ICBC : Industrial and Commercial Bank of China (1398)

[GFG]

I am not saying equity owners didn't lose anything.
But as u said it yourself, the US gov has injected capital, and potentially has losses.

That's socializing losses already.

Nobody here is comparing who lost more.

I would call it investment, other than socializing loss.

Unless you are saying that the action of US government is trying to take loss, not take profit.

Socializing losses means taking the losses from 1 entity and distributing it amongst everyone so that nothing fails. We are not comparing who profited or lost more. So yes, the US gov did socialise losses, and yes, they did it to save the system and prevent contagion. I am not here to argue whether that's right or wrong, just pointing out that it is socializing losses.
It is an action the US gov took to save the corporations/shore up confidence etc. They won't normally take equity stakes in normal situations right? I am sure they were also not looking to profit from their actions like how a normal investor would.
So there def is moral hazard, again, I am not agreeing or disagreeing with this, just pointing it out for what it is

[freedom]

Firstly, there must be loss, then you can call it socializing loss. So far, net net US government did not make loss from its investment in the financial crisis.

How could people even call it socializing loss instead of socializing profit?

[freedom]

Moral hazard? So if the US government let the whole economy collapse and rebuild it, would it be better? For whom? Maybe there is no moral hazard, but the action would be plain stupid.

The United States government did not come in the early. That it came in at a appropriate time to save the whole economy and did not make loss shows that they are more capitalistic instead of socialistic.

People with capitalism in mind don't act in such stupidity.

[freedom]

enough in this thread has nothing related to ICBC. Maybe can be moved out to another thread.

to keep ICBC thread pure.

[freedom]

If you are worrying about the book is phoney, it does not matter what you are looking at any more.

If the book is phoney, won't the earning be too?

True... earnings CAN be phoney too. But if you cheat on earnings, you get more trouble.

1. You need to answer to your shareholders why you cannot keep up your earning spree?

2. Why you cannot pay higher dividend, since you have a bumper year?

3. Why should you cheat on earning, when 70% of your shares are state-owned?

4. You are not allowed to PLAY the share price. And you receive little performance bonus, as you, as a CEO, is a State employee?

5. Why should you give one more reason for Western media to shoot your financial system? You have been enjoying questions about "human rights"?

6. You are not keen to make RMB a reserve currency?

Basic accounting tells me that if a book is phoney, surely the earning is phoney.

The book is more difficult to cook than the earning.

Don't mix emotion and politics with investment. It only gets more complicated instead of simpler.

[freedom]

I would call it investment, other than socializing loss.

Unless you are saying that the action of US government is trying to take loss, not take profit.

Yes, it is taking a lost. It's NOT an investment. It's socializing the cost.
That's why it's a MORAL HAZARD.

Fed created financial jargon to hide the true intention. Calling it "quantitative easing" instead of "money printing". Where all these freshly printed notes go to? Investment? Nah...

Try looking at why the Americans occupy Wall street couple of years back... You will understand what happen behind the scene.

I thank you for asking all these question, to make everyone understand the situation better. In return, please thank me for spending my precious time to explain to you about all these stuff. I hope they will help everyone avoid some costly mistake down the road. Cheers!

So which actor are we talking about again?

The Fed? or The US government?

The Fed is making huge profit which rightly belongs to the private sectors. So is the Fed helping the private sectors or robbing the private sectors? Maybe you should tell me.

Who is QE really helping? The banks? What's the objective of the QE? Anyone? To lower the unemployment rate. So tell me who is the QE really for?

[specuvestor]

People with capitalism in mind don't act in such stupidity.

Can't help but note that your ultra-capitalistic ideals inevitably lead to the conclusion that from Nick Leeson to Hamanaka to AIG traders and London whale are the smartest people around, just that they were unfortunate that people have to bail them out.

Your argument on US bailout is sound until now, when your tea-party tendency emerge again.

[freedom]

You quote me out of context AGAIN.

What I mean is that the action of the US government letting the whole economy collapse and rebuild it. Isn't that pure stupidity, though without so called moral hazard? Or you think it is a smart move for US government?

that's a huge difference from "capitalism does no wrong."

[specuvestor]

You quote me out of context AGAIN.

What I mean is that the action of the US government letting the whole economy collapse and rebuild it. Isn't that pure stupidity, though without so called moral hazard? Or you think it is a smart move for US government?

that's a huge difference from "capitalism does no wrong."

Agree that any reasonable man would think it is pure lunacy, but that is exactly the Austrian school of thought which many supported as the purer form of capitalism and was actually the basis of criticising the bailouts. There is no short of supporters from Republicans to Jim Rogers

Food for thought.

[freedom]

Thanks for the information.

There is no point to argue which school of thought of capitalism is more pure. By my book, anything weighing benefit and harm is capitalistic thought.