You are citing an argument that the banks should have lent the money out instead of investing it. You have assigned blame for this.
I simply want to know if there was actually enough demand for loans to have made it possible.
You really can’t blame somebody for not doing something that wasn’t possible. Can you?
So was it possible?
It’s a simple question. Why won’t you answer it?
Since you seem …
Unwilling to commit, I am just going to assume that the banks invested the money instead of lending it because there was not a lot of demand for consumer or small business loans.
Feel free to demonstrate otherwise.
http://articles.cnn.com/2009-12-12/politics/obama.bank.lenders_1_solid-loans-financial-services-roundtable-small-businesses?_s=PM:POLITICS Small business is the engine of job creation. They have had great trouble getting loans from banks, who decided to buy T Bills and gouge their customers in order to make money. The Fed should have forced them to sign paperwork guaranteeing they would help jump start the economy they fucked up. But they did not so BoA has decided to risk the economic development to keep salaries and bonuses high.
You are really very good at not saying anything.
Do you use a random phrase generator, or do you it yourself?
Oh… I have a question.
Was it possible for the banks to do as you suggested?
It may not be blimp humor, but Scylla, you can still make me laugh. 
Not at all. It took me nearly week to reply last time.
I admit, it seems to me like you have been imbuing them with magical properties that I seem unable to perceive.
The difference, is just a matter of degree. I don’t agree with the idea that they are benefitting the overwhelming majority of Americans. That’s a pretty bold claim. Usually when people tell me about how their cause is for the greater good of all, I start rolling my eyes and grabbing my wallet. I have seen nothing about this to make me feel otherwise. Largely, and I think there is know getting past this, this is because they really don’t have any concrete goals or methodologies.
That’s kind of a low fucking blow, don’t you think? Here we are talking about Occupy, and suddenly you are trying to talk about Bush, or bring him into it. The one thing has nothing to do with the other. I’m surprised at this.
No. I am not being disingenuous. I really don’t have a problem with people assembling. What I do have a problem with is people exercising their rights in such a manner as to interfere with the rights of others. The guy that wants to walk his dog in the park has as much right to do so, as the protesters have a right to use it. The one does not get to monopolize it. That’s why we get permits and such. It keeps the use fair. Similarly if I am having a dinner and a speech with a speaker, my right to have my speaker heard is greater than the right of somebody else to free speech who has not reserved the venue. My right to peacefully bury my child, or get an abortion, peacefully, without interference, and without being harangued is greater than the right of others to use free speech and the right to demonstrate in an attempt to stop me.
I just don’t think the right to assemble or the right to free speech trump somebody else’s rights.
I don’t see what is so unreasonable about that.
Thank you for seeing this. What I think is your imputing properties into the protestors that they do not have. Let me see where you are going, though.
I’m not being a smart ass, but it looks to me to be about 90% 18-30 or so with a decidedly hippy bent.
Again, this bothers me. Why are they deluded? They seem pretty fucking grounded to me. To me, it looks like the people who think they are going to change the world by camping out in a park are delusional.
That would seem, on the face of it, to be the default rational choice, no?
I agree! Still you know, I am having a problem with the progression that starts with camping out in a park, and ends with lower CEO compensation. There is a whole bunch there in the middle that I must be missing.
I can’t agree with this at all. We all have to work with systems that are not perfect, are not fair. If we drop everything to protest them then one of two things happens: Either we spend all our time protesting and none of out time actually doing stuff, or… we have to prioritize what we protest. Frankly I think they have prioritized poorly and are addressing a problem that came too a head nearly three years ago, and has been slowly fixing and improving itself since. We really don’t have to worry about the Financial sector destroying the world again for at least another 10-15 years.
Oh boy. I mean , are you really going to use Sweden as an example? You know that you guys are so different from the rest of the world that you might as well be from another planet, right? Your history and economy is really different from just about anything else out there. More importantly, what works for you guys probably won’t work for everybody else. You are some industrious motherfucking people. Even so, I think you have an awful system and it is only the fact that you are Swedes that is holding it together. Even so, the whole thing almost came crashing down in the 90s (in a scenario that was pretty similar to what we just went through,) and frankly, I think you guys are in trouble and it’s going to happen again in the next 3 years. Knock on wood, I sincerely hope you are wrong.
Finally, on behalf of my daughters and myself I would like to lodge a serious complaint against Sweden. At Epcott center one of the big Disneyworld parks, the showcase Sweden is one of only three countries that offers a ride. Even fucking Mexico seemed to get the idea that the ride was supposed to be fun (they had the three Caballeros,) but not Sweden!
Sweden’s ride was called “Maelstrom,” and I waited forty five minutes in line with my kids to watch what looked liked Thor, and a whole bunch of Asgardians in business suits and helmets standing on top of oil rigs, explaining to me how handsome industrious and totally superior Swedes and Sweden were to the rest of the world.
It was worse than the hall of Presidents. I’d like an apology for that.
I think it comes down to two things. One, I don’t accept that these people actually know what the problems are. Two, I think their attempts to address them are juvenile, self-serving and actually damaging instead of helpful.
Oakland is the lesser for having these folks. No way around that. They have cost the city money and jobs.
Thank you. It works for me.
Svin, I just don’t think your analogy is an accurate one. The real cause of the meltdown isn’t these instruments. They are the catalyst and there is a lot of blame. The real problem is that a good percentage of the entire world has been living a fantasy funded by low credit and rising housing, as if both these things were rights. The bad instruments came out of this.
It still exists. That’s the problem.
No, of course not, what would a bank know about lending money? And guys like Bernanke and Paulson, what would they know about a credit freeze?
Why, come to think of it, I haven’t even proven that there is such a thing as a “credit freeze”. I mean, outside of expert opinion offered that its “factual”.
You don’t dispute the basic facts here, as roughly outlined in the referenced article. You don’t deny there was a credit freeze, you don’t deny that this was intended as an intervention by the government to break that freeze. You don’t deny that loaning that money was the purpose of the venture, so far as Mr Paulson and Bernanke were concerned. And further, you don’t deny that the banks did not lend that money.
What you do blithely suggest is that maybe…just maybe…some other factor intervened. They wanted to do what was expected of them, but it simply wasn’t possible.
So now we are introduced to Scylla’s Phantom. This is some powerful shit here, pardner. Despite all the power of the money, and the government, and their bestest intentions…**Scylla’**s Phantom intervened, it just couldn’t be done, because no body wanted to borrow money.
Now, this is a head scratcher. Did they suddenly stop wanting to borrow money? Or had they been that way all along? But if there had been no massive, unmet demand for credit, then the “credit freeze” didn’t exist, at least not as any kind of crisis. In that case, why would those dumbasses Bernanke and Paulson think there was? So, clearly, that was not the state of things, if people stopped wanting to borrow money, it must have occured rather suddenly.
The only being powerful enough to do that would be Scylla’s Phantom. Or maybe Ernst Stavro Blofeld.
Now, one advantage of the thesis laid out in the article is its compliance with Occum’s Laser, it doesn’t require an additional entity to stop the banks from lending, it simply says they didn’t because they didn’t want to. Goldfarb goes further to suggest that they preferred investments over loans because there was more money in it.
His thesis doesn’t require an imaginary force. But yours does. You insinuate in the vaguest possible terms some force that prevented the banks from lending the money. (Our money, I hasten to remind.)
Now, my turn. Did you come up with this all by your lonesome, or did some Serious Person somewhere suggest this?
In my entire life I have never seen somebody expend so much effort not to answer a question.
Let’s try again, because… It’s fun.
You have taken the banks to task for not lending out the money.
Did anybody want to borrow it?
I’m going to make an argument, but guess what? It’s going to be your job to contradict with proof not mine? Why? I’m only making this argument because you are playing games and are refusing to substantiate your claim or answer a simple question.
Here it goes:
By definition, a market collapse occurs when a lot more people want to sell than want to buy. Do you see that?
Lots of sellers and few buyers equals a market crash. In 2008 it was not just the stock market and the bond market, it was also the housing market, the auto market, consumer spending, all these things were dropping.
Why?
People don’t like to make big purchases when they are worried about losing their jobs, the value of their homes are dropping, and all their investments are tanking, and they are losing their retirement plan.
That is not the time when Joe Investor looks at his wife and says “Let’s go buy a vacation home.”
No. What happens is people hunker down and spend less. Businesses lay people off and reduce inventory. Spending and borrowing decreases. People seek to borrow less.
So you see, the question of whether anybody was looking to borrow money during the biggest borrowing hangover in the history of the world is actually a pretty legitimate question.
Here’s a cite:
What this shows you is that there was suddenly a lot less borrowing going on. What it doesn’t tell you is whether this is because the banks suddenly got stingy, or because nobody wanted to borrow.
So… If you want to find out whether people were looking to borrow or not, what I say you need to look at is the Federal Reserve Senior Loan Officer Opinion Survey on Bank Lending Practices. Perhaps you choose some other statistics?
I keep my Federal Reserve Senior Loan Officer Opinion Survey on Bank Lending Practices under my pillow.
Let’s see what it says, shall we?
Holy Shit! Looks like the biggest percentage of loan officers ever were reporting that demand for loans was down after 2008? Small business loans, large business loans, residential loans, consumer credit… according to this survey the demand for all these was loans down. In one case 100% surveyed said demand was down. Wow! You can compare the statistics going back quite some way.
Here:
http://www.federalreserve.gov/boarddocs/snloansurvey/200911/chartdata.htm
SOOOOOOOO…
You fault these banks for not lending. Who are you supposed to lend money to if nobody wants to borrow?
It’s a simple fucking question.
Duh!
Jesus Christ, man.
Why are you even attempting this?
Boy, are you in luck, Scylla! That online article I referenced? You may not have noticed, but it has a comments section! I glanced over it, and you know what? Nobody else has advanced this stunning bit of insight! Nobody! Here’s your chance! Hop right over there and lay your claim down, before somebody else does!
Just think about how much you can gloat when this Goldfarb hack prints his retraction, apology, and abject adoration! Hell, you can pretty much just cut and paste your last post! And some very knowledgable people read that paper, imagine your glow of pride as they line up to sing your praises!
Scylla, this is an ego-freaks chance of a lifetime! Get over there quick, you’re not the only genius around, got to get there fustest with the mostest! Think of it as an inspiration! A challenge! A double-dog dare!
I wait with bated breath.
Sure, demand for loans was down. We know that.
But there’s a pretty big gap between ‘down’ and ‘nonexistent.’
So with less demand to borrow all that money, the banksters responded to the law of supply and demand by making it easier for the remaining prospective borrowers to borrow, right?
Without an answer to that, we must give Scylla an ‘incomplete,’ because he hasn’t shown what he purports to show: that the banksters were doing their best to lend, but there was nobody to lend to.
Turns out that wasn’t true, which was why he couldn’t show it.
While there may have been fewer people who wanted to borrow, the banksters weren’t eager to loan to them:
That one was dated February 2, 2009, JFTR.
The Fed, at about the same time:
In April 2009, the banks were still tightening up from January: about 40% of banks polled had tightened lending standards for commercial loans, and the rest were staying where they were; nobody was loosening standards. (Responses to “Over the past three months, how have your bank’s credit standards for approving applications for C&I loans or credit lines—other than those to be used to finance mergers and acquisitions—to large and middle-market firms and to small firms changed?” here.
Three months later, more of the same:
So sure, there were fewer businesses trying to borrow, but throughout the period, the banksters were making it harder for them to borrow, even though the government had just dumped a shitload of money on them.
-RTFirefly, providing quality trolling since 1999.
Goldfarb didn’t blame the banks. You did. You said:
“One hungers to take them to ten thousand feet and shove them out the door with a genuiine golden parachute.”
Goldfarb blamed the government for it’s rules. This is wrong, too but he’s a journalist, not a master financier dude like myself.
The real truth Lucy is that guys like me explain stuff like this to guys like Goldfarb who then oversimplify it, or get it wrong, or change it to make a fun article.
Anyway, since I have the actual Fed survey showing that demand for credit was way down across the board, I’m happy enough to prove you wrong.
But why hide your light under a bushel? Admittedly, we scruffy types aren’t likely to understand the rarified intellect such as yours. But those people over there at WaPo, some of them are much more knowledgable, they are just the sort of people who can appreciate your insights, and offer them the respect you so richly deserve!
You could be a contender! You could dance like Nijinsky, executing a perfect pas du gros canard! George Will will call you “Sir”, David Brooks will offer to iron your shirts, and you will finally be in a position to totally crush that little bitch Krugman!
I know I’ve suggested that you stick to domestic comedies, but I was wrong, this is your chance, let your eagle sour!
Well since master financial dudes like you brought the economy to a level not seen since the Great Depression, it is easy to see why demand was down. But the recovery and job creation would require an ability to help companies that needed money. It was not provided. It still has not been provided, even with the government urging. Sad, but that is all the government can do.
Scylla:
Just a quick response to a couple of items:
They are related though, in that both of them are moral judgements made by you. In the case of Bush, who did something I find utterly (and outrageously) morally reprehensible, and for which I think he should do hard time, you shrug your shoulders and say, “Meh. Company executive lie all the time. It’s a part of the job.” In the second case, in which people are exercising an important constitutional right to rectify perceived wrongs, you’re SHOCKED, I say, SHOCKED at the hypocrisy. I find your position to be profoundly inconsistent.
I bring it up because I often perceive a very strong bias among you right-wingers. When your side does something wrong – even something profoundly wrong - you admit that yes, maybe, they should not have done that. It was wrong. But if the left does something wrong – even something that maybe isn’t all that wrong – you are outraged, I say outraged, sir! at their shocking immorality! It’s a rhetorical trick, you see? You – and by that, I mean conservatives in general – constantly work to minimize the wrongs on your side commits while rhetorically exaggerating the wrongs committed by leftists.
*
I agree with this, in the sense that sometime the rights of one person have to be balanced against the rights of someone else, and that these can come into conflict. When that happens, it’s not always easy to figure out who’s rights should be abdicated, and sure, reasonable people can disagree about how to resolve the conflict.
But I should point out this wasn’t what you were arguing earlier. You were arguing that we had become so technologically advanced that protesting was now obsolete, and should therefore be banned. You even admitted it was a strange view for you to hold in your first or second post on the issue.
Yer welcome. Like I wrote, I wanted to make sure you knew that I understood your argument. I disagree with you, but I understand where you’re coming from.
Actually, no. Nobody is going to change anything by stupidly defending the status quo to their own detriment.
The rational choice would be for most of the country to rise up, storm the castle, and demand change. I cannot for the life of me understand why you American types didn’t do this already years ago. I suspect it is the result of a particularly toxic mix of complacency, ignorance, insularity and ideological blindness. See Gramsci, Antonio, and the concept of cultural hegemony.
You know, as far as this goes, I don’t disagree with you too much here. I also don’t really see how they get from here to there, hence my previous cynicism. They need to continue working on formulating more concrete goals, and in order for this to actually work it needs to become a mass movement. Given the ideological entrenchment of the American working and middle class, I just don’t see the latter happening.
But even if we agree that they’re probably being unrealistic, I don’t despise them for at least trying to change things here at the bitter end of the human experiment, or dismiss them as a bunch of lazy, dope-smoking, irresponsible hippies.
?
Did you just slip up for a second there? I think I saw a chink of light stream into your darkness.
So, let’s see – America is the greatest country on earth, with the greatest people on earth, until we actually have to do something about our social safety net. Then suddenly, Swedes are all superheroes with hammers. Right.
Actually, you could fairly argue that both the German and French systems have in recent years surpassed the Swedish system in terms of service and effectiveness. The entire European continent provides the social services I enumerated above to it’s citizens, more or less. You’re not going to tell me the French are better than Americans as well, are you? The French?*
As far as the crisis in the 90s goes, there were a lot factors, but certainly the major one was the refusal of the Swedish government to float it’s currency, which was at that time pegged to the dollar. Interestingly, however, in these tough times, instead of cutting down on social services, Sweden doubled up – and came out smelling like a rose.
But you actually just hand-waved your way through the substance of that section of my post – could you go back again and tell me what you actually object to in it? Do you think the class struggle in Sweden was wrong? Were workers wrong to band together into unions, protest, and fight for their rights? How do you think that process took place, what it looked like? Do you think the Swedish working class just passively accepted its lot, like the 53% you linked to above, and even defended the status quo? Is that how you think real social change comes about?
And while you’re at it, could you explain to me why you think the Swedish system is “awful”?
Blame, blame, blame. You really are stuck on the blame issue, aren’t you? There’s enough to go around. Granting freely that other factors are also in the picture, CDOs were a major component, and greed on Wall Street, along with the fact that Wall Street and the big banks own our government for all practical purposes, and make laws that benefit the 1% at the expense of the rest of us. Not true?
I do apologize for that Epcot ride though, on behalf of all Sweden.
*Just to be clear, this is a joke. France is sort of like the India of Europe. Utterly chaotic, but you just can’t help but love, love, love! the place.
Scylla, two things.
If the discussion’s going to expand to include government-run health care systems, Ezra Klein wrote a good (though hardly all-inclusive) overview, “The Health of Nations,” a few years back. It compares the health care systems of Britain, France, Germany, Canada, and the U.S.’ Veterans Administration health care system.
To the extent that you’re expecting Scylla to respond to cites in my posts, you’re bound to be disappointed. Feel free to re-post any links and quotes I’ve dug up that support any points you’re trying to make.
Great Barry Ritholtz blog post this morning (that itself consists mostly of links and quotes): Key Lesson From Iceland Crisis: “Let Banks Fail”.
And:
[/QUOTE]
You’ve been here ten years or so. You know better than to post stuff that you are unwilling to defend or respond to simple questions about.
I’m debating you on this. Go talk to Goldfarb at the Washington post is not an accept me debating stance.
This falls more into the category of wry amusement than LOL, but you lost any hope of being taken seriously with respect to defining acceptable debating stances about thirty pages back.