Comments on: One Cost of Too Big to Fail http://baselinescenario.com/2009/11/16/one-cost-of-too-big-to-fail/ What happened to the global economy and what we can do about it Sat, 11 Feb 2012 08:48:43 +0000 hourly 1 http://wordpress.com/ By: Bill http://baselinescenario.com/2009/11/16/one-cost-of-too-big-to-fail/#comment-34117 Tue, 17 Nov 2009 22:07:16 +0000 http://baselinescenario.com/?p=5513#comment-34117 Yesterday’s “Heard on the Street” column points out that S&P rates Citigroup a single-A, but adds that it would be rated triple-B-minus, four notches lower, w/o government assistance. Morgan Stanley and B of A “get a three-notch lift.” What’s that worth?

]]> By: Pete http://baselinescenario.com/2009/11/16/one-cost-of-too-big-to-fail/#comment-34083 Tue, 17 Nov 2009 09:23:21 +0000 http://baselinescenario.com/?p=5513#comment-34083 That’s what you charge them then. Stop moaning about regulation or TBTF, there’s no way round the fact that some institutions will always be TBTF or rather Too Systemic to Fail which is far more relevant. Just start charging them for the privilege and we can all go back to work. This argument got dull and stupid a long time ago.

]]> By: RA http://baselinescenario.com/2009/11/16/one-cost-of-too-big-to-fail/#comment-34053 Mon, 16 Nov 2009 23:15:06 +0000 http://baselinescenario.com/?p=5513#comment-34053 Are the issues really too big or too inter-connected to fail, or is it too irresposible to be allowed to play with derivatives?

]]> By: Russ http://baselinescenario.com/2009/11/16/one-cost-of-too-big-to-fail/#comment-34049 Mon, 16 Nov 2009 21:13:21 +0000 http://baselinescenario.com/?p=5513#comment-34049 That’s the moral truth about all these “profits”.

Then, in addition to that, there’s things like the TBTF premium, the government cultivation of this oligopoly, all the loan guarantees, Fed acceptance of toxic paper as collateral, and the massive conveyance of free money, which render a large portion of these potemkin profits ours in the more technical sense as well, since we’re the ones paying for them.

The big banks all belong to the people. They now exist in the state of being stolen property.

]]> By: redleg http://baselinescenario.com/2009/11/16/one-cost-of-too-big-to-fail/#comment-34038 Mon, 16 Nov 2009 19:03:55 +0000 http://baselinescenario.com/?p=5513#comment-34038 If they would have failed in the absence of a bailout, wouldn’t any and all profits be attributable to the bailout?

]]> By: Ted K http://baselinescenario.com/2009/11/16/one-cost-of-too-big-to-fail/#comment-34029 Mon, 16 Nov 2009 18:09:25 +0000 http://baselinescenario.com/?p=5513#comment-34029 This is great analysis by Baker and McArthur and I’m glad James highlighted it. But I’m afraid it’s an example of good information that will never be applied or put to use in Congress when they make the laws.

]]> By: albrt http://baselinescenario.com/2009/11/16/one-cost-of-too-big-to-fail/#comment-34002 Mon, 16 Nov 2009 14:45:13 +0000 http://baselinescenario.com/?p=5513#comment-34002 “Logically speaking large banks could plausibly provide benefits”

Why would you expect this? Have you seen a lot of noblesse oblige among the large bankers that you haven’t been writing about in your blog?

The business of large banks is extracting rents. I know of no reason to believe that anyone else gets any benefits from that.

]]> By: Russ http://baselinescenario.com/2009/11/16/one-cost-of-too-big-to-fail/#comment-33995 Mon, 16 Nov 2009 13:24:23 +0000 http://baselinescenario.com/?p=5513#comment-33995 I just haven’t seen many attempts at quantification of such benefits.

As we saw in the Calomiris case:

http://baselinescenario.com/2009/10/26/are-big-banks-better/

it looks like all the king’s horses and men have only been able to come up with flimsy arguments.

It looks like even the world’s most accomplished liars are having trouble with this one.

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