Originally Posted by taxwonk (Post 491020)

Well, as long as you realize it, that's what's important, Bubbelleh.

Originally Posted by ThurgreedMarshall (Post 491027)

I don't think that's how it would work. If the next bank fails, there's a run on banks. If multiple banks fail, the money is gone, not just the CDOs and credit default swaps. The banks used your money to gamble on those products. And the FDIC wasn't created to insure every person's money from every single bank. And if the US system goes down, the world system goes down.

TM

Originally Posted by taxwonk (Post 491024)

I may be wrong, but I think if the banking system had collapsed, it would have been the super rich that would have been fucked. The Fed could have come in the day after the collapse, picked up the good pieces, pulled them together, and sold that off to someone else, subject to a lot more supervision.

I don't know too many middle class folks who were over-invested in CDOs and credit default swaps. I don't think most of them would have felt a thing. But that's easy for me to say, because it didn't happen. I acknowledge that.

Originally Posted by Sidd Finch (Post 491030)

I truly hope and will assume that was a jest. I fear it wasn't, but such is life.

Originally Posted by Adder (Post 491033)

It's not the first order effects, its the shockwaves it causes. When Uncle Wayne's Hardware closes shop because it no longer line of credit and can't pay suppliers and employees, that's not going to hurt the super rich.

Those with a cushion would be fine. Those on the margins lose jobs and homes.

Originally Posted by taxwonk (Post 491016)

Gang rapes and mutilation are as much a part of the ISIS arsenal as anyone else's. They are practicing savagery on a massive scale and that is a big component of their strategy. They are inhuman savages undeserving of any quarter, much as they offer none to their opponents.

Don't let a good point get dragged down by offering any sort of support for those assholes.

Originally Posted by Greedy,Greedy,Greedy (Post 491037)

I offer no support to ISIS of course and you know that.

What do you think of Assad? He's a secularist, of course, but there are many people right now stuck between Assad and ISIS, with a choice of where to seek safety.

Originally Posted by Greedy,Greedy,Greedy (Post 491029)

Statements like this lead to all the counterexamples. See above.

Originally Posted by taxwonk (Post 491039)

It's easy for me to say, because I am thousands of miles away, and will stay safe, but between the two, I'd choose Assad for now. Once ISIS is dealt with, there will be a chance to take care of Assad. If they make the other choice, they will never dislodge ISIS.

Originally Posted by Greedy,Greedy,Greedy (Post 491042)

It appears that over the last year more people living there made the opposite choice. I think that choice had more to do with survival than Islam, myself. Over the last few years, Assad's Syria has been a place where random barrels of gas explode, leaving everyone in a neighborhood to die a wretched death, and after a few years and over a 100,000 bodies, they may have been ready for any choice at all.

Originally Posted by Sidd Finch (Post 491028)

My general view is that 9/11 was sufficiently shocking that everyone gets a grace period for shit they said. The period lasts anywhere from a couple of weeks to a few months depending on how "close" they were (not just geographically, but including whether they lost someone, etc.). They don't need to apologize for that, just show by their words an actions that it was an aberration.

Originally Posted by ThurgreedMarshall (Post 491044)

Also, people are fucking stupid.

TM

Originally Posted by ThurgreedMarshall (Post 491044)

Remember right after 9/11 when everyone was so nice and pulling for each other and, despite the terrible feeling of loss, there was kind of this warm glow in that we finally felt unified and everyone kind of supported one another?

Well, a few days after 9/11, I was on the subway platform and this group of ignorant assholes (all of them black) starts harassing these three Sikhs because they were wearing what were quite clearly Sikh turbans. I had to head these guys off and tell them that they weren't Muslim (like it would have been okay if they were) and to leave them alone. It is absolutely amazing how people who are subjected to bullshit every day of their lives are so quick to mete it out on others.

Long story short, I'm not sure I'm with you on always giving people a pass because they went through something terrible. Also, people are fucking stupid.

TM

Originally Posted by taxwonk (Post 491036)

The investor group that came in the next day, or two days later, and bought all the solid assets, with a partial government guarantee, would have been happy to keep Uncle Wayne's line of credit open. They would have been making a decent return on his L/C without having to pay some B-school grad fresh out of Wharton $250K plus bonus his first year to buy shit and call it Shine-ola.

Originally Posted by Sidd Finch (Post 491010)

I don't disagree with you. Islam is an old religion and subject to a huge range of interpretations, as any other.

Here, in sum, is my view, or part of it. You and GGG and Wonk anyone else can feel free to call me racist, or tell me that I obviously hate all Muslims, or any other shit you feel like spewing. Forgive me in advance for not responding.

Today, and in recent years, violent extremists that find their inspiration and justification in religion are largely Muslim. (That does not mean "exclusively" Muslim, nor "all Muslims are bad," nor that there are not violent extremists finding their justification in something other than religion, such as national identity or race.)

These violent extremists get a level of support and sympathy among Muslims that I view as far too high -- higher than I would expect if, say, Catholic militias were blowing up Protestant churches and vice versa. (This does not mean that there has never been horrifying sectarian violence among Christians that many Christians supported or did not protest.)

Part of that support is seen in the phenomenon of Muslims from Western countries joining overseas extremist groups in a way that I believe is extraordinary in history.

Islam -- not inherently, but the way in which it is being taught to people -- has something to do with the above. I don't know why. I don't know why a Sunni cares so much about who Muhammad designated as his successor that he would kill a Shiite. In some instances, "has something to do with" means "is a primary factor," in others it means "contributes to, along with many other factors."

Islamic countries -- countries that are not just predominantly Muslim, but in which Islam is a dominant cultural fact and influence (for example, countries in which you can be jailed for defaming Islam) -- have certain cultural norms that I find disgusting, particularly relating to the treatment of women. (This does not mean that no non-Muslim nations treat women poorly.) That treatment is not limited to government policy but permeates down to a man-on-the-street level, and is often worse at that level, and in my personal experience also carries over, to a thankfully lesser extent, to Muslims who do not live in Islamic countries.

I believe that the way Islam is taught has a great deal to do with the last item, too.

All of the above does NOT lead me to believe that Islam is evil, or Muslims are evil. It does lead me to believe that there is a problem within Islam, generally, that needs to be fixed within Islam. In a similar vein to how I believe that there is a problem of racism within American society, that needs to be fixed within American society.

All of the above renders me a bile-spouting Muslim hater, I realize.

Originally Posted by taxwonk (Post 491024)

I may be wrong, but I think if the banking system had collapsed, it would have been the super rich that would have been fucked.

Originally Posted by Tyrone Slothrop (Post 491049)

OK, so my hypothesis here is that Islam is a symptom of the violent extremism you're describing rather than the cause -- i.e., that what you are describing is true in a bunch of countries that happen to be Islamic, is the result of factors other than their religion, and is expressed in an Islamic form because because such things often find a religious outlet and the religion in these countries happens to be Islam.

I think the phenomena you're describing is about the part of the world stretching from North Africa across to Pakistan. It's happening in nations which don't have much legitimacy, because the people in them don't see themselves as part of a national community. Countries like Iraq and Syria seem to be melting away. Lebanon often seems to be as well. Some nations that do have real legitimacy, such as Tunisia, Egypt and Iran. Absent strong national identity, both ethnic and religious identity becomes more important. Kurds and Pashtuns are examples of the former; Sunni and Shia are examples of the latter.

So you have a lot of instability caused by the lack of legitimate nation states. In that vacuum, ethnic and religious group identities assume more importance. But the fundamental problem is that vacuum.

Now maybe there's an argument that the vacuum can be attributed to religious beliefs -- that just as Max Weber thought that Protestant beliefs explained the success of Western capitalism, Islamic beliefs explain the politics of the Middle East. I'm all ears.

To your point about the treatment of women, I agree, but I again am not sure this is anything specially true about Islam -- which is to say, I don't see a reason to single out Islam on that score.

Originally Posted by Sidd Finch (Post 491041)

Counterexamples would be helpful if I said "exclusively" rather than "largely". I did not.

That should be clear, but I think your view, that you are no longer interested in trying to convince anyone, means you also are no longer interested in actually reading, or giving honest consideration to, what anyone says that is contrary to what you believe.

Originally Posted by Greedy,Greedy,Greedy (Post 491052)

I still dispute largely, and was trying to focus on just that one issue with respect to counterexamples rather than write another essay to add the all the other essays. And I am going to resist the urge to point out that we pounded the shit out of Iraq for the better part of the last three decades, and now are complaining about Muslim violence and how it's caused by Islam. (Ok, maybe I didn't resist that urge.)

I have indeed listened to all your points, but that doesn't mean I'm going to respond to each one. There are some I agree with, some I disagree with, almost all I'd qualify. Yeah, I focus on what I'm most interested in in the responses, or on where I have an issue with somebody, and don't call out every place I agree with them or don't want to argue the point, or where I disagree but feel like I've already made my point and listened to theirs.

Think about it, do you really want me to write another long post interspersing a bunch of quotes from you and my thoughts on them to show I'm listening? Imagine we're in a bar discussing it, and assume I've nodded approval here and there and scowled at you a few times, and let's move on.

Originally Posted by ThurgreedMarshall (Post 491051)

I'm not sure you have it right. And clearly I'm no expert, but do you think that there is a vaccuum because, say Afghanistan, isn't considered part of the international community and that leads to the tribalism you mentioned? Or is it because the ethnic and religious group identities are fundamentally more important to those groups of people such that the drawing of borders that defines Afghanistan as a country is and will always be meaningless?

Originally Posted by taxwonk (Post 491043)

I don't doubt for a moment the choice was based on survival. I just fear that we will all find out that, in the long run, they chose poorly. I see ISIS engaging in a killing spree that will make Assad look like a schoolyard bully by comparison. And I'm not just talking about a genocidal murdering of Kurds by the hundreds of thousands.

Originally Posted by Sidd Finch (Post 491053)

I imagine we're in a bar, you called me a racist, threw a drink at me, and stormed off.

Originally Posted by Tyrone Slothrop (Post 491049)

OK, so my hypothesis here is that Islam is a symptom of the violent extremism you're describing rather than the cause -- i.e., that what you are describing is true in a bunch of countries that happen to be Islamic, is the result of factors other than their religion, and is expressed in an Islamic form because because such things often find a religious outlet and the religion in these countries happens to be Islam.

Originally Posted by Sidd Finch (Post 491053)

I imagine we're in a bar, you called me a racist, threw a drink at me, and stormed off.

Originally Posted by ThurgreedMarshall (Post 491047)

?

What investor? If the entire financial system goes down, there are no investors. There is no credit. There are no businesses because there are no customers. Hell, there was no credit WITH the bail out. And the limited credit provided by hedge funds who jumped into that space cost 12-15%. But if the entire system goes down, there are no hedge funds either. We start over after the Super Great Depression.

Krugman does a better job: http://krugman.blogs.nytimes.com/201...iled-strategy/

TM

Originally Posted by taxwonk (Post 491059)

Krugman says that what needs to be protected are deposits. That could have been protected and sold, along with good loans. And not to hedge funds. To real investors. Hell, we would have been better off if Citicorp and Chase had been turned into mutuals, the equity given to account holders, and the shareholders and bondholders told to fuck off. You're mistaking the institution for the assets. You're telling me that the pensions, Warren Buffett, and a few million good old citizens with the money to invest $10/share to buy a bank that has been cleansed of shit, management, and backed by the US government is not going to find a buyer?

I remember the S&L meltdown of the 80's. An S&L would shut down on Friday, and reopen on Monday with new owners, no toxic loans, and the depositors hardly noticed anything had changed. The same thing could have happened 4 or 5 years ago with Chase and BofA.

It didn't happen because the White House and Congress didn't want to lose some of their biggest donors, not because Uncle Wayne's hardware store was in jeopardy. Citadel may have been in jeopardy, but they were big boys and girls; they knew what they were playing with was all going to go poof one day.

Originally Posted by Greedy,Greedy,Greedy (Post 491055)

If I had to identify the biggest things I thought fueled the rise of ISIS, they would be as follows:

1. Assad. Lots of causes for him being there and being what he is, but the chaos and brutality of his reign have a lot to do with creating the conditions in Syria for ISIS.

2. The Iraq war. We are the primary drivers of the conditions for ISIS' existence on the Iraqi side of the border. The combination of destabilizing local governments when we took out Hussein's people without having people and systems to put in place and leaving enormous caches of arms and large numbers of disenfranchised soldiers and police has a lot to do with why ISIS spread in Iraq.

3. Oil. Lots of people keep buying ISIS oil. It's their main source of funding. The pay their soldiers ten times what the other members of the Assad opposition pay their soldiers.

4. Gulf oil. Additional funding has come from individual oil barrons in the Gulf States and Saudi Arabia. Governments are tightening the screws on this now, but ISIS has alternative financing.

5. Theology. Being the baddest guy on the block helped them get off the ground by raising money originally and gets them some Jihadis, especially the ones they use for suicide attacks, even though their elite troops seem to be drawn more from the ranks of unemployed professional soldiers out of Iraq than from jihadis.

There are four things on that list the US can or has influence, but we're spending more time on the 5th. We seem to have drawn a line around Baghdad and Mosul, and along the Turkish border. If that holds, their rampage is unlikely to exceed Assads in body count. If that doesn't hold, you are exactly right.

Originally Posted by taxwonk (Post 491059)

Krugman says that what needs to be protected are deposits. That could have been protected and sold, along with good loans. And not to hedge funds. To real investors. Hell, we would have been better off if Citicorp and Chase had been turned into mutuals, the equity given to account holders, and the shareholders and bondholders told to fuck off. You're mistaking the institution for the assets. You're telling me that the pensions, Warren Buffett, and a few million good old citizens with the money to invest $10/share to buy a bank that has been cleansed of shit, management, and backed by the US government is not going to find a buyer?

I remember the S&L meltdown of the 80's. An S&L would shut down on Friday, and reopen on Monday with new owners, no toxic loans, and the depositors hardly noticed anything had changed. The same thing could have happened 4 or 5 years ago with Chase and BofA.

It didn't happen because the White House and Congress didn't want to lose some of their biggest donors, not because Uncle Wayne's hardware store was in jeopardy. Citadel may have been in jeopardy, but they were big boys and girls; they knew what they were playing with was all going to go poof one day.

Originally Posted by Tyrone Slothrop (Post 491061)

There is a huge difference between letting a big financial institution fail, and keeping it from failing in a way that nonetheless cleans out the existing owners. I am very sympathetic with the argument that we should have taken ownership as the price of the bail outs, but that doesn't mean we should have let those institutions fail. That would have had huge impacts on the rest of the financial sector, and on everyday economic activity.

Originally Posted by Not Bob (Post 491063)

Wonk, I am with you in spirit, but 2008 was a magnitude bigger clusterfuck than the S&L crisis was. The adults (Paulson, Bernake, Geither at the NY Fed, and Barry O) didn't have a choice but to act as they did. Now, they could and should have done a better job of healing the patient after saving his life in the ER, but that is a different issue.

"Let it burn!" might have been a viscerally satisfactory thing to do, but we'd be all Mad Max right now if that's what happened.

Originally Posted by Sidd Finch (Post 491057)

I don't agree. I don't think it is coincidence or a symptom but rather that strains of Islam are promoting violent extremism. In way similar to, when Catholics actually listened to the Pope and he was telling them that all non-Catholics were heretics who God wanted killed, Catholics went around killing them. Or Hindus, as to Muslims in India.

Of course, they aren't mutually exclusive. There is a cycle. Extremism feeds off of violence and bad conditions, and then feeds violence and bad conditions, too.

Many, perhaps even most, religions have had a tendency over history to push people towards violent extremism. Over centuries, that situation has improved in many places. Sometimes (or in part -- it's always a mix I suppose) the improvement is due to the religious institutions lightening up, not calling for crusades and death to infidels and so forth. Sometimes it's because the religious institutions themselves hold less sway over adherents. Very few Catholics, particularly in the parts of the world where Catholicism originated and developed, follow church rules in anything resembling strict fashion. But Islam appears to be more firmly rooted in daily life, giving rise to more violence, and having more support for extremism, than any other. Not withstanding all the counterexamples that GGG has pointed to, which have not come close to showing that what I am saying is not accurate about today's world.

Originally Posted by taxwonk (Post 491059)

Krugman says that what needs to be protected are deposits. That could have been protected and sold, along with good loans. And not to hedge funds. To real investors. Hell, we would have been better off if Citicorp and Chase had been turned into mutuals, the equity given to account holders, and the shareholders and bondholders told to fuck off. You're mistaking the institution for the assets. You're telling me that the pensions, Warren Buffett, and a few million good old citizens with the money to invest $10/share to buy a bank that has been cleansed of shit, management, and backed by the US government is not going to find a buyer?

Originally Posted by taxwonk (Post 491059)

I remember the S&L meltdown of the 80's. An S&L would shut down on Friday, and reopen on Monday with new owners, no toxic loans, and the depositors hardly noticed anything had changed. The same thing could have happened 4 or 5 years ago with Chase and BofA.

Originally Posted by taxwonk (Post 491059)

It didn't happen because the White House and Congress didn't want to lose some of their biggest donors, not because Uncle Wayne's hardware store was in jeopardy. Citadel may have been in jeopardy, but they were big boys and girls; they knew what they were playing with was all going to go poof one day.

Originally Posted by taxwonk (Post 491036)

The investor group that came in the next day, or two days later, and bought all the solid assets, with a partial government guarantee, would have been happy to keep Uncle Wayne's line of credit open. They would have been making a decent return on his L/C without having to pay some B-school grad fresh out of Wharton $250K plus bonus his first year to buy shit and call it Shine-ola.

Originally Posted by taxwonk (Post 491065)

If you're right, we might as well just admit that the Fed is a worthless puppet, and the big money has won. It was already burning. The difference is in who got touched by the flames.

Originally Posted by taxwonk (Post 491059)

I remember the S&L meltdown of the 80's. An S&L would shut down on Friday, and reopen on Monday with new owners, no toxic loans, and the depositors hardly noticed anything had changed. The same thing could have happened 4 or 5 years ago with Chase and BofA.

Originally Posted by ThurgreedMarshall (Post 491071)

Correct! Banks made huge money borrowing from the Feds at almost zero percent and then lending it back out again at much higher rates and paying themselves huge bonuses for their genius business acumen. You know why the Fed was lending at such low rates? BECAUSE BANKS REFUSED TO LEND AT ALL (EVEN TO EACH OTHER), WHILE LYING ABOUT AT WHAT THEY WERE CURRENTLY LENDING (SEE: LIBOR SCANDAL). The whole system is a joke and our politicians are owned by the people laughing the hardest.

TM

Originally Posted by Tyrone Slothrop (Post 491073)

If someone could get the banks to compete with each other, this wouldn't be such problem.

Originally Posted by ThurgreedMarshall (Post 491069)

I think you're having trouble understanding how a bank works. Banks take deposits and invest them. When they invested them in CDOs, those deposits disappeared (which is why doing away with Glass Steagal was so stupid). If the bank fails, the deposits are *gone.* Didn't you ever see It's a Wonderful Life?

Ha! First, you're talking about a total of like $3-400 billion lost compared to trillions upon trillions! Nevertheless, hundreds of savings and loans were closed forever. The government came in paid off using the equivalent of the FDIC for S&Ls. And banks got dragged down too (apparently over a thousand) and the crisis is probably the cause for the recession we went through in the early 90s.

Again, you are comparing a small leak in a dam to the whole dam turning to dust. Shit, that small leak created a huge recession. Imagine what would happen if numerous huge banks went under in '08.

And you're wrong. The bail out was in the form of making good on the insured deposits, which the Federal Savings and Loan Insurance Corporation absolutely had to make good on.

TM

Originally Posted by Adder (Post 491072)

And that happened with lots and lots of banks this time around. But with these global behemoths with lots of non-banking businesses (thanks, deregulation!), I am sympathetic to the uncertainty that it would have been possible for these institutions.

Which again, is not to say that that it could not have been handled more equitably.

But you've come a long way from the "let them fail" that started this conversation.