Anger about the 2008 bailout makes sense. Yen carry unwind deserves attention. However, the trading call to action fails on market structure.
Key counterpoints:
- Global FX turnover runs near $9.6T per day (BIS, April 2025). A retail wave of calls will not move USD/JPY in a durable way at that scale.
- /6J options settle on /6J futures. When you buy calls, you mostly push dealer delta hedging into futures, then dealers unwind as exposure changes. No sustained spot yen demand comes from that flow.
- FXY calls track an ETF wrapper, not spot.
- “Widowmaker trade” most often refers to repeated losses from shorting Japanese government bonds, not a long-yen crowd squeeze.
That $9.6T is mostly back and forth non-directional HFT.
Otherwise it would not take a day to swap $500 mil for commercial reasons (think buying a couple Boeing plane with Euros) to avoid too much market impact as documented in multiple interviews with currency dealers stating it takes them 1 day to "work" a $500 mil order.
Retail can move FX, if it piles into one pair. But unlike the Boeing order they will also need to exit the trade at some point, which makes them vulnerable.
It cost the taxpayers nothing (in fact it made us money), it destroyed 4 of the 5 largest investment banks in the US, and it sent over 200 bankers, brokers, and auditors to jail.
The people angry about the 2008 bailout usually have little interest in the facts. I’ve had countless conversations where I’ve tried to tell people that the bailouts were a net positive or that people were, in fact, sent to jail. Outside of people familiar with finance, most people refuse to believe it.
A lot of people I’ve talked to about it weren’t even adults when the bailout happened. They weren’t watching the news and didn’t care at the time. They only know it through pop culture and from fiery speeches from politicians and influencers.
The idea of a bailout has become synonymous with the government handing hard-earned tax dollars over to banks, no strings attached. The facts don’t really matter.
2008 was caused, in part, by the governments deciding many "banks" were "too big to fail".
The fix was for the government to pick some winners, coercively lend them money and force them to buy the failing banks.
Now we have fewer, bigger banks. People who were conservative with money, saved instead of over-leveraging, did not get to buy assets cheaply, because the government propped up asset prices with unlimited, cheap money.
And TARP did eventually produce weak positive returns. So I'm glad they didn't lose money, but I'm not happy I was prevented from buying fire sale assets. I'm also not happy residential housing prices are 2x what they were in 2010 (and still well over 1.5x the peak of the bubble).
> 2008 was caused, in part, by the governments deciding many "banks" were "too big to fail".
Perhaps worth noting that Ben Bernanke, who was the chair of the Fed at the time, was/is one of the most top experts on Great Depression (it's the work he later won the Nobel Prize for). So as bad as the GFC was, Bernanke thought it could get really bad and pushed for measures that he probably thought would prevent another 1930s scenario.
So, the NPE isn't a real Nobel Prize :) but if the only allowable decisions are to concentrate wealth at the top, then we're just delaying and amplifying the collapse.
> but I'm not happy I was prevented from buying fire sale assets.
This is another common misconception about bailouts: That if the government hadn’t stepped in, individuals would have been better somehow or been able to take advantage of a collapsing economy for personal gain.
You wouldn’t be buying fire sale assets and getting great personal returns. That would have gone to corporations, family offices, and people in higher tax brackets.
> I'm not happy I was prevented from buying fire sale assets
People who want a society-wide crisis so they can profit off it are far more morally reprehensible than people who said "we'll loosen the mortgage criteria a bit so people can buy houses, houses always go up in value right?"
Uh, no, we're having a generational crisis because wages are flat and rent cost has been growing for decades. That's quite reprehensible. Unfortunately, in our push for home ownership, we now have a majority of people being homeowners and opposed to lowering prices, and a few companies who can make a profit lobbying to ensure prices only go up.
None of the highest up were sent to jail. CEOs perfectly fine taking responsibility for the profits, but what happened to taking responsibility for the fraud they enabled?
Literally dozens of CEOs went to jail, which is again why I think this may be the biggest ball-drop of the media this century (and there have been some pretty huge ones competing with it)
> None of the highest up were sent to jail. CEOs perfectly fine taking responsibility for the profits, but what happened to taking responsibility for the fraud they enabled?
> > Literally dozens of CEOs went to jail, which is again why I think this may be the biggest ball-drop of the media this century
The GP's remark is centered around the *sentiment* that none of the C-suite / execs in the Big Banks (Merrill, Goldman, BoA, Citi) were jailed for their involvement / excessive speculation in the 2008 crisis.
The keywords there being "Big Banks": If it's a national household name, OR if their positions are coveted by finance employees, it's a Big Bank. Otherwise, it's not a Big Bank.
> > > Your Google skills may need some work because this is the first result for "bank CEO jailed by TARP":
1) This is a goalpost shift from "bank CEOs jailed for causing / excessively speculating up to the 2008 crisis".
2) TARP was established as a result of the crisis (i.e. AFTER it happened), and therefore cannot be used to mark execs that were jailed for their involvement / excessive speculation in the 2008 crisis.
3) "TARP defraudment" is a different matter, and not "Causing the 2008 crisis" or "excessive speculation"
The case cited only tangentially involves TARP, when the bulk of the case was about the President of FirstCity Bank & his associates defrauding the bank with loans that *they themselves had involvement in*.
If you want to argue the wrong 200 bankers went to jail I think that would be a great discussion to have, but that's absolutely not where the public narrative is right now, which is that these convictions simply never happened
> but that's absolutely not where the public narrative is right now, which is that these convictions simply never happened
In terms of public sentiment, for the conviction to have happened, it has to happen to the Big Banks, and not anyone else. If it didn't happen to the Big Banks, then narrative-wise it didn't happen at all.
You're blaming the public for not caring about 200 irrelevant bankers going to jail for mostly other reasons (e.g. TARP fraud), when there's no reason for them to. There might as well have 0 bankers gone to jail. Getting pedantic about your definition of "bankers going to jail" being technically correct and the public's definition of "banker going to jail" being too specific, completely misses the point and serves nothing but to make you feel good. You well know what the public means, and that they're right about it.
Though it sounds like they're mainly talking about bankers jailed for fraud related to the TARP loans themselves, as opposed to the mortgage fraud that precipitated the crisis.
Key counterpoints:
- Global FX turnover runs near $9.6T per day (BIS, April 2025). A retail wave of calls will not move USD/JPY in a durable way at that scale.
- /6J options settle on /6J futures. When you buy calls, you mostly push dealer delta hedging into futures, then dealers unwind as exposure changes. No sustained spot yen demand comes from that flow.
- FXY calls track an ETF wrapper, not spot.
- “Widowmaker trade” most often refers to repeated losses from shorting Japanese government bonds, not a long-yen crowd squeeze.
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