Click to see an interactive graphic.

Source: WSJ

Category: Regulation

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.

5 Responses to “The Tab for the Financial Crisis”

  1. winstongator says:

    I would like to calculate this in a different way. Consider the path history would have taken without a bailout. Where would the listed companies stock prices be? Take the difference between actual stock prices and that and you get a more accurate measure of the cost. The no-bailout history is also important to examine from a point-of-view of government intervention. Would current US GDP be as high had there been no bailout? How about the total stock market? You could look at the cumulative GDP over the past 6 years vs. what it would have been w/o bailout and see that the investment was well worth it. Should it have been structured differently, and possibly been tougher on banks: yes. But arguing against any intervention, with the evidence of history, is a hard sell.

  2. Iamthe50percent says:

    The chart is not complete unless you add bars showing the fraudulent profits made for which these fines were only a cost of doing business. Doing business the Corleone way.

  3. 873450 says:

    WASH RINSE REPEAT

    2 Banks Forged in Crisis, CIT and OneWest, Are Set to Merge, to a Big Payoff

    http://dealbook.nytimes.com/2014/07/22/cit-to-buy-onewest-for-3-4-billion/?rref=business

    “For some, the financial crisis was very, very good.

    Five years ago, after the mortgage market had imploded, a group of investors — including the billionaire hedge fund managers George Soros and John A. Paulson — banded together to create a new bank from the wreckage of the failed California lender IndyMac.

    Now those investors are set for a big payday, thanks to the CIT Group, a lender that itself ran into trouble after the housing bust.

    On Tuesday, CIT said it would acquire the bank that rose from IndyMac’s ashes — OneWest — paying $3.4 billion in cash and stock to its hedge fund and private equity owners.

    The deal illustrates how casualties of the financial crisis have moved on, and even prospered.

    The deal is a coup for John A. Thain, the Wall Street executive who sold Merrill Lynch during the depths of the crisis and was later unceremoniously ousted from the bank. Under his leadership, CIT, a lender to small and midsize businesses, has grown — to the point where, with the acquisition of OneWest, it will be deemed a systemically important bank for the first time. … And the cost of its funding will drop to about 2.4 percent. …”

    WASH RINSE REPEAT

  4. Phipp says:

    So why in the face of this evidence of fraud by the players listed and many others (rating agencies, regulators, shadow banks, appraisers etc.) do the courts uphold the “personal guarantee” business owners made in 2005/2006 in an obviously fraudulent market as a remedy for failed projects and failed local bank loans, while creating partnerships the FDIC made with so called “white knights” like Lennar/Rialto to squeeze business owners using the “personal guarantee” as a hammer to punish people when the system was fraudulent through and through?

  5. Rookie says:

    In economic theory, a moral hazard is a situation in which a party is more likely to take risks because the costs that could result will not be borne by the party taking the risk. Why does no one talk about the moral hazard created by the government bailing out the banks? Isn’t this the true cost? Or, said a different way, isn’t this government MO (bailing out the folks being too aggressive/mismanaging their companies) the real risk to our economic/financial system in the future?

    ~~~

    ADMIN: Your host would want me to remind you that chapter 13 of his book Bailout Nation is titled Moral Hazard: Why Bailouts Cause Future Problems