That's a separate issue though - right now pretending like these assets are worth more isn't really going to alleviate the burden ont he taxpayers when it turns out that they're not
So what you are saying is in the good times lets let bank overvalue assets and in the bad times lets protect them. What about all those guys shorting these companies is it fair to them?
No, i'm just saying that valuing an asset based on some imaginary idea that it has to sell RIGHT NOW isn't, in my view, a good view on value.
let's goooo market!! i want to lay into this thing short.....buy buy buy! financials are not participating in this rally and don't have any volume behind them. market volume in general kind of sucks too.
I couldn't honestly care less about people trying to profit from shorting. I'd laugh my ass off if they got screwed.
The Fed is making the auto manufacturers restructure, to a more sustainable business model. Some people will lose their jobs permanently and their lives will be dramatically impacted. Others will keep their jobs and have the outlook of maintaining their careers. The tradeoff is that if the autos don't restructure now (impacting some employees) that later when they go bankrupt all of the employees will be impacted. Why are the financials not given the same treatment? As an example, I suspect that most of AIG's employees will still have jobs after a restructure. Many of AIG's business units make money and the employees therein should have "safe" jobs. The boards and executive teams for the troubled financiials have shown their gross incompetence. Keeping them in place defies logic.
right?? particularly if you're shorting financial institutions backed by taxpayer money. short it all you want...but i'm not rooting for you.
We could nationalize banks if you want. I'm open to listen to that. But banking affects EVERY industry. Saving banks and saving auto makers are apples/oranges to me. I understand your sentiment though, and feel the same way from an emotional standpoint.
Except that what they are worth is fundamentally different from what they will be worth. So not forcing to make longterm business decisions based on immediate values *will* save the taxpayers money. Just because they aren't worth something now doesn't mean they won't be a year from now.
Because the auto manufacturers can be restructured *now* without collapsing the US economy. They were given aid to prevent systemic risk. Now that they've had the time, they are restructuring in a way that avoids systemic failure. The financial companies will be restructured once they are out of that mess too. But unlike the autos, that takes a lot more time. Trying to treat two very different industries under the same policies would be horribly inefficient and counterproductive.
Well, if the powers that be are following the "MadMax guide to economic recovery", we'd all be fools not to invest in big financial firms at these super low prices. They have been nationally declared "too big too fail". The whole damn country is beholden to them. Corporatocracy, FTW!
it's not my guide. i'm not smart enough to put that stuff together or to put together a better alternative.
There are LOADS of alternatives. They've been solutions and ideas thrown around left and right since this catastrophe started! But - what a shocker - the one our plutochratic overlords decided upon just happens to be..... the one that absolves responsibility from the instigators, and perpetuates the status quo. The only way this scheme makes sense is if there is some punitive portion, as sam mentioned. Does anyone think that is going to happen in sufficient caliber after the cash is handed out and the ruse commenced? Who's that naive? Are we going to see BAC dissolved into 10 smaller companies after their stock price rises like a slow missle once their balance sheets are "fixed" courtesy of mr. and mrs. chump american and their great-great-great-great grandchildren? I understand the "we have to fix this to not make things turn into the great depression on acid" argument, but anyone here who thinks we can do that without some considerable pain and some immediate and massive changes is freeking delusional. And anyone who thinks pretending the bad **** isn't really bad is a reasonable solution provided we throw the collective bag of **** to the taxpayer is just plain irresponsible. No Worries made the point: We can do this to GM, why can't we do it to AIG? Worried about ramifications? I'll happily take short-term pain to long-term perpetuation of a broken system. Now excuse me, while I invest in a few banks. It's apparently the only way I can play this without branding a giant "sucker" tag on my forehead.
M2M is great when times are good, sucks when times are bad. It's the nature of the beast. Doing away with it right now is the right decision. It's just buying more time for the banks to fix themselves. We cannot allow a market as we see as dysfunctional to value assets on balance sheets.
heh. got a little steamed there momentarily. to summarize more succintly: we need to do this because it's more accurate and fair (the madmax argument) doing that only makes sense and is only fair with punitive conditions laid on those companies responsible. (the sam argument) Punitive aspects should be done after we fix the system (the Major argument) anyone who thinks real punitive action will occur post-fix is nuts (the rhad argument) woohoo beer and t*tties! (the thadeus argument)
