Posts filed under “Bailout Nation”

Off to Midtown Barnes & Noble

bn-read

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I am off to the mid-town Bailout Nation discussion!

Wednesday June 24, 2009 6:30 PM
Barnes & Noble
555 Fifth Avenue, New York

Stop by and say hello!

Category: Bailout Nation

Reading: Barnes & Noble NYC Midtown

> The request was made for a mid-town book reading, and it is now scheduled. This Wednesday June 24, 2009 6:30 PM Barnes & Noble 555 Fifth Avenue, New York 212-697-3048 Should be fun!

Category: Bailout Nation

Tales From “Bailout Nation”

Barry Ritholtz, author of the new bestseller “Bailout Nation”, blames Alan Greenspan for America’s financial collapse and says troubled banks should be allowed to fail.

click for video
tscm-bn

Category: Bailout Nation, Video

Too Big to Fail: Special NYT edition

If they are too big to fail, make them smaller.”

-Nixon Treasury Secretary George Shultz about Fannie Mae and Freddie Mac

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This Sunday NYT seems to be all about one of our favorite crisis whipping boys: The concept of TBTF — “Too Big to Fail.”  There are numerous articles, stories, blog posts on this pernicious policy, including our own “Too Big to Succeed” meme (aka chapter 18: Too Big to Succeed? in Bailout Nation).

• Gretchen Morgenson asks: Too Big to Fail, or Too Big to Handle?:

Rather than propose ways to shrink these companies and the risks they pose, the Geithner plan argues instead for enhanced regulatory oversight of the behemoths. This suggests the taxpayer safety net will be larger after our national financial train wreck, not smaller.

More than two years after the crisis began, “too big to fail” remains “too problematic to address” with anything other than more souped-up regulation. Given that earlier efforts at policing these entities failed so miserably, why should anyone think that a new-and-improved regulatory approach will fare better?

• Eric Dash asks If It’s Too Big to Fail, Is It Too Big to Exist?:

Today, amid the wreckage of the gravest financial crisis since the Great Depression, bigness is one of our biggest problems. Major banks, the Detroit automakers, the financial basket case that is the American International Group — the only reason these giant, sclerotic companies are still standing is that they have been deemed “too big to fail.”

Or, more precisely, too big to be allowed to fail. Policy makers fear companies like these are so enormous and so intertwined in the fabric of the economy that their collapse would be catastrophic. Hence, all those multibillion-dollar, taxpayer-financed bailouts.

In its overhaul of financial regulation last week, the Obama administration proposed several measures to try to contain the biggest of America’s big banks. But it stopped far short of calling for the dismantling of those institutions.”

Paul Krugman gets meta on the idea — Too big to fail FAIL — and surprisingly argues that we can never eliminate TBTF:

“I’m a big advocate of much strengthened financial regulation. One argument I don’t buy, however, is that we should try to shrink financial institutions down to the point where nobody is too big to fail. Basically, it’s just not possible . . .

So I think of the pursuit of a world in which everyone is small enough to fail as the pursuit of a golden age that never was. Regulate and supervise, then rescue if necessary; there’s no way to make this automatic.”

I totally disagree — size is problem, for it not only creates companies too large to effectively practice risk management with, the mere size creates other issues.  The fact that CitiGroup was able to get Glass Steagall repealed, but did so by forcing the government’s hand via a technically illegal merger is quite telling.

When companies get to be that large, their vast wealth buys influence and power and corrupts the political system. Despite the crisis caused by the banks, just look at how successful their lobbying effort was. Their enormous pushback effectively neutered any true regulation of the finacial sector.

I think that from now on, I will be referring to the President as Barack W. Obama — since he is adopting Bush’s economic policies, he might as well as adopt his middle initial.

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Previously:
Too Big To Succeed . . . (January 14th, 2009)

http://www.ritholtz.com/blog/2009/01/too-big-to-succeed/

Obama Reform Plan Fails to Fix Whats Broken (June 18th, 2009)

http://www.ritholtz.com/blog/2009/06/obama-reform-plan-fails-to-fix-whats-broken/

Read More

Category: Bailout Nation, Bailouts, M&A, Regulation

Off to Book Revue

I am off to the reading at the Huntingotn Book Revue — so no FNJ this week. Lots of killer things in the queue for next week . . .

Category: Bailout Nation

Was TARP Just a Ruse to Protect Citigroup?

I discuss Citigroup and TARP with Aaron Task and Henry Blodget at Yahoo Tech Ticker:

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Source:
Bailout Nation: Was TARP Just a Ruse to Protect Citigroup?
Aaron Task, Henry Blodget
Yahoo Tech Ticker, Jun 16, 2009 04:41pm

http://finance.yahoo.com/tech-ticker/article/264931/Bailout-Nation-Was-TARP-Just-a-Ruse-to-Protect-Citigroup;_ylt=AhXk7XQ4BDKzxdfvyta1qyVk7ot4?

Category: Bailout Nation, Video

Tomorrow Night: Huntington Book Revue

Tomorrow! Friday (June 19), I will be at the Huntington Book Revue, discussing Bailout Nation. Its at 7pm. Rather than a straight up reading I will instead discuss some of the more incredible factoids of the Bailouts in the book — Why I wrote the damn thing, why it was written and rewritten 3X. Oh,…Read More

Category: Bailout Nation

Obama Reform Plan Fails to Fix Whats Broken

So much for “not letting a crisis go to waste.” The initial read on the Obama Regulatory plan was an enormous disappointment. Both supporters and critics who expected him to take a hard turn to the Left have been left either surprised or disappointed, depending upon their leanings. To the pragmatic center, including your humble…Read More

Category: Bailout Nation, Bailouts, Regulation

Barry Ritholtz, author of “Bailout Nation” says the Obama administration did the right thing in letting poorly run automakers fail and that the same rule should have applied to badly managed banks that took too many risks.

June 17, 2009

Category: Bailout Nation, Bailouts, Video

Bailout Costs vs Big Historical Events

It is exceedingly difficult to convey exactly how much we are spending on all these bailouts. Whenever I start talking trillions (versus mere billions), I get puzzled looks from people. Humans have a hard time conceptualizing any number that large.  I wanted a graphic way to clearly show how astonishingly ginormous the amounts involved were….Read More

Category: Bailout Nation, Bailouts