TARP has lost 40% since inception

[Allan from Fallbrook]

Breeze: You’re off your meds again, aren’t you? Where, oh where, to begin?

First off, there is a key distinction between businesses and individuals, and being a “balance sheet” kind of guy (as you yourself pointed out), my advocacy has always been for safe and sound lending.

Obviously, that has not happened and that is a major part of the problem we’re facing.

Secondly, and based on that, I would never and never have advocated lending to someone who is a poor credit risk, business or personal.

Third, good and great credit risks remain out there and they need capital to continue operations and grow their businesses (this, Breeze, would the aspect of “proper capital allocation” you seem to be willfully ignoring). As I mentioned before, credit remains frozen due to fear of the unknown, meaning those crappy assets that haven’t come to light, versus actual credit risk, which is still finding it’s proper pricing in the market. In order for us to find our way out of this morass, capital will need to be properly allocated to those businesses that are best able to put it to use and grow efficiently. Parenthetically, yes, we are watching the government engage in some central planning and questionable “asset management”, but we’re also in the throes of a very serious credit crisis, with the risk of systemic collapse near by (see the fourth point below).

Fourth, the word “crisis” by it’s very definition recognizes a situation that will pass at some point. Where that point is can often be determined by what strong actions are employed to avert or mitigate it. I am an advocate of the free market (not that I think that one exists, but that’s another story), but I also recognize that sometimes you have to do things that transcend normal policy, since these aren’t normal times. Akin to Lincoln’s suspension of the writ of habeas corpus during the American Civil War. Extraordinary measure for an extraordinary time (and, yes, Breezie, he reinstated it, so please don’t worry).

Fifth, I’m not a liberal. Never have been, never will be. You, Breeze, are a liberal, or, more correctly, a leftist. Hence your doe-eyed, stutter breathed support of Obama and his various henchpersons and minions. Me, not so much.

Sixth, Barney Frank? Really? Yet another cheap strawman argument and with no basis (given that I’m a conservative and all). No, my esteem for the Honorable Mr. Frank is about on par with Maxine Waters, Henry Waxman and Diane Feinstein (whom I fondly remember from my days growing up in the San Francisco Bay Area).

[Arraya]

Personally, I think this story has much more to do with political and financial connections than it does with what’s good for the nation.

Like watching a greek tragedy that we know ends badly. Yet, we watch just to see the twists and turns in the plot. Do the actors know how it ends? Probably not. How about the directors?

All the world’s a stage….

http://www.atimes.com/atimes/Global_Economy/KC14Dj04.html

Increasingly ominous clouds are gathering in what could soon be the perfect storm against the United States dollar and against the present dollar-centric global financial order.

This is not shaping up to be a storm that anyone is trying to initiate, not even those who are actively driving for a new global financial order that is no longer centered on the dollar. Instead, it will result from a correlation of forces arising out of the deepening global financial and economic crises, coupled with recurring and conspicuous miscalculation on the part of some of the world’s political, financial and economic leaders.

The storm has the potential to cause upheaval on a grand scale, opening the door to swift, and largely uncontrolled, fundamental transformation.

As is widely recognized, the present financial order that is

inordinately reliant on the US dollar must some day give way to a new order that is more balanced, stable, resilient and reliable, one that is based on multiple currencies and that therefore won’t be plagued by the extremely dangerous structural drawback of an increasingly worrisome elemental single point of failure (the dollar).

But if the current dollar-centric financial order should become more seriously shaken than it already has been, perhaps even suffering a collapse, as a casualty of the present deepening global crisis, then the transition to any new global financial order is most likely to be disorderly, disruptive and unmanageable rather than gradual and orderly.

[Arraya]

Personally, I think this story has much more to do with political and financial connections than it does with what’s good for the nation.

Like watching a greek tragedy that we know ends badly. Yet, we watch just to see the twists and turns in the plot. Do the actors know how it ends? Probably not. How about the directors?

All the world’s a stage….

http://www.atimes.com/atimes/Global_Economy/KC14Dj04.html

Increasingly ominous clouds are gathering in what could soon be the perfect storm against the United States dollar and against the present dollar-centric global financial order.

This is not shaping up to be a storm that anyone is trying to initiate, not even those who are actively driving for a new global financial order that is no longer centered on the dollar. Instead, it will result from a correlation of forces arising out of the deepening global financial and economic crises, coupled with recurring and conspicuous miscalculation on the part of some of the world’s political, financial and economic leaders.

The storm has the potential to cause upheaval on a grand scale, opening the door to swift, and largely uncontrolled, fundamental transformation.

As is widely recognized, the present financial order that is

inordinately reliant on the US dollar must some day give way to a new order that is more balanced, stable, resilient and reliable, one that is based on multiple currencies and that therefore won’t be plagued by the extremely dangerous structural drawback of an increasingly worrisome elemental single point of failure (the dollar).

But if the current dollar-centric financial order should become more seriously shaken than it already has been, perhaps even suffering a collapse, as a casualty of the present deepening global crisis, then the transition to any new global financial order is most likely to be disorderly, disruptive and unmanageable rather than gradual and orderly.

[Arraya]

Personally, I think this story has much more to do with political and financial connections than it does with what’s good for the nation.

Like watching a greek tragedy that we know ends badly. Yet, we watch just to see the twists and turns in the plot. Do the actors know how it ends? Probably not. How about the directors?

All the world’s a stage….

http://www.atimes.com/atimes/Global_Economy/KC14Dj04.html

Increasingly ominous clouds are gathering in what could soon be the perfect storm against the United States dollar and against the present dollar-centric global financial order.

This is not shaping up to be a storm that anyone is trying to initiate, not even those who are actively driving for a new global financial order that is no longer centered on the dollar. Instead, it will result from a correlation of forces arising out of the deepening global financial and economic crises, coupled with recurring and conspicuous miscalculation on the part of some of the world’s political, financial and economic leaders.

The storm has the potential to cause upheaval on a grand scale, opening the door to swift, and largely uncontrolled, fundamental transformation.

As is widely recognized, the present financial order that is

inordinately reliant on the US dollar must some day give way to a new order that is more balanced, stable, resilient and reliable, one that is based on multiple currencies and that therefore won’t be plagued by the extremely dangerous structural drawback of an increasingly worrisome elemental single point of failure (the dollar).

But if the current dollar-centric financial order should become more seriously shaken than it already has been, perhaps even suffering a collapse, as a casualty of the present deepening global crisis, then the transition to any new global financial order is most likely to be disorderly, disruptive and unmanageable rather than gradual and orderly.

[Arraya]

Personally, I think this story has much more to do with political and financial connections than it does with what’s good for the nation.

Like watching a greek tragedy that we know ends badly. Yet, we watch just to see the twists and turns in the plot. Do the actors know how it ends? Probably not. How about the directors?

All the world’s a stage….

http://www.atimes.com/atimes/Global_Economy/KC14Dj04.html

Increasingly ominous clouds are gathering in what could soon be the perfect storm against the United States dollar and against the present dollar-centric global financial order.

This is not shaping up to be a storm that anyone is trying to initiate, not even those who are actively driving for a new global financial order that is no longer centered on the dollar. Instead, it will result from a correlation of forces arising out of the deepening global financial and economic crises, coupled with recurring and conspicuous miscalculation on the part of some of the world’s political, financial and economic leaders.

The storm has the potential to cause upheaval on a grand scale, opening the door to swift, and largely uncontrolled, fundamental transformation.

As is widely recognized, the present financial order that is

inordinately reliant on the US dollar must some day give way to a new order that is more balanced, stable, resilient and reliable, one that is based on multiple currencies and that therefore won’t be plagued by the extremely dangerous structural drawback of an increasingly worrisome elemental single point of failure (the dollar).

But if the current dollar-centric financial order should become more seriously shaken than it already has been, perhaps even suffering a collapse, as a casualty of the present deepening global crisis, then the transition to any new global financial order is most likely to be disorderly, disruptive and unmanageable rather than gradual and orderly.

[Arraya]

Personally, I think this story has much more to do with political and financial connections than it does with what’s good for the nation.

Like watching a greek tragedy that we know ends badly. Yet, we watch just to see the twists and turns in the plot. Do the actors know how it ends? Probably not. How about the directors?

All the world’s a stage….

http://www.atimes.com/atimes/Global_Economy/KC14Dj04.html

Increasingly ominous clouds are gathering in what could soon be the perfect storm against the United States dollar and against the present dollar-centric global financial order.

This is not shaping up to be a storm that anyone is trying to initiate, not even those who are actively driving for a new global financial order that is no longer centered on the dollar. Instead, it will result from a correlation of forces arising out of the deepening global financial and economic crises, coupled with recurring and conspicuous miscalculation on the part of some of the world’s political, financial and economic leaders.

The storm has the potential to cause upheaval on a grand scale, opening the door to swift, and largely uncontrolled, fundamental transformation.

As is widely recognized, the present financial order that is

inordinately reliant on the US dollar must some day give way to a new order that is more balanced, stable, resilient and reliable, one that is based on multiple currencies and that therefore won’t be plagued by the extremely dangerous structural drawback of an increasingly worrisome elemental single point of failure (the dollar).

But if the current dollar-centric financial order should become more seriously shaken than it already has been, perhaps even suffering a collapse, as a casualty of the present deepening global crisis, then the transition to any new global financial order is most likely to be disorderly, disruptive and unmanageable rather than gradual and orderly.

[scaredyclassic]

THEBREEZE is right. screw the current system. There’s nothing worse saving. .A man whose income depends on believing one thing will not believe another thing (or something liek that). there is something betetr and different than what we have and doubling down on the current garbage is not the answer. we are supposed to care aboutt he wacko derivatives that greenspan told us didn’t need to be regulated? For that we have to sacrifice the currency? screw it. let the chips fall where they may. let the free rigged market work.

[scaredyclassic]

THEBREEZE is right. screw the current system. There’s nothing worse saving. .A man whose income depends on believing one thing will not believe another thing (or something liek that). there is something betetr and different than what we have and doubling down on the current garbage is not the answer. we are supposed to care aboutt he wacko derivatives that greenspan told us didn’t need to be regulated? For that we have to sacrifice the currency? screw it. let the chips fall where they may. let the free rigged market work.

[scaredyclassic]

THEBREEZE is right. screw the current system. There’s nothing worse saving. .A man whose income depends on believing one thing will not believe another thing (or something liek that). there is something betetr and different than what we have and doubling down on the current garbage is not the answer. we are supposed to care aboutt he wacko derivatives that greenspan told us didn’t need to be regulated? For that we have to sacrifice the currency? screw it. let the chips fall where they may. let the free rigged market work.

[scaredyclassic]

THEBREEZE is right. screw the current system. There’s nothing worse saving. .A man whose income depends on believing one thing will not believe another thing (or something liek that). there is something betetr and different than what we have and doubling down on the current garbage is not the answer. we are supposed to care aboutt he wacko derivatives that greenspan told us didn’t need to be regulated? For that we have to sacrifice the currency? screw it. let the chips fall where they may. let the free rigged market work.

[scaredyclassic]

THEBREEZE is right. screw the current system. There’s nothing worse saving. .A man whose income depends on believing one thing will not believe another thing (or something liek that). there is something betetr and different than what we have and doubling down on the current garbage is not the answer. we are supposed to care aboutt he wacko derivatives that greenspan told us didn’t need to be regulated? For that we have to sacrifice the currency? screw it. let the chips fall where they may. let the free rigged market work.

[patientrenter]

Wow! Finally, a thread with several genuinely interesting and funny conversations. Thanks to all for the entertainment.

UCGal: I’ve gone through AIG’s books carefully, and I don’t agree with several of Thomas Gober’s points. The truth is that AIG’s insurance operations were, overall, pretty good compared to other insurance companies and other financial institutions in general. Of course, most of the financial sector is in the toilet, so most companies have some issues.

DWCAP and others: Yes, the big show over $165 million in bonuses (that’s less than 0.02% of the amount Bernanke announced he was going to flush down the toilet just this week) and much of the other fireworks on Capitol Hill are designed to distract the weak-minded from the main action. We all know that scene from The Wizard of Oz. There is no single master manipulator, just a community of Democratic and Republican politicians hungry for votes and dollars, bankers and businessmen hungry for jobs and dollars, and 200 million voters with a perceived stake in higher asset prices.

Allan and davelj: Your support for Bernanke and others blowing bubbles from Washington DC is misplaced, I think. You see them as flawed but basically competent and trustworthy. They are just limited practical people administering the medicine the visionary Keynes prescribed 70 years ago. It has become very fashionable to dismiss the moral hazard concerns, and to attribute nothing but an altruistic concern for the greater economic good to those who advocate massive bailouts.

But what if all this is mostly just a massive and wasteful bailout for the reckless and irresponsible, under the guise of a rescue of our economic way of life? We’ll have a boost in the GDP numbers because of the bailout actions, but what if most of that is just lousy measurement of our real welfare? Does it really make us wealthier to keep hundreds of thousands of bankers at their desks instead of figuring out which other profession to make a career of? Or to pretend that our houses are all worth many, many years of someone else’s savings so that we can continue to fantasize about playing golf for 30 years when we retire and scale down?

I would be perfectly OK with 10 years of GDP 20% less than today’s, if a lot of the missing 20% was mortgage broking, asset managers, FNMA and Freddie and most of the other govt guarantee entities, and other people who add little value, or even destroy it. Yes, others would get hurt too, but we’d do fine overall. We really need a housecleaning at this point, a clean break with the past. We’re not getting it.

[patientrenter]

Wow! Finally, a thread with several genuinely interesting and funny conversations. Thanks to all for the entertainment.

UCGal: I’ve gone through AIG’s books carefully, and I don’t agree with several of Thomas Gober’s points. The truth is that AIG’s insurance operations were, overall, pretty good compared to other insurance companies and other financial institutions in general. Of course, most of the financial sector is in the toilet, so most companies have some issues.

DWCAP and others: Yes, the big show over $165 million in bonuses (that’s less than 0.02% of the amount Bernanke announced he was going to flush down the toilet just this week) and much of the other fireworks on Capitol Hill are designed to distract the weak-minded from the main action. We all know that scene from The Wizard of Oz. There is no single master manipulator, just a community of Democratic and Republican politicians hungry for votes and dollars, bankers and businessmen hungry for jobs and dollars, and 200 million voters with a perceived stake in higher asset prices.

Allan and davelj: Your support for Bernanke and others blowing bubbles from Washington DC is misplaced, I think. You see them as flawed but basically competent and trustworthy. They are just limited practical people administering the medicine the visionary Keynes prescribed 70 years ago. It has become very fashionable to dismiss the moral hazard concerns, and to attribute nothing but an altruistic concern for the greater economic good to those who advocate massive bailouts.

But what if all this is mostly just a massive and wasteful bailout for the reckless and irresponsible, under the guise of a rescue of our economic way of life? We’ll have a boost in the GDP numbers because of the bailout actions, but what if most of that is just lousy measurement of our real welfare? Does it really make us wealthier to keep hundreds of thousands of bankers at their desks instead of figuring out which other profession to make a career of? Or to pretend that our houses are all worth many, many years of someone else’s savings so that we can continue to fantasize about playing golf for 30 years when we retire and scale down?

I would be perfectly OK with 10 years of GDP 20% less than today’s, if a lot of the missing 20% was mortgage broking, asset managers, FNMA and Freddie and most of the other govt guarantee entities, and other people who add little value, or even destroy it. Yes, others would get hurt too, but we’d do fine overall. We really need a housecleaning at this point, a clean break with the past. We’re not getting it.

[patientrenter]

Wow! Finally, a thread with several genuinely interesting and funny conversations. Thanks to all for the entertainment.

UCGal: I’ve gone through AIG’s books carefully, and I don’t agree with several of Thomas Gober’s points. The truth is that AIG’s insurance operations were, overall, pretty good compared to other insurance companies and other financial institutions in general. Of course, most of the financial sector is in the toilet, so most companies have some issues.

DWCAP and others: Yes, the big show over $165 million in bonuses (that’s less than 0.02% of the amount Bernanke announced he was going to flush down the toilet just this week) and much of the other fireworks on Capitol Hill are designed to distract the weak-minded from the main action. We all know that scene from The Wizard of Oz. There is no single master manipulator, just a community of Democratic and Republican politicians hungry for votes and dollars, bankers and businessmen hungry for jobs and dollars, and 200 million voters with a perceived stake in higher asset prices.

Allan and davelj: Your support for Bernanke and others blowing bubbles from Washington DC is misplaced, I think. You see them as flawed but basically competent and trustworthy. They are just limited practical people administering the medicine the visionary Keynes prescribed 70 years ago. It has become very fashionable to dismiss the moral hazard concerns, and to attribute nothing but an altruistic concern for the greater economic good to those who advocate massive bailouts.

But what if all this is mostly just a massive and wasteful bailout for the reckless and irresponsible, under the guise of a rescue of our economic way of life? We’ll have a boost in the GDP numbers because of the bailout actions, but what if most of that is just lousy measurement of our real welfare? Does it really make us wealthier to keep hundreds of thousands of bankers at their desks instead of figuring out which other profession to make a career of? Or to pretend that our houses are all worth many, many years of someone else’s savings so that we can continue to fantasize about playing golf for 30 years when we retire and scale down?

I would be perfectly OK with 10 years of GDP 20% less than today’s, if a lot of the missing 20% was mortgage broking, asset managers, FNMA and Freddie and most of the other govt guarantee entities, and other people who add little value, or even destroy it. Yes, others would get hurt too, but we’d do fine overall. We really need a housecleaning at this point, a clean break with the past. We’re not getting it.

[patientrenter]

Wow! Finally, a thread with several genuinely interesting and funny conversations. Thanks to all for the entertainment.

UCGal: I’ve gone through AIG’s books carefully, and I don’t agree with several of Thomas Gober’s points. The truth is that AIG’s insurance operations were, overall, pretty good compared to other insurance companies and other financial institutions in general. Of course, most of the financial sector is in the toilet, so most companies have some issues.

DWCAP and others: Yes, the big show over $165 million in bonuses (that’s less than 0.02% of the amount Bernanke announced he was going to flush down the toilet just this week) and much of the other fireworks on Capitol Hill are designed to distract the weak-minded from the main action. We all know that scene from The Wizard of Oz. There is no single master manipulator, just a community of Democratic and Republican politicians hungry for votes and dollars, bankers and businessmen hungry for jobs and dollars, and 200 million voters with a perceived stake in higher asset prices.

Allan and davelj: Your support for Bernanke and others blowing bubbles from Washington DC is misplaced, I think. You see them as flawed but basically competent and trustworthy. They are just limited practical people administering the medicine the visionary Keynes prescribed 70 years ago. It has become very fashionable to dismiss the moral hazard concerns, and to attribute nothing but an altruistic concern for the greater economic good to those who advocate massive bailouts.

But what if all this is mostly just a massive and wasteful bailout for the reckless and irresponsible, under the guise of a rescue of our economic way of life? We’ll have a boost in the GDP numbers because of the bailout actions, but what if most of that is just lousy measurement of our real welfare? Does it really make us wealthier to keep hundreds of thousands of bankers at their desks instead of figuring out which other profession to make a career of? Or to pretend that our houses are all worth many, many years of someone else’s savings so that we can continue to fantasize about playing golf for 30 years when we retire and scale down?

I would be perfectly OK with 10 years of GDP 20% less than today’s, if a lot of the missing 20% was mortgage broking, asset managers, FNMA and Freddie and most of the other govt guarantee entities, and other people who add little value, or even destroy it. Yes, others would get hurt too, but we’d do fine overall. We really need a housecleaning at this point, a clean break with the past. We’re not getting it.

[Author]

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