Billionaire Ken Griffin thinks you made more money off the bubble than he did

Well, that’s not exactly how he put it. But at discussion this morning at the Milken Institute Global Conference, hedge fund titan Griffin did say this:

Gains were shared by millions of Americans through home equity extraction and sale of homes. … It dwarfed the gains reaped by Wall Street. …

We have allowed what was a society-wide bubble to be turned into a dialog about how Wall Street failed to fulfill its responsibilities in an appropriate way.

My immediate reaction to this was:

1) There is something to this. Lots of people other than investment bankers and hedge fund managers made money off the credit bubble.

2) It’s incredibly tone deaf. Many of the people who took out home equity to pay for speedboats and groceries and other frivolities are now in deep, deep financial trouble. Lots of people may have benefited from the bubble, but no other group benefited as spectacularly as Wall Streeters. (I’m including Chicago-based Wall Streeters such as Griffin here too.) PIMCo’s Mohamed El-Erian, a far more diplomatic fellow, later “paraphrased” Griffin’s point as, “Recognizing that the system is more important than any individual claim.” Well, if you put it that way …

Stocks Rally Further in Run-up to EU Summit

MOSCOW — Global stocks enjoyed one of their best days in weeks on Tuesday ahead of a summit of European leaders that’s expected to be dominated by calls to boost economic growth.

Europe remains the focus of attention across all financial markets in the run-up to the June 17 Greek election that could go a long way to determining the country’s membership of the euro as well as the future of the single currency zone.

tc125231

Well, personally I think it’s somewhat bogus.

A. Peopel may have benefited. None of them made so much money that they can quit working, even if they live frugally.

B. It is the masses borrowing money to bail out the big shots, not the other way around.

By the way, you should take a look at this. Wall Street’s raising its paying again, clearly on taxpayer money, really.

http://www.nytimes.com/2009/04/26/business/26pay.html?scp=1&sq=wall%20street%20pay&st=Search

We either take control of this situation, nationalize the “big 19″ that have 2/3 of the assets, regulate private equity and hedge funds, or we call all the loans and let them fail.

The first is clearly better. Call me a Simon Johsnon convert. These guys don’t get it, and they don’t have a speck of honor.

Geithner would get it if they weren’t his pals.

http://www.nytimes.com/2009/04/27/business/27geithner.html?hp
curmudgeon57

On reflection, I’m somewhat insulted. I, like most (though definitely not all) American homeowners, had a single mortgage, never refinanced, that I paid off as quickly as possible. Again, like the majority of Americans, I have no other debt. This is nothing more than a tepid and self-serving rationalization for the boat that Wall Street has put us in because of it’s own greed.
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I think I’d better quit now before I say something that I shouldn’t.
plukasiak

Gains were shared by millions of Americans through home equity extraction and sale of homes. … It dwarfed the gains reaped by Wall Street. …
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this is just bizarre. There is no such thing as “home equity extraction” (except for the limited case of “reverse mortgages”) — there are home equity loans that have to be paid off.
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and (again with few exceptions) those who sold their homes at bubble prices generally bought new homes at bubble prices — the bubble didn’t help them at all.
tc125231

Curmudgeon, you shouldn’t quit before you say what you SHOULD.

These guys are not going to shape up without force majeure. All this TLC is a waste of time. We have two options if we want a functioning economy:

 We force them all into the bankruptcy they so richly deserve. This has a downside, which is that it toasts the economy for everybody else.
 We nationalize the key bad actors, and institute much more heavy handed regulation of the rest. In addition, we institute a fourth tax rate band for the genuinely rich –maybe around 50%.

Don’t give me the left wing routine. Eisenhower would have already done it if he were president today.

Sorry Justin, you’re a bright guy, but you spend altogether too much time with the parasitarazi. I have always been a little skeptical of both Simon Johnson, and Krugman, even though Krugman consistently predicted this mess, and those predictions caused me to investigate carefully and save –oh 20% — more of my net worth than would otherwise have been probable.

But I am pretty sure, at this point, that they have it right. From the point of view of these clowns, the bubble wasn’t a problem. They made a lot of money didn’t they? And when things fell apart, there was a nice cushy FedGov parachute waiting for them –with few strings attached.

So, given that these are people driven by their own financial self-interest, and very little else –what would cause them to change their behavior, barring intrusive force?