Sunday, October 23, 2011

From Wall Street - 23-Oct 2011

This article has been circulating around the street. Its about dinosaurs, Wall Street and Main Street.
Posted by at 1:43 PM
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5 comments:

Greg said...

Well that's nice an sassy, a convenient way to deflect the animosity that Wall Street AND our government leaders in Washington earned.

$43,333 from every man, woman, and child in America--that's the true cost of the taxpayer bailouts of the big banks and Wall Street. Nomi Prins, a former managing director at Goldman Sachs and former senior managing director at Bear Sterns, writes in her book, It Takes a Pillage, this was the "largest transfer of wealth from the American people to the banking system in the nation's history"..., "a largely transparent $13 trillion bailout of the financial industry" that left the banking and investment structures intact. The bailout has made the average American family poorer by nearly $150,000 while the Wall Street execs continue to enjoy their multi-million dollar estates in the Hamptons. They created the crisis and we, the taxpayers, continue to pay their exorbitant bonuses. And what is their product? What do financial institutions produce? Nomi writes, "finance is one of the few disciplines based on the creation of absolutely nothing".

If you're at all interested in the details of how you became $43,000 poorer bailing out the wealthy banksters, this book is a great place to start. (The $700 billion TARP program was but a drop in the bucket compared to what went on behind the scenes at the Fed, FDIC, and other government agencies that contributed to the $13 trillion bailout bill.)

October 23, 2011 7:07 PM
MK said...

Consider this, without finance, nothing gets created by anyone in any business anywhere - businesses need finance to function. So in effect, finance and Wall Street is the only discipline responsible for the creation of everything to put it in Nomi terms. Finance is the lifeblood for business.

I dont know if the 150k figure is accurate, but I do know that if the bailout did not take place, things would be much worse now for the average family ie: unemployment would be 25%.

As for creation of the crisis, this was due to the creation and popping of the national housing bubble and everyone is to blame for the housing bubble.

October 24, 2011 8:14 AM
Greg said...

This country could have done a LOT with 13 trillion dollars! If instead of giving that money to banks and CEO's that were responsible for the crisis, what if we had used it for infrastructure projects, for schools, higher education, R&D into alternative energy production.

The thing that bothers me about that email is that first of all there's a lot of arrogance there--as in WE hard workers at Wall Street are the ones who CREATE WEALTH. Because of our long hours, you serfs can get higher tips at your waiters jobs and you construction workers can actually have a job. So that's the first thing, the implication that Wall Street creates the country's wealth.

The second is that the writer completely ignores the main reason the protestors are out there: The corruption of our government, the owning of our government by the banksters, AND the payment of taxpayers money to the banksters by corrupt government officials.

Here's a little tidbit of what went on during the crisis, just one small thing among a litany of outright thefts by our government officials. Hank Paulson gets approval for TARP money. He then changes his mind about how that money is going to be spent (and doesn't go back to Congress for approval) and buy preferred stock with the money. And what does he get? For every $100 he spends on the preferred stock, he gets $75 worth of stock. So $25 on every 100 is effectively STOLEN from the public and given to the banks.

(Meanwhile Warren Buffet buys preferred stock from Goldman. And what does he get? For every $100 that Buffet spends, he gets $110 worth of preferred stock.)

October 24, 2011 10:12 AM
Greg said...

I'm not to blame for the housing bubble. I did not buy my house at ridiculously inflated prices. Many intelligent people saw what was happening to housing prices and made the smart decision to not participate.

The housing bubble was caused by ridiculously low interest rates, AND by the way CEO and top exec compensation is made. The CEO's got huge bonuses for making subprime loans which paid a much higher interest rate than normal loans. So in the short term, for a quarter or two or three, the banks made huge profits. Turns out, the loans were made to people who could not afford them and many of them were liar loans where fraud had occurred during the application process.

The housing crisis was created by writing so many subprime loans to people who could not afford them, so they could buy houses at prices that were way above historical fair value. Who's responsible? the execs running the banks that wrote those loans, the loan officers who made them, and the people who took them out. Yes, that's a lot of people, but it ain't "everyone"!

October 24, 2011 10:20 AM
MK said...

1) Spending the bailout money on projects other than saving the financial system would have allowed the entire economic system to collapse. When the patient is bleeding to death, you have to stop the bleeding, not get him a new gym membership.

2) Finance may or may not create wealth but it always enables wealth. It is the lifeblood of business.

3) Everyone includes anyone in the same boat and unfortunately, that included everyone.

October 24, 2011 10:59 AM

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