Yabby,

You say "so far US banks have repaid any borrowed money, with a good profit for the taxpayer". You probably mean the TARP program (US$411 bln). You are right. The bank bailout is expected to turn a profit of US$20 bln (if AIG did not generate further losses) THAT IS A HUGE PROFIT over the last THREE YEARS. Please note that the autobailout has, however, generated losses of $14 bln so far. Therefore, the overall TARP profit will be close to zero in the best case scenario.(http://money.cnn.com)

It is wortwhile noting that U.S. Senator Bernie Sanders has recently stated that the Federal Reserve provided more than $16 trillion in total financial assistance to financial institutions and corporations (Washington Post). This has never been officially accounted for.

This clearly confirms my point. If there is a free market economy, there should be a level-playing-point, but there is not. Unless you are a multinational corporation, you are on your own.

You say that the bailout has protected jobs. Did the governments care about the job losses as a result of deregulation and globalisation ?

To justify futher inaction in climate change issues, you say "That discovery could come tomorrow. Just look at solar cells, they have halved in price in just a few years."

What discovery you mean ? Nuclear fission / fusion ? It is still a science fiction. You might, however, be right. If we had stayed in the caves in the first place, we would not have had these little problem with climate change.

Rob, AIG are not a bank, but an insurance company. They were saved
to stop millions of Americans from losing their 401 pension plans.
The auto industry crash was not caused by the GFC, that just brought
it to a head. Union greed caused it, they did not believe thae GM
could go broke. They learned the hard way and when confronted with
losing a million jobs or facing reality, they eventually came to
their senses. The GFC would never have happened if Bush had not
removed the SECs teeth and funding. Political ideology was the
root cause of the problem.

*Did the governments care about the job losses as a result of deregulation and globalisation ?*

Ah Rob, but trade raises peoples standard of living and creates
jobs. If you had to pay $10'000 for your computer because it was
Australian made, you would have less money to spend elsewhere,
your standard of living would drop. People are clearly voting for
globalisation with their wallets, they love it.


*What discovery you mean ?*

Who knows with science? Better battery storage, new compounds,
higher efficiencies, fuels made from algae, the list is endless.
The Americans and others now have a huge r&d programme, they want
energy independance.

You can't expect companies to invest in projects which will be
out of date next year. Just as I can't force you to invest your
life savings in some dodgy project. So if taxpayers want to wear
the losses, so be it.

Hi Yabby,

I have never thought we might get stuck in semantics. AIG is clearly a financial institution which has been subject to the banking industry bailout. BTW, AIG has many products. I have been using AIGBank overseas. AIG is also involved in many other activities. Also overseas, I have been cooperating with AIGLincoln, a land developer.

How do these pension savings compare with US$16 trillion ?

With respect to your energy holy grail suggestions, I suggest that we rather stick to the economics in our discussion.

Yabby, I really appreciate your significant contribution to this thread though we might have different views.

Rob, there is a huge difference between financial institutions.
Investment banks are banks in name only, quite different from
deposit taking retail banks etc.

Investment banks are essentially large gamblers and speculators,
their losses are not covered by FDIC if they go broke, neither
are they audited accordingly.

AIGBank is essentially a very small mainly online company owned
by AIG, which is overwhelmingly an insurance company. They came
unstuck when their British office took huge derivatives bets and
lost.The two are quite different in operations. I remind you that
we had our own scandal with insurance companies getting out of
control, which is why Costello at the time tightend the regulations.

As to the 16 trillion$, just because some US Congressman claims
something, does not make it true. I regularly watch Bloomberg
and there are some very bright businesspeople in America, but
they also show alot of Congress hearings on there. Some of those
Congress people are battling to walk and chew gum at the same time.

So I don't treat your information as gospel.

www.bloomberg.com/apps/news?pid=newsarchive&sid=armOzfkwtCA4&refer=worldwide

Yabbly, as you refer to Bloomberg as your information source, it have therefore copied above a link to a Bloomberg article where you could find some info. The recent Sen. Sanders' Fed Bank audit report is on his website so you can easily find it. The figure of $16 trillion has also been cited in recent book by renowned Noam Chomski in his Hopes and Prospects. (Noam Chomski is a MIT professor so he applies strict research methodology in his work.)

I do want to go into details what was the actual bailout, but it is definitely much greater than the TARP, in trillions. The exact figures are not important. (We have already bogged down with the issue whether the U.S. bailout has been applied to investment bank, retail banks or insurance companies. It has not been important in discusing the topic of this thread. My point is that corporations have been treated in a totally different way than SME or individuals.)

*My point is that corporations have been treated in a totally different way than SME or individuals.*

Well I should hope so Rob. If the Commonwealth Bank went broke
tomorrow, the effect on millions of people would be quite different
then if you or I went broke or dropped dead tomorrow.

This is where the whole question of "too big to fail" came up.
At some point a corporation can become so large, that it can
drag down the whole economy with it. So do they need breaking
down in size at some point? That is a hotly debated topic.

Even just letting one investment bank, ie Lehmans, crash, had
effects all the way even through the Australian economy. Many of
our shires had invested their savings in Lehmans derivative
products and lost the lot.

Had the Fed done nothing, the falling dominoes would have dragged
the whole global financial system down. Imagine the effect of
that on mums and dads. But many investors who owned shares in
these troubles institutions, did in fact lose their shirts.

I looked at the 12 trillion $ figure in the Bloomberg article,
but that includes FDIC guarantees, which is money that protects
mums and dads bank deposits. We have yet to see how much of that
is required, as many small banks did go bust in the regions.
There are thousands of banks in the US.

So how much of that was guarantees, how much is in the Fed
system etc, I do not know. What the Fed did was do whatever it
took to keep the wheels on the cart. Would you have preferred a
total collapse and how do you think that would have affected
mums and dads