"BO; there is no evidence that proves that any business is too big to fail. It is simply an assertion made by the current popular economists. There is no example in history of a business that was too big to fail; failing; or even existing."

orly. I would like to direct you a variety of academic sources that say otherwise:
http://en.wikipedia.org/wiki/Too_big_to_fail
http://www.huffingtonpost.com/dean-baker/too-big-to-fail-and-the-r_b_551178.html

Just because something doesn't fit into your world view doesn't mean it's not real. I can deny gravity all I want but if I jump I'll still come down. You can deny some corporations are too big to fail but the fact remains that these banks/companies are intrinsically intertwines with yours and the rest of the nations' prosperity. It's quite unfortunate, but that's what happens when you deregulate the shit out of the financial industry. I frankly don't think you even care if you're right or not. I think you just want to think what you want to think so you can be mad at who you want to be mad at. If you did actually care about whether you were right you'd actually read the pages I'm linking you. And if somehow they were wrong, and you demonstrated it, well then I would have no choice then to rethink my own position on this subject, wouldn't I?

But I really don't think you care.


"You say it would be Bernie Madoff times a million or something. Which would mean what? No impact on me at all? Madoff did not effect me at all; nor did it effect 99.9% of the people in the world. It was private losses."

Jesus, are you that myopic that you can't see how these things are related? I take it you haven't read Liar's Poker or other such books related to the financial industry. Let me share with you an excerpt from Liar's Poker where the author described what Alexander would do in the event of a Japanese disaster earthquake (apt, since it actually just happened): http://deepnuclei.wordpress.com/2006/06/05/liars-poker-michael-lewis-3/

Just read the bit about Japan. The point is when something happens across the world it affects the markets here and everywhere else. There was an investment group commercial a while back that said something along the lines of "When Norway has a poor fishing season we understand the repercussions this has on the price of the dollar, the timber industry and, etc..." If you know a bit about macroeconomics you'll quickly realize everything is interrelated in such a fashion. Back to Bernie Madoff, when he essentially stole billions from investors those investors lost capital they could have invested elsewhere. All these billions of dollars (say 1% of the GDP) went straight to Madoff's bank account where it did little more than accrue interest. This money was never invested and ultimately ended up in the hands of the government.

"Which is exactly my point; this is clearly a game of privatizing the gains and socializing the losses. In order to sell the pain to the general public they need an Armageddon scenario to wave around like a boogyman. Good thing they have young, green, inexperience finance students willing to eat up anything they are told by the current frauds."

Heh. I don't think my professors have a vested interest into scaring me into complying with a secret scam the bankers are running. It's just basic economics. If anything they would be trying to scare people like you, but it seems they don't really care what you think and didn't really try to show you how bad it would get. Otherwise you wouldn't be on the internet touting ridiculous shit like 'FUCK KEYNES MAN HE TOOK MY JOB!'. Maybe not that stupid, but you get the the picture I am painting.

I am going to reiterate, I am not sure if you're serious about all this or not or if you just want to be mad at someone you want to be mad at. If the latter, then I will leave you with this frank bit of analysis. You have no semblance of understanding of the intrinsic nature of the world around you. You do not actively try to learn how the world around you works. And it is not my responsibility to teach people the reality of the world, just like it shouldn't be my responsibility to teach fundamentalists evolution. But in both cases somebody dropped the ball big time. You have been fucked by somebody if you earnestly think what you're saying. If on the other hand you're willing to have a dialogue about this I will humor you and try to show you why the bailout was a necessity. The fact that most republicans AND most democrats voted for it should tell you that, but maybe you're just smarter than all of congress and everyone with a degree in economics.

BO? Do you even read your sources? Both sources you claim to "prove" to big to fail, call it a theory. Which in science means... its not proven!

BO:"Otherwise you wouldn't be on the internet touting ridiculous shit like 'FUCK KEYNES MAN HE TOOK MY JOB!'."

Lol; I OWN a business, fool. Like I've told you before; you are the underling in this conversation. You are the STUDENT. I worked in finance during the crash; and many years before and after.

Your claim to fame is "my family owns a business. Good for you, Paris Hilton.

Btw, your entire world view comes from Liar's Poker which is one guys story about the bond market in the 80's.

You need to get more sources my friend. Read some Austrian stuff; listen to Marc Faber or Peter Schiff or others you correctly predicted the disaster.

Also all your sources end with Paul Krugman; please get off that mans dick; he is a hack.

BTW, the same wiki article you reference above as proof of "too big to fail" actually names examples that show evidence to the contrary.

"Some critics see the policy as counterproductive and that large banks or other institutions should be left to fail if their risk management is not effective.[3][4] Moreover, some assert that the "too big to fail" policy has been explicitly refuted in the People's Republic of China, with the bankruptcy of Guangdong International Trust & Investment Corporation in 1998.[5]"

Enron, Lehman Brothers, Bear Stearns, IndyMac, Woolworths, Washington Mutual, Polaroid, Bethlehem Steel, Pan Am.

All these companies were big companies that failed.

Let's do a survey... who on this forum was deeply effected by any of these events? Speak now or forever hold your peace!

"Sunlight is the best disinfectant."

I purposely sent you to sources that presented both sides of the issue. Did you even read past where it mentioned what critics of too big to fail say? Did you even cite anything to support the contrary, as opposed to the evidence presented on wikipedia and that other article?

You don't understand how economics work. Not sure if you simply were never taught it, or forogt it. But you have a huge gaping hole of knowledge where your economic common sense should be. Have you ever stopped and wondered how the economy even works? Clearly you haven't.

As far as Liar's Poker goes, I read that when I was a lot younger and really liked it. My cousin who's part of a hedgefund in wallstreet gave me a few books to read on the subject. I'm only mentioning Liar's Poker more because it's the most famous one and I figured you'd be familiar with it.

As far as the examples you cite, none of those are dramatically huge portions of our economy. What percentage of the GDP do you think Enron handled? Or Bear Stearns? I'd dare say all those companies combined didn't account for more than 1% of the GDP. The problem is when ALL the banks are facing bankruptcy, then you end up with something like Black Tuesday from the stock market crash. And on top of that, nobody would be able to get credit - the credit freeze would be even worse.

But shit I really thought you would actually read the articles. Have fun living in your fantasy world where people with facts are the bad guys and everyone who lies to you is actually telling you the truth.

Enron's failures and crimes significantly impacted both my personal and professional life in a negative manner. BOOM ANECDOTE DISPROVES YOUR OPINION I WIN!

BO your assumption in each response is that in don't look at your sources. To the contrary; I read both articles. Perhaps you missed the Chinese example I presented; it was way more then the 1% scare crow you present.

You summed up your argument perfectly; "if you don't believe in too big to fail then you don't understand finance".

Perhaps this is where we part ways. This thread sums up the issue with the world; young inexperienced kids with over inflated senses of how much they know about the world.

How much hubris does it take to tell someone they are ignorant; when you are a student in the field. Ive been paid for years by companies that you one day will apply for. Btw good luck being the office bitch for the next two years after you graduate. You job in finance will start as an analyst where you will have the exciting job of changing fonts and lining up dollar signs for associates. What a wake up call it will be for you; and your ego.

The end.

PS. Lol at the "living in a fantasy world" comment. Actually I live in an apartment in NYC that I bought a couple of years back.

How does that compare to you? Dorm room? I bet your mommy left your old room at home just the way you left it. How sweet.