Comments on: To Big To Fail… What’s the Bailout For? http://www.financialwidgets.com/to-big-to-fail-whats-the-bailout-for/ Stock Trading, Money Matters, and Fun Sun, 11 Sep 2011 21:49:49 +0000 hourly 1 http://wordpress.org/?v=3.3.1 By: Patrick http://www.financialwidgets.com/to-big-to-fail-whats-the-bailout-for/#comment-86 Patrick Sun, 10 Jan 2010 00:44:30 +0000 http://www.financialwidgets.com/?p=364#comment-86 Leigh, I agree that the bank bailout was necessary. I also agree that the finnies may move higher before they start rolling down. But as for the why of it, I disagree that low interest rates are driving enough money back into the market to maintain this level, let alone to drive it higher. But what we have here is a margin call by investors to the banks that were then bailed out of by the government. It's akin someone's daddy paying theirs gambling debts because their daddy didn't teach them to manage money. And daddy is managing his money the same way. Unfortunately, daddy's money comes from us and we can't call his margins. If it was an individual he'd forced to liquidate and probably forced into bankruptcy. Instead, the government just continues to charge higher and higher taxes. So now we have the same type of Ponzi scheme that the banks gambled and lost to that is now being ran by the government. And they are making pretty d*#m good use of it. Fear and greed is now back in balance in the stock market. Fear from the retail investor and greed from the institutional investors (banks included) and the government. For all that, and yet no fix for the problem of too big to fail, we taxpayers are being soaked to the tune of $6 trillion. People are going to start voting with their pocketbooks and I just hope that they start while they still have one. Leigh,

I agree that the bank bailout was necessary. I also agree that the finnies may move higher before they start rolling down. But as for the why of it, I disagree that low interest rates are driving enough money back into the market to maintain this level, let alone to drive it higher.

But what we have here is a margin call by investors to the banks that were then bailed out of by the government.

It’s akin someone’s daddy paying theirs gambling debts because their daddy didn’t teach them to manage money. And daddy is managing his money the same way.

Unfortunately, daddy’s money comes from us and we can’t call his margins.

If it was an individual he’d forced to liquidate and probably forced into bankruptcy. Instead, the government just continues to charge higher and higher taxes.

So now we have the same type of Ponzi scheme that the banks gambled and lost to that is now being ran by the government. And they are making pretty d*#m good use of it.

Fear and greed is now back in balance in the stock market. Fear from the retail investor and greed from the institutional investors (banks included) and the government.

For all that, and yet no fix for the problem of too big to fail, we taxpayers are being soaked to the tune of $6 trillion.

People are going to start voting with their pocketbooks and I just hope that they start while they still have one.

]]> By: Leigh Drogen http://www.financialwidgets.com/to-big-to-fail-whats-the-bailout-for/#comment-77 Leigh Drogen Fri, 08 Jan 2010 14:53:07 +0000 http://www.financialwidgets.com/?p=364#comment-77 I appreciate the link to the post, and the thoughtful analysis. The problem with giving that money directly to the public, on one form or another, is that without a banking system none of it matters. The whole populist, help main street not wall street movement is missing the bigger picture, this country, nor the entire world, can operate without a functioning American banking system. The public still does not quite understand the dire straits that these banks were in, hell, Paulson got down on his knees and literally cried and begged Pelosi for the bailout, that kind of thing doesn't happen. Yes, the banks made a lot of money because of the government, and some banks that didn't need the money, Goldman Sachs, made a crap load as well because the government needed them in the asset reflation scheme. Was this all kosher, hell no, there was no precedent for the type of action the took, but was it necessary, you bet. I appreciate the link to the post, and the thoughtful analysis. The problem with giving that money directly to the public, on one form or another, is that without a banking system none of it matters. The whole populist, help main street not wall street movement is missing the bigger picture, this country, nor the entire world, can operate without a functioning American banking system. The public still does not quite understand the dire straits that these banks were in, hell, Paulson got down on his knees and literally cried and begged Pelosi for the bailout, that kind of thing doesn’t happen. Yes, the banks made a lot of money because of the government, and some banks that didn’t need the money, Goldman Sachs, made a crap load as well because the government needed them in the asset reflation scheme. Was this all kosher, hell no, there was no precedent for the type of action the took, but was it necessary, you bet.

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