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Comment by criley2 | Hacker News Reader

Ironically, the bank bailouts of 2008 were a wild success. The TARP program was paid back in under a year at a decent profit to the taxpayer. ("Through the Treasury, the US Government actually booked $15.3 billion in profit, as it earned $441.7 billion on the $426.4 billion invested."). That's basically the cost of funding NASA for that year, paid for by the return on the bailout investment.

I get that the optics of having the government loan money to banks is bad, but realistically, it was wildly successful.

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Nobody profits when a bad loan is made. Money that represents a promise of future spending made to someone who saved instead spent is destroyed. The only question is who is going to pay the cost.

In 2008 the wizzes of the banking industry had made billions of bad loans. Who paid for it? Anybody who saved instead of spent and invested instead of speculated. In other words, almost all of us did. Once all the pluses and minuses are canceled out we’re all poorer for it. Saying anything else is putting lipstick on a pig.

15B profit on 420B investment amounts 3.5% return YoY. I wouldn't brag about that sort of return. Yes TARP worked to forestall an even greater collapse. People were less upset that the government acted as an emergency creditor than by the fact that the people who made the mess of 2008 got bonuses paid out of that federal backup (a bonus is given for good performance - which was obviously not happening in 2008).

That's if you ignore the secondary effects: "moral hazard," knowing that if you become big enough to create political waves in the event that you fail you can continue to gamble with depositor money, make your annual bonus, and safely be rescued by Federal depositor backstop / bailout in the event that you eventually go tits up. I wonder if that'll ever happen again after 2008...

What they did with SVB prevents this thinking. Make the depositors whole, wipe out shareholders, prosecute the executives.

Not really - rewriting the rules (FDIC insurance limits) midway through because SVB's own depositors yelled "bank run!" loud enough is still moral hazard. Do I need to make sure I bank with an institution that Jason Calcanis, Mark Cuban, et al use so I can insure my deposits with their political / popular leverage?

It's hardly a rewrite, everyone knows that your deposits with the big 5 are already 100% "too big too fail" anyway.

The only change is that some smaller organizations might also get the same unspoken benefit that the big 5 already enjoy.

This keeps them competitive, and as the US Gov and many folks noted, if they did not do this, everyone would flee to the Big 5 and regional/community banking would be wiped out.

The irony is that "moral hazard" was the excuse used for not bailing out the homeowners directly who were defaulting on mortgages 15 years ago.

Was it paid back? Or was it "paid back" in the same way that a father might let his deadbeat son roll a loan so he can lie to his golf buddies about it?

https://fred.stlouisfed.org/series/WALCL

It sure seems to me that at least $1T stayed printed. Of course, that amount seems positively quaint now.

That graph isn’t a graph of TARP assets…

That's my point. It's misleading to zoom in on TARP because TARP is only part of the story. Swapping one asset for another without reducing the net position is a dumb trick and it's embarrassing that so many people fall for it.

Looking at the Fed's balance sheet is a simple way to track the big picture.

Those were different program that frankly had nothing to do with each other policy wise.

In one instance, the fed took over assets to backstop troubled banks, in the other, it sought to increase the monetary base.

It’s not a “dumb trick” it’s basic monetary policy.

It stops being a dumb trick the moment the Fed manages to wind down the balance sheet (i.e. never). Until then, the Fed is just the bagholder of last resort, and talk of a money printer is more accurate than talk about backstops and the monetary base.

They’ve literally been winding down the balance sheet for the last ten months.

It is annoying that this is currently grey despite being entirely correct for the US. The banking rescue worked. A few crimes did get swept under the rug, like "robo-signing", but those weren't directly linked to TARP.

Other countries did less well out of the event. The UK still owns the emergency nationalised RBS. AIB blew up Ireland quite badly; Kaupthing even worse for Iceland, and so on down to Cyprus where the depositors were deemed to "dirty money" to get a bailout and actually took losses.

I also don't think people have considered what the alternative society of "contagion" would have looked like, where enough banks had failed that a significant fraction of companies could not make payroll and millions of Americans suddenly could not buy anything.

my problem with this, and I think others share it, is that nothing came out of the situation to fix the conditions that made it happen.

The best we got was the Volcker rule (RIP). and even that wasn't nearly enough. If you're "too big to fail" you're _too fucking big_.

> Ironically, the bank bailouts of 2008 were a wild success. The TARP program was paid back in under a year at a decent profit to the taxpayer.

I'm not sure that getting paid back by reinflating a bubble is the net positive you think.

Those are lies on the level of when the Russians do their tour talking about how they are defending themselves against Ukrainian aggression. If there was that much money to be made, it doesn't make any sense for the government to be involved sucking out all the profits.

Bank creditors aren't idiots, they can be persuaded to wait a few years for a $15.3 billion bumper profit if the alternative is losing all their money. The issue is someone is pulling out smoke and mirrors in a complex situation to pretend that everything is going ok. Probably involving, to stick to theme, money printing.

I don't think "the Russians" actually said that. Maybe you should use a different example, like when the US lied at the United Nations about WMDs in Iraq.

> Russian Foreign Minister Sergei Lavrov made headlines over the weekend when his claim the Ukraine war was “launched against” Russia provoked laughter from the audience during a forum in India. But I was in the room and can report he also received applause and indifference.

https://theconversation.com/russias-foreign-minister-got-lau...

Putin absolutely used language suggesting these actions were defensive against "fundamental threats" and in reaction to "the military machine is moving and, as I said, is approaching our very border". Putin puts the war against Ukraine as "a matter of life and death, a matter of our historical future as a nation" and a threat "to the very existence of our state and to its sovereignty." He even literally states "we are acting to defend ourselves."

Putin himself has absolutely, 100%, without question, very publicly stated they needed to go to war against Ukraine to defend themselves against Western aggression. He absolutely framed it as a completely defensive action. Those words aren't some misquote or mistranslation or taken out of context, they're hosted on the Kremlin's website.

I guess you don't consider Putin to be a Russian?

http://en.kremlin.ru/events/president/news/67843

https://www.atlanticcouncil.org/blogs/new-atlanticist/markup...

Please quit spreading lies.

You are implying that "Western aggression" is the same as "Ukrainian aggression". They are not.

Please quit gaslighting.

"The purpose of this operation is to protect people who, for eight years now, have been facing humiliation and genocide perpetrated by the Kyiv regime." - Putin, from the links above. Please read them before arguing what Putin has or has not said.

Who is the Kyiv regime? I guess to you they're not Ukrainians. Who's gaslighting, the person literally quoting what Putin says, or the one essentially arguing Putin isn't a Russian and the Kyiv regime isn't Ukranian?

The current Kyiv Regime == Western, to Putin. So "defending against Western aggression" is "defending against Kyiv regime" is "defending against Ukraine."

Please quit spreading lies.

>Who's gaslighting

You are.

You are continuing to imply that "Western" and "Ukrainian" are the same to Putin. While in your links, which I read, right near the top, there is a statement about "the fundamental threats which irresponsible Western politicians created for Russia consistently, rudely and unceremoniously from year to year. I am referring to the eastward expansion of NATO, which is moving its military infrastructure ever closer to the Russian border." Maybe read the whole thing again.

And please stop your gaslighting already.

So the regime in Kyiv isn't Ukrainian, it's "Western". Got it. Makes total sense.

And to defend against the Western world, they need to shell checks notes dozens of Ukrainian cities, which were controlled by the government in Kyiv. Right. Which isn't Ukrainian, it's "Western", which are definitely two different things. Huh.

I'm quite confused by how you've twisted things. Is they Kyiv regime Ukranian or not? Is Ukraine Western or not? Did they have to defend themselves from Western world? Did they have to defend themselves from Ukraine? Are those really separate? Isn't saying they had to defend against the Western world and the Kyiv regime acknowledging they're one in the same?

I'd love if you'd spell out what you really think about the topic.

What have I twisted? Look at my opening post, to which you replied "Please stop spreading lies". What was the lie again? You doubled down and had to twist like an eel to try and justify your statements.

As for what I think: I think that we, "the West", are playing a stupid and evil role in this conflict. Furthermore, we are spreading misinformation in order to manufacture consent among the public, often in an incredibly crude manner. I'm prepared to discuss this, but maybe one thing - you pick which - at a time.

What you've twisted is you're essentially arguing the Kyiv regime isn't Ukranian. Putin sees the Kyiv regime as Western and an expansion of NATO influence, he says so in the speech I linked above.

If the special operation is having to defend against Western influence, and the Kyiv regime isn't Western, why is he shelling the Kyiv regime?

Your lie is arguing Putin never said they had to defend against Ukranian aggression. In my quote above, he talked about needing to act because of aggressive actions from the Kyiv regime. So either the Kyiv regime isn't Ukranian to you, or Putin did say they needed to defend against Ukranian aggression.

Putin feels the Kyiv regime is an extension of Western NATO influence, and he stated he had to act in defense against their aggression in DNR/LNR/Crimea. This is all in the speech I linked, not twisting any of his words at all.

So yes, Putin has absolutely argued he had to defend against "the regime in Kyiv", which I think most of the world would take to mean Ukraine. So it's pretty fair to say Russia phrased this as "defend against Ukraine", unless you are arguing the regime in Kyiv isn't Ukranian or Putin and the Kremlin aren't Russian.

Could you answer if you believe the Kyiv regime is Ukranian?

>Kyiv regime isn't Ukranian

I'm not actually arguing that. However: Zelensky was elected largely by the voters in the eastern regions of Ukraine, and largely because he promised to bring peace to those regions. He has failed in that promise and betrayed his voters. Most likely because of Western influence.

>Putin sees the Kyiv regime as Western ... ... he says so in the speech I linked above.... etc.

I read the entire thing and I don't see it. Which paragraph are you talking about? Is it this one:

"...the leading NATO countries are supporting the far-right nationalists and neo-Nazis in Ukraine, those who will never forgive the people of Crimea and Sevastopol for freely making a choice to reunite with Russia. They will undoubtedly try to bring war to Crimea just as they have done in Donbass..."

because that's certainly not about "Ukrainians" in the sense that you keep on implying.

>Could you answer if you believe the Kyiv regime is Ukranian?

Let me try. The current Kiev regime is made up of Ukrainian nationals. However, it is no longer acting in the interests of Ukrainian people. It has become a sock puppet of the NATO countries. So I believe that it is "Ukrainian" in the same sense that the ruling party of China is "communist" or that Donald Trump is a "conservative". Hope that answers your question.

Putin sees the Kyiv regime as Westernized. He doesn't directly state this as a single line, but you don't need to look too deep in his statements to understand this. Unless you're thinking he's talking about someone else when talking about far-right nationalists and neo-Nazis here.

"Focused on their own goals, the leading NATO countries are supporting the far-right nationalists and neo-Nazis in Ukraine, those who will never forgive the people of Crimea and Sevastopol for freely making a choice to reunite with Russia."

"Any further expansion of the North Atlantic alliance’s infrastructure or the ongoing efforts to gain a military foothold of the Ukrainian territory are unacceptable for us." What foothold would he be talking about here if not a Westernization of the regime in Kyiv?

"...are supporting the far-right nationalists and neo-Nazis in Ukraine"

> because that's certainly not about "Ukrainians" in the sense that you keep on implying.

What nationality are those people who are those "far-right nationalists and neo-Nazis in Ukraine"? Isn't he referring to the regime in Kyiv and its supporters with this language? Is Zelenskyy not a Ukrainian? Are those people in the Ukrainian army with the Ukrainian flag on their uniforms not Ukrainian? What nationality are those nationalists supposedly fighting for? Talk about gaslighting.

>Putin sees the Kyiv regime as Westernized. He doesn't directly state this as a single line...

If you dismiss what he is saying directly, and look for some obscure meaning instead, with some help of semantic distortion you will find what you want to find.

>What foothold would he be talking about here

Very obviously NATO foothold, that's the "North Atlantic alliance".

>What nationality are those people who are those "far-right nationalists and neo-Nazis in Ukraine"?... etc.

They are Ukrainians. And Ku Klux Klan members are American. But you can't interchange the terms willy-nilly. Eg it is wrong to say "Americans advocate the use of violence against people of colour and Jews".

> And Ku Klux Klan members are American. But you can't interchange the terms willy-nilly. Eg it is wrong to say "Americans advocate the use of violence against people of colour and Jews".

Those leading NATO countries are supporting the regime in Kyiv, the government headed by Zelenskyy, which he also "will never forgive the people of Crimea and Sevastopol for freely making a choice to reunite with Russia." Ergo, by Putin's own words, Zelenskyy == a far right nationalist/neo-Nazi. If I say a rectangle is a four sided shape with all right angles, and describe a shape with four sides and all right angles, I just called it rectangle without actually using that word directly, right?

This is very different from your example with the KKK, as the leaders of the KKK aren't currently the leadership of the US government. If the leadership of the US government was composed of largely KKK members and they started instituting KKK policies, I would agree with that statement. Are you seriously suggesting that Putin explicitly wasn't connecting Zelenskyy to the "far-right nationalists and neo-Nazis" here?

Hello again!

>Those leading NATO countries are supporting the regime in Kyiv, the government headed by Zelenskyy

Unfortunately, this is a misleading half-truth.

The truth (this is my opinion, but based on literally hundreds of hours of scouring the internet for information) is that:

1) Zelensky was elected because Ukrainians, especially Eastern Ukrainians believed that he would work to bring peace to Donbas;

2) For a year or so after his election, he actually tried to do that. The West disapproved and pressured him to change course, while the far right nationalists basically told him to f@#k off and made public death threats against him. I don't know if you understand Ukrainian, but at least skim these videos https://www.youtube.com/watch?v=_KxLuDpP4_w / https://www.youtube.com/watch?v=d5RRDnF7lKM to get an idea. I think Putin called Ukraine a failed state at that point.

3) After a while, Zelensky basically folded and let foreign backed parties and interests dictate Ukrainian policy. Ultimately leading to where we are today.

So it is not so much that "leading NATO countries are supporting the regime in Kyiv". but rather "the regime in Kyiv is a NATO puppet regime".

>This is very different ... Are you seriously suggesting that Putin explicitly wasn't connecting Zelenskyy to the "far-right nationalists and neo-Nazis" here?

I'm certainly not suggesting that, quite the opposite. He was connecting the two, just not in the way you imply. He quite rightly IMO is saying that Zelensky is carrying out the agenda of far-right nationalists and neo-Nazis. But not "Ukrainians", meaning the people of Ukraine in general.

> I don’t think “the Russians” actually said that.

As well as the broader “NATO moving up to our doorstep” justification, the more specific (as to timing) “Ukraine shelling and moving troops to prepare to follow up the shelling with a massive ground offensive against the DPR/LPR” excuse is regularly used by both Russian official sources and Russian proxies.

Hmm... You are equating responding to a "massive ground offensive against the DPR/LPR" with Russians "defending themselves against Ukrainian aggression". Are you implying that DPR/LNR are Russian?

> Are you implying that DPR/LNR are Russian?

Russia has described them as Russian by identity and allegiance and responsibility of the R.F., even if not juridically (and has since purported to annex them juridically, as well.)

Putin also cited direct military threat by Ukraine to Russia generally (including nuclear threat), and invasion threat to “Russian” Crimea specifically, in his speech coinciding with the opening of the 2022 invasion.

Man, there is some heavy semantic distortion happening in this subthread. To make sense of the NATO narrative:

"Western" = "Ukrainian"

"DNR/LNR" = "Russia"

"Threat" = "aggression"

Next, we will be "warmongering" = "peacemaking". Oh wait, this is already a thing. Along with "ignorance" = "strength".

DNR/LNR isn't in Russia though, it's Ukraine according to treaties Russia agreed to. Same thing with Crimea.

Next thing I know you're going to tell me Autonomous Republic of Abkhazia is a real, sovereign country and totally not just Russia invading a neighbor.

>DNR/LNR isn't in Russia though

Not sure of you are agreeing with what I said above, or disagreeing. Can you re-read the thread carefully and clarify?

>Next thing I know you're going to tell me Autonomous Republic of Abkhazia is a real, sovereign country and totally not just Russia invading a neighbor.

Well, I had to look this up on Wikipedia, but in a nutshell, that is roughly correct. To be precise, Abkhazia is a de facto independent state, and has been since the Georgian-Abkhaz war of 1992. Russia only recognised its independence in 2008, probably in response to Georgia's plans to join NATO.

The only reason the banks were around to pay back TARP is because the US government declared them to be "too big to fail," essentially guaranteeing their debts. So the government put the taxpayer on the hook for all the liabilities of the banking system in exchange for a $15.3 billion profit. I would call that a lot of things, but a "wild success" isn't one of them.

In uk it wasn’t though. Taken from Wikipedia regarding uk bail out. As at October 2021, the UK Office for Budget Responsibility reported the cost of these interventions as £33 billion

Ireland took an even bigger hit from Anglo-Irish, although in that case Sean Quinn did actually go to jail.

Aside from the moral hazard, you are right. But most of the histrionics about bailouts, particularly the 2008 bailouts, are often based more on feelings than facts.

>are often based more on feelings than facts.

This is how it's being framed on many news networks as well. But I don't know if I quite buy it; maybe you can clarify.

The 2008 was considered "different" because it was essentially driven by a bunch of bad bets on sub-prime mortgages. In contrast, this current one is being framed as just ensuring depositors. But that assurance is needed because the banks made bad bets on the bond market. Are the two really fundamentally different?

Well, when SVB got its “bailout”, what happened to its shareholders? They got wiped out. The people that made the bad bets didn’t get rescued.

fascinating, where can I read more about that?

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