas Media is now showing ads for the Teabagger parties. With copy like "America is on the brink of another revolution".
This constant drumbeat from Malkin and company about revolutions just isn’t okay anymore.
I think it’s high time you hang the pajamas out to dry, if you catch my drift.
Comrade Mary, Would-Be Minion Of Bad Horse
OT: Looks like Sebelius for HHS.
John Cole
@Chuck: The ads leave on 2 April. Chill.
JenJen
@Chuck: I think just one more month. No big whoop.
modgen
Too big to fail = too big to exist.
Save America. Impeach Geithner & Bernanke. Or maybe just lynch a banker.
Ivan Ivanovich Renko
@modgen: Beat me to it.
It’s that simple.
JL
OT.. It appears that Rick Santelli’s rant on cnbc was planned.. Barry at the Big Picture has more info link
gogiggs
I’m with Mogden, part of the new regulations that Obama talked about needs to be breaking up these companies that are so-called "too big to fail". Not to mention that there would probably be some nice side benefits.
AhabTRuler
@JL: Good. I think it is important that we acknowledge Santelli’s role as the Chief Teabagging Officer of the movement.
Betsy
Now is a good time to revisit this classic.
Comrade Stuck
Yes, and we are going to have to pay the ransom, this time. If Obama and dems don’t install the requisite guardrails and stoplights for these people, next time, the perps, industry, and we the hostage, likely won’t survive.
Max
Unfortunately, "we" aren’t driving this particular bus and even though many of us see that the front wheels are already over the cliff’s edge, our influence on the direction of the bus is somewhere between zero and nothing.
Chuck Butcher
In the spirit of Hannity and his Revolution Poll, I thought I’d offer my readers up one for investment bankers. Not really scientific and all but possibly cathartic.
No, you only get to vote once, but it is multiple choice…
JenJen
@JL: Now that is some interesting shit. It could certainly all be a weird coincidence, but, when was the last time something happened by accident to the Republican Party?
No, Joe The Plumber doesn’t count. :-)
KevOH
@JL:
Whois: chicagoteaparty.com
Results:
Zachary Christenson
849 N. Franklin
Chicago, Illinois 60610
United States
Registered through: GoDaddy.com, Inc. (http://www.godaddy.com)
Domain Name: CHICAGOTEAPARTY.COM
Created on: 03-Aug-08
JL
@KevOH: It was not activated until Santelli’s rant. I did not link to the playboy article itself but what Barry has posted is interesting. Let’s see if Santelli threatens a lawsuit.
JenJen
@JL: For what it’s worth, Malkin, et al prefer OfficialChicagoTeaParty.com. Registered on February 19, 2009.
KevOH
@JL:
True. Most major cities have someone camping on the citynameteaparty.com domain.
Comrade Darkness
Yup.
Nicely summarized.
TenguPhule
Its for times like this that the CIA was designed for.
AhabTRuler
Yeah, but they keep getting distracted by the torture and the overthrowing of relatively innocuous socia list governments. They never get around to the useful stuff.
Delia
Yeah, yesterday on Morning Edition they had the guy from This American Life doing a business segment where he interviewed some economist who was saying that despite the fact that it’s the bankers who have screwed up, we, the taxpayers all going to have to pay a lot for the mess for a long time to come no matter what.
The interviewer said, "So it’s basically ‘Nice little global economy you’ve got there; it’d be a shame if something happened to it,’ huh?"
Perry Como
OfficialChicagoTeaBagging.com could be used for lulz.
Scott H
Martha Stewart goes to prison over diddling about with $40,000 of her own money on an insider’s tip. Pish away $50 billion of other people’s money and Bernie Madoff is forced to live in his penthouse. Rather similar to the inverse penalties between murder and genocide.
jcricket
This is basically a result of two things:
1) The "short term" is long enough, and the rewards so extreme during that "short term", that who gives a rats ass about the long-term consequences? If you make $10 m/year for 5-10 years, who cares if you get fired after that and never work again? And screw all those people you permanently hosed and the global economy you wrecked. Whatever dude. No take-backsies.
If there were better regulation, or at least clawbacks, or even just much higher income taxes, at least we (everyone who gets screwed by this thinking) would get something out of the shenanigans of these people.
2) Related to #1 is the notion that companies only exist to please their "shareholders" – which these days are already ultra-wealthy people or those who represent their interests (Those of us with stock in 401ks/IRAs are not really shareholders) interested in juiced-up quarterly earnings. This leads to ginned-up finances to please people with a short-term (1 quarter – 1 year, tops) outlook on things.
Listen to a conference call with the CEO of Costco. He regularly has to defend his policies of, basically, not treating his employees like fucking slaves, because "shareholders" want to wring another $0.02 EPS NOW so they can flip their shares. He even has good economic (not populist/liberal/progressive) arguments for paying people well and giving them good benefits, but no, because competitors stick probes up their employees asses and get another 0.1% of productivity out of them, Costco should too.
This model of capitalism is BS. It doesn’t need to be replaced with communism or socialism but we can’t stay on this path.
Walker
The secret of modern finance? Ahem.
John Maynard Keynes, Consequences to the Banks of a Collapse in Money Values, 1931.
maya
Actually, she went to prison for lying to a fed during an interview, not even under oath. She wasn’t doing any inside trading, she just got tipped by her broker that Wachtel was selling off. He’s her broker. Believe it not, that’s what he’s supposed to do – warn his clients of significant changes in a stock position. You’d want your broker to do the same for you. Wachtel never talked to her to advise her to sell, or at least, there was never any evidence of that. He was the "insider", trading, that’s why he went to jail.
Outside of that, I hear what your sayin.