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excon · Dec 12, 2012, 07:38 AM

Hello:

When an institution is TOO big to fail, it means that IF they DO fail, We go down the crapper WITH them. We KNOW about that because it ALREADY happened to us. Having had that experience, I've posted several times about our need to BREAK up those institutions, only to be rebuffed by right wingers...

Now, a LOT of things surprise me about their logic, but HERE we have the Sword of Damocles hanging over our economy, and for, apparently, ideological reasons, it MUST REMAIN..

Not surprisingly, we've run into a criminal bank, HSBC, that SHOULD be torn apart and their managers THROWN into the clink... But, they're TOO BIG. If we did that, guess what? You got it. We'll go down with them...

Why would WE put ourselves in that position? More importantly, why do the right wingers INSIST that we STAY in that position?

excon

tomder55 · Dec 12, 2012, 07:42 AM

BS a whole bunch of them should be frog marched wearing orange jump suits . By the way ;I am in favor of breaking up the banks .What I am not in favor of is bailouts. By the way . Where is Jon Corzine these days ?

speechlesstx · Dec 12, 2012, 08:03 AM

I'm not sure where you get this idea that we've rebuffed the idea of breaking up the banks. I don't like big banks, I especially despise Bank of America. My money is in a local family-owned bank... they're good people.

Last I heard Corzine was raising money for Obama's campaign and pondering starting a hedge fund. No, seriously. He wants you to trust him with your money.

excon · Dec 12, 2012, 08:16 AM

Hello again,

You said,

Let them fail then .

Steve said,

let them fail Ex, let them fail.

I said,

Given that they're TOO BIG to fail, we're going to go down with them... Wouldn't it have been better to break them up in to smaller banks, like I suggested?? Then they could fail and we could thumb our noses at them...

Now, you SAY,

BS a whole bunch of them should be frog marched wearing orange jump suits

Well, of course THEY SHOULD, but I have to remind you, that they WON'T because, they're still TOO BIG TO FAIL. If we do bust 'em, we GO DOWN TOO! I didn't then, and STILL don't think you grasp that. That's exactly what TOO BIG TO FAIL means..

THIS is a PERFECT example of how it works out. The banksters are THUMBING their noses at US, and they're DOING it WITH your blessings.

If ONLY you had listened to me and the OWS when we were TELLING you that..

Excon

speechlesstx · Dec 12, 2012, 08:28 AM

Originally Posted by excon

Steve said,

Um, that was paraclete. I'm Steve, not tom, not clete.

excon · Dec 12, 2012, 08:31 AM

Hello again, Fred:

You guys look too much alike.

excon

speechlesstx · Dec 12, 2012, 08:42 AM

I'm the Blue Heeler puppy, tom's the Yankees logo and clete is some figure eight thingy - no resemblance at all. You need new glasses, or maybe it's trouble seeing through the smoke.

tomder55 · Dec 12, 2012, 09:21 AM

And I said :
creative distruction is necessary in a capitalist system. It is through government intervention that companies become too big to fail. The idea that a company can be bailed out creates a situation that encourages reckless and irresponsible risk taking . By guaranteeing the survival it encourages the ignoring the moral hazards inherent in excess risk taking .

excon · Dec 12, 2012, 12:49 PM

Hello again, tom:

So, you think breaking them up IS bailing them out? Okee doakee.

excon

tomder55 · Dec 12, 2012, 05:19 PM

Nope I think bailiing them out extends their flawed existence . The only reason a breakup would be needed is because government intervention allowed them to prosper outside of normal market competition. In the case of HSBC the government should arrest anyone responsible for drug and terror money laundering . Nothing difficult about that . You think if HSBC went belly up there wouldn't be other banks ready to pick up the pieces ?

excon · Dec 12, 2012, 05:26 PM

Hello again, tom:

You think if HSBC went belly up there wouldn't be other banks ready to pick up the pieces ?

Nahhhh, it's not me. It's the Justice Department..

Ok, I admit it WAS the governments' fault that they got TOO BIG TO FAIL... It probably had something to do with that scoundrel Barney Frank. Or, maybe it was the repeal of Sarbaines Oxley?

In any case, WHO CARES who's fault it is? What I care about is that there are LOTS and LOTS of banks out there that are TOO BIG TO FAIL, just WAITING to bring us DOWN. And we'll SEE this happen AGAIN, and then AGAIN.

You DIDN'T support breaking them up, no matter WHAT you say now... Do you NOW support government action to BREAK 'em up?? Am I all wet with my Sword of Damocles comparison??

Excon

PS> (edited) It's becoming clear to me that you don't BELIEVE that banks ARE, or EVER will be TOO BIG TO FAIL. I suspect you think the phrase is a liberal trick, or something.. I really don't know.

paraclete · Dec 12, 2012, 05:27 PM

Speech you are right what I say is let them fail, and speech and I are nothing alike in our views, and I say all those who break the law go to jail and particularly bankers who fail in their duty of trust. There is a whole class of people who have grown to believe they are above the law, that the end justifies the means, that corporate profit and bonuses as are more important than fairness and openness. Where did they get this, they signed on to the stupid capitalist ethic and began to worship money

excon · Dec 12, 2012, 05:36 PM

Hello again,

Am I the only one in the whole wide world who KNOWS what TOO BIG TO FAIL means?? I'm beginning to think so.

Of course, if a bank ISN'T too big to fail, then I agree with ALL of you. Let 'em FAIL.. But, if it's TOO BIG TO FAIL, it's not a good idea to let them fail, because they're TOO BIG TO FAIL.

excon

paraclete · Dec 12, 2012, 05:58 PM

Ex, I say hard luck, no matter how big it is and who it will bring down with it. The reality is if it gets to the point of failing it was done something wrong because being a bank is a licence to print money. You cannot have the situation where the government is the banker of the last resort. This is why you need enforced prudential regulation and you need large conglometates broken up. There used to legislation against cartels and monopolies, when you say too big to fail, you are saying it is in a monopolistic situation, it has too much of the market. It doesn't matter that it has competitors, its market power is too great, so it fails and parts of its business are taken over by smaller banks. The banks should be forced to insure their deposits so if they fail depositors are not affected, just a cost of doing business

excon · Dec 12, 2012, 06:11 PM

Hello again, clete:

You don't understand "too big to fail". I don't know WHAT you think it means, but being too powerful, or having investors that will lose too much money, AIN'T it...

What do YOU think it means? Apparently, you think it's a POLITICAL phrase, geared to DO something, or SCARE somebody for political gain.

Now, it COULD be ME who doesn't understand it.. But, nahhh... It ain't me. I KNOW what it is.

excon

paraclete · Dec 12, 2012, 06:18 PM

Ex I understand it has economic implications and there will be short term chaos in certain markets and some rich dudes will lose some money and some ordinary people will lose some money too. Ex I have been through 9/11, I have been through the GFC, I have lost more money than I care to, but I doubt it would have been any worse if AIG or Goldman or GM or whoever had been allowed to fail. Saving them was just political, an attempt to lessen impacts and of course panic, but you will pay for it for generations

excon · Dec 12, 2012, 06:27 PM

Hello again, clete:

Apparently, you don't believe the phrase, TOO BIG TO FAIL. I do. I'm not going to try to convince you either. But, this isn't about a few bucks. It's about our survival...

This is like YOU saying we could survive a nuclear war, and me saying we can't. That argument wouldn't get solved either.

excon

paraclete · Dec 12, 2012, 06:39 PM

The only thing I know of that is too big to fail is the US because it carries too much debt, but individual institutions, saying too big to fail is like saying we will have a war on banking failure, it is just convenient rhetoric for saying we don't like the consequences. Look ex if your government wants to become lender of the last resort, nationalise your banks, then they really will be too big to fail, as for HSBC, the bank of choice for money laundering, it trained its top executive well, he now is a minister in the UK government. Read whatever inferences you like into that

tomder55 · Dec 13, 2012, 06:52 AM

You DIDN'T support breaking them up, no matter WHAT you say now... Do you NOW support government action to BREAK 'em up?? Am I all wet with my Sword of Damocles comparison??

All you have to do is show me where I said they shouldn't be broken up.. Then show me where I supported TARP to bail them out. Yes you will find where I wrote many times that I don't believe any business is too big to fail .Someone who believes in capitalism would never say that . The real problem in this country is we have let the government grow 'too big to fail' .

paraclete · Dec 13, 2012, 06:55 AM

The government was always too big to fail Tom, I mean if it did goodbye constitution, you would have to start over