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Politics : View from the Center and Left -- Ignore unavailable to you. Want to Upgrade?

To: Steve Lokness who wrote (211985)	12/18/2012 2:39:50 AM
From: Maurice Winn	2 Recommendations Respond to of 541248

The first [individuals borrowing too much and paying too much for houses] was quite separate from the bundling of millions of dodgy mortgage securities. <If a person borrows too much and can't pay it back that is individual event. When banks bundled thousands of mortgages in risky instruments that they then turned over to other investors - that is an event that effects the well being of our economy. > As the purchase of Lehman Brothers by Barclays showed, the problem with the second was for the shareholders and creditors of the banks, who lost their money. The transfer of ownership to Barclays didn't affect the mortgagors. Nor did it cause financial implosion. It was a giant swindle by banks and other mortgagees to get free money from the government aka citizens. I have no idea why citizens would want to reward risk-taking bank managers who paid themselves huge bonuses and huge salaries to cause huge failures, but they did [via the political process]. I would have been quite happy to take over Citibank's assets and "restructure" the loans. But of course my bid was too low for the shareholders and creditors who preferred [of course] to be thrown an opm lifeline by the government. In my business model, the home owners could have continued to own their properties with a greatly reduced financial burden. The Federal Reserve and government refinanced the banks so that they could continue as though nothing too much had gone wrong. Their bonuses were soon back at astronomical levels. Nice work if you can get it. "The economy" would not have collapsed. As happened with the Barclays purchase of Lehmans, business carried on with some corporate restructuring, with the Lehman shareholders and creditors being severely punished for their financial mismanagement. Other more favoured banks made out like bandits. A similar thing happened in NZ after the 1987 financial implosion, with BNZ [Bank of New Zealand] being given big heaps of opm to protect the shareholders and creditors of BNZ. The 1987 crunch in NZ was a serious business, unlike elsewhere in the world where it was more of a bump which was soon a faded memory with irrational exuberance the order of the day through the 1990s and then into the housing bubble of the early 21st century. It was absurd that BNZ was given a big heap of opm loot to save their corporate bacon. Another such financial swindle was when South Canterbury Finance scored over $1 billion because they played the government for a fool [the government guaranteed deposits in various financial institutions and those financial institutions did casino investing = bet the lot and if it fails, get the money back from taxpayers]. Heads we win, tails you lose. Nice work if you can get it. The government soon realized their blunder and limited the guarantee but too late. Maybe I'm blinded by my ideology, but I didn't lose my money. I prefer to save my bacon rather than provide pork to government cronies. Have a look at "alternative energies" for mega$billion winnings. Another giant swindle. In my BP Oil days, BP spent a fortune on alternative fuels. But there was an expectation of financial return. BP shut BP Solar after decades of success to avoid financial losses. I'm a paid up fan club member of innovation and technology, but not when it's going to fail and lose money. It's not a matter of ideology. It's a matter of what's rational and will work. Mqurice