With the government now debating the release of the second half of the TARP funds, perhaps now is as good a time as any to look at how successfully spent the first $350 Billion dollars were.

The evidence is not very favorable.

What I can say without reservation is that the TARP spending prevented large brokers and banks from going to zero. Since the legislation was passed in the Fall, there has not been a major disruptive bankruptcy.

Sure, the FDIC had to take over a few institutions that were overdue for the long dirt nap anyway, but the sort of market roiling Bear Steans collapse, and the subsequent Q3 Lehman/AIG/CitiGroup disasters have at least stopped.

This is not, to be clear, any declaration that the TARP has been a success. We have avoided financial armageddon, but other than that, it has been an abject failure.

The short list of criticisms starts with the ad hoc way it was formed, and foisted on the public. There were no clear goals, no over-arching strategy, no milestones to evaluate its success.

Let’s take a quick look at some of the shortcomings and misfires the TARP has yielded:

1. No Strategic Plan:  What was the original purpose of the TARP? Its hard to say, other than it was of the greatest importance it be passed with minimum debate and even less information. Without stated objectives, its difficult to evaluate whether it is achieving those goals.

2. Methods and Tactics: By what method was the TARP to be implemented?  Buy distressed assets? Recapitalize the banks? Increase lending to businesses and consumers? Rescue foreclosed homeowners? Stimulate the economy? The constantly morphing objectives make it hard to take the original claims very seriously.

3. No Triage:  There seemed to be no evaluative method in determining which banks should be saved and which should be put down. If the goal was to strengthen the financial sector, then the approach is to help those that can be strengthened, and have an orderly liquidation of those that cannot.  Merely throwing money at weak and dying banks is no long term strategy.

4. Wasting Taxpayer Monies:  Why did private investors like Warren Buffett get so much of a better deal than Uncle Sam? Its clear to me that both Treasury and the Fed lack the expertise to negotiate these investments. Instead, set up a matching investment. Let those in the private sector with the expertise to do so make substantial arms-length investments, with the the US matching ( at 10 or even 20X) on the same terms.

5. Transparency, Accountability, Responsibility: How monies have been spent by the Treasury department (and Fed) should be a textbook example of government accountability and transparency. Its not, and there is no good reason why. The Fed is even worse, refusing to release any details, which has led to lawsuits being filed by Bloomberg and Fox News to get the specific public information.

6. Evaluating Progress:  All major programs should have some method of evaluating if they are achieving their goals. This is missing from the TARP, and its why so many people have no idea if it has been successful or not.

7. Moral Hazard:  Why are we rewarding companies that were poorly managed, reckless money losers? All of the TARP recipients should have anyone senior management associated with the bad investments fired; bonuses suspended, shareholders wiped out. How are these firms paying dividends with government money? Where are the clawbacks of bonuses from Stan O’Neill, Angelo Mozilo, Chuck Prince? That the people responsible for the mess are even remotely profiting from it is simply unconscionable.

As bad as the $700 plus billion expnditures have been, the real damage lay in the future. When in doubt, traders will go bigger and more reckless than ever before. That is the terrible lessons of the TARP: Make sure you screw up big enough to get the taxpayer to rescue you . . .

Category: Bailouts, Corporate Management, Dividends, Taxes and Policy

Please use the comments to demonstrate your own ignorance, unfamiliarity with empirical data and lack of respect for scientific knowledge. Be sure to create straw men and argue against things I have neither said nor implied. If you could repeat previously discredited memes or steer the conversation into irrelevant, off topic discussions, it would be appreciated. Lastly, kindly forgo all civility in your discourse . . . you are, after all, anonymous.

44 Responses to “The Terrible Lessons of TARP”

  1. VennData says:

    My favorite CNBC personality, Billy Mays, could have sold this TARP plan to America quickly and we would have avoided so many of these problems.

    But I disagree that there was no triage or accountability plans. If Paulson liked you, you were saved. If not, you weren’t. Let that be a lesson to you people who want to avoid sucking up to the Wall Street elite.

  2. I have to respectfully disagree. Have a closer look at the list of the FDIC’s list of bank failures. We have not seen a failure since Dec 12, 2008. Additionally, The even better news continues to be backed up by the Fed’s own current data:
    - Overall lending by US banks is at a record high and has increased…
    - Consumer credit is at record highs and also has increased during the “crisis…”
    - Deposits at all banks continues to increase….
    - Loans by banks to businesses continues to grow rapidly.
    Have a look at all the fed charts that illustrate this…http://mast-economy.blogspot.com/2009/01/banks-are-no-longer-failing.html
    Also a quick glance at any daily trade publication shows that commercial paper markets are now back to operating within their normal ranges as are the municipal bond markets.
    We had a big chill back in October and swift policy leadership globally (while not perfect) has us back on the right track.

    ~~~
    BR: Um, incorrect:

    The Fed’s Beige Book was downbeat as expected in all areas of the economy. On the issue of lending out the money. “Most districts indicated that lending activity continued to decline or remained weak, and many Districts reported that credit conditions remained tight or tightened further.”

    Demand for C&I loans were mixed as was demand for consumer loans. Some districts noted an increase in refi activity. Boston reported that credit availability continues to be a major barrier to CRE activity and SF noted that that the availability of credit remains quite constrained.

    I don’t know where you get your data from, but you are wildly wrong . . .

  3. awilensky says:

    Its harder to get a small business development loan or grant than 150 billion from TARP: http://abmw.wordpress.com/2009/01/12/tarp-vs-salem-ma-small-business-loan-program/

  4. dead hobo says:

    It sucks to watch thieves and liars win at taxpayer expense.

    About all we can hope is that Obama does two things. The first is to make the remaining balance more Main Street oriented so that housing and auto sales benefit. The second will be to discover and report on a full accounting of cash already spent, with the intention of getting back cash that was wasted and seeking some kind of retribution from those who took advantage of the situation.

    Metaphorically speaking, a few public hangings would look pretty good.

  5. harold hecuba says:

    that is preposterous banks are hoarding cash and buying treasuries. why would a bank lend to anyone in a deep recessionary environment. lending standards have increased dramatically. consumer credit at record highs?? good lord maybe it is but you call that healthy? i call it an absolute nightmare. deposits at banks are incrreasing. well i’ll bet they are as well but i certainly hope they are pulling money from the big banks. increased savings is a huge strain on an economy that relies on the consumer if you can even call what this country has as a functional economy. loans to banks to businesses continue to grow rapidly. on what planet. oh those great birth death models. as a matter of fact i know several people who run small businesses that cannot get loans. the economy is on life support. if the fed takes the pedal off the gas it falls into complete oblivion

  6. dead hobo says:

    Re your title: The Terrible Lessons of TARP

    comment:
    ——————
    TARP is an example of perfection, as defined by the current incarnation of the Republican Party.

    Live on Borrowed Money

    Stick someone else with the bill

    In one way, I don’t understand why anyone is surprised about the outcome so far. This has been the Republican Way for over a decade. Decrease Taxes to finance consumption and idle, speculative investment, Borrow to finance the shortfall. Repeat so that those who got the cash will die of old age before any reckoning comes due. The Mafia must be jealous beyond description.

  7. wally says:

    “What I can say without reservation is that the TARP spending prevented large brokers and banks from going to zero.”

    So far. Remember, we were supposed to get paid back and even make a profit. To date, temporary liquidity has been provided and a chance to make money on the government’s money has been proffered. Whether that has or will resolve the solvency questions is not yet known.

  8. Marcus Aurelius says:

    Being robbed seldom, if ever, works out well for the victim.

  9. Marcus Aurelius says:

    Good News Economist Says:

    “We had a big chill back in October and swift policy leadership globally (while not perfect) has us back on the right track.”

    ________

    Propping up enterprises that should fail is not the business of government, no matter the situation. We weren’t on the “right track” to begin with.

  10. wally says:

    Bernanke’s London speech this morning doesn’t exactly say the financial institutions are ‘saved’. In fact, it implies they are not.

  11. dead hobo says:

    Karen,

    re the plea agreement:

    It’s probably a phony ploy, or only something an idiot would agree to. If he walks, then I think Europe might consider taking one from the GWB playbook and go with a rendition, unless they like looking like fools, too.

  12. super_trooper says:

    What is it about Americans and learning from history? Could have learned from the British adventure in the 20′s in Iraq. Could have learned from the Swedes in the 90s on how to deal with a banking crisis.
    After this poor result, my suggestion is, take a big chunk of the 350b and let the government start a new healthy bank. All the money will be available for lending (rather than spending $40b on dead capital on citi). Call it the “Jump-start” bank. Yeah, yeah, unfair competitive advantage and look at Fannie and Freddie. But the bank must be sold or dissolved in 3-5 years.

  13. philipat says:

    It makes me smile that the US can be so self-righteous about corruption. The bottom line is that this is corruption with a capital C. At least the Indians are now learning how to do it the right capitalist way?!

  14. ronin says:

    Any crack dealer from Baltimore knew this TARP deal was just plain WRONG!

    It’s called fraud and all of the people involved should be hung from trees. To sit here and pretend that it was justified and/or even an act of desperation and/or a foolhardy act is completely absurd!

    The people who did this knew exactly what they were doing. It was well documented that these criminals threatened congressmen and women and strong armed people to get their way. Only a brave few stood firm against this total SCAM!

    Our government has been hijacked by a crime syndicate and it won’t stop until the right people stand up against it. All you Obama/Clinton lovers can dream of unicorns and rainbows but the reality is that the crime syndicate is still in control and the curtain on the final act has yet to be raised….

  15. larster says:

    BR, you’re bullet points look like an assessment of the Bush administration performance for the last 8 years.

    As far as banks lending money, as opposed to ratholing the Tarp funds, just drive around the periphery of whatever town you live in. There are devlopments with streets and no homes. There are developents with streets, homes under construction, and no sales. There are a number of bankrupt developments in my small community, but no one has pulled the plug. One assumes that the reason for this is that it would reduce bank capital, i.e. the Tarp funds are sitting and waiting to fill in the capital voids as needed.

  16. Ethel-to-Tilly says:

    Of course it’s the Republican way. After Bush’ re-election they wanted to privatize Social Security to send all the money to their friends on Wall Street and discovered that politically they couldn’t do it. So instead, on their way out the door, they’ve jiggered up a crisis to take care of their Wall St friends another way. The big money paid big bucks to put Bush in the White House 8 years ago – did anybody really think he’d leave office without leaving them a big present?

  17. Marcus Aurelius Says:

    January 13th, 2009 at 8:54 am
    Good News Economist Says:

    “We had a big chill back in October and swift policy leadership globally (while not perfect) has us back on the right track.”

    ________

    Propping up enterprises that should fail is not the business of government, no matter the situation. We weren’t on the “right track” to begin with.

    Reply:

    Thank you Marcus Aurelius. The TARP is the biggest fraud to have ever been perpetuated on the American public, at least until the “stimulus” package gets passed. Then that will be the biggest one. Before that it was WMD’s in Iraq. Is there any way to short the lies? Soon enough, when the phony dollars that are being printed exceed the amount of phony dollars that the credit fraud destroyed, the only schmucks left holding the bag will be the American public.

    There’s no reason to save a system whose fundamental precept is fraud. It’s time to start anew.

  18. Mannwich says:

    Sounds a lot like the way Iraq has been handled to me………

  19. “What is it about Americans and learning from history? Could have learned from the British adventure in the 20’s in Iraq. Could have learned from the Swedes in the 90s on how to deal with a banking crisis.”

    Haven’t you heard? Americans are not subject to the viscitudes of history. For us, history doesn’t apply. It’s different this time.

  20. Mannwich says:

    Re: Madoff: There’s no chance the feds will allow this to go to trial. They’re clearly going to strike a deal and try to snuff out revealing the real details of this scam, which is much, much bigger than ‘ol Bernie.

  21. bcasey says:

    Hangings, beheadings, stockades, drawn and quartered, I’m an American, I’m delving back in history, I’m sure somewhere we’ll find just the right recipe to fix this dilemna. Btw that funny story about the plane crash missing the pilot yesterday is turning out to be another fraud scheme. What is with these trader jokers?

  22. Greg0658 says:

    1st I present my advice to myself next to my password and log of postings … SLOW THE F**K DOWN

    next … resistance is futile – you will be assimilated
    peace will be achieved when there is only 1 … when the stronger cabal has prevailed

    that said I hope it’s the good cabal … and the struggle is not to hungered or bloody

  23. Tom K says:

    Wow, the conspiracy theories are rampant here this morning.

    I heard an interview with Barney Frank on NPR this morning regarding the remaining $350B. So now I know how they’re going to squander the remaining TARP funds:

    1) Force TARP recepients to lend the funds — Hey, wait a minute Barney. Isn’t this part of the reason we’re in this mess? Where are the new lending requirements? The new regulations? Isn’t part of the reason banks aren’t lending is because they finally got religion about lending requirements?

    2) use more TARP funds to restructure loans on impending foreclosures with a heavy emphasis on reducing the principle of those loans. Hmmmm, so I get a ARM with sweet introductory rate for a home I can’t afford, rates go up and I can no longer make the payments, the home loses value…and Uncle Barney comes to the rescue with taxpayer money to bail me out? My neighbor got a conventional mortgage for a home he could afford, his home lost value, and he got…well, screwed. He’s the guy bailing me out.

  24. Mannwich says:

    @Tom K: I”m that neighbor you’re talking about. Feeling a little cranky these days.

  25. bcasey says:

    Don’t get cranky, Join me and get midieval on their @sses! let’s see, there’s boiling oil, tarred and feathered, burned at the stake, impalement… the list goes on and on.

  26. constantnormal says:

    I see this morning that Bernanke is pounding the pulpit with cries of “More bailouts! More bailouts! the banks are (still) in trouble!”

    Perhaps the true situation is that the economy (national and global) has shrunken to the point where we have too many TBTF banks contending for too small a pool of business. Some of them have to die for the herd to survive.

    And by “die” I don’t mean merging their rotting carcasses into the sickly bodies of other TBTF banks, I mean the FDIC paying off the depositors and the shareholders and bondholders being wiped out, kaput. The Fed can triage the other TBTF banks damaged by the blowback if necessary. Then we repeat the process, with each successive TBTF bank being allowed to die, thinning the herd until it is able to survive in the much smaller economies that we now have.

    How would this be different from how Lehman was handled? For one thing, there was no attempt to shield others from the collateral damage as Lehman exploded. Admittedly, the gang that couldn’t shoot straight did end up guaranteeing money market funds, but that was in a panicky, “oops” reaction instead of as a part of a well-thought-out plan. And in hindsight, it appears that the money markets did not need Federal backing to avoid breaking the buck (the few that did recovered without explicit government aid), although the government guarantees may have prevented a run on the money markets and helped to save the CP markets.

    We are still following in the Japanese experience, apparently unable to learn from those into whose footsteps we are so precisely stepping.

    I’m eagerly awaiting Obama’s replacement for Bernanke. Ben has written a lotta history with his creative approaches, but they all have utterly failed to address the underlying problems of too much banking industry for the size of the economy. If anything, his “save every bank” approach has made the problem worse, not better.

  27. Scott F says:

    To Good News Economist: I don’t know what you are smoking, but consider this:

    Economists React: ‘Crushed by Credit Crunch’

    Economists and others weigh in on the decline in the U.S. trade deficit.

    # In practical terms, the decision to slash the target rate The collapse in the price of crude oil caused the U.S. trade deficit to narrow spectacularly… However, a little caution is needed because November’s decline was driven by a drop in the quantity imported as well as the price… Not surprisingly, non-oil trade volumes fell sharply as well. Exports declined by 5.8%, while non-oil imports fell by an even bigger 7.8%. Some of this decline in volumes is due to the well-known problems with obtaining trade credit, but we suspect it is mainly just a reflection of the collapse in global demand post-Lehmans collapse. Looking ahead, the survey evidence suggests that exports will shrink at a slightly faster pace than imports this year, but as imports are still bigger in absolute terms, the trade deficit is unlikely to move very far in either direction.
    –Paul Ashworth, Capital Economics

    # With the 6.8% plunge in real goods imports outpacing the 3.2% drop in real exports, the price adjusted merchandise trade deficit fell $6 billion, substantially better than we expected. And while aircraft production started ramping back up quickly in November after the end of the Boeing strike, shipments remained severely depressed, so a sharp rebound in overseas aircraft deliveries in December is likely to contribute to a further narrowing in the real trade deficit (on top of another probable price driven drop in the petroleum products trade gap).
    –Ted Wieseman, Morgan Stanley

    # As far as we can tell, trade flows have been crushed by the credit crunch, which has reduced demand for traded goods and services and made it more difficult for exporters and imports to obtain trade finance. The result is that the data have become impossible to forecast. We now reckon real fourth quarter exports fell 27%, with imports down 16%.
    –Ian Shepherdson, High Frequency Economics

    # Non-petroleum imports will be on a declining trend owing to the U.S. recession, while exports are also going to be falling owing to weakening economic activity abroad. The net trade deficit is likely to continue to shrink, although with both sides of the ledger showing losses, the news cannot really be quantified as good. On a longer term basis, as the U.S. saving rate rises and consumer spending shrinks as a percentage of GDP back toward a more sustainable share, the main offset in terms of share of GDP will be a narrower trade deficit owing to less imports of consumer goods. Mathematically this will cushion the blow to U.S. GDP, but it will not represent good news to trading partners who have gotten fat and happy in the past by selling ever-increasing amounts of products to the U.S. consumer.
    –Joshua Shapiro, MFR Inc.

    # The real story is the contraction in important export volumes that underscores the decline in world trade — an economy cannot grow its way out of a recession by reducing imports (especially one the size of the U.S.).
    –RDQ Economics

  28. DL says:

    8. No way to pay off the Federal debt without devaluing the currency.

  29. Greg0658 says:

    Scott F Says: “# ….. as the U.S. saving rate rises …”
    I ask where (what country) are we going to see (allow) it to be invested in?

    The rub of my pension disappearing by the year (and I don’t even qualify for it yet). Hind sight .. shoulda had a party with it (like Wall Street).

  30. GloomBoom says:

    OK, so nobody can agree if the TARP was good or bad, if it saved the economy or just wasted money. Such diversity of views are not atypical for economic issues. But if things have settled down and we are not on the brink of Armageddon, can we at least take our time and make sure we have a plan for the second $350 billion? Sheesh.

  31. willid3 says:

    i thought the FDIC only payed the depositors, the investors etc are on their own. so if the Fed and FDIC allow the bank to collapse, the only ones they will make whole are those who deposited cash with them. So you could say that they are protecting the investors (and 401k etc) by not allowing the bank to just disappear. besides have you tried to move to a new bank lately? and especially if your old bank cratered? and what would that do to the other banks investors and depositors? i could see lots of bank runs caused just by allowing a TBTF bank to collapse. cause if TBTF can fail, there is no really good reason to trust your current bank either, as they are all basically run the same way with the same rules

  32. Lugnut says:

    Barry,

    Before you can pass any sort of judgement on the merits of TARP I, I would think you would have to be able to look at an audit trail of fund utilization within each of the receiving institutions to see how it was utilized. I seem to recall a post regarding inquiries to specific donor institutions that was filled with many “no comments” and “we are not publically disclosing how we spent it” types of responses.

    If the prevailing sentiment is that they basically sat on it to maintain solvency requirements, then the real question is not ‘was it sucessful’, but are we happy propping up insolvent private institutions with taxpayer debt for the sake of ‘reducing systematic risk’ and allowing the management structures that brought this about to remain intact, and for those bad assets to remain closeted and unaccountable to the public.

    Were it not for the associated counterparty risk, they should all be imploded, rather than to allow to zombify themselves on our largess. The money would be better served having the government capitalize new banks that don’t have this inherhent baggage and might stand a better chance of survival, rather than waiting for a second (and then third, and fourth) call by Bernanke for a rerun of bailouts for the same fvcked banks. Enough of this Keynsian crap.

  33. ottovbvs says:

    Barry old man read your comment:

    “This is not, to be clear, any declaration that the TARP has been a success. We have avoided financial armageddon, but other than that, it has been an abject failure.”

    Say that again:

    “Other than the fact that the patient survived a terminal illness the surgery was an abject failure????”

    Bite me again Barry.

  34. DL says:

    ottovbvs @ 4:34

    “We have avoided financial Armageddon…”

    Because of TARP, or in spite of it?

  35. ronin says:

    constantnormal: We would be so lucky if we were like Japan back in the ’90s. Your observation is missing a few major points; 1. Japan had a population that saved their money; 2. The Yen wasn’t the reserve currency of the world; 3. Japan wasn’t the world’s consumer; 4. Japan wasn’t super G.I. Joe; 5. Japan wasn’t begging for handouts from every neighbor and stranger.

    The “Japan experience” comparison fails on so many levels….

  36. ronin says:

    Tom K: No conspiracy theories here, you just need to stop watching mainstream news:

    http://www.youtube.com/watch?v=ETx6wW1C04g

  37. Andy Tabbo says:

    Fast thoughts on BLM: Fed’s will do a deal with him…it’s in the public interest to get as much info out of him as possible. He’s going to jail till he’s dead. The deed is done. The best thing for the public now is to right as many wrongs as possible and then move on.

    In re: Market action and technicals….

    First let me say there should be no shame in suggesting “I don’t know” or “I’m a little confused.” And so with that, I must say that the current action is a little confusing to me. On the break of 875 Cash S&P I thot we might careen much lower, but all we did was sort of grind and congest….no breakdown.

    Additionally, the Yen is butting up against an area that should provide MAJOR resistance and the Euro is resting on an area that should be MAJOR support. If these respective levels hold, then ALL risky assets will rally. So maybe that’s what is going on here…..

    Also, intraday action on the SP futures, I’m looking at a “complex inverted head and shoulder pattern” that triggers around 874 ish…..so if we’re trading 878+Cash tomorrow….look out shorts. [ "Complex" means "double-headed."]

    So….I must give this bearish market what it’s due and respect the action. That being said, if we collapse tomorrow below 857 (860 cash), it’ll become very, very ominous.

    Color me a little confused and OUT OF THE MARKET after today.

    -AT

  38. DL says:

    So, TARP II is coming in a couple of weeks.

    More money down the drain.

    When is TARP III going to arrive?

  39. TrickStyle says:

    I’m satisfied with the first slug of the TARP financing. It stopped a global financial meltdown. Hello…MELTDOWN. Meltdown means savings gone, banks gone, unemployment 25%+, starving people in not-so-poor countries. Old people screwed. Young people screwed. Meltdown means your investments would have dissipated into thin air. And you wouldn’t be able to make them back, because there wouldn’t be any stock exchange trading.

    At least now you have a chance to recoup the 40% you lost. Thanks to swift action.

    For those that think that the GAO was going to monitor every last nickel in real-time, well that’s just plain ol’ naive. It doesn’t work that way. What cracks me up is that many of the people here complaining about the TARP were trading the bear market rally that ensued thanks to what…um, the TARP. I don’t recall a lot of complaining when we were on pushing 950. People were giddy with excitement.

    On saving the financial sector, I recall Warren Buffett noting on Charlie Rose that the exact prescription later would be worse than a directionally correct medication immediately. I agree. Few people in the world really understand the financial markets. The fact that we avoided utter disaster is somewhat of a feat, particularly given that it got pushed through Congress.

    If you wanna make this a political issue, fine. But it isn’t. In Oct/Nov, the issue at hand was how to keep the global financial system from dissolving. That crosses political lines and borders.

    As for why banks aren’t lending yet…well that’s because there’s still too much risk. Duh.

  40. ronin says:

    TrickStyle: You act is if it was a surprise! LOL! Guess what? The smart people prepared for it–saw it coming a mile away! All you guys who lost 40%, you should ask yourself why you didn’t see it coming. I’ll bet the people that think it was a surprise watch mainstream news so they can get spoon fed happy patriotic propaganda.

    A meltdown would have been just what the doctor ordered. All those unhappy people you talk about would have gotten MAD, real MAD, and then we would have seen some real CHANGE!

    Instead we get more of the same, and the uber rich @$$holes get to stay on top with a little help from the US tax slave….

  41. d4winds says:

    There is, or should be, no such thing as TBTF; but the simultaneous failure of many major financial institutions (AIG, WaMu, Wachovia, and Citi with implications for MS and GS after Lehman, Fran/Fred, &BS [not to mention European IBanks like RBS]) is TBTF. The TARP recapitalizations are a necessary evil to manage the process of letting these dominoes fall in a more orderly fashion. The Citi universal bank break-up may be the beginnings of the domino process. AIG should be next.

  42. Greg0658 says:

    and I’ll throw this concept

    can the TARP track if the banks are issue’g the funds into an entity that its sole purpose is to byback shares of its parent bank … but with stealthyness so as to not run up the share price – but be there to squelch rumors there is not a mal-funcition’g banking system

    and to bring a prior post thought here – the end … when the run on the bank is over – recapitalize the parent with those bought back shares and its boomtimes all over again – hooray hooray for WS

  43. TrickStyle says:

    @ ronin – I must admit that I unfortunately didn’t see “it” coming. I underestimated the effect of the US housing market on the global financial system. While I stopped additional investments in the stock market in Sept 07 as word of the credit crunch became more prominent in mainstream media sources like WSJ, I didn’t take invested money out because when I invest I invest for the long term and am not concerned about volatility. I wish I had.

    Had I, like you clearly did, understood the magnitude of the chain reaction, I, like you would have shorted the S&P, Bear, Lehman, Citi, etc. and quadrupled my wealth like you and the other smart people out there.

    As for a meltdown being what the doctor ordered, I suspect you aren’t quite grasping the implications on humanity. To say such harsh things makes you sound angry and unreasonable, rather than smart and prescient, as you represent here.

  44. Scott F says:

    Good News Economist needs to change his name to “Spinning the News Economist ‘