Real cost of US bank bailout: $7.7 TRILLION

[Theige]

Investopedia says:


Policeman, hmm. Sounds pretty enforce-y to me.

Regulating and supervising isn't enforcing.

I like Investopedia, but the Fed is not the policeman of the financial system, the SEC is.

The Fed is certainly a part of the regulatory structure, but it does not enforce or make laws. But they certainly have a tremendous amount of input and influence into financial laws and regulations.

They did directly oversee brokerage firms for a time, until around 1993, iirc, when that responsibility was handed off to FINRA and/or the SEC.

 

[kochman]

This was made public about six months ago, iirc.

Also, the $7.7 trillion figure is misleading. These are overnight loans, usually re-paid in full in a very short time frame, which is why the "total" adds up to such an incredibly large number.

And there wasn't any "cost" associated with this lending; we (the Federal Reserve) actually made a profit. And that profit goes back to us (the federal government)

The problem is (aside from the misleading headline) that this was done with what type of oversight? Who knew it was going on? Had it gone bad, who would have paid the price?
It was done in secret.

Watch Jon Steward for a laugh once in a while but don't take him too seriously. Lately I found him to be less than funny in many ways. He's been completely outdone by Colbert in that department although both remain equally unreliable as source of good information.

See next...

However, a recent poll showed that viewers of the daily show are much better informed about current events than fox news viewers. ok, not because he delivers more news than fox but because despite his comedy he's not bullshitting people.

And if you watch Colbert, Stewart, Foxnews, MSNBC for your news... you are probably a sheep.

It isn't stealth at all.

The Federal Reserve was created, above all else, to stabilize the financial system. When the financial system is on the verge of failure, the Federal Reserve is there to make sure it doesn't. This is in everyone's interest.

The Fed isn't there to make a profit. It still does, however, making about $80 billion dollars for the U.S. government last year. Could it make a lot more? Undoubtedly. But that isn't what it's there for.

As to inflation; it was relatively low last year, and regardless, it doesn't apply to this conversation.

For comparison, the most profitable American bank was JP Morgan, which was $17 billion in the green.

But it was stealth.
Yes, the FedRes was created to stabilize... and it did that (somewhat). Good.
However, they did it in a very sneaky way... and only released the information when ordered to by the Supreme Court.
How many elected officials are in the FR?
Who was overseeing the loans that were made?
How do we know more isn't floating around out there, unaccounted for?
The list of questions goes on and on... because no one knows.

If I borrow $100 dollars from you every morning and repay it later every evening, then over a year, you will have given me a bailout worth more than $35,000.

Yeah, but the people whose money it was (in this case "me") know it is happening, and if there is a problem, know where to go ("you").
If I run a public company that you invest in (in this case the US Gov, but for argument, let's say I own Starbucks and you have stock that I force you to buy [in the form of taxes]), and I start making risky loans, without telling the (forced) investors what is going on...
Is that ethical?

 

[Theige]

The Fed publishes its balance sheet every single week, anyone could have seen the increased lending activity virtually as it happened.

We only require publicly traded banks to publish their balance sheets once every quarter

 

[kochman]

The Fed publishes its balance sheet every single week, anyone could have seen the increased lending activity virtually as it happened.

We only require publicly traded banks to publish their balance sheets once every quarter

And apparently the Fed requires the Supreme Court to step in to show those balance sheets sometimes...
Unless, of course, you think this is all a fabrication.

http://www.bloomberg.com/news/2011-...k-loan-data-as-high-court-rejects-appeal.html

 

[Conspirator]

What are you guys bleating on about? How is this even relevant? Do you guys seriously still think political parties make any difference to these sorts of things? You know, things that actually matter?

If the United States Federal Reserves provide loans to banks, it's not a 'cost' to the US taxpayer. The money doesn't come from anybody's pocket. It's literally credited into creation. The only way the US taxpayer loses out here is if the bank collapses and don't pay back the loan in full, in which case all US Dollar holders would pay with inflation.

If this money wasn't made available to the banks they wouldn't be able to meet demand for cash withdrawal or loans.

 

[wolfigor]

If this money wasn't made available to the banks they wouldn't be able to meet demand for cash withdrawal or loans.

However it is the same money that the bank borrow at 0.1% interest and lend out at 16.8% (on credit cards).
That's a huge profit that goes directly from people to banks... Maybe it will be fair to have a ceiling on that profit.

 

[Conspirator]

Yes exactly.

Why are we paying this ridiculous price for debt?

Fed board members are hand picked by the President and 'primary dealers', the large, Jewish owned, regional banks, are the Fed 'shareholders'. It's not too far-fetched to imagine that even though the President picks the board members, with their money-making abilities these primary dealers make sure THEY actually decide the board members. The Fed is there to protect the banking system and therefore the big American banks because the banking system is what made America rich.

If the Fed is controlled by these 'primary dealers' (and it is) obviously they're going to take advantage of it. When there's enough cash flowing that the banks don't need the Fed to help them out in making lots and lots of profits then everything is fine and dandy; but when cash stops flowing (and this can be for a whole number of reasons) the Fed has no choice but to offer liquidity because the job of the Fed is to do just that - keep the system running smoothly when cash is needed in an emergency when everyone who has a deposit or a loan wants the money at the same time on the same day, for example. The reason it is 'short term' is because people only really need cash on hand for short periods, so usually all that cash will be redeposited shortly after if people still trust said bank.

It seems to me that the banking industry make vast sums of cash for doing very little work with very small assets. This is a commendable accomplishment to many people. However it will probably come to an end with following the demise of the petrodollar.

Moderator Action: 'Jewish-owned' is not an appropriate phrase to be using in this context, really.
Please read the forum rules: http://forums.civfanatics.com/showthread.php?t=422889

 

[Cutlass]

Jewish owned.....

For the rest of it, you don't give a reason any of it is bad....

 

[wolfigor]

I agree... that was a weird note from conspirator.

For the rest of it, you don't give a reason any of it is bad....

Can't say is bad but is somehow unfair that banks have the option to borrow at very low cost and lend out charging whatever they want.
So banks get from the state an opportunity to make huge profits at our expense.
Why (credit-worthy) people can't access similarly low cost loans?

 

[kochman]

If the United States Federal Reserves provide loans to banks, it's not a 'cost' to the US taxpayer. The money doesn't come from anybody's pocket. It's literally credited into creation. The only way the US taxpayer loses out here is if the bank collapses and don't pay back the loan in full, in which case all US Dollar holders would pay with inflation.

Ok, let me inform you of something.
Every time the government creates new money, it is a cost to the taxpayer.

It's called inflation.

Do you get a raise every time the value of the US dollar decreases (which happens whenever they create more money)? Do things start costing less?
The answers are probably NO and NO to these questions.

Therefore, you have been subjected to a tax that you don't even realize... making you poorer.

And, again, the problem was... no oversight... no transparency... secret loans.
If we start allowing secret loans, the potential for corruption is HUGE... Look at Goldman Sachs for example...

 

[Cutlass]

Ok, let me inform you of something.
Every time the government creates new money, it is a cost to the taxpayer.

It's called inflation.

Do you get a raise every time the value of the US dollar decreases (which happens whenever they create more money)? Do things start costing less?
The answers are probably NO and NO to these questions.

Therefore, you have been subjected to a tax that you don't even realize... making you poorer.

And, again, the problem was... no oversight... no transparency... secret loans.
If we start allowing secret loans, the potential for corruption is HUGE... Look at Goldman Sachs for example...

You need to read the my Money thread. . You have a false understanding of inflation.

 

[kochman]

You need to read the my Money thread. . You have a false understanding of inflation.

I read your thread.

And, no, I do not have a false understanding of inflation.
Inflation means growth, as in, of the supply of money.

It is a sneaky and beloved way for the government to tax people, and have, as a result, an easier time paying down debt.

If you borrow $100 from me today, and have to pay it back in 10 years... well, that $100 you return to me is worth a lot less ten years down the road... so, it was easier for you to pay it back, since you were basically paying about (just for example) $80 worth of the money from 10 years prior...

And, since the common man (not the rich, because they have enough dollars inflation doesn't really impact them) suffer from this, but doesn't realize it is happening, I like talking about it... making people aware.

 

[Theige]

And apparently the Fed requires the Supreme Court to step in to show those balance sheets sometimes...
Unless, of course, you think this is all a fabrication.

http://www.bloomberg.com/news/2011-...k-loan-data-as-high-court-rejects-appeal.html

Oddly enough, the phrase "balance sheet" doesn't appear in that article. Neither do the words "balance" or "sheet."

It seems you are horribly mistaken, and I suggest you read the article you attempted to quote, as it is clear you haven't yet done so.

 

[kochman]

Oddly enough, the phrase "balance sheet" doesn't appear in that article. Neither do the words "balance" or "sheet."

It seems you are horribly mistaken, and I suggest you read the article you attempted to quote, as it is clear you haven't yet done so.

Are you really nitpicking on that because you were shown to be wrong?
They were keeping secret data... (you know, some would say data could potentially go onto something like a balance sheet, but since the article didn't specifically say that, I guess we should gleen that it was just like lists of middle names, etc).

In other words... NOT PUBLIC (until forced by the Supreme Court).

Not so innocent as you seem to be saying, eh?

 

[Theige]

The Fed was forced to reveal who took loans from them and for how much. This had never been required of them. Banks didn't want this information to be released, because in a future crisis they may shy away from borrowing.

In essence, they were required to reveal who their "customers" were. This type of information is never put on a balance sheet.

Please familiarize yourself with what a balance sheet is before continuing this conversation.

Until you stop posting blatantly false statements without bothering to educate yourself, I will not be responding to your posts. I apologize. I just can't continue wasting my time.

 

[Cutlass]

I read your thread.

And, no, I do not have a false understanding of inflation.
Inflation means growth, as in, of the supply of money.

It is a sneaky and beloved way for the government to tax people, and have, as a result, an easier time paying down debt.

If you borrow $100 from me today, and have to pay it back in 10 years... well, that $100 you return to me is worth a lot less ten years down the road... so, it was easier for you to pay it back, since you were basically paying about (just for example) $80 worth of the money from 10 years prior...

And, since the common man (not the rich, because they have enough dollars inflation doesn't really impact them) suffer from this, but doesn't realize it is happening, I like talking about it... making people aware.

You apparently didn't understand the thread. Just "growing the money supply" is not the definition of the cause of inflation. You have to know what the other variables are doing as well.

Some small amount of inflation is critical to maintaining a stable and growing economy. A government that is trying to have 0% inflation is fracking up by the numbers. This is not a "hidden tax" or "stealing from people". This is what is fundamentally required to avoid an extremely unstable economy.

 

[kochman]

The Fed was forced to reveal who took loans from them and for how much. This had never been required of them. Banks didn't want this information to be released, because in a future crisis they may shy away from borrowing.

In essence, they were required to reveal who their "customers" were. This type of information is never put on a balance sheet.

Please familiarize yourself with what a balance sheet is before continuing this conversation.

Until you stop posting blatantly false statements without bothering to educate yourself, I will not be responding to your posts. I apologize. I just can't continue wasting my time.

Still nitpicking on the term balance sheet?
The point was, which somehow you are still missing despite it being completely obvious... they weren't forthcoming with information, and resisted Congress trying to investigate it, until forced to provide the information by the SC.
I really don't see how you think that is ok.

You apparently didn't understand the thread. Just "growing the money supply" is not the definition of the cause of inflation. You have to know what the other variables are doing as well.

Some small amount of inflation is critical to maintaining a stable and growing economy. A government that is trying to have 0% inflation is fracking up by the numbers. This is not a "hidden tax" or "stealing from people". This is what is fundamentally required to avoid an extremely unstable economy.

I'm sorry that you don't think any other way of talking about things can be accepted, because you wrote something about it. Your opinion does not fact make (something that I have to repeat at this forum a lot).

Whether it is necessary (inflation) or not has nothing to do with the fact that it makes people poorer. It is somewhat necessary, I agree.
If prices go up, due to a greater supply of dollars (to "inflate" the supply), but you don't personally get more money, you are poorer, and can by less.

Meanwhile, the government's debt got that much smaller, proportionally.

So, who paid that portion of the debt? The dollar holders.
In other words, a tax in a different form.

Recently, a lot of the inflation has been done to devalue to the dollar, in order to increase US exports abroad. In the meanwhile, the common man has been paying for it (and the rich are getting richer)...

I hope you can see this point.

 

[Cutlass]

I'm sorry that you don't think any other way of talking about things can be accepted, because you wrote something about it. Your opinion does not fact make (something that I have to repeat at this forum a lot).

Whether it is necessary (inflation) or not has nothing to do with the fact that it makes people poorer. It is somewhat necessary, I agree.
If prices go up, due to a greater supply of dollars (to "inflate" the supply), but you don't personally get more money, you are poorer, and can by less.

Meanwhile, the government's debt got that much smaller, proportionally.

So, who paid that portion of the debt? The dollar holders.
In other words, a tax in a different form.

Recently, a lot of the inflation has been done to devalue to the dollar, in order to increase US exports abroad. In the meanwhile, the common man has been paying for it (and the rich are getting richer)...

I hope you can see this point.

I can see your point. Which is why I understand how wrong it is.

There are 2 choices. A little inflation all the time. Or thrashing back and forth between inflation and deflation. 0% inflation is literally not a choice. There is no power of government and no economic theory that could accomplish it.

The first choice means that literally every person in the country is better off in the long run. Because the economy itself will be so much larger and richer and more stable that it can't happen any other way. The second choice means that most people have their livelihoods, savings, lives, wiped out over and over again. Everyone is poorer. The nation is poorer. Debt burdens are periodically made crushingly high. It is, in every respect, far worse for all people. But it is mostly worse for those poor, working poor, working middle class, small business people, and anyone else who has to live by working and would have to borrow money for business or mortgage.

 

[kochman]

I'm not saying there should be 0% or deflation...
That isn't my point.

I am just making sure people realize why the government likes inflation... and really does allow it to happen, and what it really is (a tax).

Is it necessary is what you are arguing... but I am not arguing that it isn't.

 

[Cutlass]

I'm not saying there should be 0% or deflation...
That isn't my point.

I am just making sure people realize why the government likes inflation... and really does allow it to happen, and what it really is (a tax).

Is it necessary is what you are arguing... but I am not arguing that it isn't.

Government doesn't "like" the inflation either. They're just stuck with it.