Skip to comments.Resist The Urge To Punish Success ( RE: Goldman Sachs)
Posted on 07/20/2009 12:21:49 PM PDT by Ernest_at_the_Beach
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Uh, yes, they played their own role in overleveraging the financial markets.
That is the first point.
The second point is that your fantasy policy is stupid and that is why it was not followed by the responsible men actually in charge of the matter. Not because it helped Goldman or AIG or your Aunt Mabel, but because it helped the US treasury. They tried the puritanical no bailouts line with Lehman, and attempting to "save" the treasury about $60 billion that way, for all of 72 hours, cost the authorities $2 trillion in necessary interventions by the following Friday's close. Starving a panic is stoopid, it doesn't work. Some of them had to be beaten over the head by events to admit this, but admit it they did; you still haven't. If they had continued on the no bailout policy, it would not have saved them another $185 billion or whatever on AIG. It would just have cost them another $2 trillion, or $5 trillion, in another month or so.
In the long run, the treasury is only solvent if the financial markets in which they live are sound. There was never any prospect of the treasury not being on the hook, or just backing away and pretending that others could take all losses. All the losses would have multipled 10 to 100 fold and ended up in a big steaming pile at the treasury, after first taking down more intervening institutions and wrecking more future economic growth.
Your approval isn't required for any of those propositions either. Any more than a stone needs your permission to fall under the force of gravity.
The treasury did the right thing, it did not harm you in the slightest, it benefited you. It benefited other men too, and this apparently bothers you. Tough freaking toenails. None of the rest of us are under any obligation to give a damn about your raving lunacies and your false fantasy alternate realities. And I for one don't.
Your policy recommendations are that stupid. The comparison is quite exact.
That's my point, weasel. GS did such a good job auditing AIG's ability to make good on its CDS commitments that they missed the fact that when the economy slowed, AIG would need $185 BILLION in goverment assistance to meet commitments. And that GS would rely on a decision by government officials as to whether they would get that $13 billion from AIG. That is an abject failure to properly assess risk by any objective standard - taking a path to where your fate as a corporation is left in the hands of others.
And the fact that the entire financial sector required massive intervention by goverments around the world shows just how wrong the lot of all these geniuses were in getting so overleveraged.
So these guys you are defending have triggered a financial crisis that so far has cost this country $4.7 billion, led to unemployment approaching 10 percent, yet you act like no one was impacted by all this? And guys like me are wrong for pointing all that out? You're truly an obtuse idiot and an utter fool.