Bailout Nation: Freddie, Fannie, and more

[Subdude]

I'm not sure what a better course of action would be. Non-interventionism in the wake of a collapsing market didn't prove terribly efficient in 1929-1933, and it wasn't long ago that we saw Japan lose 12 years of economic growth due to bungling of the collapse of their bubble. Is this a price you are willing to pay for non-interventionist dogma? What's happened isn't pretty, especially for the taxpayer, but as it is economics isn't a morality play about punishing the evil and rewarding the virtuous.

Speaking of which, the mother of all bailouts is coming. The Fed/Treasury are working with Congress to shape legislation in which it seems the government will buy troubled assets from banks and put them in a Resolution Trust type structure. One estimate I read was half a trillion dollars, but at this point that is pure speculation.

Like I've been saying for days, this house of cards is getting scary. As bad as I really disliked Alan Greenspan at times, he would have never let this happen.

If anything, Alan Greenspan is coming to look more and more like the villain of the piece, at best a serial enabler of bubbles.

My favorite blog recently let loose on Greenspan (also printed in Forbes):

The credit crunch. Bear Stearns. The housing crisis. Fannie Mae and Freddie Mac. And as of today, Lehman Brothers, Wachovia and possibly even such august firms like AIG and Merrill Lynch.

These are the bailouts of the past 12 months and the potential bailouts of the next 12 months. The U.S. is experiencing a set of financial crises unlike anything since the Great Depression. It has forced long-held ideologies to be closely re-examined, destroyed enormous amounts of wealth, quashed hundreds of thousands of jobs and ruined the reputations of corporate titans and former Fed chairs alike.

....

The current headache begins and ends with ideology, namely that of former Fed Chairman Alan Greenspan--an acolyte of Ayn Rand, a free-market absolutist, a true believer in the evils of regulation. Many of the present headaches point directly back to the decisions made by the Greenspan Fed. Sure, there is plenty of other blame to go around: an unengaged president, a clueless Congress, a hapless FDIC, a compromised OFHEO, and Phil Gramm--but the biggest and most accusatory finger points directly at Easy Al....

Link

[TheNiche]

The current headache begins and ends with ideology, namely that of former Fed Chairman Alan Greenspan--an acolyte of Ayn Rand, a free-market absolutist, a true believer in the evils of regulation.

For the record, Ayn Rand disowned Greenspan from the Objectivist philosophy...I want to say that I read that in the forward to a book that he co-authored with her and others, Capitalism: The Unknown Ideal. And he was a really crappy practicioner of the philosophy, by the way, if he ever really tried at all.

EDIT: By the way, I agree that a hands-off policy is not appropriate, here. And while I would be very very cautious about trying to point fingers, I do concur that Greenspan deserves a share of the blame; the Fed's actions under his leadership certainly contributed to the problem. Had he been a better objectivist, the Fed would not have engaged in so much activism to begin with, and today's problems would've been less severe.

[dbigtex56]

And allowing these fat cats at the top to leap with their golden parachutes intact, which would not happen until Chapter 13 Title 11. This is one thing that truly bothers me, is I'm involuntarily footing the bill.

I wholeheartedly agree.

The top execs should be last on the list of those being bailed out.

The captain(s) go down with the ship - at least, those with honor do.

[crunchtastic]

I'm not sure what a better course of action would be. Non-interventionism in the wake of a collapsing market didn't prove terribly efficient in 1929-1933, and it wasn't long ago that we saw Japan lose 12 years of economic growth due to bungling of the collapse of their bubble. Is this a price you are willing to pay for non-interventionist dogma? What's happened isn't pretty, especially for the taxpayer, but as it is economics isn't a morality play about punishing the evil and rewarding the virtuous.

Speaking of which, the mother of all bailouts is coming. The Fed/Treasury are working with Congress to shape legislation in which it seems the government will buy troubled assets from banks and put them in a Resolution Trust type structure. One estimate I read was half a trillion dollars, but at this point that is pure speculation.

If anything, Alan Greenspan is coming to look more and more like the villain of the piece, at best a serial enabler of bubbles.

My favorite blog recently let loose on Greenspan (also printed in Forbes):

Link

You know how I love Barry Ritholz' blog. Did you see the one from earlier this week where the Daily Show asked him to describe Lehman, Bear and AIG in layman's terms and he likened AIG to a kid taking unmarked vials out of a bio-war lab?

I feel like getting some shirts made for my team at the office: TBTF (too big to fail).

As much as I would like to, as an AIG American General employee who wants to keep her job, I won't comment here other than what has already been addressed or alluded to in the media. Suffice it to say corporate intends to pay off that loan as quickly as possible. Assets will be going up for sale quickly. We should know in the next 3 weeks or so if we are considered a core asset. The global P&C business stays. Everything else is potentially an expendable crew member.

In any event, the current Fed actions (RTCs, money markets, suspending shorting) are absolutely unfathomable to people who have been in the business. Greenspan has quite a legacy on his hands. The dereg party is over. Like Rithholz said, it's the new new deal.

As a side note, I don't think political conservatives (or liberals) have a clue as to how to spin this. Can't exactly do much with the anti-big government platform now. And the average person knows squat about this level of ecomonics and certainly does not grasp the enormity of the situation. All of which means more of that awful, screeching Fargo accent from Ms Palin, since this election's handlers are not prepared to deal with economics and will treat us to her, instead of a debate on the issues.

[BryanS]

I've seen bailout numbers ranging from 500 billion, to 1 trillion. Some even estimate that all the "bad debt" that Paulson wants us to pull onto the Fed's balance sheet could be 1.7 to 2 trillion. What happened? What did we miss? Has it all just been one big illusion? And why do the tax payers get all the "bad debt" - that no one else wants? How in the world could we, as a nation, be so far off the mark?

[westguy]

Add $85 billion for AIG on to the list.

I understand the rationale for all of this, and if done right I don't think it is necessarily a bad thing, but what I find astounding is the lack of uproar from all the ideologues out there who usually like to go on about Free Markets and Socialism etc.

Two weeks ago the government engineered the two largest nationalizations in our history, doubling the national debt (although they're not advertising that one). This is one of the largest credit/financial crises in recent memory, it's costing taxpayers billions, but from a public interest and policy viewpoint the silence is deafening. I suppose it is just much more important for the country to focus on Palin's daughter's morals, or whether Obama may be some sort of crypto-Muslim, and other similar critical issues.

Sorry for the editorial, back to the bailouts!

It's pretty calming for the nerves to know that the two biggest architects of this disaster - Greenspan and Gramm - both have McCain's ear. Palin's going to fix it with a tube of lipstick, probably. I guess that's supposed to appease the masses.

[musicman]

I've seen bailout numbers ranging from 500 billion, to 1 trillion. Some even estimate that all the "bad debt" that Paulson wants us to pull onto the Fed's balance sheet could be 1.7 to 2 trillion. What happened? What did we miss? Has it all just been one big illusion? And why do the tax payers get all the "bad debt" - that no one else wants? How in the world could we, as a nation, be so far off the mark?

wait...don't you work for george bush?

[Subdude]

Another day, another bailout. Treasury announced yesterday they are guaranteeing money market funds against losses, up to $50 billion.

I've seen bailout numbers ranging from 500 billion, to 1 trillion. Some even estimate that all the "bad debt" that Paulson wants us to pull onto the Fed's balance sheet could be 1.7 to 2 trillion.

The numbers are obviously all over the place and we won't know the total for years, but most of the estimates I'm hearing for the big bailout rolled out Thursday are about $1 trillion. Toss in everything else: AIG, Bear, Fannie, Freddie, investment bank supplemental funds etc. etc. and you're probably talking another trillion or so.

You know how I love Barry Ritholz' blog. Did you see the one from earlier this week where the Daily Show asked him to describe Lehman, Bear and AIG in layman's terms and he likened AIG to a kid taking unmarked vials out of a bio-war lab?

Yep, required reading. Quite a bit I disagree, but it's a great read. He doesn't suffer fools gladly.

Ayn Rand disowned Greenspan from the Objectivist philosophy

It never occurred to me that one could be disowned from a philosophy, but if there were ever a philosophy from which it would be worth being disowned, that would be it.

as an AIG American General employee who wants to keep her job

Technically aren't you a Federal government employee now? It's odd, but I've noticed that what happened to AIG, Fannie and Freddie is universally referred to as "nationalization" in European newspapers, but you never see the term in American news. "Conservatorship" is a nice little euphemism, isn't it?

As a side note, I don't think political conservatives (or liberals) have a clue as to how to spin this.

Nor should they. This is an economic crisis, and trying to make it a political issue at this point is a sideshow. Both political parties, and the President and Congress, all agree on the necessity of what the Treasury is proposing.

[TheNiche]

I've seen bailout numbers ranging from 500 billion, to 1 trillion. Some even estimate that all the "bad debt" that Paulson wants us to pull onto the Fed's balance sheet could be 1.7 to 2 trillion. What happened? What did we miss? Has it all just been one big illusion? And why do the tax payers get all the "bad debt" - that no one else wants? How in the world could we, as a nation, be so far off the mark?

If you look carefully at what is being proposed, you'll start questioning how those numbers were derived and what they actually represent. Some items in the package of programs are easy to figure out, as they are more or less infusions of cash. But those are relatively small outlays totally a few tens of billions of dollars. It seems like the bulk of the activity contributing to that $500 billion to $1 trillion figure will be guarantees (which may or may not ultimately be paid out) or the discounted buying and eventual selling of collateralized debt for which there is no longer a functioning market and thus no way for institutions to convert illiquid fixed assets to liquid current assets. It isn't even really clear that they won't ultimately make money on that operation; I personally suspect that they'll lose some, but certainly not all of their investment. Even the AIG bailout yields 11% interest.

Personally, I'm less concerned for the bottom line dollar amount of activity (which in the private sector would be a lot like adding together all Cash Outflows and all Contingent Liabilities in a company and assuming that that figure has meaning) than I am with the precedents that are being set. And sure, far more extensive involvement was undertaken during the Great Depression and something similar (the RTC) was set up to handle the S&L crisis from the late 80's, but my chief concern is that involvement of this sort becomes a habit every time there is a hint of recession in the air. And what is especially disconcerting is that Bush is bowing to the loud uneducated populist types that think that speculators and short sellers are a big part of all of this. So it is politicized.

[Subdude]

Classic..

[BryanS]

If you look carefully at what is being proposed, you'll start questioning how those numbers were derived and what they actually represent. Some items in the package of programs are easy to figure out, as they are more or less infusions of cash. But those are relatively small outlays totally a few tens of billions of dollars. It seems like the bulk of the activity contributing to that $500 billion to $1 trillion figure will be guarantees (which may or may not ultimately be paid out) or the discounted buying and eventual selling of collateralized debt for which there is no longer a functioning market and thus no way for institutions to convert illiquid fixed assets to liquid current assets. It isn't even really clear that they won't ultimately make money on that operation; I personally suspect that they'll lose some, but certainly not all of their investment. Even the AIG bailout yields 11% interest.

Personally, I'm less concerned for the bottom line dollar amount of activity (which in the private sector would be a lot like adding together all Cash Outflows and all Contingent Liabilities in a company and assuming that that figure has meaning) than I am with the precedents that are being set. And sure, far more extensive involvement was undertaken during the Great Depression and something similar (the RTC) was set up to handle the S&L crisis from the late 80's, but my chief concern is that involvement of this sort becomes a habit every time there is a hint of recession in the air. And what is especially disconcerting is that Bush is bowing to the loud uneducated populist types that think that speculators and short sellers are a big part of all of this. So it is politicized.

All the garbage that Paulson wants to pull onto the Fed's balance sheet... no one knows how to value. So we get the crap (at an outrageously overpriced "discount" value) for .50 on the dollar. Yay. But what if it was really worth only .25 on the dollar? We could lose 50% of our $2 trillion "investment." So basically, overnight, we just added 10% to our national debt. We're screwed.

Excessive, abusive short selling can damage, and destroy, companies for no good reason, over night. If I held a large short position for company... and then start a rumor... I win. That crap has happened, and must stop.

EDIT: Sydney jumps on ban on short-selling, leads region. Interesting. Seems to work.

[TheNiche]

All the garbage that Paulson wants to pull onto the Fed's balance sheet... no one knows how to value. So we get the crap (at an outrageously overpriced "discount" value) for .50 on the dollar.

Possibly. I don't know. Neither do you.

We could lose 50% of our $2 trillion "investment." So basically, overnight, we just added 10% to our national debt. We're screwed.

Not really. Not only is the total package of programs fairly complicated, making your assessment grossly oversimplified, but you're making a lot of unsupported assumptions about how potential government expenses would be financed. Debt is not the only tool in the shed. Also, much more importantly, you need to recognize that the bad business decisions have already been made. In real terms, the nation has already lost wealth and to the extent that domestic financial institutions continue to hold onto the illiquid debt, they would realize the future gains or losses sooner or later. So if we are to be screwed, then we already are. If damage control is the best thing we can do, then we need to do that. The government is just shifting the burden around to try and minimize the secondary impacts (i.e. damage control).

Excessive, abusive short selling can damage, and destroy, companies for no good reason, over night. If I held a large short position for company... and then start a rumor... I win. That crap has happened, and must stop.

And if I hold a large long position for a company...and then start a rumor...I win. That crap happens too. People that knowingly and maliciously spread misinformation can be prosecuted, but it can't be stopped altogether.

Besides which, the short-term effects of unfounded rumors upon the stock price of a firm has absolutely nothing--NOTHING--to do with its operational profitability.

EDIT: Sydney jumps on ban on short-selling, leads region. Interesting. Seems to work.

Two problems: 1) the Asian markets weren't privy to the bailout package announced on Friday, so the effects of our rally from last week have been delayed until now, and 2) what is the problem that a ban on short selling is intended to solve, is the problem relevent to the financial crisis, and does the ban do what it is supposed to do?

[RedScare]

And what is especially disconcerting is that Bush is bowing to the loud uneducated populist types that think that speculators and short sellers are a big part of all of this. So it is politicized.

After 7 years of listening to the loud uneducated free market types, it would be about time. But, these bailouts were not demanded by populists. They were demanded by wealthy Wall Streeters who feared losing their fortunes. How convenient that you would attempt to shift blame away from the greedy bastards that caused the collapse.

[BryanS]

Possibly. I don't know. Neither do you.

And that's what makes this one giant crap shoot. Looking back at the S&L crisis... It was going to cost us X billions, but ended to be much more expensive than we thought. 700 billion is just the starting number.

Now I hear Paulson's plan includes the bailout... but lacks the necessary REGULATION... to keep all this from happening again. Fork over money now - ask questions later. I don't think I like that. Hopefully, whatever comes of this bailout will include provisions to actually protect the US tax payer.

I guess another thing that needs to be curtailed is abusive, naked short selling of stock. Shorting a stock, and taking a profit, for something I don't even own. I don't think that's possible to do... even in Las Vegas.

[TheNiche]

After 7 years of listening to the loud uneducated free market types, it would be about time. But, these bailouts were not demanded by populists. They were demanded by wealthy Wall Streeters who feared losing their fortunes. How convenient that you would attempt to shift blame away from the greedy bastards that caused the collapse.

You seem misunderstand my criticism. The total package is comprised of different measures, each of which have different impacts. It would be inappropriate to try and make some kind of sweeping statement about the appropriateness of "these bailouts" because parts of them make sense and some of it doesn't. And I see the short selling ban as a politicized measure to satisfy a particularly ignorant constituency--something to make a bitter pill easier to swallow.

Wall Streeters like to have short selling available to them. They actually seem quite pissy about the short selling ban.

Options Executives Decry SEC's Short Selling Ban

http://www.iht.com/articles/ap/2008/09/21/...ing-Options.php

The Great Short-Selling Ban Debate

http://blogs.wsj.com/deals/2008/08/13/the-...ing-ban-debate/

Five Reasons: Why the Short-Selling Ban Stinks

http://blogs.wsj.com/marketbeat/2008/09/19...ing-ban-stinks/

SEC Bashed Over Short-Selling Ban

http://www.marketwatch.com/news/story/sec-...D&dist=hpts

Short Selling Ban Backlash

http://www.usnews.com/blogs/the-ticker/200...n-backlash.html

Short-Selling Ban is a 'Mind-Blowingly Stupid' Knee Jerk Reaction

http://www.telegraph.co.uk/money/main.jhtm...bcnshort119.xml

Some Warn of Short-Selling Ban's Downside

http://www.chron.com/disp/story.mpl/headli...iz/6012479.html

Threat to Sue Over Short-Selling Ban

http://www.thisismoney.co.uk/news/article....=2&ito=1565

Short-Selling Ban is Two-Edged Sword

http://www.venturacountystar.com/news/2008...wo-edged-sword/

Chris Cox's Short-Selling Ban Stinks (video)

http://www.thestreet.com/video/10438396/in...rs&&s=1

[westguy]

Wall Streeters like to have short selling available to them. They actually seem quite pissy about the short selling ban.

Wall Streeters know what's best now? Didn't they just drive away all investors and force the federal government's hand?

[TheNiche]

And that's what makes this one giant crap shoot. Looking back at the S&L crisis... It was going to cost us X billions, but ended to be much more expensive than we thought. 700 billion is just the starting number.

Now I hear Paulson's plan includes the bailout... but lacks the necessary REGULATION... to keep all this from happening again. Fork over money now - ask questions later. I don't think I like that. Hopefully, whatever comes of this bailout will include provisions to actually protect the US tax payer.

Welcome to life, BryanS. No matter the path you take, it is uncertain. Even an optimal risk management strategy does not equate to the elimination of risk.

And the only way to protect the US taxpayer from risk is to ban investment altogether...and that's just not plausible. Bad decisions have been made for millenia; they cannot be legislated or regulated away.

[TheNiche]

Wall Streeters know what's best now?

I didn't make that claim.

I complained that the short-selling ban was evidence of politicized policy. Red responded that Wall Streeters demanded the bailout. And I countered (with evidence) that Wall Streeters did not demand the short-selling ban, a component of the bailout.

If it should happen that Wall Streeters and other persons educated in Finance know what is the best policy with respect to short selling, it would not surprise me as they are actually the sort that understand how it works. The recognition that they have expertise in this subject matter does not elevate them to superhuman status, nor does it make them infallible.

[memebag]

Yesterday I read that Paulson wants our taxpayers to help bail out foreign banks. So people in those commie euro states with those pretty little socialized lives where they help each other out are going to get further help from US taxpayers who can't afford to go to the doctor. And the folks who were all about private property and responsbility when it showed a profit will accept a giant welfare check when they showed a loss.

I used to be upset that the fools who bought crazy ARMs when I bought my fixed rate mortgage turned out to be much wiser than I did. That pales in comparison to this. How do I get some of this taxpayer money? How much debt do I have to ring up before I'm everyone else's problem?

[BryanS]

Welcome to life, BryanS. No matter the path you take, it is uncertain. Even an optimal risk management strategy does not equate to the elimination of risk.

And the only way to protect the US taxpayer from risk is to ban investment altogether...and that's just not plausible. Bad decisions have been made for millenia; they cannot be legislated or regulated away.

Never advocated anything of the sort...

Not advocating that either... Not sure where you keep pulling this stuff out of... I have an idea though.

Maybe you should also welcome all those now-bank employees of Morgan and Goldman to life, too. And Lehman, and Bear Sterns, and all the rest of the die hard free market types. They built their empires on a fatally flawed "anti-gov regulation" business model, and now it is coming home to roost... Except all of us get to pay higher taxes now to finance all this mess

[memebag]

They built their empires on a fatally flawed "anti-gov regulation" business model, and now it is coming home to roost...

Only it isn't. It's coming to my house and it's going to roost all over me.

[crunchtastic]

As I told my mom when I was trying to eduacte her a little bit about how the law enabled this to happen..... Phil Gramm pushed through the legislation that overturned Glass Steagall. It was signed with much fanfare by Clinton, so he has to take his lumps too. This created the apparatus for Sandy Weill and Travellers to buy Citibank. That is the big bang of this whole mess. The next year, Phil Gramm pushed through another piece of legislation (the name escapes me) that allowed credit swaps to be unregulated. Again, to much fanfare. Of course the closest thing McCain has to an economic advisor is Phil Gramm. Where is his defense of the legislation? Where is anyone's defense of their anti-regulation policy? What is insufferable now is the patronizing tone that sugests : we don't have to account for any of this becasue it's just too complicated for the voting public to understand. That and the 'We don't have a choice' .

Well, yes, there is a choice. The feds (vis a vis the thinly disguised federal department called the IMF) let their free market experiments destroy the currency and the middle classes of a number of south american countries, indonesia, and for a time, Russia, even. What they mean to say is not 'we didn't have a choice', but rather 'we can't take the policitical risk that people will show up on the white house lawn with pitchorks and burning torches as the economy collapses' ......in other words.... it would look to bad to foreign investors to invoke martial law as we ride out the pain.

PS> still employed! No perceivable difference now that I work for Uncle Sugar. I have stayed busy with my projects. New CEO is supposed to be on Maria Bartiromo today. Supposedly with a tip on when they will unveil the list of expendable AIG crew members. The official line is that regulated insurance divisions are core assets, but there is also rumor that Met Life and Pru are interested.

[Mark F. Barnes]

Crunch.... What no one is addressing is the fact that there are certainly many facets to the causes of the subprime disaster that is currently infecting all sectors of the financial services industry. IMO the main culprit is Fannie Mae/Freddie Mac and the removal by Congress of any restrictions on its growth. You are correct in saying there is a lot of blame to go around, because a simple Veto by Slick Willy would have possibly sent it back to the rear of the line. The movers and shakers behind that effort, and the stalwart defenders of Fannie Mae and Freddie Mac were without a doubt Barney Frank and Chris Dodd, though they certainly needed GOP support (aka Phil Gramm) to make it happen. But Dems far and away dominate the receipt of campaign contributions from Fannie Mae and Freddie Mac, and the millions of dollars Fannie and Freddie spent on lobbying and campaign contributions wasn

[crunchtastic]

Crunch.... What no one is addressing is the fact that there are certainly many facets to the causes of the subprime disaster that is currently infecting all sectors of the financial services industry. IMO the main culprit is Fannie Mae/Freddie Mac and the removal by Congress of any restrictions on its growth. You are correct in saying there is a lot of blame to go around, because a simple Veto by Slick Willy would have possibly sent it back to the rear of the line. The movers and shakers behind that effort, and the stalwart defenders of Fannie Mae and Freddie Mac were without a doubt Barney Frank and Chris Dodd, though they certainly needed GOP support (aka Phil Gramm) to make it happen. But Dems far and away dominate the receipt of campaign contributions from Fannie Mae and Freddie Mac, and the millions of dollars Fannie and Freddie spent on lobbying and campaign contributions wasn't for nothing. They bought off any interest in Congress for tighter regulation of their growth in purchasing securities in the secondary market. This willingness created a "black hole" of secondary market purchasing, where Fannie and Freddie sucked up every kind of mortgage debt instrument the financial services industry could create. NO, NONE NADA, paper was too risky for Fannie and Freddie to buy, and when they resold those instruments to investors, no instrument was too risky for Fannie and Freddie to insure with a repurchase guarantee.

I couldn't agree more. Fannie/Fredie blurred the lines between public and private, and wrongly hid behind the flag-waving sound bite of home ownership for everyone, never mind that that homeownership should not be for everyone. The amount of lobbyist money to keep re-selling bad debt was staggering, and dems enjoyed the greased palms of the lobbyists and Clinton was only too happy too oblige.

The bottom line is that the current crisis is the direct result of power brokers in the insurance and investment banking field, who lobbied congress for better terms, and won, i/e. new ways to make gajillions more money off the same old debt. It was a huge bonus play for mortgage brokers. They made their billions and are now reluctantly acknowledging the party is over. They broke their shiny credit swap toy, in a major way.

[CyKat]

Fannie and Freddie cooked their books so senior executives would be paid millions of dollars in bonuses to which they were not entitled. Inadequate regulation kept the book-cooking from being discovered until the crisis had become a catastrophe.

President Bush proposed regulatory reforms in 2003 but Congress took no action. In 2005, John McCain and three other GOP senators proposed a strong reform bill. It died when Democrats threatened a filibuster. When the bill was reintroduced in this Congress, Sen. Chris Dodd, the new Democratic chairman of Banking Committee, refused even to hold a hearing on it.

Democrats opposed reform in part because they feared it would mean fewer loans to poor people.

CyKat

[TheNiche]

Never advocated anything of the sort...

Not advocating that either... Not sure where you keep pulling this stuff out of... I have an idea though.

Sure seemed like it, whether you realized it or not. :shrug:

Maybe you should also welcome all those now-bank employees of Morgan and Goldman to life, too. And Lehman, and Bear Sterns, and all the rest of the die hard free market types. They built their empires on a fatally flawed "anti-gov regulation" business model, and now it is coming home to roost...

You don't know what a business model is.

Except all of us get to pay higher taxes now to finance all this mess

[crunchtastic]

My credibility is probably not very good either. On the other hand, when Morgan Stanley and Goldman Sachs (Goldman!) agree to the Giant Oversight Hand of commercial banking just so they can get cut in on the fed discount window goodness, I think that's saying something. That's saying we some stuff up.

I want to know where I can go belly up to the capital bar.

[TheNiche]

My credibility is probably not very good either. On the other hand, when Morgan Stanley and Goldman Sachs (Goldman!) agree to the Giant Oversight Hand of commercial banking just so they can get cut in on the fed discount window goodness, I think that's saying something. That's saying we f**** some stuff up.

I want to know where I can go belly up to the capital bar.

You and I are both accomplices to to the crisis (remember that .ppt I sent you)...but then so is everyone in the industries we're in. If we had refused to be accomplices, we would've been useless and fired. And firms without sin underperformed.

But that only makes us gigantic tools. It doesn't detract from our credibility.

[HtownWxBoy]

Classic..

[crunchtastic]

You and I are both accomplices to to the crisis (remember that .ppt I sent you)...but then so is everyone in the industries we're in. If we had refused to be accomplices, we would've been useless and fired. And firms without sin underperformed.

But that only makes us gigantic tools. It doesn't detract from our credibility.

gigantic tools!

Seriously though, you take a lot of knocks here on the haif, but you are not the amoral that some people (and your own occasionaly poor choice of language) would have some people believe. Like you and most people in the all the businesses touched by this, my goal is to do the best job with fewest resources in the least amount of time. All t's crossed and i's dotted. I am tied at the hip with my compliance attorneys and I make the best of it. I really don't give a flip about the shareholders. I have a reputation to uphold. If I do my job, the value is there. I do not tolerate behavior outside my personal ethics, which helps explain why I am not an SVP and tend to run only small teams. I think that is the same with all of us conscientous types---you too. I'd bet.

Tools unite!