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Heeeeeeere's Cliff (Asness), With A Truly Impressive Dose Of Obama Bashing
Your recommended daily allowance of the Greenwich, CT perspective on life, the universe and a murder of governmental Cossacks on full tilt. An interesting read, which disagrees with most of what Jeremy Grantham said yesterday, but entertaining nonetheless.
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By allowing them to live at all Obama created the banks as they exist today.
They are his children and heirs. And they have already received their inheritance.
The TBTF banks have all they need from this administration (and the SCOTUS) and can do just fine on their own now. The next election cycle will demonstrate their new-found power in immortal zombie-hood when they start pouring a slight fraction of their bonus pool money into another branch of their daily operations, that being government and regulation at the Federal level. The expansion into bribery and corruption will be nothing less than spectacular.
You keep asking how long they can keep this up. I keep telling you, as long as they want. No social, political, military or regulatory force on earth can stop them now. If there is any Nemesis to their machinations it can only be a force of nature.
cougar
How about asking the banks to put aside the profits against the black hole on their B/S (and much still held off-B/S) from a proper marking to value of many of their assets? Is that unreasonable?
Asking?? Why not say, Please, too.
The time for asking, prodding, and other inducements, positive incentives is long past.
Now what is required is an Andrew Jackson moment, and shut
down the FED so that this Tribe of ripoff gypsies, can't gain access to free money, not one red cent.
In addition, Lord Blankfein's spawn with their eggs hatching in every conceivable financial nexus need to be shut out for good.
This is nothing short of a global Cabal shoving it in our faces because of their outsized power and the constant abuse of it for their own gain, while saying "Fuck you", to the rest of the world.
Now is time for demands, onerous penalties and shunning, not requests.
Then they would have no cash to pay bonuses....
It's funny how quickly fiscal conservative types will don the cloak of victimhood, after chastizing every minority group in the country of playing the victim for the past 60 years.
I've said it here many times, but I'll say it again;
Cliff, NO ONE cares about you guys. No one feels sorry for you, or gives a damn that you'll only make a few million this year instead of a truly obscene number of millions. No one gives a shit.
Chet you sound like a whiney little bitch; victimhood not working out for you anymore?
I'm no obama fan, but this is nothing but tripe plain and simple. Bank bonuses paid out exceeded profit margins this year. That means that bank bonuses were paid directly out of TARP money. Also, banker bonuses equalled 1% of gdp this year. That is excessive by anyones standards.
What are you smoking?
>80% of banks have paid back TARP, including interest and warrants. The govt looks like it will make money on TARP and the only remaining issues are AIG, FNM, FRE and autos.
Reading is fundamental...
BigBagHolder is clearly one of Cass Sunstein's initiates.
bullshit bagholder. taxpayer still guaranteeing their shit assets. fed still subsidizing them with 0% while screwing savers. there are many other unseen subsidies. you need to read more. maybe you work for GS. no those ass fucks deserve every bit of the pitchforks that may be coming. Tyler said it well earlier, they have nothing to do with capitalism, they are bloodsuckers on capitalisms back.
I agree with you. My post 206554 was directed at bagholder.
Unfortunately, your calculation ignores the lion's share of (ongoing) U.S. subsidy to the banks--ZIRP, underpriced deposit insurance, and for example the soon-to-expire program that permitted banks to issue a flood of commercial paper at way-below market interest (think it was TLGP but not sure). BTW, these subsidies preferentially favor the TBTF's because the U.S (FedTreas) has made it clear that their failure will not be permitted no matter the cost to the taxpayer/sucker.
Good question BBH. WTF are you smoking? Crack I thinks.
Let's not miss the mark here--the problem is that the middle class has been squeezed by those who sought incredible gains to the point that now my CEO is making 100X what I make. The money had to come from somewhere. This situation is unsustainable and it is directly the cause behind all of the other problems--the two income family, the massive reliance on credit, the mortgage meltdown, offshoring, all of it. It all directly relates back to the greed of those who formulated a system that could fleece the middle class and make it look like nothing at all had happened. The government and all its big-spending ways have been a major problem, but it is the massive discrepancy between what the workers earn and what the management and boards of directors earn that is the problem here. The power centers are sticking it to us and then they got into trouble and they think that they can stick it to us just a little harder to get out of trouble.
Of course, the massive transfer of wealth from savers (even savers in Greenwich) to bankers as a result of artificially-low interest rates doesn't interest or concern Mr. Asness. I get 0.01% at Schwab on my cash while Goldman and hedge funds carry their inventory of HY bonds at absurdly low costs. This ridiculous state of affairs, driven by the Fed's desire to rescue the miscreants, will create another debacle.
He is right about the GSEs, but he still misses the main point. A real Libertarian should be writing an essay about ending deposit insurance for TBTFs and bringing malefactors to justice.
Maybe the Gummint should have cut a better deal with the banks originally. Maybe it isn't kosher to "re-trade" the bailout deal. But don't tell me that things are all square. Because that is bullshit and Cliff surely knows better.
Lurking in the Mianus River...
Captain Willard
Or you could try and get more than 0.01% instead of simply complaining about it?
http://www.bankrate.com/checking.aspx
Yes.. the Fed's policies as attempted in Japan have dropped their savings rate from 20% + in 1990 to about 2% in 2010 !! Way to go Bernanke !!!!
I lost interest with the lead-in that this is a totalitarian government... I may not be a fan of the administration, but that kind of BS name calling is right out of the RNC propaganda playbook, or some teabagger wetdream... totally idiotic commentary which is too bad, because he no doubts loses much of his audience with such nonsense.
I lost interest in your comment when YOU resorted to name calling! You complain that the author is name calling and then you turn around and use the term "teabagger"! Describing the current administration as totalitatarian my be inappropiate but does not rise to the vitriolic level of hate that you are putting on display for all to see!
You lost so much interest that you felt compelled to reply?
I have a name for you. It's moron.
I felt inclined to point out hypocrisy. Although I am clearly wasting my time replying to you since the only thing your tiny brain has to offer is an Ad Hominum attack!
I am trying to remember...why is OK to demean someone by calling them a "teab*gger" but not OK to demean someone by calling them a "n*gger"?
You probably consider yourself a Progressive, but you write like a Fascist.
Captain Willard --
Why not buy HY bonds in your Schwab account?
Earning .01% on cash is your choice. You could've been up 100% if you bought HY 1-yr ago.
Well Cliff, you didn't have to take the money. But now that you've taken the money you can take the "shafting" like the rest of us.
Don't go crying to Uncle Sugar if you don't want to play by his rules, bud. Just take your 8-figure bonus and STFU.
Right on... 2 thumbs up.
Do any of you idiots read? He didn't take any money (he is a HF manager, not a banker) He didn't go crying to the government (and TARP wasn't optional anyway) more conspiracy nut/liberal dogma (odd combo, I know) from the proletariat --ugh
I think it is time to change the captcha from a math question to a 10 question multiple choice quiz on the content of the article. This way only people who have read and comprehend the content of the article may comment on it. This may do away with some of the rather inane comments posted here lately!
So, was the bully allowed to beat up Ritchie or did the Fonz "take-over"?
This guy is a complete asshole!
Truth hurts.
Beating the progressive movement into the fetal position is a job I'll do for free. How's that for volunteering Valerie and Rahm?
I think Cliff is a tool... but this post is actually pretty good.
First thing I have seen from him that makes sense.
The process of one segment of society telling the rest that their welfare is essential to the nation continues apace.
I think the point that Asness is making is that the President is creating a diversion. Regardless of how you feel about the banks, it is quite clear that the President is just trying to shift the focus of the nation's attention off of his plundering and onto a different group. The responses to Asness' comments would (ironicly) corroborate his view.
This is awesome and hilarious! the general legitimacy of the goals of financial reform notwithstanding (which he mentions) you can't blame the guy for using his brain. and he defintely is.
Nothing Obama says will ever get done -
http://politicalticker.blogs.cnn.com/2010/01/26/senate-rejects-measure-t...
Anyone else wondering if/when the MSM will figure out that the President is going to the mat for Bernanke (with one hand), AND bashing Wall St. (with the other hand)... all in the same week/day/paragraph.
Barack Obama is now contradicting himself on a minute-by-minute basis.
Barack Obama and our Congress are hypocrites of the highest order.
Evict all pro-Wall St. & pro-Fed incumbants from office in November.
Sound money. Small government.
Even if we fix government, we still have the problem of the massive imbalance in the pay scale.
It's amazing how few people understand that capitalism is not an economic system, it's a political system. In capitalism, the function of the government is to promote, protect, guarantee, and subsidize the profits obtained through the ownership or control of capital. That's exactly what the last two Fed Chairmen, the last two Treasury Secretaries, the last two Presidents, and just about all the Congressmen and Senators have been doing. Speeches, token "reforms" and diatribes aside, the system has been the same for hundreds of years and it isn't going to change now.
One inherent feature of capitalism is an imbalance in financial, social, and political power between the owners/controllers of capital and those who provide labor for them. "Progressive" eras in America have been periods when this imbalance has been openly discussed and efforts made to use the government to restrict the worst abuses (e.g., slavery, child labor) that may arise from the imbalance. The legalization of collective bargaining was the single most important step in the creation of a middle class as the majority of the population for the first time in any country in history. In this regard, America has indeed been a "shining city on a hill".
But, capitalism is a very productive, dynamic, and powerful political system. Capital never sleeps, and it never stops the hunt for greater profit. To reduce labor costs, unions have been de-legitimized through a thirty-year relentless propaganda campaign, and corporations are now taking their "rightful" place as our highest priority, with rent-seeking finance as the most important civic function of all.
Thomas More's words from the 16th Century beginnings of capitalism provide an accurate picture of the darkness at the heart of the unfairness in pay and power, then and now:
"When I consider the state of all flourishing commonwealths today, so help me God, I can see nothing but a conspiracy of the rich, who are aiming at their own advantage under the name and title of the commonwealth. They invent and devise all ways and means by which they may keep without fear of losing all they have amassed by evil practices, and do everything in their power to purchase as cheaply as possible and misuse the labor and toil of the poor."
He's a beauty.
Lets get Barney Frank out! http://www.rachelforcongress.com/
Lets get Barney Frank out! http://www.rachelforcongress.com/
Did you over react1200?
This whole Obama-as-populist pose is an old trick, sort of reminiscent of FDR's rhetoric against plutocrats. In both cases it's simply a false front to deceive the masses. The fascist system we have today, even more so than the New Deal, benefits a small, well-connected elite such as the Goldman types.
Unfortunately, the only realistic chance I can see for real change is if we suffer a currency collapse. That may be in our future over the next few years, but it's hard to look forward to the horrible widespread suffering that would result. Recent history on the subject doesn't exactly brighten the outlook. The situations in Zimbabwe and post-hyperinflation Germany (1920s-1930s) don't exactly give a lot of hope to what we might expect after a dollar collapse.
As to Asness's allusions to Cossacks, pogroms and the Greenwich Pale of Settlement, I think he's just a touch paranoid. Obama, like all system pols, knows where his bread is buttered.
"The situations in Zimbabwe and post-hyperinflation Germany (1920s-1930s) don't exactly give a lot of hope to what we might expect after a dollar collapse."
We as a people must be ever vigilant to a wolf in sheeps clothing coming after a collapse to save us. Luckily for us we have an advantage that the German and Zimbabwean people did not have and that is a well armed citizenry.
Deception of the masses is still a popular ploy. We have the insurance industry publicly opposed to Obamacare while it is their lobbyists that are writing the bill. Same goes for Cap and Trade, which is opposed in public by Big Oil while their lobbyists have a hand in that sordid creation.
Just like in 1913 when we had The Fed thrust upon us. The banks were publicly opposed to the creation of The Fed even though it was created at the 1910 meeting at Jekyll Island by the biggest bankers in the country!
"In no way did the large bonuses, or "asymmetric risk and reward" of bonuses, cause the real estate bubble, still the major cause of our pain."
Yes I'm sure that greed for short-term financial gain had ZERO to do with the entire financial industry inventing new and insane mortgage products, so that busboys could get a $400K mortgage which could then be stamped AAA and sold to sucker pension funds in Norway. I'm also sure banker greed also had nothing to do with the clones and synthetics and derivatives of derivatives (of derivatives) that bankers created to allow them to leverage their bets and threaten the entire global economy with a collapse many orders of magnitude worse than the total of all the crap mortgages they had peddled to idiot home buyers.
Asshole.
You sir, have nailed the issue. Government had every opportunity to stop unregulated derivatives back when LTCM collapsed (Brooksley Born had them in her sights) and instead we let it ride. And now we can't fix it without a system reset.
I thought AQR is a decent shop.
I work at a competing quant fund down the road and i still dont get what his problem is?
Some of the banks jumped the freaking gun colluded with the fed and got their monies. What is the govt supposed to do? Live with it?
This regulators sleeping with the bank officials nonsense needs to end. (prime example: that NY Fed Chairman)
AQR MAKE SURE THAT SOME NUT JOB DOES NOT USE YOUR FIRMS CREDENTIALS FOR PUTTING SHIT OUT.
Anyone who compares the gullible, pandering pantywaists of the Obama Administration to "Cossacks", and the privileged denizens of Greenwich to the cowering, defenseless Jews of an Eastern European shtetl has got a real persecution complex, and is fucking retarded to boot.
Love the New Canaan reference. Good on you, Cliff.
Cliff Asness is just an ex-Goldman ass who lost his ass when his quantitative trading models went belly up and he couldn't make money on the way down nor on the way up. He's simply become an old fart who suffers from chronic hemmoroids and sits around all day ranting because he and his other Goldman ilk can no longer make the easy money they were used to making.
Amen Cliff.
Literacy calling stoverny
"Yes I'm sure that greed for short-term financial gain had ZERO to do with the entire financial industry inventing new and insane mortgage products"
we are talking about BONUSES here. Who invents mortgage products, RETAIL BANKs ie RETAIL BANKERS. How much of their pay is bonus ? NOT MUCH. Sorry but the reasoning is right, you're capacity to force you're own conclusion not so much
get the facts straight "asshole". You're the prototype of the ignorant scapegoater described in the article
Go read "Liar's Poker" and you get YOUR facts straight!
Where's Marla?
I have criticised ZH in the past for a lack of balance in its 'reporting'.
But I take some of that back now for publishing a link to this as I think it's a fantastic counterpoint to some of the ridiculous views some people have on the bailout/crisis.
Only surprising thing is why haven't the fanboys come out with their usual rants against 'banks', 'GOLDMAN' etc in response to a coherently argued opposing view ? I think we all know the answer to that one :-)
Because his maunderings are absurd. Because that senile deslusional loser is not a helpless jew on the way to the gas chamber, he's just another failure. And what is contemplated is not using his skin for a lampshade but letting preening failures fail. Letting their equity holders get wiped out, letting their bondholders fight for liquidated scraps. Letting the big and little swinging dicks lose their jobs and beg for new ones because everyone remembers how they fucked up. That is what would happen if the government declined to loot the fisc to save their asses. Just go hide in a fucking attic like Ann Frank, you delicate fucking flower.
Great comment - you pretty much prove all the counter arguments people have made against the so-called 'prevailing wisdom' on this site.
You are a stereotype and offer no substance, only abuse and nonsense.
Spoken like a well-trained functionary of the servant class whose reductive closed-form Gaussian copulas fucked up the world, but who escaped immediate termination because no one wants to pick up your MATLAB drudgery. Guess what, chump, all the cultish ass-kissing in the world is not going to get you that MD, because you you're the last hookworm to climb into the colon and you killed the fuckin host. Even in the best of times, they only promote your sort so far. You're a prole.
Angry - tick
Offensive - tick
Partially incomprehensible/vague - tick
Congratulations, you win the award for submitting yet another stereotypical ZH comment.
Ooh, make the most of that passive-aggression thing, it's a real asset to any aspiring financial mover & shaker. Your many bosses must get quite a kick out of watching your face when they humiliate you just for shits and grins - you know what I mean.
The too big to fail bank is not an Obama creation. It is a result of deregulation, the destruction of the Glass-Steagal act, proudly claimed a triumph by none other than Bill Clinton. It is a result of too much risk taking in a little regulated industry, betting the wrong way and at the wrong time.
Financial innovation is not something to be criticized. People are quick to point the finger at the evil banks and financial institutions, and they are even quicker to forget about the good life they lived under this era of financial innovation. New avenues to ownership were opened, the job market was booming, the stock market was at all time highs.
Complaining about bubbles in the economy, is like complaining about rain. Every 10 or so years, another bubble forms and pops, and that's how our economy works. That's how our system is built. Too bad this one was just simply more painful for Joe, the average guy.
Maybe next time, Joe, maybe you shouldn't get all that "free" money from banks, you know, the money that you bought your house/car/boat/nice clothes with, and then lose your job, with exorbitant amounts of debt?
"new avenues to ownership" is just propaganda--none of those folks currently "own" anything anymore. It's been reverted to the bank. All that this financial engineering has accomplished has been to increase money velocity so that the banks could take another nick with each go around. Artificial booms don't count. Bubbles are not, I repeat NOT a foregone conclusion except in this make-believe world the Fed has created. Anyone who took that "free" money is up to their ass in trouble right now.
It's a little late for patronising finger pointing at this stage of the game.
I'll take the opportunity you provide to criticize financial innovation that relied on fraudulent ratings provided by complicit agencies that resulted in a global clusterf*ck as it was exported around the world by greedy individuals working out of the US.
Please feel free to correct me if I have naively misunderstood how we got here.
I'll go out on a limb and say that his mutual funds must be doing alright.
In answer to why this moment, I agree Obama is thinking purely politically. He should have rounded up the vampire squid's minions and shucked them in the East River a year ago.
I can honestly say that Blankfein et. al. appear to have no redeeming quality or feature that spurs any humanitarian impulse toward them on my part.
So, be clear I agree that Obama's timing is off, but not for the same reason as you do.
Frankly, anyone who gripes about how tough it is to be a banker should meet a punishment akin to, say, forced castration.
To all you bankers and their supporters who earlier begged Washington to do something to save you and of course it follows to save the country by doing so [for the clueless among you that is sarcasm], and who now gripe about what he's doing, go to hell...
It's hard for me to say this, but I agree. I could never bring myself to believe that capitalism can misallocate resources on the same order of magnitude as communism can, but it did, and it has, and we must stop it lest we suffer the same fate. There is no silver lining in putting people who formerly had a halfway decent lifestyle out onto the street to become the problem of the welfare system. Plenty of Americans got in over their heads, true, but plenty more are innocent victims of this mess. Everyone with a pension, for starters.
If the banks are so rich then we should force them to mark to market.
+100
Would have been a decent set of reflections if he had addressed that little issue and fake low interest rates.
He is correct to say that the bankers are not the only problem.
Until the Criminal Activities (there is just SO many of them) that are so blatant and not even being attempted to conceal are addressed, the problems and malaise in society will continue. In fact, conditions will get worse.
Politicians, Bankers, Businessmen, Police, Unions, the military-industrial complex, the medical services industry, the drug companies, the obvious crimes being committed and the perception that they can do so with impunity is pure poison to society.
I think a large percentage of the population has been demoralized and beaten down because of the perception that crime and corruption are rampant (and very visible) and that there is nothing being done about it.
Fraud and corruption is wrong, period, there can be NO exceptions. There's a Financial Crisis; not a sufficient excuse to allow corruption and fraud.
Corruption needs to become a bad word again, with people ashamed to have such a word associated with their name.
Put 10 thousand FBI agents to work to root out the corruption in society and solving the additional problems (which will STILL NEED to be fixed as well) will perhaps stand a chance of succeeding.
I also think that if all the people in the country again SEE the law being properly enforced, that they will be more willing and motivated to pick themselves up and try again.
Society is sick, and it is going to become sicker, until someone ( and I do not think that hardly any of the current players are going to be part of the solution) steps forward.
I don't get the point of the whole thing except to attempt to give cover to those who blew themselves up and then ran to government to get bailed out lest they lose their six mansions, five yachts, their gulfstream, and their huge car collection. What am I missing here? This mess doesn't get solved until somebody on top gets pulled down.
Mr. Asness is very successful and he's obviously a die hard Republican. Nonetheless, politics aside, after reading the comment, I agree with him. But as a hedge fund manager, I expect a little more meat on the form of "punishing failure". In particular, he stopped short of going after bankers' personal assets, a position taken by Warren Buffett last week. Someone who has skin in the game knows all about sticks and carrots. He is way too easy on bankers, failing to recognize that if they didn't have access to TARP, they'd be toast!
Exactly! Of all the fraud and corruption we have endured (makes one heart-sick and then furious)--who, besides Ken Lay, Skilling and Madoff has been accountable?
GREENWICH = POLO
That's why they have so little time up there for serious banking, please they can't be bothered. They may advertise a few jobs cleaning stables if really pressured to do something for the economy.(under minimum wage you understand).
SS
Greenwich does equal polo in most people's minds (and probably in some truth). But, do you think maybe Asness (a Jewish guy) had this in mind and was joking when comparing white bread rich Greeniwch to a poor Jewish village?
Hey Cliff right on dude... Power to the people... power to the people right on... Bankers and rich people pay the majority of the taxes.... Maybe the should pay less so you all can pay more....
oligarchs= lick my balls
gold bitches
Why would you let them that close to something which is probably more precious to you than even the gold?
I believe the bonuses are part of an extortion racket keeping the employees hush on executive skullduggery.
are hedge fund managers the johns or the whores, or both? it's clear that Goldman et. al. is the pimp... FU to cliff and the whole bunch, rot in your own personal hell, which i like to think will be a big trading exhange where you all just trade with one another, and prices keep going up and up and up, but you can never sell anything, so you're rich on paper but never make a dime!
a) As to the cossack thing, it may have been in poor taste, but all Asness is trying to say here is the government is using the attack on bankers (oddly occuring right after Scott Brown's victory) as a distraction. I don't think Asness is really comparing the MAGNITUDE of a murderous progrom to Obama attacking bankers, but rather the DIRECTION of the governmetn attacking a disliked people to distract from its own problems. He probably should not have gone there, but only because it gives the children who don't get a directional analogy something to yell about.
b) Most of you think he's so pro-banker, but only a few of you notice he's saying he would have let them fail. No bonuses, no equity, gone. He may be wrong but he thinks the country would've survived and the bankers would've gotten what they deserved. It's only after making the TARP deal, and after the banks paid it back, that he seems to be saying the government can't go re-write history and change the rules (again). Does that really seem like an oligarch defending bankers?
c) His major point is that although this crisis was caused by government, banks, and individuals, the new "narrative" seems to blame only the bankers. Does anyone seriously disagree with that? Seriously?
Is it not incredibly obviously that by putting "Greenwich CT" in parens after "pale of settlement" Asness was making a, perhaps poor, joke about Greenwich being anything but a pale of settlement?
Also, he doesn't say the administration is totalitarian, he says they have totalitarian impulses. That seems to be a fairly huge difference.
Focus on the arguments guys. You can agree with him or not on the substance, but Asness clearly likes to push the envelope. He also clearly isn't equating murder to taxing bankers, nor is he saying the administration is a dictatorship.