This from a friend of mine. There is lots of anger out there.

When a fireman sees a house on fire, he sounds an alarm, dons his turnout gear, bravely rescues the occupants and puts out the fire.

When an investment banker sees a house on fire, he quietly sells the burning house short, uses the proceeds to buy a larger house for himself and, when someone suggests that his taxes be raised to help the homeless, he rails against the dangers of socialism.

Category: Markets

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.

22 Responses to “Fire !”

  1. rootless_cosmopolitan says:

    And the Federal Reserve pumps oxygen into the burning house to prevent that the occupants suffocate.

    rc

  2. Super-Anon says:

    Well, the “dangers of socialism” don’t come from taxing the rich – they come from making a bloated, hemmoraging, debt-ridden government bigger, bloodier and more debt-ridden than before.

    The “dangers of socialism” lie in the possibility that more spending programs will cause a fiscal crisis and and the “Sudden Stop” that Buiter warns of.

    Of course less spending may result in a similar outcome.

    Pro-tip for the future leaders of The Country Formerly Known as the United States:

    Don’t spend more than you can pay back.

  3. franklin411 says:

    Completely agree with that sentiment, Barry. Isn’t it funny how the pharisees are always the ones selling the country to the Romans?

  4. call me ahab says:

    reminds me of the joke about the hollywood agent who was visited by the devil. The devil promised him all the best clients and untold riches. In return the agent’s family had to burn in hell forever. The agent rested his chin on his hands and went into deep thought before finally looking up in confusion and said: “I don’t get it, what’s the catch?”

  5. skardin96 says:

    I cringed every time when I see an republican speaking against Obama’s policies and somehow manages to connect it “socialism”. I wonder how many of those that keeps crying about “socialism” actually understands the philosophy concepts behind it.

  6. AGG says:

    WASHINGTON (CNN) — Senate Banking committee Chairman Christopher Dodd told CNN’s Dana Bash and Wolf Blitzer Wednesday that he was responsible for adding the bonus loophole into the stimulus package that permitted AIG and other companies that received bailout funds to pay bonuses.

    I’m responsible for bonus loophole, Dodd says

    On Tuesday, Dodd denied to CNN that he had anything to do with the adding of that provision.

    There’s a nice bullseye! It would be a nice start to impeach Dodd and put him in prison.

  7. AGG says:

    call me ahab,
    Be Careful now, you might offend ottovbs with such irreverent comments about important people. Fois Gras isn’t getting any cheaper, you know. All elite shrinks are booked solid these days.

  8. franklin411 says:

    AGG,
    You were clearly not paying attention during the stimulus debate or you would have caught what appears to be a mistranscription by a local newspaper. Dodd inserted an amendment to the stim bill last February that would have banned bonuses such as these at the last minute. Wall Street raised a howl about how the Dodd Amendment would cause banks to stop accepting TARP funds. They claimed that Dodd’s move would actually cause the failure of TARP for this reason.

    The measure was watered down in conference committee. Think about it–would you fight to insert a provision in a bill and then work to eliminate your own measure? Of course not.

  9. call me ahab says:

    AGG

    otto is old school- hard to teach an old dog new tricks.

  10. bergsten says:

    I’m sorry, but try as I might, I just cannot fathom what you-all are so worked up about.

    When it comes right down to it, the PURPOSE of the market is to put one over on the other guy. Where do you think all of the money comes from, bales just lying in the street? No, it comes from others, slower, stupider, more honest than you.

    These guys put one over on us BIG TIME. Seriously big time. History-making big time.

    That kind of behavior DESERVES bonuses. Haven’t you been watching all of the “reality” game shows? This is 21-st century America. This is how it works now.

    Oh. I see.

    THEY thought of it first. They had the connections. They were in the right places at the right times.

    Well, tough. I never EXPECTED to get any bail-outs. I expected the old fork in the eye, and I wasn’t the least bit surprised when I got it.

    You can bet I’m keeping my hands over the OTHER eye.

  11. Michael M says:

    An i-bankers doesn’t see a house burning. He observes the historic data on the house and know that such an event is highly unlikely, then sells fire insurance to a counter party that is leveraged 30-1, book the profit upfront (’cause it’s highly unlikely it will ever burn and it’s highly rated) and then ask the government to bail him out when the house burns down so that the counter party can be made whole. Then he gets a job with the Government Sachs being the only one who understands the details of the fire insurance documentation.

    BTW I wonder how big the bonuses will be for the Goldman guys who made 6 bn on their CDSs with AIG….

    Maybe one day the fireman will realise that the madness only stops when he starts to educate himself about the ways of the world, vote with his brain instead of his gut and stops believing in all that American dream nonsense.

  12. AGG says:

    franklin411 said,
    ” Think about it–would you fight to insert a provision in a bill and then work to eliminate your own measure? Of course not.”
    Actually, when FDR was trying to pack the supreme court, his front man in congress fought like crazy to increase the number of justices. The outrage was so great that this same politician had to lead the charge against the measure. Remember this was the establishment’s attempt (using the supreme court) to block FDR’s stimulous package to thwart the depression.
    Let’s be clear. Less than 1% of our politicians give a rip about our economic wellfare. They are bought and paid for by the lobbyists. ANY heat brought on ANY of them benefits the people of the USA. They are comfortable. They must be made severely uncomfortable. They must NEVER be trusted. They must NEVER be given the benefit of the doubt. We must NEVER again assume that they know what they are doing and that they have our best interests at heart. They are ONLY moved by public outrage. They are the first, like a certain commenter here, to talk about logical, rational legislation rather than emotional responses to public indignation. It’s just another of their many faux arguments to keep us from questioning their authority and honesty. People are mad and they are getting madder. This shit has reached the point where calm debate will not feed hungry peoiple while others get million dollar bonuses. Fuck the business as usual types. Yes, even Obama, who used the argument that business as usual is over, has been gaming us. Well, I’ve got news. People heard you, Mr. President and they are going to hound you and congress until you deliver.

  13. Jason Crowell says:

    Actually, I think you leave out the part about the I-Banker paying off some guy called “Matches” Malone to make sure that their CDS payoff bigtime. Then saying “Hoocoodanode” when Matches does…what guys nicknamed Matches do.

    THEN grumbling about having to pay taxes for the Fire Department, and railing against taxes to help the homeless. (At first, I figured something about the I-Banker tossing the gas can and taking a shower to get the smell of five gallons of gas off him…then I realized, no I-Banker would get themselves dirty like that)

  14. AGG,

    franklin has no intelligible to what you laid out. That *History isn’t taught at his level.

    in a way, it’s too bad, he’s a bright boy, maybe he’ll discover that one has to Learn more than they’re Taught..

    Jason,

    to your point: “then I realized, no I-Banker would get themselves dirty like that”, and given the recency of AIG coverage, see: http://clusty.com/search?input-form=clusty-simple&v%3Asources=webplus&query=AIG+CIA

    yon’ Rabbit Hole, may it have an End.

  15. WNL says:

    I have a thought on how to handle this.

    Announce that in 2 weeks, the gov’ t will release the names of only the AIG current and former employees who elected to keep, rather than return, their ‘bonuses’ – those who return the bonus will not make the list.

    Some think that there is a real risk to life and limb for those who keep that bonus. Further decisions (to tax them, etc) can be made depending upon how many keep the bonus.

  16. GB says:

    Barry, You forgot to mention that the house is fully insured by a federally subsidized agency lobbied into existance by the banker.

  17. rootless_cosmopolitan says:

    AGG, Mark,

    may I ask you, do you believe in following? If politicians weren’t corrupt, if they just were honest, knew things and acted because they had the best for “the people of the USA” and “our economic welfare” in mind, then they would do the right thing to fight the economic crisis and all the major problems would be solved and everything would be just fine afterward? Or there hadn’t even been any economic crisis in the first hand, but economic growth forever, and a good life for everyone who is “honest” and “hard-working” in USA instead?

    Really?

    rc

  18. rootless,

    you’d need a few more conditions to really delineate the bounds of the field..but, given this: ” If politicians weren’t corrupt, if they just were honest..” and Today’s current scene: They’d resign, go Home to their constituents, explain what they thought the deal was, why they were resigning, instruct as to the 9th & 10th Amendments, to begin with, and apologize for being so deluded for too long.

    but, to the general demeanor of your Q: Do I think we’d live on “EZ St.” w/ 168. Happiness for all and sundry? No, not quite. Could we be, significantly, better off? Of Course, we, most certainly, could, and, dare say, would be.

  19. AGG says:

    rootless_cosmopolitan ,
    An interesting point you bring up; sort of like asking a person why he wants to play chess when everybody plays checkers. Ethical relativism is an oxymoron. It’s also the current popular delusion of the vox populai. The shrinks will pontificate that a person demanding a “golden rule” type behavior from his leaders has a RIGID PERSONALITY. This poor rube doesn’t understand the “real” world. I say, I understand it all too well. To accept common political corruption as status quo ante not to be questioned but to be lived with is the sophistic cowerdice that destroys nations. Granted, the “rigid” true believers who claim some holy religion while killing anyone who disagrees are conveniently grouped with those who demand principled behavior of politicians. After all, ridicule is a great rhetorical device. But truth always stands and sleazy behavior always brings poverty to individuals and to nations. Yeah, I know. it doesn’t look like it but all the clever PR for the financial gimmickry practiced by our leaders will bring them, and us, down.
    So have some fun and scream at a politician today.

  20. zitidiamond says:

    A lady friend of mine from the South once told me that the American Constitution prohibits socialism. I could only think to respond by saying that if that had been the case, her part of the country, as a slave based feudal economy, would never have ratified the Constitution.

  21. benesposito says:

    AGG said:
    “There’s a nice bullseye! It would be a nice start to impeach Dodd and put him in prison.

    Less than 1% of our politicians give a rip about our economic wellfare. They are bought and paid for by the lobbyists

    Fuck the business as usual types.

    An interesting point you bring up; sort of like asking a person why he wants to play chess when everybody plays checkers. Ethical relativism is an oxymoron. It’s also the current popular delusion of the vox populai. The shrinks will pontificate that a person demanding a “golden rule” type behavior from his leaders has a RIGID PERSONALITY.

    After all, ridicule is a great rhetorical device.”

    So have some fun and scream at (ridicule) a politician today.

    So let’s see, ridicule filled rants are going to stop the ridiculers.
    Also in a short space you managed to commit the fallacies of ad hominem, argument from omniscience, argument from adverse consequences, argumentum ad baculum, argumentum ad ignorantiam, argumentum ad populum, begging the question, composition fallacy, confirmation bias, confusion of correlation and causation, non sequitur, red herring, slippery slope, and straw man.

    lol, if only you could lead us out of this trouble.

  22. Mutant Capitalism says:

    Excellent analogy! Let’s be a little more specific about this subprime playbook. This house fire was no accident. It can not be blamed entirely on economic conditions, financial ability of borrowers, liar loans or time worn predatory lending tactics. There were arsonists involved and their flame accelerant was mortgage servicing fraud. These were subsidiary servicers of major investment banks. Some were independent servicers who merely contracted their services aka “Fire for Hire”. Now these servicers had perfected their game, having been at it since late ’80′s for their own and others’ profit. Here’s one who recently got FTC wrist slap after 20 years of despicable behavior:
    Bear Stearns – EMC Mortgage Corp – http://www.ftc.gov/opa/2008/09/emc.shtm
    Where’s the profit in these times when mortgages are under water and homes no longer hold equity?
    Insurance, of course…… but not just any old insurance policy, one where you are not required to have skin in the game, which makes it almost impossible for forensics to identify and prosecute perpetrators of this crime. Thanks to Phil Gramm’s deregulatory dance moves credit default swaps became that emminently suitable vehicle for this purpose. So it was that in cold dark winter days of January 2006 – subprime ABX index was born, conceived and birthed by a group of traders working for investment banks that all had subsidiary servicers under their roofs/control.
    http://www.bloomberg.com/apps/news?pid=20601170&refer=special_report&sid=aA6YC1xKUoek
    How are ABX.HE indices compiled every 6 months? By these very same traders of course.
    http://www.forbes.com/2007/08/06/croesus-chronicles-indexes-oped-cz_rl_0807croesus.html
    Was the whole subprime credit default swap orgy rigged from the start?
    Did investment banks conspire to rig ABX in their favor?
    Did insider servicing information inspire obscene leverage in these bets?
    Did investment bankers instruct subsidiary servicers in which REITs to manufacture bogus defaults?
    Take a look at the big players in Markit Group’s kick-off ABX presentation: ABN AMRO, Bank of America, Barclays Capital, Bear Stearns, BNP Paribas, Citigroup, Credit Suisse, Deutsche Bank, Goldman Sachs, HSBC, JPMorgan, Lehman Brothers, Merrill Lynch, Morgan Stanley, UBS, and Wachovia, all firms with subsidiary mortgage servicing units.
    http://www.markit.com/information/products/category/indices/abx/documentation/contentParagraphs/09/document/ABX_Marketing_Presentation.pdf
    Markit’s own website acknowledges “Working in conjunction with a consortium of key asset-backed security trading desks” Financial Times reports that these banks and brokerage firms held a majority interest in Markit of approximately 67%, hedge funds owned 13%, and employees 20%. The firm’s web site currently says it has 16 banks as shareholders, without naming the banks. That’s okay. We know who THEY are.
    It’s time to call things are they are: Retention Bonuses = Hush Money
    Markit Group Consortium = Banking CARTEL
    House on Fire = ARSON !