DavidScubadiver said:Goldman is the ONE company that is synonymous with sound investing, and if they fail, nobody succeeds.

Sound Investing?! LOL A hundred billion of level 3 assets "sound investing?!" Lay down the crack pipe..

DavidScubadiver said:I get a lot of red, and I understand that people think this is unfair. But think for a moment what life would be like if the government let the last of the independent investment banks fail -- one that was not stricken by the toxic housing losses, one that made it possible for business to take place. It would have been bad. Thousands of people would have lost their jobs, we'd go into a deep deep recession and the stock market would have collapsed. Goldman is the ONE company that is synonymous with sound investing, and if they fail, nobody succeeds.I didn't give you red but I agree with those to did. RTC is not the curbs on short sellings, which did need to be restricted. The RTC idea only makes sense if fundamentally the "bad" assets it pledges to buy are not really bad. I don't believe it since the underlying deterioration in housing, commercial real estate, and the small to midium companies are still underway.

Let me try this again. What would those who are giving me red would have liked to see? People have been permitted to drive Goldman out of business? That we let the markets collapse? That we let fear completely destroy our country while the "runs" were made on MONEY MARKET funds? Hmmm? You realize, those funds are made up of short term commercial paper from virtually every publicly traded company in the country? Do you have ANY idea what it would have been like if these companies lost access to the capital markets because "main street" decided to take their money elsewhere? Disaster. Absolute disaster was possible. People were terrified. Now they are not.

DavidScubadiver said:Lol, Morty, the teaher in Ohio has her money with the State Teacher's Retirement system, and when the capital markets freeze up, that retirement fund is hit, and hit hard. The new businesses can't look elsewhere if the money market funds stop buying their paper because main street stops making deposits and only makes withdrawals.

Edited: Goldman did not take on too much risk. Goldman was fine. It was the short sellers driving their stock price down that put them in jeopardy.

are you a Goldman employee?

What would I do?

IF the bailout was needed, i'd start attaching conditions.

First, all these i-bank boards, and exce's would be let go. I'd start putting caps on their income, make it some multiple of the number of employees the company has x average salary.

Then i'd just start shutting down companies.

What punhsiment is there for investors in crap, if mommy big goverment, bails you out.

When I lost my job, couldn't pay for my car and credit cards, did big goverment send me a check? Nope.

actaully, I'd work backwards.

if this is really going to cost us 1 trillion dollars. I'd just cut people a check for a few grand so they can pay off some of their mortage, or save money.

DavidScubadiver said:Lol, Morty, the teaher in Ohio has her money with the State Teacher's Retirement system, and when the capital markets freeze up, that retirement fund is hit, and hit hard. The new businesses can't look elsewhere if the money market funds stop buying their paper because main street stops making deposits and only makes withdrawals.

Edited: Goldman did not take on too much risk. Goldman was fine. It was the short sellers driving their stock price down that put them in jeopardy.Of course, I'm sure Goldman never used short selling as a strategy to make money either. Its what short sellers do in the market. See weakness, pounce.

But a real question that may be too long for an internet forum. (I don't see Goldman failing, as people who see it at a huge bargain would start buying it up to counter the short sellers -- I myself really thought about buying it yesterday, considering it oversold)But how does Goldman failing cause a loss to the retirement fund? The capital market are already restricted, the stock market is already down, the retirement fund is already hit. Individual stocks (other than the banks and financial companies) aren't collapsing at the same rate, so people see more value and less risk in them.

Why not let the Goldmans and Morgans and the crappy banks die off, and let the good ones continue to issue credit. If the credit market can't handle this downturn, those firms took on too much risk and should fail.

So the new funding comes from venture capitalists, Arab sheiks, and grandma with her mattress money. They see good deals, fund them, and the process starts anew. And anyone who bought low and the company survives ends up making money. The beauty of capitalism, right?

DavidScubadiver said:People were terrified. Now they are not.

That's the problem there. People had no fear of losing money in real estate investments. They had no fear of lending to people who had stated income only. They had no fear buying securitized products with which you couldn't really tell the quality of underlying mortgages. Etc. Risk was grossly underevaluated. We've seen where this has led us.

This RTC 2.0 sends the message that ultimately they were right to dismiss lending/investment risk and that it's fine to repeat this in the future. Heads they win, tails taxpayers lose. You know sometimes you need shock therapy to pound some sense (and fear, caution, etc.) into people. This RTC 2.0 will only delay the necessary market correction and the following recovery. Instead of a sharp correction that paves the way for saner market next year, we (taxpayers) will be paying for this over many years and set us up for reoccurence once memory of this mess fades.

And that's without getting into the moral hazard of who gets rescued, who doesn't, and who's too big to fail or not. I can start a small business gambling that customers are gonna buy my product like hotcakes. If it happens, bingo. If not, why should I not get bailed out like the big guys and dump my debt onto the government for the taxpayer to foot my bill? Think about the message it sends to business school new grads. Take as much risk as possible. Great if it pays off, if it doesn't taxpayers' got your back.

Shandril, I do not disagree. (Love your avatar by the way). This was not an elegant solution, and hopefully there will be considerably more oversight in the future to make sure that "risk" is not chopped up so finely as to be negligible and then packaged into something that can poison the world. I honestly believe that more government oversight will help rather than hurt things. I just don't think it would have been a good idea to let everything collapse and let people run around like Mad Max because everybody's jobs were lost while companies dealt with the fact that they could not raise any capital because all of the investment bankers disappeared and nobody wanted to keep their money in the money market funds....

Michal, that may be, but its a scam that funds this country. All of the companies get their money from short term paper bought by money market funds. You may think it is silly, and it might even be silly, but the fact remains that they serve an important role.

DavidScubadiver said:Goldman did not take on too much risk. Goldman was fine. It was the short sellers driving their stock price down that put them in jeopardy.I could easily see that billions of goldman position got sold to RTC2.0.

sensia said:We are the country of biggest whinners on paper- this should be the time to walk on the streets and demand that Fed should not misuse our tax $ inappropriately. Length of this thread can reach 30-40 pages long which will finally have zero effect on Fed.

i contacted my congressmen and sentors.

And David:

I didn't get a goverment check because I was a part time employee. But I bet that I'd have my job, and the paychecks would start coming. I got a car, some stuff on credit, etc. I accept that it was my fault.

However your saying the big that because these banks got so big, someone else needs to help them out. pphhff. WHY? because other big banks will go down?

If theres a need for lending, it will come back as soon as the dust settles. But were not allowing it happen.

And 'they' are the people running companies. IMHO, my solution was very elegant, if your a big company you get paid more, you pay your workers alot, you get paid alot. you downsize, your pay downsizes.

Theres no 'cap' on how much money you can make, as long as your making everyone you work with alot of money, you'll make alot too.