The Truth About Bankers’ Bonuses (How You’re Getting Screwed By Banks and Government)

Above is a video I posted of a live and heated debate on Al Jazeera TV on Friday about the controversial issue of bankers bonuses.

As a trader I sympathise with my colleague Peter Schiff that we should not have bailed out the banks and let them fail. He does have a good point that market forces should have been allowed to take hold instead of interference by the government.

However, I disagreed with Peter based on the fact that had we not bailed them out, the economy would have been pushed into a deeper depression than we may have anticipated. That may be OK for millionaires like George Soros and Warren Buffett, but not so easy for the hard working man or woman in the street who is already struggling to make ends meet.

This may sound contradictory considering earlier I had said I was “dreaming of a recession”.

But I think you’ll agree that there is a massive difference between a recession where the economy “contracts” and a full fledged depression which flushes the entire economy into a black hole! The first is a necessary cycle of any economy, the second is the stuff of nightmares.

But maybe you have a different opinion. Let me know what YOU think and leave me a comment below.


  1. hey Alessio – great interview. I think you and Peter made some excellent points. I am beginning to understand now your viewpoint about “dreaming of a recession” which I must say I totally did not get until now. thanks for clearing this up. Otis

  2. Alessio – I am sorry but I disagree. Bankers should get paid for the talent they bring to the table. That is the essence of a capitalist society. Why should we judge how much or whether the banks get? What business is it of ours? If they deliver on returns and make people money why should they not get compensated? So I think you’re wrong on this one mate.

  3. Hey Alessio:

    Great interview and I agree with you totally. As difficult as it may have been to stand up to everyone, you did a remarkable job. It takes guts man! I love watching your interviews!

  4. Alessio, RIGHT ON! Why pay Banker’s a bonus on government money for being a thief? During the Mortgage crisis, they were the one’s as CEO’s who permitted with their serious lack of oversight practices of robo-signing simply for the benefit of fluffing their portfolio’s at any cost. Thousand’s of people received mortgages who had no business getting them in the first place, and now we are paying double for not only covering the banks’ greed, but covering the consumers who now are faced with the reality of their own personal financial demise. These CEO’s did NOT deliver on returns, they permitted fraudulent activities, and now they hold their hand out for the government to pay them a bonus on my dime? How about putting a pair of handcuffs on them instead, as they deserve?

  5. The banker’s bonuses should be in stock and be pegged at a price above the current market price say between 8 and 10% compound rate. If the stock price does not go up 8 to 10% a year they get nothing. None of this million shares at $1.00 on a stock of $100. This would give bonuses based on stock price which are roughly driven by earnings growth and would not take advantage of the current shareholders.

  6. There’s ideologies and theories, and then there’s reality.

    I think Alessio hit it bang on in terms of what the practical and realistic outcomes would have been if big banks were allowed to fail. I personally don’t like that the banks were bailed out, but as Alessio says, the small guy would have been paying dearly if it was allowed to happen.

    On the topic of bankers getting bonuses: I agree with Alessio that until the bankers return all funds that were loaned to them (with interest), and a percentage of the profits they made with that loaned money, no bonuses should be paid out. After that, it’s fair game.

  7. A simple question of bonuses being ethical turns into a pointless Keynes vs classic economics debate. The hardcore liberals are blind to errors of their phony theory. Peter is plain wrong, if we let the banks fail it would turn into a horrible depression, far worse than 1930, especially now when bank systems are so intertwined with everyday life. You talk reason and insight Alessio, good on you!

  8. Your passion to defend the truth and try to give a clear and real message to the people it’s inspireful, i apreciate that a lot. You are “the man”, not much people are stong enought and have the courage to break down the lies.. keep the good work!

  9. Peter Schiff… If we go all in as a Pure Capitalist System, the average joe will get eaten alive by the Monopolized corporated capitalist noble. Live or let die capitalism. Please look at China if you would like to study Pure Capitalism (Live or let die). China is the only Pure Capitalist in the earth at this moment.

    Alessio, It is a great intellectual debate. There aren’t really good intellectual constructive debate in the main stream nowadays. Most of the debate nowadays are covered up and noise distraction smokescreen operations.

  10. The premise is that bonuses are to award individuals with what they deserve.

    In 2008 bank stocks tanked.

    Since then the monetary interference by government set up the economic conditions for their recovery.

    That monetary interference will ultimately be borne by everyone through devaluation of their own net worth.

    You notice it by the fact that the average price of a fresh avocado is much higher than in that of the past.

    People argue that it is shareholder’s rights to pay their executives whatever they desire. Sure, but it is myopic to think that it is just the bank executives reaping the lions-share of bailout benefits. It is the entire banking industry is in cahoots. The dollar value of executive bonuses are dwarfed by the dollar value of the aggregate recovery in banking stocks due to their socialised industry bailouts. Everyone in the banking industry is allied to ride their industry’s stock prices higher thanks to you and I financially supporting them.

    Socialized bailouts means that it is you and I who bear the costs. You and I are thus responsible for the bank stock recovery.

    What bonuses do the people du-jour in the banking industry deserve…

    Sorry, but I am at a loss.

  11. Hi Allesio,

    Absolutely loved your statements at the BBC, however, I also feel you got caught up in the excitement of the interview and in the heat of the moment you said you’re dreaming of a recession. Yes, correct, we all like to short the H*** out of low value stock once we’re in the elevator down, however, the normal man in the street will not appreciate your statements. Not because it’s wrong or illegal but simply because he doesn’t understand what we’re doing. In my view you’re totally right, but I think there’s no point to say this on BBC…..people perceive that as greed, hence very negative…..which is a pity because it is not our fault that they don’t educate themselves in this fantastic field of opportunity….Keep it going, you’re a great teacher and empowering the world;-)

  12. Hey Allesio,

    More or less it seems to me that you have quite a lot in common with Peter Schiff anyway. I’d like to see you both in some other interview or conversation, where you could put more attention to the economy and its impact to common citizens.

    And the banks should not be bailed out. Doing that, government prints the money, so you – wether you like or not – pay for that. And after all they’re getting another bonuses? In my opinion Peter Schiff is right.

    One more thing about bonuses. It doesn’t matter if system works properly and regulations are good or bad. When there’s something wrong with people, the temptation for power and money makes in most cases crime. This relates to bankers and politicians.

  13. Seems to me that the Governments are at fault for allowing a banking Casino with fractional reserve lending gone nuts,CDSs and hypothecation. The game is rigged.Whoever controls the Money Supply/Debt,controls the Casino & bonuses.We,the people have no choice but to play our money.The chips are down.If only we could walk away and trade something Time..mine & yours.

  14. I really don’t know where Peter Scihiff gets the nerves to tell the regular people, like hard working americans who barely make the ends meet that it’s in their best interest to endure a lot more pain, to make even lesss than minimum wage, etc., that’s short sighted and insane to say the least, I fully endorse Alessio Rastani’s point of view

  15. In my view, after hearing these opinions about banks who caused X and bonuses for them and government involvement… I Would like to hear more specific situations of a event that caused X and how that happened and then a solution instead of the generic slogans of big banks big government… Remember JP Morgan and Carnegie from long ago and how they manipulated the market…Things are in place for reasons.

    Keynesian Economic policies created the positon of the govenrment involvment because they thought it would work. Like a drug addict who needs his fix now.

    And look, a loan is a loan… If the banks paid it back then it’s fine. Chrysler paid it back in the late 70’s.

    Though the argument is that the average joe, (Like me losing all my money on my GM stock) doesn’t get the fair shake at these events.

    How does Jim Cramer get away with saying he manipulates a stock price and creates a position for his fund to reverse out of it for a profit?
    Why do funds have access to the stock market pre-trading hours? Why do market makers manipulate the price of a stock?

  16. The critical issue as always is a banks worth but not just monetarily. Go into any UK bank and what do you see? Well, steel, plastic, nasty souless furniture and paper but generally the contents are neutral and worthless. Now, go to the counter and ask for £5,000 in cash and you will find that they are scrabbling around to find it or they will ask “have you ordered it?” That should tell you that what they have behind the counter is worthless too because it is all digital. Ok then what about the building they are in? Ah, now we are talking because they must own some very valuable property especially in the cities, bingo! But wait, can’t banks lend 10 times what they have on deposit? That makes the debt to others, such as mortgages on your family home very real because it feels real when I pay my earned money each month. So if they have lent 10 times what they have on deposit surely that means there is real money somewhere, surely? Well where is it then? So to summarise, the contents of the bank is worthless, they have no cash to speak of (lots of digital money though) and they have lent 10 times what they have in assets. I am no accountant but doesn’t that mean they are bankrupt and always have been? This also assumes that the banks are doing what they do honestly, oh dear!!! And still people put large sums of money into banks!! Don’t ever call banks stupid!

  17. Hi,
    Good discussion.

    What makes you so sure that the bailout stopped a much deeper depression?

    And couldn’t the goverments bailed out the costumers instead of the banks, and then let them out for sale for the solvent banks to overtake their business?

    And won’t the next time or next time (when there are no money to bail them out) make a much deeper depression then would had been in the first place, if not bailed out?

  18. Maximiliano Herrera

    Well that’s true. Bankers are liberals,liberalists…everyone carries his own responsabilities, right ? So, if they fail, let them fail. It’s too easy to screw the people and than, if anything goes wrong, they ask (blackmail) the government in order to get saved by the same taxpayers they had screwn.
    It’s against the liberalism thinking, right ? So, if they are in trouble, we should let them fail.
    But they blackmail the govt. about all people who will be left jobless, so they convert into a pseudo social democrats when they need it.

  19. I would like to see some of these TBTF’s bail out pimp’s try making a living scalping pennie’s on the betfair exchange! like a lot of us in the real world alessio? portfolio lol? if i make enough? i eat! shorting on the market with insider trading info! with a free bet the worse outcome? is not even gambling! TBH i would prefer my job back with a living wage as a milk man! but the world will not allow such a privilege for one of its slave’s anymore!

  20. Hi Alessio. The contents of this email are my intellectual property.
    Having met you last year at a convention in London I can see a lot of sound sense in what you say. I do keep an eye on the email updates I get from you as it is the exact opposite of what the coporate media/propoganda machine is pumping out.
    Personally I couldn’t care less if the banks pulled out of the UK. The banks from my now considerable experience as a human being on this planet are nothing more than thieves/trickster/liars and fraudsters.
    Since I am what could be described as someone at the coal face, it’s just another case of mafia style extortation.
    The banks like corporations exist to make their shareholders money. Corporate culture has little regard for the man/woman in the street except in what way they can fleece them.
    In a nutshell they are operating a global ponzi scheme. Unfortunately few people know what this is.
    If they did there would be enough anger you would think to have all involved arrested and flogged in the street for the enduring misery they have caused/are causing. That may be a bit harsh, but thay should be treated like the criminals that they.
    When I go into my home town I see more boarded up shop fronts. Evidence of business that cannot survive because of economics. There is no other way to put it.
    Banks are businesses, yet they are given money that doesn’t exist because they have gambled and lost all the supposed money thay have.
    The problem is as one post on here highlights is that they never had any to start with. They are all operating fraudulently. Why is every day people go to jail for fraud and banksters who commit fraud get bonuses.
    Or put it another way if you like when we do it is is criminalised. If the banks/finance do it it is called banking /finance. The corruption is staggering. Criminal activity is criminal activity and that is what the bottom line is here with the population on the receiving end of global racketeers and gangsters. You either give them your money or they engineer a situation where you lose your house/livliehood and end up on the street.
    Yet these people are ruining economies aided and abbetted by our so called government who are in essence owned by these people.
    Another point made was why didn’t/doesn’t the government bail out the population? You know those ones who actually produce real things and actually have real money.
    Now if I supposedly own part of a bank, surely I can go into that bank and demand that they sell an asset as I want my money back. I didn’t ask/give my permission for my government to give my money or any other asset to these people. That in itself is a criminal activity. Therefore the government are committing as many crimes as the banks/financial institutions that they are supposedly trying to regulate.
    It was obvious that the European woman was finding it hard to justify her/their position. She was flustering her responses because she really had nothing helpful to say.
    At the convention I met you, the organiser said that it is all a game and we need to learn how to play it. I understand that now through experience. Vast amounts of people don’t and continue to get screwed by people who play the game very well and who in a lot of cases have set the game up.
    This is asset stripping the nation by any other name.
    I’ve no doubt you know who said give me control of nations money and I care not who sits on the throne.
    As I see it Peter is another part of the problem,. Part of that culture of greed.
    Our country like so many others has been allowed to be used as usurious/fractional reserve casino where the house wins 100% of the time. The little guy lost, now give me your shirt!!
    What is actually going on wordwide when all the talk has subsided? When the bailouts have run their course or they run out of paper to print worthless Reichmark style money.
    When the people behind this have gone even more insane than they already are.
    I agree with you about you latest points on this debate.
    However what is going on behind all of the smokescreens and distraction techniques is a Global Financial Coup d’etat.
    Think of a financial version of the Hunger Games and that is what we are looking at in the making.
    Intellectual property of Richard Barbour

  21. I see where you’re getting at, disagreeing with Peter. But we have to put an end to this, and the sooner the better. The world just have to face the music. The system is designed in such a way that there will be booms and busts. The fiat money system is a magnifier to the already natural inequality in the natural state. I hate to say this but it’s either we get hurt now or face death later. If I have a piece of mind, I would choose the former but everyone continues to live in denial and continues to struggle to postpone a punishment that increases with every effort to “bailout” or “QE”.

    I personally don’t find it unethical to let recession wipe the public out. Although everyone will suffer except the likes of Warren Buffet and George Soros, after the suffering, people will learn and become less ignorant. Everyone will learn to be more intelligent. Equipped with better knowledge, we can then correct the wrong as the majority. In life, we can’t always stay in our comfort zone. Even when we fall, we got to learn and get up and then try again. Babies naturally learn how to walk after many tries, Thomas Edison had over 10,000 failed experiments and finally 1 that succeeded in creating his lightbulb. However, the system created by past “unscrupulous” and greedy bankers (rothschilds) had somehow taken over since three centuries ago and turned everyone into sheeps, learning to follow the crowd, easily giving up after 3 tries, happy to jump in when the market looks like its about to topple. It all boils down to ignorance. Ignorance is the evil and it is being bred by educating people wrongly. I’m only a teenager and throughout my whole school life, not a word was uttered about finance or managing money, which we have to deal with every single day. We got to change and the time is never too late. I’ve prepared myself financially by attending seminars, reading books about financial analysis, bought physical silver. I’m expecting a hit worst than the ’30s but the longer this illusion drags on, the more fearful I am of a world war. In a globalized world, every country would get implicated and it will truly be a fearful sight to behold. There’s still hope that it will not lead to such a scale if we take action now.

  22. The argument that people la Schiff and Pirooz, in the comments, that Bankers deserve to be compensated for their work and talent displays an enormous value system disorder. What about scientists, engineers, designers that develop incredible technologies that TRULY drive the economy, putting new technologoies to be exploited and developed in the market, saving lives in some case and making others better as well. These people rarely get anywhere beyond 250k a year. They bring immense contribution to the culture and the economy, palpable stuff, and get paid a fraction of the bankers and traders who just move the money around and grab huge handfulls at each move. That i,s when they are actualy doing their job of moving capital around. Most energy in the financial sector seems to be aimed at creating financial products that will generate profit and bonuses, products that dont actually develop the economy and technology. It is fake progress at best, and it is disproportionatly compensated. The table is tilted, our value system is completly deranged because real progress is compensated at a fraction of fake progress.

  23. Good points from Alessio and Peter.

    In a perfect working system of Capitalism there are private gains and private losses, not as it is now, private gains and public losses.

    I certainly understand why Peter is saying the banks should have failed and not been bailed out. This would be in line of how Capitalism should work. Unfortunately, in our current system the Central Banks control our currency supply not the Government. The Central Banks are controlled by the very banks that were bailed out! Goldman Sachs, JP Morgan, etc.

    Banks through the practice of Fractional Reserve Banking create the currency supply. Roughly only 3% is state issued coin supply. Admittedly, some form of fixed supply, like gold or something similar, if in place would be more suitable curb the currency supply from inflating too much.
    However, no matter how bad fractional reserve banking may be, there is no escaping the fact, that it is the current system in place. The currency is the lifeblood which keeps the economy ticking over. If the Banks were let fail, the system would simply implode.
    So I would have to side with Alessio, even though Peter’s viewpoint is very understandable – unfortunately it’s not that simple as the banking system is now interconnected with Derivatives.

    Brooksely Born of the C.F.T.C. warned of a Derivatives crisis back in 1998 which was only in the region of $15 Trillion or so not the $638 Trillion nominal value that the Bank of International Settlements recently reported.
    Her idea of regulating the Derivatives market was aggressively side-lined by Larry Summers, Robert Rubin and Alan Greenspan. CDO’s and MBS’s would not have been allowed to grow or trade during the 2000’s if the correct trading standards were put in place initially.

    More attention should be paid by the general public as to what Bills are passed and not passed in Congress, along with the people who ‘prevent’ correct,necessary measures and regulation being implemented BEFORE markets collapse.

  24. Do something different: vote wisely! Yong Chiang, you have my vote! Either a chinese leader today or a chinese owner tomorrow. Choose wisely! And if you don’t like those options, then start sacraficing your first born, and possibly your second, because those guys in the aposing warship are just as right as you are.

  25. This TED TALK makes the case that big bonuses don’t motivate the type of work that bankers do.
    What do you think Alessio? I think the case is made yet the financial industry doesn’t want to know!

  26. My problem with the bonuses is when they are paid to bankers that have failed to deliver – they’ve made a loss!

  27. Empty the pockets of taxpayers to keep alive artificially ailing economy can not be done indefinitely. Sooner or later there will be a limit (wall) is reached. At that time some banks, people and countries will face the consequences and take responsibility. The longer you wait the more it will hurt …

    Sorry for my english, i am a french canadian!!!

  28. “…after the suffering, people will learn and become less ignorant. Everyone will learn to be more intelligent.” Spoken like a true youthful idealist, I am afraid to say… oh the hope we have for this ship of fools to steer a saner course… Hope is all well and good, but always…always temper idealistic aspiration with the realism of historic lessons….

    Nature red in tooth and claw brutalises as much as it can sensitise a human to the bigger picture of connectedness to each other and community or even planet. Recession = war zone. In a war the biggest sufferers are women and children… Is this what those who want TBTF to end really want? Riots? Blood-shed? Horror? Look back to the Second World War… then say you want the ‘natural market forces’ of poverty to hit the streets and the common man…. Common man is nothing to be glorified in a state of chaos and poverty brought about by systemic collapse…
    To take the tack of let the weak founder is ignorant
    of the realities of war…

    As for merely putting off war and depression fro a later date by intervention – I am all for that… Because this buys us time to figure out a wiser system which counts as valuable
    the contribution of the social worker, the teacher, the nurse, the carer, the environmentalist, the poet…

    And here is a key… until we value those human contributions that have nothing to do with the pursuit of profit, we will have a banking system that shows symptoms of insane corruption alluded to by other contributors here.

    Well said, Alex about production of crappy financial products that merely serve to deepen the wounds and tear the flesh of this beautiful planet and its communities apart……

    Perhaps rather than croney capitalism or even caring capitalism we need conservation capitalism – and not of the status quo, but in the biological sense… We are after all one giant organ of which we are all mere cells with bit parts… We need to know our true place

    It is not currency which is the life blood any more, currency has become a cancer in the wrong hands… planet and its biodiversity is the life-blood, the rest predominantly broken human mess…

    It is time to re-assess the meanings of GDP and growth and basic economic concepts and do that in full awareness of the part each plays to sustain connectedness of human to human regardless of economic status and of human to planet… including the sea, where we do not inhabit and therefore completely devalue to the point where we would rather explore the stars and planets we see above us than the depths of this earth we inhabit yet cannot yet even imagine… More solutions please smart people…. more solutions…

  29. Bubbles. Froth. It’s all froth. The DOW at 14,000 USD is meaningless. It’s the same DOW, only now the currency it’s valued in is worth much less. Bubbles and froth. Bankers don’t make anything, they just create and redistribute froth, whilst creaming off a big helping for themselves. They created these derivatives. These “Financial Weapons of Mass Destruction.” They did it with the blessing of the government.

    Banks gamble with other people’s currency. The rewards they reap far outweigh the risks. They should all be nationalised. P.E.R.M.A.N.E.N.T.L.Y. Every single penny of bailout cash was courtesy of the taxpayer. By rights, we OWN their asses. Salaries should be cut right back. Instead of bonuses, they should be issued penalties for screwing up. And, FFS, that woman should be kept off TV. Peter Schiff makes some good points, but ultimately doesn’t seem to care about what bankers and government get up to. Alessio did a good job of fighting for the working class. We should all be fighting for the working class. We should be educating them. Guys like Mike Maloney and Peter Schiff are missing the point. They’re tinkering with the engine, but ignoring the tyres. Get knowledge and precious metals into the hands of the working class, then watch the world change.

  30. Alessio – keep up the great work. The bank bonuses issue is just a symptom and distraction of issues that are not controllable and irrelevant to the consumer or small investor. Personally, I only care about how to exploit the system and it seems you are trying to enlighten people to that basic truth. I remember this famous quote from a character in a popular television series.

    “I would never lie. I willfully participate in a campaign of misinformation.” – Fox Mulder, The X Files

    The quote is profound in that the lie is the truth. It is just a matter of what kind of role one is to take as a participant. One will either be a victor or a victim. That’s basically all there is to it.

  31. Speaking of idealism…

    “until we value those human contributions that have nothing to do with the pursuit of profit”

    Oh, rewarding peoples efforts with something other than econonomic measure. I am all for that. Kisses and hugs for everyone!

    Everyone wants to be a poet. Kisses and hugs for all poets!

  32. Ideologically Peter is right.

    In our unfortunate reality, the bailout was probably moderately beneficial.

    Ideally it would be best to endure short term pain for the reward of long term sustainable growth. The problem is our government has screwed us all by giving the economy growth hormone for the past 20 years. Because of this, the booms and busts have been amplified. The 2008 non-bailout bust would have been so big that whole sine wave could have flatlined.

    The problem of course is that all we did was set up a BIGGER bust by bailing out the banks. I say the only way to save the global economy is to toss it a sacrificial lamb that lets the rest of us get out alive.

  33. We should have let the banks fail “if we didn’t have this moral asset” . .

    Is that people Peter? Their lives, savings, homes, college funds? That was why they didn’t let the banks fail. Because the market doesn’t care about the greater moral element. And neither from that comment do some bankers.

  34. Peter is right, market would fix it and government make it only worse. Government should help those hard working people who is struggling to make ends meet, not the banks. Simple as that.

  35. Wow, I’m sorry that Mr. Rastani had to experience such a low minded debate.

  36. One of the laws of the universe is the law of the opposites. Everything has an opposite and the extremes connect. Another is that for every action there is an equal and opposite reaction. When we ,the human beings create a system ,in order for that system to function properly ,we must imitate the laws ,otherwise the laws will destroy the system.

    Alessio is absolutely right. Recession is one thing ,depression is another. Depression is an extreme. And since the bankers created an extreme bubble growth ,the opposite of it being absolute depression ,in order not to let the bubble burst at its extreme and connect with its opposite we had to bail out the banks a little.

    Just a little though so as to cut the negative momentum. As weird as it may seem. The banks are not the bankers. Yes the bankers are corrupt and try to screw everybody ,because they have hijacked the system and manipulate the use of the banking mechanisms (and not only). We must try to correct and balance the system ,not bailout the corrupted individuals. But as long as people do not understand how a system functions ,the limitations ,the needs ,the HISTORY ,as long as people do not know how to define and divide for better understanding , as long as people fall victims to notion manipulation ,people will be meat. One notion manipulation is the notion of neo-liberalism. In action it is neo-conservatism with corporations and bankers being the kings and queens.

    I really am sorry for those that do not understand that we can not have:
    1. Absolute free markets
    2. Absolute controlled markets

    I am not referring to stupid ideologies.

    The laws are absolute. Period.


  37. I find that there is no “big guy” or whoever that can give a solution for the problem that we have been encountered, that will actually work, simply because the human being naturally can not build a law that will work for everyone fairly.

    I know that the fish decay from its head and I do believe that in order to blame some one, we need to look at the roots of the system itself where it is – an interest. if we replace usury and instead of dollar denominator will use fair benchmark of gold or something real (it’s hard to believe that it is be possible especially after 1973, but still) this will change a lot.

    The earnings that can be get from purely performance of the business will cause normal growth or falling trend that is can be managed fairly, Yes probably it won’t give you a big fortune but it more steady fair and will not cause hyper inflation. Furthermore this is not a secret that the more debt we have the slower we move. this system invented by people who don’t want to work but make other working. But being lazy they still so bloody smart that they develop F Instruments to enrich themselves

    I understand what you are trying to say without explanation, you should be read between the lines (sorry my English if I do mistakes) but rescuing banks by ourselves or by the government, for me means to cut the weed without roots!

  38. libertarian shaman

    in real capitalism we let businesses fail. no question about that. and yeah, hardship would have come. but as history shows us, the times the government has not manipulated the business cycle, recovery is faster. sure, it would have been hard, but real and sustainable growth would have followed that.
    now, by 2015 the current administration will start over regulating the newly found oil reserves in the united states and it will seem as if the upcoming bonanza is due to all these regulations. it will confirm to many that government is the answer, but that would be looking at it from the wrong lens. in reality, this upcoming boom will be the one that will save the government’s ass with all their debt. think of teddy roosevelt, his cousin, etc. lots of money will be made, but our liberties will be lost. sigh…

  39. Hi to all from the netherlands, btw thats in EU

    I personally believe this crisis is not a crisis coming from the natural economical cycle, where it tends to go up and down, but from bankers filling up the pockets and politicians not doing the work they are paid for properly.

    I dont believe in conspiracy theories. I also understand that statement above is one which many people believe. I know i am not the only one. Althoug may i recommend all to view documentary on following link:

    This documentary explains the start of the crisis with the sinking of the exxon valdez in the nineties. That caused so much damage that Exxon needed a lot of cash to fix all problems. They lend the money at JP morgan sachs. This loan exposed the

    bank to so much risks. The bankers decided to brainstorm about how can we get rid of this risk. So they started to look at the commodities market, how they do it.

    All of this lead to the derivatives market and the credit default swaps. And risks can be sold off, traded, so even if you dont have an income no problemo dude. You’ll get the cash.This lead to a derivates market with, as of today, estimated value of 34 trillion dollars. YEs trillion not billion. This casino of derivatives trading goes well untill one cant pay his bills anymore. THen shit hits the fan and we have a banking crisis. (Lehman Brothers bankruptcy also explained in the documentary) Meaning the banks see their investments into these derivatives really go down the drain and the profits plunge deep into the red zones.

    Well what now? We get the banking crisis evolving into a economical crisis. THe banks need to clean up their balance sheets to make profit again. And thus the consumer, which bailed them out as tax payer already, has to pay again. If he needs money

    for your mortgage or whatever suddenly you dont get it anymore or the bankers want to look you deep into the eyes if you are really sure on yr plans. Thus leading to an economical crisis, no more houses sold, cars, whatever. THe economical activity start to collapse and here we have an economical crisis.

    Understanding mentioned documentary it was so: during the post 2nd world war era the investment and consumer banking activities where split. Our friend Bill clinton lifted the glass steagale act in the nineties. Its history now. To my understanding this means that banks can invest your savings into e.g; derivates make big profits and pay you a lousy percentage of interest.

    And of course all of this under the leadership of the republicans. ALso the former chief of the FED Allan Greenspan always said dont interfer with the markets, a policy which he maintained for 20 years. That should fix it by itself. Well we have seen to what it lead. A big party of just filling up yr wallets.

    If you just see the documentary. Unbelievable what happened. It says the US tax payer pumped 7.7 trillion dollars of tax money into the banking system to keep it alive. I mean is this worth it. All the troubles we have now. I do agree that people should get paid properly for their talents. Of course but not in such a way that it nearly destroys the global financial system. The market of derivates is extremly

    profitable for the bank, and they DONT want any government interference to regulate it. Wasn’t the CEO of GOldman the guy who said bankers do God’s work.

    We had a big issue in the Netherlands with a corporation which owns houses and rents them out. This was government owned property in the past but for the sake of the budget spending cuts, of the government, it was privatized in the ninties. The current management started to invest into derivates. They gambled and lost. People who rent these houses have to pay for. By increasing rents.

    Anwyay i believe this issue will never be fixed. Its just plain nonsens that we can fix this with more rules and control. Money is as addicitve as hash of drugs. And bankers and lawyers will always find ways to make money. Whatever rules you make. If their goals cant be achieved with legal manipulation it will be done through financial manipulation.

    Anyway if you have time take a look at it. Another one i recommend on the same website is called: cliff hanger. Its about how the Obama team dealt with the crisis before the last election. It gives a nice insight view of how they handled things.

    Coming back to my starting statement. This is not a crisis due to the normal economical cycle.

    GTRZ from netherlands.

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