It's astonishing how banks (saved with your money) can go home scotch-free, and hedge funds (that will die for their recklessness) get all the blame.
You see this through policy. Why ban short selling? It's really dumb if you ask me.
The banker investors that are used to taking risk and not caring precisely becuase they get their comission and the bank is saved (too big to fail) are the irresponsible people here.
A hedge fund manager will ride or die with their risk tolerance.
>> It's astonishing how banks (saved with your money) can go home scotch-free, and hedge funds (that will die for their recklessness) get all the blame.
The rationale is (not saying I agree with it) that broker dealers' and banks' can cause systemic risk and cause a domino effect.
Note that one hedge fund was indeed saved -- AIG-FP, and was given a record $180 billion dollar bailout, albiet on initially punitive terms. Incidentally they were so large (1Trillion USD of exposures, much of it leveraged) that they fell under the category of systemic risk.
That $180B wasn't all though, one could argue that the QE buy-back program purchasing securities at arguably inflated prices was also an additional bailout, but the amount for that is difficult to quantify and difficult to segment beneficiaries for.
but income taxes have continued to fall in spite of such bailouts, suggesting that no one actually had to pay for it. It was not anyone's money but rather printed off with 0 percent yielding bonds. The huge post-2009 bull market and economic expansion in hindsight makes the bailouts one of the most successful govt. programs ever even if maligned.
>> but income taxes have continued to fall in spite of such bailouts, suggesting that no one actually had to pay for it.
I would strongly disagree with this. Taxes would go up with fiscal bailouts, not directly with monetary bailouts. A huge amount of the bailout was via monetary policy -- i.e. "print money and buy bonds to drive bond prices up and rates down."
We all feel it in the form of asset bubbles. Some people benefit (asset holders) while others lose out (young people, those without assets, renters, fixed-income retirees with almost no yields on their 401ks.
Taxes are a very simplistic way of judging payment.
You see this through policy. Why ban short selling? It's really dumb if you ask me.
The banker investors that are used to taking risk and not caring precisely becuase they get their comission and the bank is saved (too big to fail) are the irresponsible people here.
A hedge fund manager will ride or die with their risk tolerance.