Would "troubled assets" be paper that banks wanted to get rid of?

[Trillo]

What are three quick ways to become a leader? a) Execute on the firm’s “axes,” which is Goldman-speak for persuading your clients to invest in the stocks or other products that we are trying to get rid of because they are not seen as having a lot of potential profit. b) “Hunt Elephants.” In English: get your clients — some of whom are sophisticated, and some of whom aren’t — to trade whatever will bring the biggest profit to Goldman. Call me old-fashioned, but I don’t like selling my clients a product that is wrong for them. c) Find yourself sitting in a seat where your job is to trade any illiquid, opaque product with a three-letter acronym.

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The TARP bailout would seem to fall under Smith's phrase "a". What was TARP?

TARP allows the United States Department of the Treasury to purchase or insure up to $700 billion of "troubled assets," defined as &quot A) residential or commercial mortgages and any securities, obligations, or other instruments that are based on or related to such mortgages, that in each case was originated or issued on or before March 14, 2008, the purchase of which the Secretary determines promotes financial market stability; and (B) any other financial instrument that the Secretary, after consultation with the Chairman of the Board of Governors of the Federal Reserve System, determines the purchase of which is necessary to promote financial market stability, but only upon transmittal of such determination, in writing, to the appropriate committees of Congress."[4]

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It surely looks like a great big con game.

[truedelphi]

1. Thank you for posting this. It's a great read.

You forgot the major way in which an entity (oops - did I say entity; I surely meant "person&quot like Goldman Sachs uses to do so well - own a Senator or two. Own a couple of Congress people.

In fact Goldman Sachs has had as its backers none other the the various heads of the Federal Reserve, both in Washington and in New york.

Here on DU, Octafish has run some seriously good articles about how well treated Goldman's has been from the various finangling that has gone on. If Tim Geithner was not such a close buddy of the President, he'd be in jail from RICO violations springing from his various activities while he headed the New York Fed.

Instead Tim is in an office just down the hallway from the Oval Office.

[Trillo]

2. I remember being on DU during the approval of the TARP funding,

the right and the left came together and almost defeated it. I seem to recall that it failed in the House, and it was somehow magically resurrected.

It's sobering to believe that the folks that tend to rise up the career ladder are the less ethical ones, that concept is so dissonant with the various honor codes and codes of conduct which a great many of us have been subjected to. The boss is always right and so on. When inspired-and-funded-by-corporate legislation keeps trickling down it would seem to make it kind of hard for the ethical, of whom there are a great many, to life, liberty, and pursuit of happiness.

Those three things are priceless to U.S. citizens, but culturally they seem to have now been assigned monetary values, and happiness is considered to be completely an inner matter divorced from external circumstances. Be happy while the powerful corporations rip you off! How much life and liberty can you afford? Citizens United was such a terrible court decision, but I suppose completely consistent with plutocracy.


Anyway, I always look forward to Octafish's posts,
though I don't see them very often.