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DUMB BOND HOLDERS?
and people wonder why there are no jobs, no one is investing a penny?
By the way explain to us who find you amazing and enjoy reading you threads, why would 1 job dis appear?
People would stop buying cars because the UAW collapsed?
I dont think so
Oh, I was hoping you would post that! Thanks. Now let's review, shall we:
The US Taxpayer (that's you!) stepped in to fund the company. The company, mind you, not the people dumb enough to hold the company's equity.
US taxpayer funds were distributed in order to ensure that over a million jobs didn't disappear, not in order to ensure that people dumb enough to hold the company's debt could be made whole. The courts owe the debt holders nothing - and if the debt holders felt they were illegally harmed they could get in line in court (a short line, as it turns out).
US taxpayer funds were put forth to ensure that the company was able to continue producing cars. Paying off dumb debt holders doesn't secure a job, doesn't keep the company competitive and doesn't help stave off the chain-reaction collapse of so many suppliers.
The UAW exchanged debt for equity, which kept it's employees closer to whole. Common debt holders exchanged debt for equity at a lower rate - which makes sense because they don't have the same stake in the company.
And what gives the Obama Administration the right to change the order in which creditors get paid? What makes private debt holders any "dumber" than unions for holding that debt?
They're not dumber. They have less leverage.
Why should private debt holders be compensated at a greatly reduced rate than the unions?
I explained that in the previous post. The taxpayer money pumped into GM was not put there to make investors whole. It was put there to save the company.
There are laws in existence to protect the rights of investors. When those laws are tossed away
Those laws were not tossed away. That's why the line of bondholders filing suit has zero people in it.
what do you mean the UAW exchanged debt for equity?
I'm not sure what you mean by that , exactly - the UAW exchanged its GM Debt (unsecured claims) for GM equity. Or maybe I didn't understand your question.
I was questioning what you meant when you said "the UAW exchanged debt for equity".
What you left out of your analysis...and by no means did I ignore the accuracy of what you said....
1) the reward to the UAW was the influx of capital saved the jobs of the employees
2) Those that financed the company and were pushed in the back of the line lost out on what they would get if GM went Bankrupt...a certain percentage on their investment when all assets were liquidated.
DUMB BOND HOLDERS?
and people wonder why there are no jobs, no one is investing a penny?
LOL! Yes, dumb bondholders.
By the way explain to us who find you amazing and enjoy reading you threads, why would 1 job dis appear?
if the company's capital is put to rest, the labor that works that capital is put to rest as well.
People would stop buying cars because the UAW collapsed?
I dont think so
Well, yes -they would stop buying GM Cars. They would start buying cars from companies based in Japan and Europe, made with parts made in China. But of course the price of cars would increase.
Mortgage-backed securities and synthetic credit default swaps, among others.Before the repeal "depository institution were not allowed to put deposits at risk outside the money market"?
Which non money market investments caused the crisis?
This conversation would move a bit faster if you actually made a point instead of offering a quiz.
Mortgage backed securities weren't allowed under Glass-Steagall?
You know that derivatives are zero sum, right?
My point is lots of people think Glass-Steagall would have prevented the crisis.
So far I haven't seen a single person prove it.
I'm not sure what you mean by that , exactly - the UAW exchanged its GM Debt (unsecured claims) for GM equity. Or maybe I didn't understand your question.
I was questioning what you meant when you said "the UAW exchanged debt for equity".
What you left out of your analysis...and by no means did I ignore the accuracy of what you said....
1) the reward to the UAW was the influx of capital saved the jobs of the employees
I know! That's my point amigo. I am far more interested in putting my taxpayer money towards protecting the productive sector of the economy, where people actually make stuff and create value, than I am in artificially making investors whole by transferring my money to them.
2) Those that financed the company and were pushed in the back of the line lost out on what they would get if GM went Bankrupt...a certain percentage on their investment when all assets were liquidated.
GM DID go bankrupt. And common debt holders got a portion of their investment. And equity holders were wiped out. And the employees kept their jobs, as did the employees of all their suppliers.
The senate dems blocked the GOPs bills that would have helped.
Also the dems control the senate and the white house so no one on the right in the govt can "force" them to do anything.
Don't get all hackish on me dude! Lets stay on topic.
Which bills would those be, specifically? The GOP (Cantor, Boehner) stated they would NOT work on any additional legislation until Obama extended the Bush era tax cuts for the wealthy, I mean "job creators"....yes?
what do you mean the UAW exchanged debt for equity?
I'm not sure what you mean by that , exactly - the UAW exchanged its GM Debt (unsecured claims) for GM equity. Or maybe I didn't understand your question.
I was questioning what you meant when you said "the UAW exchanged debt for equity".
What you left out of your analysis...and by no means did I ignore the accuracy of what you said....
1) the reward to the UAW was the influx of capital saved the jobs of the employees
2) Those that financed the company and were pushed in the back of the line lost out on what they would get if GM went Bankrupt...a certain percentage on their investment when all assets were liquidated.
Now bear in mind...when people infused captial into GM, it was an investment made knowing the risk....and the risk they analyzed the investment with, was increased dramatically when they were put at the back of the line.
(risk referring to "least return on investment")
Mortgage-backed securities and synthetic credit default swaps, among others.
This conversation would move a bit faster if you actually made a point instead of offering a quiz.
Mortgage backed securities weren't allowed under Glass-Steagall?
oh bejeebers, just once could you try making a point instead of asking me questions?
Yes, MBS's were allowed under Glass Steagall. Depository institutions were not allowed to invest in them. That seemed rather obvious....
You know that derivatives are zero sum, right?
No, actually - i don't know that. When your capital ratios are based on the value of a swap, then the derivative is not zero sum - especially when the largest banks were given permission to cut their capital ratios in half.
My point is lots of people think Glass-Steagall would have prevented the crisis.
So far I haven't seen a single person prove it.
I'm not "lots of people" and I never said GS would have prevented the crisis. Lets' review what I actually said before we started playing 20 Questions:
Financial institutions had already found ways around GS, but with GS in effect the major depository institutions wouldn't have faced such steep declines in capital when the financial markets collapsed. They would have been hurting for certain, but the scope of the problem in standard banks would have been smaller.
of course, the investment banks would have still been fried.
Toyota builds there cars and trucks here, non union
Honda, same
in fact your no different in buying a Toyota than a GM as far as the labor and parts go except for it being built non union, non tax payer funded, profit making company
Or you could buy a ford
Mortgage backed securities weren't allowed under Glass-Steagall?
oh bejeebers, just once could you try making a point instead of asking me questions?
Yes, MBS's were allowed under Glass Steagall. Depository institutions were not allowed to invest in them. That seemed rather obvious....
No, actually - i don't know that. When your capital ratios are based on the value of a swap, then the derivative is not zero sum - especially when the largest banks were given permission to cut their capital ratios in half.
My point is lots of people think Glass-Steagall would have prevented the crisis.
So far I haven't seen a single person prove it.
I'm not "lots of people" and I never said GS would have prevented the crisis. Lets' review what I actually said before we started playing 20 Questions:
Financial institutions had already found ways around GS, but with GS in effect the major depository institutions wouldn't have faced such steep declines in capital when the financial markets collapsed. They would have been hurting for certain, but the scope of the problem in standard banks would have been smaller.
of course, the investment banks would have still been fried.
Just an FYI....
Those who use this board properly ask questions so they can have a better understanding of the thought process of their debate opponent.
Thus why I asked what you meant by something.
Carry on.....
) )
Because they have the false premise that the government is the solution to all our problems.
Banks didn't own Fannie or Freddie bonds before 1999?Mortgage-backed securities and synthetic credit default swaps, among others.
This conversation would move a bit faster if you actually made a point instead of offering a quiz.
Mortgage backed securities weren't allowed under Glass-Steagall?
oh bejeebers, just once could you try making a point instead of asking me questions?
Yes, MBS's were allowed under Glass Steagall. Depository institutions were not allowed to invest in them. That seemed rather obvious....
You know that derivatives are zero sum, right?
Really? When I write a call option, the buyer doesn't mirror my gain or loss? I make $100, he loses $100. Pretty basic stuff.[/quote]No, actually - i don't know that.
When your capital ratios are based on the value of a swap, then the derivative is not zero sum - especially when the largest banks were given permission to cut their capital ratios in half.
My point is lots of people think Glass-Steagall would have prevented the crisis.
So far I haven't seen a single person prove it.
I'm not "lots of people" and I never said GS would have prevented the crisis. Lets' review what I actually said before we started playing 20 Questions:
Financial institutions had already found ways around GS, but with GS in effect the major depository institutions wouldn't have faced such steep declines in capital when the financial markets collapsed. They would have been hurting for certain, but the scope of the problem in standard banks would have been smaller.
of course, the investment banks would have still been fried.
oh bejeebers, just once could you try making a point instead of asking me questions?
Yes, MBS's were allowed under Glass Steagall. Depository institutions were not allowed to invest in them. That seemed rather obvious....
No, actually - i don't know that. When your capital ratios are based on the value of a swap, then the derivative is not zero sum - especially when the largest banks were given permission to cut their capital ratios in half.
I'm not "lots of people" and I never said GS would have prevented the crisis. Lets' review what I actually said before we started playing 20 Questions:
Financial institutions had already found ways around GS, but with GS in effect the major depository institutions wouldn't have faced such steep declines in capital when the financial markets collapsed. They would have been hurting for certain, but the scope of the problem in standard banks would have been smaller.
of course, the investment banks would have still been fried.
Just an FYI....
Those who use this board properly ask questions so they can have a better understanding of the thought process of their debate opponent.
Thus why I asked what you meant by something.
Carry on.....
Oh, I understand that Jarhead. The person with whom I was conversing (is that what it's called on a message board?) had asked a series of five or six consecutive questions without making a comment - at some point, it's helpful to actually get to one's point. The questions were clearly meant to steer the conversation (or somehow prove that I didn't know what I was talking about, which didn't work out
Just an FYI....
Those who use this board properly ask questions so they can have a better understanding of the thought process of their debate opponent.
Thus why I asked what you meant by something.
Carry on.....
Oh, I understand that Jarhead. The person with whom I was conversing (is that what it's called on a message board?) had asked a series of five or six consecutive questions without making a comment - at some point, it's helpful to actually get to one's point. The questions were clearly meant to steer the conversation (or somehow prove that I didn't know what I was talking about, which didn't work out
Cool.
Just didnt want to get the wrath of 8537 if I were to ask you a question.
I ascared Norton...Im ascared.
Toyota builds there cars and trucks here, non union
Honda, same
in fact your no different in buying a Toyota than a GM as far as the labor and parts go except for it being built non union, non tax payer funded, profit making company
Or you could buy a ford
Take a look at a list of cars by origin of their parts and see who leads it:
The Cars.com American-Made Index - Cars.com
For those keeping score at home, the top four and seven out of ten are American. Look, you can drive a foreign car all you want (and I do!) but lets not act like the direct return to the US economy is as high with a foreign car.
Banks didn't own Fannie or Freddie bonds before 1999?Mortgage backed securities weren't allowed under Glass-Steagall?
oh bejeebers, just once could you try making a point instead of asking me questions?
Yes, MBS's were allowed under Glass Steagall. Depository institutions were not allowed to invest in them. That seemed rather obvious....
Or plain vanilla mortgages?
I suspect you're mistaken.
Really? When I write a call option, the buyer doesn't mirror my gain or loss? I make $100, he loses $100. Pretty basic stuff.
Yes, that's zero sum. But if the buyer uses it as part of his capital ratio he can borrow against it multiple times. So it's not zero sum.
But let me repeat:
Financial institutions had already found ways around GS, but with GS in effect the major depository institutions wouldn't have faced such steep declines in capital when the financial markets collapsed. They would have been hurting for certain, but the scope of the problem in standard banks would have been smaller.
of course, the investment banks would have still been fried.
Banks didn't own Fannie or Freddie bonds before 1999?oh bejeebers, just once could you try making a point instead of asking me questions?
Yes, MBS's were allowed under Glass Steagall. Depository institutions were not allowed to invest in them. That seemed rather obvious....
Or plain vanilla mortgages?
I suspect you're mistaken.
Banks owned mortgages. Mortgages are not mortgage-backed securities or synthetic CDS's. I'm not mistaken.
Really? When I write a call option, the buyer doesn't mirror my gain or loss? I make $100, he loses $100. Pretty basic stuff.Yes, that's zero sum. But if the buyer uses it as part of his capital ratio he can borrow against it multiple times. So it's not zero sum.
But let me repeat:
Financial institutions had already found ways around GS, but with GS in effect the major depository institutions wouldn't have faced such steep declines in capital when the financial markets collapsed. They would have been hurting for certain, but the scope of the problem in standard banks would have been smaller.
of course, the investment banks would have still been fried.
Are you sure banks couldn't own Fannie bonds before 1999?
Banks can use a CDS for capital purposes?
I don't suppose you can prove that either?
When the US Govt takes 1 trillion dollars of our wealth to "create a job" as Obama did, then all they have done is take 1 trillion dollars (really about 800 billion) of our wealth and re distributed it
It is wealth destruction is all it is
the private sector with the right conditions can create real jobs. How many jobs would that same 800 billion create in the private sector If the those who really pay taxes were allowed to keep that wealth?
What we purchase with that wealth would create work and we would get too keep the end product, instead of it becoming part of Obama's re-election campaign fund
That is real trickle down economics made simple. Allow the tax payer to keep more of his wealth, show him you can be trusted and watch him use it to grow the economy
