@stairs021 really? That's great ! I hope Anthony Weiner also runs again! We need more politicians who are in it to honestly help the USA and not be pawns for the global corporations or industrial military complex! Grayson, Paul, Weiner are my new hero's!
You are my hero Grayson :) keep up the good work. I think maybe the FED's understand what you are saying because you are speaking in there language which is how to decive the American people with there jibber jabish. Love ya man
at 2:40 to 2:42 lady is thinking answer that question asswhole...because i had comon sense and i also had same question but i didnt ask you as you are my boss...now answer that MORON
@patbarkley So I guess it`s an idiot who asks tough questions to a pack of corporate serving dolts who are stealing your taxes.
I guess he`s an idiot because he wants to contribute to a fundamental change in federal transparency and make the US a less totalitarian place to live.
No. I think the real idiots are the ones who have some kind of strange problem with decent people like Grayson.
As far as him being an idiot, did you see where he asked Bernanke who got the $500 billion in central banks swaps? Do you know where your paycheck goes after you deposit it in the bank? He's either an idiot asking stupid questions or it's an act meant to fool idiots.
@patbarkley comparing my paycheck to $500 billion dollar swaps is a weak argument, a misequation. My paycheck doesn't effect the health/sickness of an entire country's economy. The movement of my money doesn't throw people out their houses or lose their jobs. He was right to ask.
And yeah so he has a bit of personality and panache, a good sense of humor (you'd need that dealing with the jokes he's asking questions too), you're probably just not use to seeing that in a politician.
@patbarkley comparing my paycheck to $500 billion dollar swaps is a weak argument, a misequation. My paycheck doesn't effect the health/sickness of an entire country's economy. The movement of my money doesn't throw people out their houses or lose their jobs. He was right to ask.
And yeah so he has a bit of personality and panache, a good sense of humor (you'd need that dealing with the jokes he's asking questions too), you're probably just not use to seeing that in a politician.
@jimmyrtle Yeah, the many in Congress who work for, support and are supported by the corrupt and corrupting large financial firms, multi-nationals, and banks like Goldman Sachs.
@jimmyrtle Do you find it somehow expedient for yourself to protect the """honour""" of the big banking institions and the scum that run them? Why pick on the patsies, lackies, and puppets when ultimately the ones running the show are the CEOs and CFOs of Goldman Sach, JP Morgan, Citigroup, and on an on.
They deserve the real punishment. The congress only deserve punishment for being pathetic, suckling whelps to those corporate shits.
@unfortunatebeam Goldman, Morgan and Citi may be the worst corporations in history, but my grandchildren will be crushed by the debts run up by Congress and their spending on stupid wasteful programs. That has nothing to do with Goldman et al.
Alan Grayson is vigorously supported & endorsed by Oliver Stone and actor Martin Sheen. This should tell you all you need to know about this arrogant, narcissist, buffoon. This New York shyster needs to go back to the slums of New York from which he came ASAP.
why don't you ppl vote for this guy as a us president in the next elections? he looks like hes always on top of the game. i'm from europe, unfortunatelly its not up to me, but if it were, i'd convinge all my friends, neighbours, and even do a personal internet campaign in his favor. i freakin love the guy.he's got balls so big i can see em from all the way here!
@e1p11 then why don't you finish fucking up your own country, and stay the hell out of our business. by the way, you should probably learn the facts about how underhanded and lying this cocksucker really is (or was) until he got voted out on nov. 2nd. i love how europeans watch some michael moore "documentary" and i use the term very loosly, more like "crockumentary"), and think you know everything about american history from the stupid bowling for columbine cartoon.
Mr. Grayson is again making very simplistic arguments. I'm very pro MTM accounting but there are very reasonable arguments against it. For example it can incite downward spirals as MTMs fall, margin calls are triggered, assets are sold to meet margin calls (putting further downward pressure on MTMs). Its not some sorcery crooks used to deceive the poor guy who just had his house foreclosed. His tone is offensive and undermines legitimate debate.
Rep. Grayson's argument is reasonable, someone had to make it, but you're right about the MTM. As far as I know the new rules came into play in '07 with FAS 157 and probably caused more damage than OTC derivatives. Its like pegging the dollar back to gold, every time you want to buy or sell something you'll have to check the commodities market minute by minute to make sure you're not getting ripped off.
Look at these smug AIG creeps. They think they're pulling one. But Grayson's got their number. Good thing he's independently wealthy. He can't be bought off for so many ham sandwiches, unlike the vast majority of the Congress, Dem OR Repub.
Damn, Grayson is smart as hell, AND he does his homework. He comes prepared, and persists until he gets the lying CEO scumbags (and Herz here) to admit when they're lying or hiding the truth.
As a Florida and New York CPA, kudos to Robert herz - the FASB witness, for speaking truthfully about the games played by banks. And of course, further kudos to Grayson for his persistent efforts to get to the heart of the problem.
the fed for years wants 2 partys becaues they keep fighting and miss the big picture we are entering a new age partisanship is here and all eyes are on the feds
I've met Dennis Kucinich and he's almost as tall I am at 5'9". I know that it can seem as though we sometimes choose our candidates based on how they look. Personally, I'm not so sure that's a good criteria.
Where did florida find alan grayson.This guy has harvard graduates with their masters unable to answer his questions.Florida might not be able to fix what they did in the 2000 election but they can sure make up for it putting this guy up in washington.Good job
This comment has received too many negative votesshow
Grayson might be the biggest waste of space in Congress. Mark to Market's major problem is it assumes you are treating all your assets as liquid assets.
A better analogy for him to use would be "I was 5'7" in Jr. High. Did that mean I was going to remain 5'7" ". The more I see of this guy the more I realize he is only there to say idiotic things that offer nothing to advance the American citizen.
Then we might as well do away with accounting. When a huge percentage of your assets are tied up in illiquid assets of questionable value, how in the world can you form an accurate financial picture of a bank. Grayson's questions are right to the point. Why not throw out the yardstick? You twisted his analogy into a non sequitur.
Single-payer GRAYSON Single-payer ...It would have been just too damn expensive to remove all that asbestos from the Twin Towers... As the 9/12 Tea Party looks into the events of 9/11 they have many questions concerning the Official Story. They know not to trust the Government & Media. Only the guilty fear inquiry. An ill wind comes arising Across the cities of the plain There's no swimming in the heavy water No singing in the acid rain Red alert Red alert
this is a great place to have installed on the interviewee one of them dog training shocker devices. where when said interviewee has a responce undesirable by we the people we all begin to press and the more people who press at some rate over 50% deliver the voice of the people and maybe we correct the wrong doings of the crooks in office and maybe do weekly interviews and do all of governement.. and no i didnt say kill anyone but think of what it could do
you know what im sayin it could be a non-lethal device that would start at a minimum and the maximum would be the same as a non-lethal stun gun. if its ok to use on us when we are nonconforming, it should be just as effective on our employees right??
Beautiful! Great Video! I worth a penny today but my future earning power will be $1 million. I want my $1 million today, right now! That's how the stock market is rising these days no assumed phony earnings. August 6, 2009. S&P 500 value is 378 and not the current market propping 1000. As the dollar collapses, inflation is priced into the stock market to reflect the amount of money the Federal Reserve is printing.
Yes, the do-nothing republican and blue dog democratic congress sat there with Bush and watched all this happen. How much worse was the financial collapse made by the Bush/Cheney panic?
Boy, when I go to the convenience store and I hear the man say
"im just the cashier"
I want to let him know that he has failed as a human being and is stripping me, and us as people of our morals and dignity as choosing the profession to be engaged in.
LOL! This is one of the better ones. At least the guy being grilled was honest! "Yeah, the ones who wanted to change the rules most were the ones who eventually failed." Slam dunk!
shhhhhh, go back to sleep, there is nothing going on, change the channel to one of those new TV shows, buy more consumer goods on credit, the government & police will protect you, if you own a gun you will only get hurt, disarm, disburse & dumb-down ... like good little subjects.
Simple, your phone calls and text messages can be wirelessly tapped and monitored and you can be arrested and detained without reason, and without legal council as the federal government sees fit, all in the name of "homeland security."
Take my freedom, just don't take my gun? Seems to be the message too many American's are sending out right now.
This is small in comparison to what's about to happen in the U.S. Obama names his enemies, and now pushes to have all your front doors marked with GPS coordinates and a 90-day deadline. The census isn't 'til 201...what's the deal?Sounds like the makings for a police state coming soon.....
I would like to pay off all my bills with my next pay check, all the bills I o will get a %, and the american people can pay the rest. You have got to be f------ kidding me
listen to ron paul. he knows the truth that the federal reserve is just a big scam. he wants to be able to audit the federal reserve since he can't get the support to abolish it yet. he really wants to get rid of the federal reserve and switch to a gold standard economy where the government prints the money like president lincoln did. and we had that untill woodrow wilson was bribed into signing the treasonous fereral reserve act of 1913 which was written by global bankers in secret
The Democrats and Republicans and these finance guys are all in this together....shift the money around, print more money make sure they have enough money for bonus's and make the avg worker tax paying cit suffers...these guys are all crooks .....
The untold story in this whole national crisis is that President Clinton put on steroids the Community Redevelopment Act, a well-intended Carter-era law designed to encourage minority homeownership. And in so doing, he helped create the market for the risky subprime loans that he and Democrats now decry as not only greedy but 'predatory.
the very people that designed the program that led to all of this mess now get to blame the private sector and they're put back in total control and charge of it. "Yes, the market was fueled by greed and overleveraging in the secondary market for subprimes, vis-a-vis mortgaged-backed securities traded on Wall Street. But the seed was planted in the '90s by Clinton and his social engineers. They were the political catalyst behind this slow-motion financial train wreck.
Block bonus money? His party knew about it a year ago! It is law that these bonuses not only are allowed, but law that gov't can't interfere with bonus payout. So why would they stop them? It's all a distraction to keep you from screaming about the BIG bonus money going to foreign companies. And to distract from the trillion + in "stimulus" (Porkulus) money being blown. Your tax dollar hard at work :)
I really wish these bonus assholes would commit suicide! ...cause there going to rott in hell! and they GOD DAMM! well know it! Perform your suicide on HBO so we can watch !
you sir are an idiot. You don't understand the situation yet you want your opinion out there. Do a little research and until then keep your comments to yourself. The people who received bonuses were contractually owed these bonuses. It was under 1% the total money the company received. The problem was that the company received money at taxpayer expense to begin with, not that they payed their contracts as any business should do.
New CEO, Liddy, was singled out for praise by President Obama today during the small business seminar. Who is in charge when these bonuses get paid out? Ed Liddy, who was just singled out for praise by President Obama. You connect the dots.
How much BULL SHIT is there possible to spew out of ones ass. In your case there is no end. Bank act of 1996? There's no such thing as the bank act of 96 dumb ass. And you say there's no accountability in the new stimulus packages... am i dealing with a retard? The only time there was no accountability was when Bush passed his own stimulus package for his cronie friends on wall st to take billions out for themselves. Typical of an ignorant republican to think he must be squeeky clean though!
TARP. Section 1, Short Title, emergency stabilization act, Economic Stabilization Act of 2008. Section 2. Purposes. Provides authority to the Treasury secretary to restore liquidity and stability to the US financial system and to ensure the economic well-being of Americans. Congress attached no strings to the $700 billion TARP money, zilch, zero, nada. They gave the Treasury secretary, in this case Geithner czar-like authority to do whatever he wanted with that money.
Who do you think wrote the TARP bill? Barney Frank, Chris Dodd, Nancy Pelosi. They wrote it. Did they put any accountability in it? No. Did they put any strings in it? No. They gave total authority to the Treasury secretary
And I mean FUCKED IT UP. Now the majority of American people have finally caught on and realized that hmm maybe competence and policy matter more then having a former coke head in the office who shares my religion. Most Americans except for a few ignorant idiots. If you havent caught on to who those ignorant idiots are well then let me put it into simpler terms that your brainwashed mind might be able to understand... YOU, YOU IGNORANT DOUCHE!
The dirty little secret is that all these people getting all these bonuses are friends of Barack.
Most of the people on Wall Street who have their homes in the Hamptons and in San Francisco and Hollywood and Chicago and New York, most of these people are wealthy, filthy-rich Democrats. A lot of this money is going straight to people who end up kicking it back to Obama in the form of campaign contributions and what have you.
Wow, you sound like the quintessential brainwashed republican. Those greedy rich people you talk of on wall street, um yeah, 85% republican. Don't you get it. The republican party has now become a party set out to make the rich richer and allow no room for the little guy struggling to catch a break. That's why their were hundreds of lobbyists in Bush's ear and the same reason were in this mess now.
Ya know, I use to think the same thing, until I did my due diligence. Tilbily is correct in what he says. The Democrats are an evil bunch, and they are essentially run by jewish banksters. They have caused this financial fiasco, and of course, the republicans have been complicit. They are all a waste of living tissue. I hope they all hang for selling out this country. I will donate the rope.
Nope, DEMS have controlled Congress the last 2 years. Bush warned of this collapse repeatedly and called for oversight. DEMS said there was no problem! And proceeded to tie Republican hands.
Republicans shower you dumb southern hicks with words of Christianity and bible talk so that you end up voting for these incompetent pricks so they can keep their country club pals living lavish lifestyles while fucking over everyday Americans. You saw this destruction with our last president George W. Of course after Clinton built this country back up after the first Bush fucked it up and handed it gift wrapped to George W. (who yes is a republican), Bush then went and fucked it up.
lol, this whole mess has it's origin in the sub-prime mortgage/housing fiasco. And that all started with the Bank Act of 1996. MADE LAW BY CLINTON. It says you can't refuse ANYBODY a mortgage. Even if they can't afford it. Carter proposed the concept, Clinton gave it teeth. Good luck with "that one". lol Now you have a collapse and the pigs(Congress,Dem-controlled) snouts are planted in the trough and pretending to be innocent, on your side.
Obama and his administration are fucking INCOMPETENT. How the HELL does Geithner roll another 30 billion in taxpayer money to AIG without FORCING them to renegotiate executive bonuses? Hellooooo? I miss Bush already.
Hmmm they need to handout millions in bonuses because its in their contract? If they wouldn't hav got 160billion wouldn't their company hav tanked? Then wat would their contracts be worth? A thank u for saving their jobs would hav been sufficient. When are the people going to take this country back?
Hmmm they need to handout millions in bonuses because its in their contract? If they wouldn't hav got 160billion wouldn't their company hav tanked? Then wat would their contracts be worth? A thank u for saving their jobs would hav been sufficient. When are the people going to take this country back?
Hmmm they need to handout millions in bonuses because its in their contract? If they wouldn't hav got 160billion wouldn't their company hav tanked? Then wat would their contracts be worth? A thank u for saving their jobs would hav been sufficient. When are the people going to take this country back?
Cut there fucking heads off. Now. Make an example out of them Enough is enough. Anyone who kills the people who keep giving them money or the people who keep taking it and giving out bonuses to friends, should be pardoned. Jefferson was right. AIG needs to chopped up and nationlized.
WHEN AND HOW EXACTLY ARE THEY GOING TO PAY US BACK FOR 160 BILLION. HONESTLY HOW ARE THEY GOING TO PAY THAT BACK. THEY DON'T MAKE MORE THAN 10 BILLION PROIT. IT'S GOING TO 50 YEAR BEFORE THEY PAY US BACK.
That is why congress should have let these institutions fail. Maybe we need to get rid of the congress and the banks. Start by calling your reps and senators and cuss at them to listen to you, stop being nice.
Letting them fail would totally screw anyone with more than $100,000 dollars in those banks. A lot of innocent citizens would lose a lot of money, perhaps a great portion of their life savings.
You can't take revenge on these foolish banking execs by letting the banks fail. The execs need punishment that doesn't affect the bank itself.
What are you talking about? The FDIC insured limit isn't 100k. The basic insurance amount is $250,000 per depositor, per insured bank. Also, anyone can remove their money any time they like - it isn't locked down. They can take it anywhere they want; including banks that are not failing. We do have those.
People lost their life savings fucking around in the stock markets and 401k. You are throwing straw man arguments around. Unfortunately, they are both inaccurate and uninformed.
But all the bonuses I made when the hurricane didn't hit...those i get to keep. After all, my company was profitable until the unthinkable (hurricane) happened.
The shame of it is that even a 10% reduction is asset prices makes a lot of these financial institutions bankrupt, because they are leveraged 20-1 or 30-1 or 40-1.
If you are leveraged 20-1, and assets go down 10%, that means you liabilities are twice your assets.
Now imagine a 50%+ drop is assets (as the market is proposing) and you see the futility of trying to bail out these guys.
So in my beanie baby example, the market might have originally thought that 5 years from now they would be worth 2.3 billion or more.
But now the market realizes those original assumptions are wrong. That's why the market won't buy them for 2.3 billion from me, but will only give me a measely $100 bucks.
- its a matter of a lack of buyers (i.e., illiquidity), not a matter of impairment - these aren't BB's - these have values at maturity if left to run to maturity
a similar condition occurred in early 90's LatAm crisis
my view on the policy response isn't necessarily wrong - its just an opinion and just happens to differ from yours - I don't think anybody 'knows' what the right response is, otherwise we would've done it already
but the asset overpricing issue is more factual - I've seen too many banks with securities that are performing and no matter what scenario they place on them, the expected loss isn't anywhere near the price-implied loss
Take AIG for example. AIG should not be bailed out - not only because they are insolvent because of mismanagement - but because AIG is a financial black hole.
No one knows how deep the hole is. Their obligations might exceed assets to the tune of 1 trillion dollars...or more. No one knows.
Throwing $150 billion to an undeserving company won't help at all, if their net liabilities are much higher than that.
AIG is a tough one - if gov't doesn't assist here, they you can throw out the top 15 banks in the world given their giant exposures to AIG - and the European banks are more exposed than the U.S. banks, so the Europeans won't be too pleased
so, with AIG, you clearly would be making a call that systemic destruction is better than saving the system - again, I'd disagree, but that would be your opinion as to the policy prescription - I think it would be disastrous
I start a hurricane insurance company, and insure all florida homeowners against hurricane damage for $5 dollars a year. For the years they don't have hurricanes, I rake in the dough. 3 million households at $5 dollars a pop means I make $15 million a year. I have a great company don't I?
When the hurricane finally happens, I can't pay my obligations (ie: I am AIG). So I need a government bailout, so all the homeowners can get paid.
ummm, if you're a regulated insurance company, there's no reason you shouldn't be able to pay your policyholders - thats your business - you're required to hold x amount of capital so that when the hurrican hits, you can pay out
bad example
unless you're AIG, which had too many non-regulated businesses like insuring CDS, etc., which wiped out the entire business - AIGFP fell through the regulatory cracks from what I understand
if your BB has a stated maturity value of $2.3B after 5 yrs and we have no reason to expect it not to perform, then yes, I won't mark it down to today's $100 'value' -& no bailout for you
if there's no way your BB is worth $2.3B, then thats a permanent impairment and it should be markded down
you're assuming ALL these marked-down assets are bad - this is not the case
separate the good from the truly bad and value them more accurately, thats all I'm saying
I fail to see how I 'proved' anything you might say.
The reason the market is pricing assets way way below book value is because the market does have reason to expect them not to perform as originally stated. Original expectation of cash flows and losses were wrong. Hence the assets are worth less and should be marked down.
yes, the original expectations were wrong, in the cases of good assets that I'm really talking about, by maybe 10% - but the market is valueing them as if they were wrong by 50% - thats the problem with the mark-to-market of these otherwise unimpaired assets
From this post it seems all you got is the belief that assets couldn't possibly have gone down 50% in value.
That's what you have. Disbelief.
The market, however, says otherwise. And a lot of anecdotes I've collected say otherwise as well. The 300%+ increase in housing prices the past few years in some areas say otherwise. Growing credit card balances and unemployment rates say otherwise.
I'm not saying that at all - the true 'toxic' assets have in some cases gone down by 100% - both in 'price' and in economic value (expected losses)
I don't think you're quite hearing me on this - I agree with you that there are plenty of those assets, and they deserve the mark-to-market treatment of marking down to the market price
but I'm saying there are a meaningful amount of not-toxic assets being priced as if they were toxic because they're all being thrown into the same bucket
How do you decide which assets are overpriced and which ones are not?
Pull them out of a hat? There has to be a consistent systemic way of pricing assets in a reasonable way. Mark-to-model is broken. Mark-to-market is the only reasonable way.
I believe you are wrong on whether assets in financial institutions are overpriced.
But you are also wrong in what should be the policy response by the government.
These companies should not be bailed out.
If the government wants to prevent a total collapse of lending, it should start its own retail bank. Alternatively, or concurrently, it could give loans to banks that are solvent.
But to figure out which banks are solvent, it first needs to let insolvent institutions fail
so this isn't 'make believe' pricing - its pricing similar to how they value the vast majority of their assets, which has been the accounting standard for decades or more
further, nobody really cares if your BB's are marked down - they have no impact on broader society, unlike these 'inaccurate' marks on bank books, which result in taxpayer-funded capital infusions (like them or not)
Don't you see though I should qualify for a taxpayer-funded bailout!!!
I took out a loan for 2.3 billion dollars in order to buy my beanie babies. So mark-to-market says I'm 2.3 billion dollars in the hole.
I could default on my 2.3 billion dollar loan and the bank could take my $100 beanie baby collateral. But that means the institution that loaned me 2.3 billion for beanie babies would take a hit.
Clearly that means I should get a bailout, so I can keep paying the loan.
problem is, your assets really don't have any other way to value them
bank assets actually have expected cash flows and losses - this is how ALL of their loans are 'valued' - the securities also have a value at maturity, unlike your BB, which has no maturity (no double-entendre intended!)
The key phrase in your explanation is "Expected cash flows and losses."
Bank assets are overvalued because their value reflects "expected cash flow and losses" that are out of touch with reality.
Their expectations are extremely overly optimistic, which is why we see the 'market' for these assets collapse. No one wants to buy these assets at book value, because everyone knows that book value reflects these optimistic assumptions everyone now sees are wrong.
And then this!!: /watch?v=FSaeRHE4_fo
abeismain 2 weeks ago
vote for Paul and Grayson!!!
Mangottaja1 4 months ago
love the fact that grayson is running for congress again.
stairs021 6 months ago
Comment removed
larryjohnny 3 months ago
@stairs021 really? That's great ! I hope Anthony Weiner also runs again! We need more politicians who are in it to honestly help the USA and not be pawns for the global corporations or industrial military complex! Grayson, Paul, Weiner are my new hero's!
larryjohnny 3 months ago
the bitch smirking in the back needs a bernanke cock in her mouth
justbreatheify 7 months ago
I want Pi, however on another note, F you rejects I am voting for Grayson 2012!
deeppurple28 8 months ago
You are my hero Grayson :) keep up the good work. I think maybe the FED's understand what you are saying because you are speaking in there language which is how to decive the American people with there jibber jabish. Love ya man
bobsizzz 9 months ago
at 2:40 to 2:42 lady is thinking answer that question asswhole...because i had comon sense and i also had same question but i didnt ask you as you are my boss...now answer that MORON
rockingnandpatel 11 months ago
always watch the body language...lol
missionaryoffaith 1 year ago
Let's change IQ, so Grayson isn't an idiot but only an imbecile.
patbarkley 1 year ago
@patbarkley So I guess it`s an idiot who asks tough questions to a pack of corporate serving dolts who are stealing your taxes.
I guess he`s an idiot because he wants to contribute to a fundamental change in federal transparency and make the US a less totalitarian place to live.
No. I think the real idiots are the ones who have some kind of strange problem with decent people like Grayson.
unfortunatebeam 1 year ago
@unfortunatebeam
"So I guess it`s an idiot who asks tough questions"
No, it's an idiot who asks idiotic questions.
"to a pack of corporate serving dolts who are stealing your taxes"
Yes, many congressmen are dolts stealing our taxes.
"I guess he`s an idiot"
No need to guess, he is.
" decent people like Grayson"
LOL! Thanks, that was funny.
patbarkley 1 year ago
@patbarkley So you think Grayson is not decent and idiot. Explain please, citing examples if you can.
unfortunatebeam 1 year ago
@unfortunatebeam It's obvious he's not decent.
Republicans want you to die quickly?
Taliban Dan? I could go on and on, but I won't.
As far as him being an idiot, did you see where he asked Bernanke who got the $500 billion in central banks swaps? Do you know where your paycheck goes after you deposit it in the bank? He's either an idiot asking stupid questions or it's an act meant to fool idiots.
patbarkley 1 year ago
@patbarkley comparing my paycheck to $500 billion dollar swaps is a weak argument, a misequation. My paycheck doesn't effect the health/sickness of an entire country's economy. The movement of my money doesn't throw people out their houses or lose their jobs. He was right to ask.
And yeah so he has a bit of personality and panache, a good sense of humor (you'd need that dealing with the jokes he's asking questions too), you're probably just not use to seeing that in a politician.
unfortunatebeam 1 year ago
@patbarkley comparing my paycheck to $500 billion dollar swaps is a weak argument, a misequation. My paycheck doesn't effect the health/sickness of an entire country's economy. The movement of my money doesn't throw people out their houses or lose their jobs. He was right to ask.
And yeah so he has a bit of personality and panache, a good sense of humor (you'd need that dealing with the jokes he's asking questions too), you're probably just not use to seeing that in a politician.
unfortunatebeam 1 year ago
@unfortunatebeam Forget about the difference in magnitude, where does your paycheck go?
Why don't you know?
Yeah, you're right, I'm not used to seeing such blatant assholiness on display in a politician.
patbarkley 1 year ago
lmfao he owned them
lemmelul 1 year ago
If we used MTM on Congress, they'd have been shut down decades ago.
And clowns like Grayson would be in jail.
jimmyrtle 1 year ago
@jimmyrtle Clown how
and who`d be shut down, congress....
and who deserves to go to jail here
You`re not making youself very clear
unfortunatebeam 1 year ago
@unfortunatebeam "and who deserves to go to jail here"
Well, if we went by who causes the most damage to the country, many in Congress deserve jailtime.
jimmyrtle 1 year ago
@jimmyrtle Yeah, the many in Congress who work for, support and are supported by the corrupt and corrupting large financial firms, multi-nationals, and banks like Goldman Sachs.
unfortunatebeam 1 year ago
@unfortunatebeam No, I was thinking about the Congressmen who waste our tax dollars.
jimmyrtle 1 year ago
@jimmyrtle Do you find it somehow expedient for yourself to protect the """honour""" of the big banking institions and the scum that run them? Why pick on the patsies, lackies, and puppets when ultimately the ones running the show are the CEOs and CFOs of Goldman Sach, JP Morgan, Citigroup, and on an on.
They deserve the real punishment. The congress only deserve punishment for being pathetic, suckling whelps to those corporate shits.
unfortunatebeam 1 year ago 2
@unfortunatebeam Goldman, Morgan and Citi may be the worst corporations in history, but my grandchildren will be crushed by the debts run up by Congress and their spending on stupid wasteful programs. That has nothing to do with Goldman et al.
jimmyrtle 1 year ago
Do you think Sarah Palin knows what these two Men are discussing?
Slayerfan84 1 year ago
@Slayerfan84 wtf are they talking about?
unholyaquarius 1 year ago
MONEY what about this way: youtube.com/watch?v=Y14CHYN-9yk youtube.com/watch?v=l7zBYIsU6xo
this guy is a killer!!! i respect your intelligence black brother, but still all these stupid slaves here pffffffffff
nwofromoldbabylon 1 year ago
Alan Grayson is vigorously supported & endorsed by Oliver Stone and actor Martin Sheen. This should tell you all you need to know about this arrogant, narcissist, buffoon. This New York shyster needs to go back to the slums of New York from which he came ASAP.
crusades0917 1 year ago
Lets start with mr crook LOL!!!!!
NatureofCircuitry 1 year ago
why don't you ppl vote for this guy as a us president in the next elections? he looks like hes always on top of the game. i'm from europe, unfortunatelly its not up to me, but if it were, i'd convinge all my friends, neighbours, and even do a personal internet campaign in his favor. i freakin love the guy.he's got balls so big i can see em from all the way here!
e1p11 1 year ago 3
@e1p11 then why don't you finish fucking up your own country, and stay the hell out of our business. by the way, you should probably learn the facts about how underhanded and lying this cocksucker really is (or was) until he got voted out on nov. 2nd. i love how europeans watch some michael moore "documentary" and i use the term very loosly, more like "crockumentary"), and think you know everything about american history from the stupid bowling for columbine cartoon.
albertmarriner 1 year ago
@albertmarriner Sychophant
splicedenergy 1 year ago
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@albertmarriner oh don't worry, Grayson IS, he's not going anywhere anytime soon despite what you may hope.
unfortunatebeam 1 year ago
@e1p11 He is just what Europe needs especially Greece, Spain, Ireland, France. I would love for him to move to China!
mueygringo 1 year ago
Alan Grayson is such a weapon; he really does a good job of showing how preposterous the request of the banks is. IFRS ftw!
dawp 1 year ago
Mr. Grayson is again making very simplistic arguments. I'm very pro MTM accounting but there are very reasonable arguments against it. For example it can incite downward spirals as MTMs fall, margin calls are triggered, assets are sold to meet margin calls (putting further downward pressure on MTMs). Its not some sorcery crooks used to deceive the poor guy who just had his house foreclosed. His tone is offensive and undermines legitimate debate.
wcknecht 2 years ago
Rep. Grayson's argument is reasonable, someone had to make it, but you're right about the MTM. As far as I know the new rules came into play in '07 with FAS 157 and probably caused more damage than OTC derivatives. Its like pegging the dollar back to gold, every time you want to buy or sell something you'll have to check the commodities market minute by minute to make sure you're not getting ripped off.
smg1one 1 year ago 2
Look at these smug AIG creeps. They think they're pulling one. But Grayson's got their number. Good thing he's independently wealthy. He can't be bought off for so many ham sandwiches, unlike the vast majority of the Congress, Dem OR Repub.
tim23z 2 years ago 8
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tim23z 2 years ago
Damn, Grayson is smart as hell, AND he does his homework. He comes prepared, and persists until he gets the lying CEO scumbags (and Herz here) to admit when they're lying or hiding the truth.
ctwriter 2 years ago 3
As a Florida and New York CPA, kudos to Robert herz - the FASB witness, for speaking truthfully about the games played by banks. And of course, further kudos to Grayson for his persistent efforts to get to the heart of the problem.
JOMO59 2 years ago
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JOMO59 2 years ago
Grayson is fucking awesome in making these lying scumbag/ whore bankers look like the criminals they really are! Grayson for President!!!
oneirishpoet 2 years ago 6
@oneirishpoet yeah! him and Ron Paul FTW
supersmashman9999 1 year ago
the fed for years wants 2 partys becaues they keep fighting and miss the big picture we are entering a new age partisanship is here and all eyes are on the feds
galef8 2 years ago
see the woman behind him laughing dont you?
nuumskee 2 years ago
F-ing awesome!!! Grayson, keep it up! We need you!
lawtek711 2 years ago 24
even my Gray said, WHAT !!
dadhadit 2 years ago
You are so awesome sir.
yaboyterror09 2 years ago 3
Mrs. Palin is about as Republican as u can be and no where near as intelligent as this Congressman. are you kidding me?
cplmagnum 2 years ago 2
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Grayson/ Palin would get 90% of Americas vote, including mine
30percentplusreturns 2 years ago
By the way, the 3 thumbs down are because Palin is not fit to be my company's receptionist.
gujubadboy 2 years ago 22
If you go up in front of this guy, you better be ready or he's going to hammer you.
Krait99 2 years ago
this was THE most interesting government conversation I thave ever seen!
who is this guy?
Obama - Grayson '12?
MagicTimeVideos 2 years ago
Kucinich - Greyson 2016
Rennpanzer 2 years ago 7
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that would just look silly now wouldn't it?
a short litttle 5'4" guy next to a 6'4" guy in a stripped suit?
Grayson - Palin '16 ? that would be hot!
MagicTimeVideos 2 years ago
I've met Dennis Kucinich and he's almost as tall I am at 5'9". I know that it can seem as though we sometimes choose our candidates based on how they look. Personally, I'm not so sure that's a good criteria.
Rennpanzer 2 years ago 2
Palin could piss close to Grayson... and this guy fucking HATES republicans...
whereitsat309 2 years ago
I don't care if those companies go bankrupt. I would rather that companies go bankrupt than the people.
LET THEM FAIL!!!
Sally9999 2 years ago 3
Where did florida find alan grayson.This guy has harvard graduates with their masters unable to answer his questions.Florida might not be able to fix what they did in the 2000 election but they can sure make up for it putting this guy up in washington.Good job
independent684 2 years ago 4
This comment has received too many negative votes show
Grayson might be the biggest waste of space in Congress. Mark to Market's major problem is it assumes you are treating all your assets as liquid assets.
A better analogy for him to use would be "I was 5'7" in Jr. High. Did that mean I was going to remain 5'7" ". The more I see of this guy the more I realize he is only there to say idiotic things that offer nothing to advance the American citizen.
board405t 2 years ago
Then we might as well do away with accounting. When a huge percentage of your assets are tied up in illiquid assets of questionable value, how in the world can you form an accurate financial picture of a bank. Grayson's questions are right to the point. Why not throw out the yardstick? You twisted his analogy into a non sequitur.
gigie555 2 years ago 2
if he has you that scared, I like him
MagicTimeVideos 2 years ago
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mmeredith82 2 years ago
Wow! you think your smart. but damn stupid
jsmith31451 2 years ago
Super Fail!!
ikedirty318 2 years ago
Grayson suffers from the inherent ego that comes from actually being the smartest guy in the room.
TheSlimViper 2 years ago 4
I think he goes for being the smart guy in the room who asks smart questions and doesn't take BS for an answer.
Krait99 2 years ago
Let's hope they can make some change and audit the FED already...
everything within our culture (or lack thereof) is forgotten in a week...indictments *disappear*, ...strange times..coming around again..
I hate to seem ignorant...BUT...this is the room of the ugliest ties I have ever seen...I mean really bad.
0ubermann2 2 years ago
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ryanshaunkelly 2 years ago
Grayson's the best! Always makes me laugh!!
mephistodood82 2 years ago 3
this is a great place to have installed on the interviewee one of them dog training shocker devices. where when said interviewee has a responce undesirable by we the people we all begin to press and the more people who press at some rate over 50% deliver the voice of the people and maybe we correct the wrong doings of the crooks in office and maybe do weekly interviews and do all of governement.. and no i didnt say kill anyone but think of what it could do
chad00023 2 years ago
what a brilliant idea!
i'm in!
MagicTimeVideos 2 years ago
you know what im sayin it could be a non-lethal device that would start at a minimum and the maximum would be the same as a non-lethal stun gun. if its ok to use on us when we are nonconforming, it should be just as effective on our employees right??
chad00023 2 years ago
Listen to Fatso laughing at us. He's LAUGHING at us.
TadRapidly 2 years ago
Beautiful! Great Video! I worth a penny today but my future earning power will be $1 million. I want my $1 million today, right now! That's how the stock market is rising these days no assumed phony earnings. August 6, 2009. S&P 500 value is 378 and not the current market propping 1000. As the dollar collapses, inflation is priced into the stock market to reflect the amount of money the Federal Reserve is printing.
samlaunch 2 years ago
congress was told for 3 years that fannie/freddie were not sound et el
BeantownJim 2 years ago
Yes, the do-nothing republican and blue dog democratic congress sat there with Bush and watched all this happen. How much worse was the financial collapse made by the Bush/Cheney panic?
cmfluteguy 2 years ago 2
the determination of fair value??????
BeantownJim 2 years ago
Boy, when I go to the convenience store and I hear the man say
"im just the cashier"
I want to let him know that he has failed as a human being and is stripping me, and us as people of our morals and dignity as choosing the profession to be engaged in.
Its sad really when you think about it.
Im just the cashier.
m3taLB1Rd 2 years ago
Come to think about it, all sports are unfair. The two teams should just play for fun with no score kept.
Outcome based education is based on that idea, so everyone can play and no one gets ahead of anyone.
And there are dumber ideas around.
WEREFEAT 2 years ago
"The two teams should just play for fun with no score kept."
Considering how fucking stupid the whole idea of pro sports is, that could only be an improvement.
yt5454 2 years ago
Jews in charge of our economy = Foxes guarding the henhouse
john48917 2 years ago
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satansbackdoor 2 years ago
watch?v=4ZhXfw1e_Zc&feature=PlayList&p=ED8BF9169D3A6DEB&index=1
slonerider777 2 years ago
LOL! This is one of the better ones. At least the guy being grilled was honest! "Yeah, the ones who wanted to change the rules most were the ones who eventually failed." Slam dunk!
JoshuaSethComposer 2 years ago
American is bankrupt
syri0 2 years ago
shhhhhh, go back to sleep, there is nothing going on, change the channel to one of those new TV shows, buy more consumer goods on credit, the government & police will protect you, if you own a gun you will only get hurt, disarm, disburse & dumb-down ... like good little subjects.
Turk1389 2 years ago 9
You said it man.
Coola34234 2 years ago 2
Simple, your phone calls and text messages can be wirelessly tapped and monitored and you can be arrested and detained without reason, and without legal council as the federal government sees fit, all in the name of "homeland security."
Take my freedom, just don't take my gun? Seems to be the message too many American's are sending out right now.
pooniman1 2 years ago
lol, you think a GPS positioning of your house is an outrage? Please, and I'm begging here, go look up the Patriot Act and read what Bush did.
pooniman1 2 years ago 3
Isn't the Patriot Act around a billion pages? Would you please summarize the germane passages?
Thanks.
skingk 2 years ago
This is small in comparison to what's about to happen in the U.S. Obama names his enemies, and now pushes to have all your front doors marked with GPS coordinates and a 90-day deadline. The census isn't 'til 201...what's the deal?Sounds like the makings for a police state coming soon.....
Tilbily 2 years ago
...'til 2010...
Tilbily 2 years ago
I would like to pay off all my bills with my next pay check, all the bills I o will get a %, and the american people can pay the rest. You have got to be f------ kidding me
bossduff 2 years ago
stop paying your taxes.
TadRapidly 2 years ago
game is over
when some one die u can not change the definition of death in order to make him alive again
MELOR2002 2 years ago
What about Dr Frankenstein?
You didn't think of that did you?
Your whole argument collapses in ruins.
ianclivewright 2 years ago
listen to ron paul. he knows the truth that the federal reserve is just a big scam. he wants to be able to audit the federal reserve since he can't get the support to abolish it yet. he really wants to get rid of the federal reserve and switch to a gold standard economy where the government prints the money like president lincoln did. and we had that untill woodrow wilson was bribed into signing the treasonous fereral reserve act of 1913 which was written by global bankers in secret
qweqqweqbt 2 years ago 4
VOODO ECONOMICS. These people serve the Occult
WarDogLRS 2 years ago 2
You can't blame this on "Republicans" or "Democrats"
You can blame this on greed.
benlongberg 2 years ago
greed makes the world go around. You need to establish a society in which greed can be tamed the best possibly, The current system is not the best.
ogello 2 years ago
The Democrats and Republicans and these finance guys are all in this together....shift the money around, print more money make sure they have enough money for bonus's and make the avg worker tax paying cit suffers...these guys are all crooks .....
a211pc 2 years ago 2
this guy's tell that he is lying is rubbing his pants.
eacoop07 2 years ago
Posting - test.
I think Im being blocked from posting - basically everywhere.
AmagnonX 2 years ago
AIG? RIP!!!
mausmiss 2 years ago
Guess what...OBAMA recieved $130 000. 00 in campaign contributions in '08 from AIG execs! Now he's surprised and angry?? Whatever.........
Tilbily 2 years ago
brilliant comparisons!!!
marcosoloS 2 years ago
The untold story in this whole national crisis is that President Clinton put on steroids the Community Redevelopment Act, a well-intended Carter-era law designed to encourage minority homeownership. And in so doing, he helped create the market for the risky subprime loans that he and Democrats now decry as not only greedy but 'predatory.
Tilbily 2 years ago
the very people that designed the program that led to all of this mess now get to blame the private sector and they're put back in total control and charge of it. "Yes, the market was fueled by greed and overleveraging in the secondary market for subprimes, vis-a-vis mortgaged-backed securities traded on Wall Street. But the seed was planted in the '90s by Clinton and his social engineers. They were the political catalyst behind this slow-motion financial train wreck.
Tilbily 2 years ago
True, but it was the Bankers on wall street that lent money to people, they knew werent financially able to pay back loans.
Clam234 2 years ago
This goes beyond sub prime residential loans. This goes into the much larger commercial realistate market which is about to collapse.
JuzzChiln 2 years ago 2
Our President better block this ripp off money or he's going down like Jimmy Carter in the history books!
mortician54 2 years ago
Block bonus money? His party knew about it a year ago! It is law that these bonuses not only are allowed, but law that gov't can't interfere with bonus payout. So why would they stop them? It's all a distraction to keep you from screaming about the BIG bonus money going to foreign companies. And to distract from the trillion + in "stimulus" (Porkulus) money being blown. Your tax dollar hard at work :)
Tilbily 2 years ago
I really wish these bonus assholes would commit suicide! ...cause there going to rott in hell! and they GOD DAMM! well know it! Perform your suicide on HBO so we can watch !
mortician54 2 years ago
you sir are an idiot. You don't understand the situation yet you want your opinion out there. Do a little research and until then keep your comments to yourself. The people who received bonuses were contractually owed these bonuses. It was under 1% the total money the company received. The problem was that the company received money at taxpayer expense to begin with, not that they payed their contracts as any business should do.
mahynes 2 years ago
They don't give a damn what we think. They've got our money and are walking away with it.
eks56 2 years ago
what the fuck???
AirpowerAirforce 2 years ago
New CEO, Liddy, was singled out for praise by President Obama today during the small business seminar. Who is in charge when these bonuses get paid out? Ed Liddy, who was just singled out for praise by President Obama. You connect the dots.
Tilbily 2 years ago
How much BULL SHIT is there possible to spew out of ones ass. In your case there is no end. Bank act of 1996? There's no such thing as the bank act of 96 dumb ass. And you say there's no accountability in the new stimulus packages... am i dealing with a retard? The only time there was no accountability was when Bush passed his own stimulus package for his cronie friends on wall st to take billions out for themselves. Typical of an ignorant republican to think he must be squeeky clean though!
BigDiesol 2 years ago
TARP. Section 1, Short Title, emergency stabilization act, Economic Stabilization Act of 2008. Section 2. Purposes. Provides authority to the Treasury secretary to restore liquidity and stability to the US financial system and to ensure the economic well-being of Americans. Congress attached no strings to the $700 billion TARP money, zilch, zero, nada. They gave the Treasury secretary, in this case Geithner czar-like authority to do whatever he wanted with that money.
Tilbily 2 years ago
Who do you think wrote the TARP bill? Barney Frank, Chris Dodd, Nancy Pelosi. They wrote it. Did they put any accountability in it? No. Did they put any strings in it? No. They gave total authority to the Treasury secretary
Tilbily 2 years ago
Touche'! Once again a defensive posture proves the truth hurts:)
Tilbily 2 years ago
And I mean FUCKED IT UP. Now the majority of American people have finally caught on and realized that hmm maybe competence and policy matter more then having a former coke head in the office who shares my religion. Most Americans except for a few ignorant idiots. If you havent caught on to who those ignorant idiots are well then let me put it into simpler terms that your brainwashed mind might be able to understand... YOU, YOU IGNORANT DOUCHE!
BigDiesol 2 years ago
The dirty little secret is that all these people getting all these bonuses are friends of Barack.
Most of the people on Wall Street who have their homes in the Hamptons and in San Francisco and Hollywood and Chicago and New York, most of these people are wealthy, filthy-rich Democrats. A lot of this money is going straight to people who end up kicking it back to Obama in the form of campaign contributions and what have you.
Tilbily 2 years ago
Wow, you sound like the quintessential brainwashed republican. Those greedy rich people you talk of on wall street, um yeah, 85% republican. Don't you get it. The republican party has now become a party set out to make the rich richer and allow no room for the little guy struggling to catch a break. That's why their were hundreds of lobbyists in Bush's ear and the same reason were in this mess now.
BigDiesol 2 years ago
Ya know, I use to think the same thing, until I did my due diligence. Tilbily is correct in what he says. The Democrats are an evil bunch, and they are essentially run by jewish banksters. They have caused this financial fiasco, and of course, the republicans have been complicit. They are all a waste of living tissue. I hope they all hang for selling out this country. I will donate the rope.
dogismyth 2 years ago
You are a fucking idiot, you just said the democrats caused this, who has been running the government for the past 8 years. Republicans, you shit.
Clam234 2 years ago
Nope, DEMS have controlled Congress the last 2 years. Bush warned of this collapse repeatedly and called for oversight. DEMS said there was no problem! And proceeded to tie Republican hands.
Tilbily 2 years ago
Republicans shower you dumb southern hicks with words of Christianity and bible talk so that you end up voting for these incompetent pricks so they can keep their country club pals living lavish lifestyles while fucking over everyday Americans. You saw this destruction with our last president George W. Of course after Clinton built this country back up after the first Bush fucked it up and handed it gift wrapped to George W. (who yes is a republican), Bush then went and fucked it up.
BigDiesol 2 years ago
lol, this whole mess has it's origin in the sub-prime mortgage/housing fiasco. And that all started with the Bank Act of 1996. MADE LAW BY CLINTON. It says you can't refuse ANYBODY a mortgage. Even if they can't afford it. Carter proposed the concept, Clinton gave it teeth. Good luck with "that one". lol Now you have a collapse and the pigs(Congress,Dem-controlled) snouts are planted in the trough and pretending to be innocent, on your side.
Tilbily 2 years ago
Kill all those thieving conniving sneaks !
bubukaka5 2 years ago
I want a job there then we could buy up all companies with bailout $ ,benefits are not that bad either
louis12346 2 years ago
Obama and his administration are fucking INCOMPETENT. How the HELL does Geithner roll another 30 billion in taxpayer money to AIG without FORCING them to renegotiate executive bonuses? Hellooooo? I miss Bush already.
usamericanz 2 years ago
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Hmmm they need to handout millions in bonuses because its in their contract? If they wouldn't hav got 160billion wouldn't their company hav tanked? Then wat would their contracts be worth? A thank u for saving their jobs would hav been sufficient. When are the people going to take this country back?
zc0z 2 years ago
Hmmm they need to handout millions in bonuses because its in their contract? If they wouldn't hav got 160billion wouldn't their company hav tanked? Then wat would their contracts be worth? A thank u for saving their jobs would hav been sufficient. When are the people going to take this country back?
zc0z 2 years ago 2
Hmmm they need to handout millions in bonuses because its in their contract? If they wouldn't hav got 160billion wouldn't their company hav tanked? Then wat would their contracts be worth? A thank u for saving their jobs would hav been sufficient. When are the people going to take this country back?
zc0z 2 years ago
AIG IS PULLING A MADE OFF !
bubukaka5 2 years ago
fucking thieving pigs !
bubukaka5 2 years ago
This is why we need to let failures fail and winners win.
AndrewEyedea 2 years ago
Cut there fucking heads off. Now. Make an example out of them Enough is enough. Anyone who kills the people who keep giving them money or the people who keep taking it and giving out bonuses to friends, should be pardoned. Jefferson was right. AIG needs to chopped up and nationlized.
WHEN AND HOW EXACTLY ARE THEY GOING TO PAY US BACK FOR 160 BILLION. HONESTLY HOW ARE THEY GOING TO PAY THAT BACK. THEY DON'T MAKE MORE THAN 10 BILLION PROIT. IT'S GOING TO 50 YEAR BEFORE THEY PAY US BACK.
a7241982 2 years ago
Who is the woman?
very interesting
gladiator070707 2 years ago
Sounds good! Off with their heads.
VPSF2 2 years ago
brilliant
msternbe 2 years ago
That is why congress should have let these institutions fail. Maybe we need to get rid of the congress and the banks. Start by calling your reps and senators and cuss at them to listen to you, stop being nice.
REVOLT !!!
maximouni 2 years ago
Letting them fail would totally screw anyone with more than $100,000 dollars in those banks. A lot of innocent citizens would lose a lot of money, perhaps a great portion of their life savings.
You can't take revenge on these foolish banking execs by letting the banks fail. The execs need punishment that doesn't affect the bank itself.
chromatic2006 2 years ago
What are you talking about? The FDIC insured limit isn't 100k. The basic insurance amount is $250,000 per depositor, per insured bank. Also, anyone can remove their money any time they like - it isn't locked down. They can take it anywhere they want; including banks that are not failing. We do have those.
People lost their life savings fucking around in the stock markets and 401k. You are throwing straw man arguments around. Unfortunately, they are both inaccurate and uninformed.
Badkittym 2 years ago
What a fool you are.
70road 2 years ago
Source:
I enjoyed our little argument. I think I won :) Though you are free to disagree.
But as the old adage says, winning an argument on the internet is like winning at the special olympics.
I gotta get out of the house :)
gawime1 2 years ago
I obviously disagree with a lot of what you said, but its just differing opinions, so ditto on the enjoyment
and frankly, as long as we're in this mess, neither of us is a winner because this all blows for everybody!
sourcethree 2 years ago
AIG parallel continued--
But all the bonuses I made when the hurricane didn't hit...those i get to keep. After all, my company was profitable until the unthinkable (hurricane) happened.
gawime1 2 years ago
oh brother! - the compensation argument
where do you stop with that slippery slope
mom and pop shop goes belly-up - should they make their 5 employees pay back all their compensation from the prior x years?
this is largely just a pick on the wealthy argument and doesn't hold a lot of water - unless you want a socialist economic structure
sourcethree 2 years ago
Source:
The shame of it is that even a 10% reduction is asset prices makes a lot of these financial institutions bankrupt, because they are leveraged 20-1 or 30-1 or 40-1.
If you are leveraged 20-1, and assets go down 10%, that means you liabilities are twice your assets.
Now imagine a 50%+ drop is assets (as the market is proposing) and you see the futility of trying to bail out these guys.
gawime1 2 years ago
So in my beanie baby example, the market might have originally thought that 5 years from now they would be worth 2.3 billion or more.
But now the market realizes those original assumptions are wrong. That's why the market won't buy them for 2.3 billion from me, but will only give me a measely $100 bucks.
gawime1 2 years ago
- its a matter of a lack of buyers (i.e., illiquidity), not a matter of impairment - these aren't BB's - these have values at maturity if left to run to maturity
a similar condition occurred in early 90's LatAm crisis
sourcethree 2 years ago
my view on the policy response isn't necessarily wrong - its just an opinion and just happens to differ from yours - I don't think anybody 'knows' what the right response is, otherwise we would've done it already
but the asset overpricing issue is more factual - I've seen too many banks with securities that are performing and no matter what scenario they place on them, the expected loss isn't anywhere near the price-implied loss
sourcethree 2 years ago
(continued from previous post)
Take AIG for example. AIG should not be bailed out - not only because they are insolvent because of mismanagement - but because AIG is a financial black hole.
No one knows how deep the hole is. Their obligations might exceed assets to the tune of 1 trillion dollars...or more. No one knows.
Throwing $150 billion to an undeserving company won't help at all, if their net liabilities are much higher than that.
gawime1 2 years ago
AIG is a tough one - if gov't doesn't assist here, they you can throw out the top 15 banks in the world given their giant exposures to AIG - and the European banks are more exposed than the U.S. banks, so the Europeans won't be too pleased
so, with AIG, you clearly would be making a call that systemic destruction is better than saving the system - again, I'd disagree, but that would be your opinion as to the policy prescription - I think it would be disastrous
AIG is truly a disaster
sourcethree 2 years ago
An AIG parallel.
I start a hurricane insurance company, and insure all florida homeowners against hurricane damage for $5 dollars a year. For the years they don't have hurricanes, I rake in the dough. 3 million households at $5 dollars a pop means I make $15 million a year. I have a great company don't I?
When the hurricane finally happens, I can't pay my obligations (ie: I am AIG). So I need a government bailout, so all the homeowners can get paid.
gawime1 2 years ago
ummm, if you're a regulated insurance company, there's no reason you shouldn't be able to pay your policyholders - thats your business - you're required to hold x amount of capital so that when the hurrican hits, you can pay out
bad example
unless you're AIG, which had too many non-regulated businesses like insuring CDS, etc., which wiped out the entire business - AIGFP fell through the regulatory cracks from what I understand
sourcethree 2 years ago
Dude, my AIG example is perfect. AIG was insuring hundreds of financial assets in a relatively unregulated fashion.
As was my hurricane insurance company.
gawime1 2 years ago
thanks for proving my point
if your BB has a stated maturity value of $2.3B after 5 yrs and we have no reason to expect it not to perform, then yes, I won't mark it down to today's $100 'value' -& no bailout for you
if there's no way your BB is worth $2.3B, then thats a permanent impairment and it should be markded down
you're assuming ALL these marked-down assets are bad - this is not the case
separate the good from the truly bad and value them more accurately, thats all I'm saying
sourcethree 2 years ago
I fail to see how I 'proved' anything you might say.
The reason the market is pricing assets way way below book value is because the market does have reason to expect them not to perform as originally stated. Original expectation of cash flows and losses were wrong. Hence the assets are worth less and should be marked down.
gawime1 2 years ago
yes, the original expectations were wrong, in the cases of good assets that I'm really talking about, by maybe 10% - but the market is valueing them as if they were wrong by 50% - thats the problem with the mark-to-market of these otherwise unimpaired assets
sourcethree 2 years ago
Sourcethree.
From this post it seems all you got is the belief that assets couldn't possibly have gone down 50% in value.
That's what you have. Disbelief.
The market, however, says otherwise. And a lot of anecdotes I've collected say otherwise as well. The 300%+ increase in housing prices the past few years in some areas say otherwise. Growing credit card balances and unemployment rates say otherwise.
gawime1 2 years ago
I'm not saying that at all - the true 'toxic' assets have in some cases gone down by 100% - both in 'price' and in economic value (expected losses)
I don't think you're quite hearing me on this - I agree with you that there are plenty of those assets, and they deserve the mark-to-market treatment of marking down to the market price
but I'm saying there are a meaningful amount of not-toxic assets being priced as if they were toxic because they're all being thrown into the same bucket
sourcethree 2 years ago
How do you decide which assets are overpriced and which ones are not?
Pull them out of a hat? There has to be a consistent systemic way of pricing assets in a reasonable way. Mark-to-model is broken. Mark-to-market is the only reasonable way.
gawime1 2 years ago
Sourcethree:
I believe you are wrong on whether assets in financial institutions are overpriced.
But you are also wrong in what should be the policy response by the government.
These companies should not be bailed out.
If the government wants to prevent a total collapse of lending, it should start its own retail bank. Alternatively, or concurrently, it could give loans to banks that are solvent.
But to figure out which banks are solvent, it first needs to let insolvent institutions fail
gawime1 2 years ago
(part II to gawime)
so this isn't 'make believe' pricing - its pricing similar to how they value the vast majority of their assets, which has been the accounting standard for decades or more
further, nobody really cares if your BB's are marked down - they have no impact on broader society, unlike these 'inaccurate' marks on bank books, which result in taxpayer-funded capital infusions (like them or not)
sourcethree 2 years ago
Sourcethree:
Don't you see though I should qualify for a taxpayer-funded bailout!!!
I took out a loan for 2.3 billion dollars in order to buy my beanie babies. So mark-to-market says I'm 2.3 billion dollars in the hole.
I could default on my 2.3 billion dollar loan and the bank could take my $100 beanie baby collateral. But that means the institution that loaned me 2.3 billion for beanie babies would take a hit.
Clearly that means I should get a bailout, so I can keep paying the loan.
gawime1 2 years ago
gawime - good one!
problem is, your assets really don't have any other way to value them
bank assets actually have expected cash flows and losses - this is how ALL of their loans are 'valued' - the securities also have a value at maturity, unlike your BB, which has no maturity (no double-entendre intended!)
sourcethree 2 years ago
Sourcethree:
The key phrase in your explanation is "Expected cash flows and losses."
Bank assets are overvalued because their value reflects "expected cash flow and losses" that are out of touch with reality.
Their expectations are extremely overly optimistic, which is why we see the 'market' for these assets collapse. No one wants to buy these assets at book value, because everyone knows that book value reflects these optimistic assumptions everyone now sees are wrong.
gawime1 2 years ago