Happy Face 29 Posted April 21, 2009 Author Share Posted April 21, 2009 That's what's really screwing us in my opinion- we're sending this "Too Big to Fail" message and that's the wrong message. A key point of the show that was on last night I mentioned above is how they even managed to fuck up the "too big to fail" message they wanted to send (wrong as it was), by letting some big companies fail and bailing out others in a seemingly random fashion. Bailing out AIG to give investors confidence to invest in the market is all well and good....but when you let Lehman bros fall by the wayside then it completely undermines the confidence you're trying to spread. Link to comment Share on other sites More sharing options...
Cid_MCDP 0 Posted April 21, 2009 Share Posted April 21, 2009 Not sure I totally agree we did it to ourselves though. I know the view of government is different in America where the idea is they should interfere as little possible. But the only people that took out loans they couldn't afford were those gullible enough to be hoodwinked by the banks and the extortionate rates they'd offer someone on the bones of their arse. I believe it's the place of government to protect those people from their own stupidity, not enable the strongest members of society to bleed them dry and make off with their ill gotten gains. If Fop has said that this thread would already be on page 16. (it's true though) If that's how he feels, that's how he feels. I don't necessarily agree with it, but there's an assload of people in this country who do these days. With the way our government has handled education, I kinda see the need for it, to be honest. Link to comment Share on other sites More sharing options...
Cid_MCDP 0 Posted April 21, 2009 Share Posted April 21, 2009 That's what's really screwing us in my opinion- we're sending this "Too Big to Fail" message and that's the wrong message. A key point of the show that was on last night I mentioned above is how they even managed to fuck up the "too big to fail" message they wanted to send (wrong as it was), by letting some big companies fail and bailing out others in a seemingly random fashion. Bailing out AIG to give investors confidence to invest in the market is all well and good....but when you let Lehman bros fall by the wayside then it completely undermines the confidence you're trying to spread. Did you see the South Park where they explain how the government picked who got bailed out and who didn't? It involved headless chickens... lols. Link to comment Share on other sites More sharing options...
Happy Face 29 Posted April 21, 2009 Author Share Posted April 21, 2009 That's what's really screwing us in my opinion- we're sending this "Too Big to Fail" message and that's the wrong message. A key point of the show that was on last night I mentioned above is how they even managed to fuck up the "too big to fail" message they wanted to send (wrong as it was), by letting some big companies fail and bailing out others in a seemingly random fashion. Bailing out AIG to give investors confidence to invest in the market is all well and good....but when you let Lehman bros fall by the wayside then it completely undermines the confidence you're trying to spread. Did you see the South Park where they explain how the government picked who got bailed out and who didn't? It involved headless chickens... lols. I really should catch up with South Park. I've hardly seen an episode since series 3 or something. Link to comment Share on other sites More sharing options...
Park Life 71 Posted April 21, 2009 Share Posted April 21, 2009 aye, basically... "If the firms have not attained viability by March 31, 2009, the loan will be called and all funds returned to the Treasury" Who'd have guessed. That turned out to be bollocks.... This week, the New York Times revealed that General Motors (NYSE: GM), in concert with the government's wishes, is considering filing for bankruptcy in the coming months. The company has fallen victim to the new patterns of energy consumption, which have changed the demand for automobiles, as to the lack of credit and the consequent slump in demand caused by the recession. Both the new and the previous administrations agreed to use some of the stimulus package approved last year to support restructuring the company, without going to court. However, government funding, in the amount of $13.4 billion, was conditioned to the compliance with requirements, which were not met. This led, on March 31, to the resignation of the chief executive, Rick Wagoner and to his replacement by Fritz Henderson, who declared that the company is working on two tracks. Before the government set deadline of June 1st, if there is agreement mainly between bondholders and workers, one path can lead to restructuring out of court. If there is no agreement, the other path leads to filing for bankruptcy. Both the new and the previous administrations agreed to use some of the stimulus package approved last year to support restructuring the company, without going to court. However, government funding, in the amount of $13.4 billion, was conditioned to the compliance with requirements, which were not met. This led, on March 31, to the resignation of the chief executive, Rick Wagoner and to his replacement by Fritz Henderson, who declared that the company is working on two tracks. Before the government set deadline of June 1st, if there is agreement mainly between bondholders and workers, one path can lead to restructuring out of court. If there is no agreement, the other path leads to filing for bankruptcy. The solution depends from a complex set of mutual concessions granted by the main creditors, the bondholders, the workers, the pension plans and some of the main suppliers of parts. Anyway, both of these alternatives, either out of court agreement or bankruptcy, will require at least $70 billion in government financing. This time, what is good for General Motors may not be good for the United States. http://www.hispanicbusiness.com/news/2009/..._to_fork_in.htm Wahey! Another deadline. What happened to all that let the markets decide bollocks?! Exactly my problem with the whole issue; it should be one way or the other. Either... 1. Don't regulate past basic stuff like you can't charge people 1000% interest and let the chips fall where they may, or 2. Regulate and bailout as necessary. That's what's really screwing us in my opinion- we're sending this "Too Big to Fail" message and that's the wrong message. Wonder how these thieves are getting on with their plans for the next little war. Link to comment Share on other sites More sharing options...
Fop 1 Posted April 21, 2009 Share Posted April 21, 2009 That's what's really screwing us in my opinion- we're sending this "Too Big to Fail" message and that's the wrong message. A key point of the show that was on last night I mentioned above is how they even managed to fuck up the "too big to fail" message they wanted to send (wrong as it was), by letting some big companies fail and bailing out others in a seemingly random fashion. Bailing out AIG to give investors confidence to invest in the market is all well and good....but when you let Lehman bros fall by the wayside then it completely undermines the confidence you're trying to spread. Did you see the South Park where they explain how the government picked who got bailed out and who didn't? It involved headless chickens... lols. I really should catch up with South Park. I've hardly seen an episode since series 3 or something. aye, basically... "If the firms have not attained viability by March 31, 2009, the loan will be called and all funds returned to the Treasury" Who'd have guessed. That turned out to be bollocks.... This week, the New York Times revealed that General Motors (NYSE: GM), in concert with the government's wishes, is considering filing for bankruptcy in the coming months. The company has fallen victim to the new patterns of energy consumption, which have changed the demand for automobiles, as to the lack of credit and the consequent slump in demand caused by the recession. Both the new and the previous administrations agreed to use some of the stimulus package approved last year to support restructuring the company, without going to court. However, government funding, in the amount of $13.4 billion, was conditioned to the compliance with requirements, which were not met. This led, on March 31, to the resignation of the chief executive, Rick Wagoner and to his replacement by Fritz Henderson, who declared that the company is working on two tracks. Before the government set deadline of June 1st, if there is agreement mainly between bondholders and workers, one path can lead to restructuring out of court. If there is no agreement, the other path leads to filing for bankruptcy. Both the new and the previous administrations agreed to use some of the stimulus package approved last year to support restructuring the company, without going to court. However, government funding, in the amount of $13.4 billion, was conditioned to the compliance with requirements, which were not met. This led, on March 31, to the resignation of the chief executive, Rick Wagoner and to his replacement by Fritz Henderson, who declared that the company is working on two tracks. Before the government set deadline of June 1st, if there is agreement mainly between bondholders and workers, one path can lead to restructuring out of court. If there is no agreement, the other path leads to filing for bankruptcy. The solution depends from a complex set of mutual concessions granted by the main creditors, the bondholders, the workers, the pension plans and some of the main suppliers of parts. Anyway, both of these alternatives, either out of court agreement or bankruptcy, will require at least $70 billion in government financing. This time, what is good for General Motors may not be good for the United States. http://www.hispanicbusiness.com/news/2009/..._to_fork_in.htm Wahey! Another deadline. What happened to all that let the markets decide bollocks?! Exactly my problem with the whole issue; it should be one way or the other. Either... 1. Don't regulate past basic stuff like you can't charge people 1000% interest and let the chips fall where they may, or 2. Regulate and bailout as necessary. That's what's really screwing us in my opinion- we're sending this "Too Big to Fail" message and that's the wrong message. Wonder how these thieves are getting on with their plans for the next little war. The mid-west will be ripe for invasion within the year. Link to comment Share on other sites More sharing options...
Cid_MCDP 0 Posted April 21, 2009 Share Posted April 21, 2009 That's what's really screwing us in my opinion- we're sending this "Too Big to Fail" message and that's the wrong message. A key point of the show that was on last night I mentioned above is how they even managed to fuck up the "too big to fail" message they wanted to send (wrong as it was), by letting some big companies fail and bailing out others in a seemingly random fashion. Bailing out AIG to give investors confidence to invest in the market is all well and good....but when you let Lehman bros fall by the wayside then it completely undermines the confidence you're trying to spread. Did you see the South Park where they explain how the government picked who got bailed out and who didn't? It involved headless chickens... lols. I really should catch up with South Park. I've hardly seen an episode since series 3 or something. Like most shows, it's pretty hit or miss, but the hits are good hits. I'm sure it's on YouTube or SouthParkStudios.com (both blocked for me from work so no link, sorry). Don't remember word for word what the title of the episode is, but it actually gives a surprisingly accurate take on the whole financial crisis through an analogy of Stan trying to return his dad's Margaritaville Margarita maker. Link to comment Share on other sites More sharing options...
Cid_MCDP 0 Posted April 21, 2009 Share Posted April 21, 2009 aye, basically... "If the firms have not attained viability by March 31, 2009, the loan will be called and all funds returned to the Treasury" Who'd have guessed. That turned out to be bollocks.... This week, the New York Times revealed that General Motors (NYSE: GM), in concert with the government's wishes, is considering filing for bankruptcy in the coming months. The company has fallen victim to the new patterns of energy consumption, which have changed the demand for automobiles, as to the lack of credit and the consequent slump in demand caused by the recession. Both the new and the previous administrations agreed to use some of the stimulus package approved last year to support restructuring the company, without going to court. However, government funding, in the amount of $13.4 billion, was conditioned to the compliance with requirements, which were not met. This led, on March 31, to the resignation of the chief executive, Rick Wagoner and to his replacement by Fritz Henderson, who declared that the company is working on two tracks. Before the government set deadline of June 1st, if there is agreement mainly between bondholders and workers, one path can lead to restructuring out of court. If there is no agreement, the other path leads to filing for bankruptcy. Both the new and the previous administrations agreed to use some of the stimulus package approved last year to support restructuring the company, without going to court. However, government funding, in the amount of $13.4 billion, was conditioned to the compliance with requirements, which were not met. This led, on March 31, to the resignation of the chief executive, Rick Wagoner and to his replacement by Fritz Henderson, who declared that the company is working on two tracks. Before the government set deadline of June 1st, if there is agreement mainly between bondholders and workers, one path can lead to restructuring out of court. If there is no agreement, the other path leads to filing for bankruptcy. The solution depends from a complex set of mutual concessions granted by the main creditors, the bondholders, the workers, the pension plans and some of the main suppliers of parts. Anyway, both of these alternatives, either out of court agreement or bankruptcy, will require at least $70 billion in government financing. This time, what is good for General Motors may not be good for the United States. http://www.hispanicbusiness.com/news/2009/..._to_fork_in.htm Wahey! Another deadline. What happened to all that let the markets decide bollocks?! Exactly my problem with the whole issue; it should be one way or the other. Either... 1. Don't regulate past basic stuff like you can't charge people 1000% interest and let the chips fall where they may, or 2. Regulate and bailout as necessary. That's what's really screwing us in my opinion- we're sending this "Too Big to Fail" message and that's the wrong message. Wonder how these thieves are getting on with their plans for the next little war. I'm sure it's going just fine. That's what's hilarious about this country- we can't get shit we really need like say, education reform, but start a war? We're all over it. Oh, and invading the mid-west would be a horrible idea. We've got guns. Tons of 'em. Lols. You'd take Mexico easier than you would the mid-west. Not even joking. Link to comment Share on other sites More sharing options...
Park Life 71 Posted April 21, 2009 Share Posted April 21, 2009 aye, basically... "If the firms have not attained viability by March 31, 2009, the loan will be called and all funds returned to the Treasury" Who'd have guessed. That turned out to be bollocks.... This week, the New York Times revealed that General Motors (NYSE: GM), in concert with the government's wishes, is considering filing for bankruptcy in the coming months. The company has fallen victim to the new patterns of energy consumption, which have changed the demand for automobiles, as to the lack of credit and the consequent slump in demand caused by the recession. Both the new and the previous administrations agreed to use some of the stimulus package approved last year to support restructuring the company, without going to court. However, government funding, in the amount of $13.4 billion, was conditioned to the compliance with requirements, which were not met. This led, on March 31, to the resignation of the chief executive, Rick Wagoner and to his replacement by Fritz Henderson, who declared that the company is working on two tracks. Before the government set deadline of June 1st, if there is agreement mainly between bondholders and workers, one path can lead to restructuring out of court. If there is no agreement, the other path leads to filing for bankruptcy. Both the new and the previous administrations agreed to use some of the stimulus package approved last year to support restructuring the company, without going to court. However, government funding, in the amount of $13.4 billion, was conditioned to the compliance with requirements, which were not met. This led, on March 31, to the resignation of the chief executive, Rick Wagoner and to his replacement by Fritz Henderson, who declared that the company is working on two tracks. Before the government set deadline of June 1st, if there is agreement mainly between bondholders and workers, one path can lead to restructuring out of court. If there is no agreement, the other path leads to filing for bankruptcy. The solution depends from a complex set of mutual concessions granted by the main creditors, the bondholders, the workers, the pension plans and some of the main suppliers of parts. Anyway, both of these alternatives, either out of court agreement or bankruptcy, will require at least $70 billion in government financing. This time, what is good for General Motors may not be good for the United States. http://www.hispanicbusiness.com/news/2009/..._to_fork_in.htm Wahey! Another deadline. What happened to all that let the markets decide bollocks?! Exactly my problem with the whole issue; it should be one way or the other. Either... 1. Don't regulate past basic stuff like you can't charge people 1000% interest and let the chips fall where they may, or 2. Regulate and bailout as necessary. That's what's really screwing us in my opinion- we're sending this "Too Big to Fail" message and that's the wrong message. Wonder how these thieves are getting on with their plans for the next little war. I'm sure it's going just fine. That's what's hilarious about this country- we can't get shit we really need like say, education reform, but start a war? We're all over it. Oh, and invading the mid-west would be a horrible idea. We've got guns. Tons of 'em. Lols. You'd take Mexico easier than you would the mid-west. Not even joking. That's why Obama will take the guns away innit. Link to comment Share on other sites More sharing options...
Cid_MCDP 0 Posted April 21, 2009 Share Posted April 21, 2009 aye, basically... "If the firms have not attained viability by March 31, 2009, the loan will be called and all funds returned to the Treasury" Who'd have guessed. That turned out to be bollocks.... This week, the New York Times revealed that General Motors (NYSE: GM), in concert with the government's wishes, is considering filing for bankruptcy in the coming months. The company has fallen victim to the new patterns of energy consumption, which have changed the demand for automobiles, as to the lack of credit and the consequent slump in demand caused by the recession. Both the new and the previous administrations agreed to use some of the stimulus package approved last year to support restructuring the company, without going to court. However, government funding, in the amount of $13.4 billion, was conditioned to the compliance with requirements, which were not met. This led, on March 31, to the resignation of the chief executive, Rick Wagoner and to his replacement by Fritz Henderson, who declared that the company is working on two tracks. Before the government set deadline of June 1st, if there is agreement mainly between bondholders and workers, one path can lead to restructuring out of court. If there is no agreement, the other path leads to filing for bankruptcy. Both the new and the previous administrations agreed to use some of the stimulus package approved last year to support restructuring the company, without going to court. However, government funding, in the amount of $13.4 billion, was conditioned to the compliance with requirements, which were not met. This led, on March 31, to the resignation of the chief executive, Rick Wagoner and to his replacement by Fritz Henderson, who declared that the company is working on two tracks. Before the government set deadline of June 1st, if there is agreement mainly between bondholders and workers, one path can lead to restructuring out of court. If there is no agreement, the other path leads to filing for bankruptcy. The solution depends from a complex set of mutual concessions granted by the main creditors, the bondholders, the workers, the pension plans and some of the main suppliers of parts. Anyway, both of these alternatives, either out of court agreement or bankruptcy, will require at least $70 billion in government financing. This time, what is good for General Motors may not be good for the United States. http://www.hispanicbusiness.com/news/2009/..._to_fork_in.htm Wahey! Another deadline. What happened to all that let the markets decide bollocks?! Exactly my problem with the whole issue; it should be one way or the other. Either... 1. Don't regulate past basic stuff like you can't charge people 1000% interest and let the chips fall where they may, or 2. Regulate and bailout as necessary. That's what's really screwing us in my opinion- we're sending this "Too Big to Fail" message and that's the wrong message. Wonder how these thieves are getting on with their plans for the next little war. I'm sure it's going just fine. That's what's hilarious about this country- we can't get shit we really need like say, education reform, but start a war? We're all over it. Oh, and invading the mid-west would be a horrible idea. We've got guns. Tons of 'em. Lols. You'd take Mexico easier than you would the mid-west. Not even joking. That's why Obama will take the guns away innit. That's why he'll try ... Link to comment Share on other sites More sharing options...
Park Life 71 Posted April 21, 2009 Share Posted April 21, 2009 aye, basically... "If the firms have not attained viability by March 31, 2009, the loan will be called and all funds returned to the Treasury" Who'd have guessed. That turned out to be bollocks.... This week, the New York Times revealed that General Motors (NYSE: GM), in concert with the government's wishes, is considering filing for bankruptcy in the coming months. The company has fallen victim to the new patterns of energy consumption, which have changed the demand for automobiles, as to the lack of credit and the consequent slump in demand caused by the recession. Both the new and the previous administrations agreed to use some of the stimulus package approved last year to support restructuring the company, without going to court. However, government funding, in the amount of $13.4 billion, was conditioned to the compliance with requirements, which were not met. This led, on March 31, to the resignation of the chief executive, Rick Wagoner and to his replacement by Fritz Henderson, who declared that the company is working on two tracks. Before the government set deadline of June 1st, if there is agreement mainly between bondholders and workers, one path can lead to restructuring out of court. If there is no agreement, the other path leads to filing for bankruptcy. Both the new and the previous administrations agreed to use some of the stimulus package approved last year to support restructuring the company, without going to court. However, government funding, in the amount of $13.4 billion, was conditioned to the compliance with requirements, which were not met. This led, on March 31, to the resignation of the chief executive, Rick Wagoner and to his replacement by Fritz Henderson, who declared that the company is working on two tracks. Before the government set deadline of June 1st, if there is agreement mainly between bondholders and workers, one path can lead to restructuring out of court. If there is no agreement, the other path leads to filing for bankruptcy. The solution depends from a complex set of mutual concessions granted by the main creditors, the bondholders, the workers, the pension plans and some of the main suppliers of parts. Anyway, both of these alternatives, either out of court agreement or bankruptcy, will require at least $70 billion in government financing. This time, what is good for General Motors may not be good for the United States. http://www.hispanicbusiness.com/news/2009/..._to_fork_in.htm Wahey! Another deadline. What happened to all that let the markets decide bollocks?! Exactly my problem with the whole issue; it should be one way or the other. Either... 1. Don't regulate past basic stuff like you can't charge people 1000% interest and let the chips fall where they may, or 2. Regulate and bailout as necessary. That's what's really screwing us in my opinion- we're sending this "Too Big to Fail" message and that's the wrong message. Wonder how these thieves are getting on with their plans for the next little war. I'm sure it's going just fine. That's what's hilarious about this country- we can't get shit we really need like say, education reform, but start a war? We're all over it. Oh, and invading the mid-west would be a horrible idea. We've got guns. Tons of 'em. Lols. You'd take Mexico easier than you would the mid-west. Not even joking. That's why Obama will take the guns away innit. That's why he'll try ... Whatever the fuck else happens keep dem guns. The next few years look hairy at best. Link to comment Share on other sites More sharing options...
Fop 1 Posted April 21, 2009 Share Posted April 21, 2009 Obama needs no guns. Link to comment Share on other sites More sharing options...
Cid_MCDP 0 Posted April 21, 2009 Share Posted April 21, 2009 Obama needs no guns. Lols! Link to comment Share on other sites More sharing options...
Lazarus 0 Posted April 21, 2009 Share Posted April 21, 2009 Obama needs no guns. Who dat ninja? Link to comment Share on other sites More sharing options...
Happy Face 29 Posted May 8, 2009 Author Share Posted May 8, 2009 Credit crunch explained in handy cartoon format.... http://vimeo.com/3261363 Link to comment Share on other sites More sharing options...
Happy Face 29 Posted May 8, 2009 Author Share Posted May 8, 2009 Ten of America's largest 19 banks need a combined $74.6bn (£50bn) of extra funds to boost their cash reserves. That is the main finding of the so-called "stress tests" to see if the banks have sufficient capital to cope should the recession worsen. Bank of America is the most at risk, needing an additional $33.9bn. "Our hope with today's actions is that banks are going to be able to get back to the business of banking," said US Treasury Secretary Timothy Geithner. The results should go some way to lift the cloud of uncertainty that has engulfed the US banking sector by providing assurance that the sector would have the capital to handle further losses. Other banks that need more money include Wells Fargo, which is said to require $13.7bn, and GMAC, the financial arm of General Motors, which needs $11.5bn. Citigroup requires an additional $5.5bn of funds, and Morgan Stanley has been told to find $1.8bn. Some of the banks have already indicated how they intend to raise the money they need by private means such as asset sales, rather than having to secure any additional government loans. 'No surprises' The 19 banks that were tested by Treasury Department and Federal Reserve officials account for two-thirds of the total assets of the US banking system, and more than half of the total amount of credit in the US economy. THE 10 THAT NEED MORE CAPITAL Bank of America - $33.9bn Wells Fargo - $13.7bn GMAC - $11.5bn Citigroup - $5.5bn Morgan Stanley - $1.8bn Regions Financial - $2.5bn SunTrust Banks - $2.2bn KeyCorp - $1.8bn Fifth Third Bancorp - $1.1bn PNC Financial Services - $600m The banks that require extra capital have been given until 8 June to finalise their plans to do so, and get them approved by regulators. Mr Geithner said earlier on Thursday that no US bank being screened by regulators was at risk of insolvency, comments echoed by Federal Reserve Chairman Ben Bernanke. The treasury secretary said he believed that while the majority of the banks would be able to raise any additional money they need from private sources, if they were unable to do so the government may have to provide them with more taxpayer money. Analysts broadly welcomed the results of the stress tests. "It seems to be that the leaks were very accurate, so there doesn't seem to be any major surprises," said Eric Kuby of North Star Investment Management. "The fears of nationalisation or of failure have more or less disappeared." Asset sale The other five banks that have been told they require additional capital are Regions Financial ($2.5bn), SunTrust Banks ($2.2bn), KeyCorp ($1.8bn), Fifth Third Bancorp ($1.1bn), and PNC Financial Services ($600m). Those that do not require extra funds are Goldman Sachs, JPMorgan Chase, Bank of New York Mellon, MetLife, American Express, State Street, BB&T, US Bancorp and Capital One Financial. Some of the banks that need extra funds have been quick to announce how they intend to do so. Bank of America said it would raise the $33.9bn it needs through the sale of assets and other measures, while Citigroup, Morgan Stanley and Wells Fargo are to issue or exchange shares. Citigroup chief executive Vikram Pandit said his bank's actions would "give it the financial strength to weather an adverse stress scenario". Criticism Some commentators have questioned whether the tests have been strict enough. And as such, they said "the stress test results will not be credibly interpreted as a sign of of bank health". Others say that the tests do not take account of the banks' varying business models. http://news.bbc.co.uk/1/hi/business/8039096.stm "Please sir, can we have some more?" Link to comment Share on other sites More sharing options...
Happy Face 29 Posted May 8, 2009 Author Share Posted May 8, 2009 Hooray! The banking crisis is over! Let’s party! O.K., maybe not. The New York Times Paul Krugman In the end, the actual release of the much-hyped bank stress tests on Thursday came as an anticlimax. Everyone knew more or less what the results would say: some big players need to raise more capital, but over all, the kids, I mean the banks, are all right. Even before the results were announced, Tim Geithner, the Treasury secretary, told us they would be “reassuring.” But whether you actually should feel reassured depends on who you are: a banker, or someone trying to make a living in another profession. I won’t weigh in on the debate over the quality of the stress tests themselves, except to repeat what many observers have noted: the regulators didn’t have the resources to make a really careful assessment of the banks’ assets, and in any case they allowed the banks to bargain over what the results would say. A rigorous audit it wasn’t. But focusing on the process can distract from the larger picture. What we’re really seeing here is a decision on the part of President Obama and his officials to muddle through the financial crisis, hoping that the banks can earn their way back to health. It’s a strategy that might work. After all, right now the banks are lending at high interest rates, while paying virtually no interest on their (government-insured) deposits. Given enough time, the banks could be flush again. But it’s important to see the strategy for what it is and to understand the risks. Remember, it was the markets, not the government, that in effect declared the banks undercapitalized. And while market indicators of distrust in banks, like the interest rates on bank bonds and the prices of bank credit-default swaps, have fallen somewhat in recent weeks, they’re still at levels that would have been considered inconceivable before the crisis. As a result, the odds are that the financial system won’t function normally until the crucial players get much stronger financially than they are now. Yet the Obama administration has decided not to do anything dramatic to recapitalize the banks. Can the economy recover even with weak banks? Maybe. Banks won’t be expanding credit any time soon, but government-backed lenders have stepped in to fill the gap. The Federal Reserve has expanded its credit by $1.2 trillion over the past year; Fannie Mae and Freddie Mac have become the principal sources of mortgage finance. So maybe we can let the economy fix the banks instead of the other way around. But there are many things that could go wrong. It’s not at all clear that credit from the Fed, Fannie and Freddie can fully substitute for a healthy banking system. If it can’t, the muddle-through strategy will turn out to be a recipe for a prolonged, Japanese-style era of high unemployment and weak growth. Actually, a multiyear period of economic weakness looks likely in any case. The economy may no longer be plunging, but it’s very hard to see where a real recovery will come from. And if the economy does stay depressed for a long time, banks will be in much bigger trouble than the stress tests — which looked only two years ahead — are able to capture. Finally, given the possibility of bigger losses in the future, the government’s evident unwillingness either to own banks or let them fail creates a heads-they-win-tails-we-lose situation. If all goes well, the bankers will win big. If the current strategy fails, taxpayers will be forced to pay for another bailout. But what worries me most about the way policy is going isn’t any of these things. It’s my sense that the prospects for fundamental financial reform are fading. Does anyone remember the case of H. Rodgin Cohen, a prominent New York lawyer whom The Times has described as a “Wall Street éminence grise”? He briefly made the news in March when he reportedly withdrew his name after being considered a top pick for deputy Treasury secretary. Well, earlier this week, Mr. Cohen told an audience that the future of Wall Street won’t be very different from its recent past, declaring, “I am far from convinced there was something inherently wrong with the system.” Hey, that little thing about causing the worst global slump since the Great Depression? Never mind. Those are frightening words. They suggest that while the Federal Reserve and the Obama administration continue to insist that they’re committed to tighter financial regulation and greater oversight, Wall Street insiders are taking the mildness of bank policy so far as a sign that they’ll soon be able to go back to playing the same games as before. So as I said, while bankers may find the results of the stress tests “reassuring,” the rest of us should be very, very afraid. http://www.nytimes.com/2009/05/08/opinion/...ugman.html?_r=1 Krugman agrees with me Link to comment Share on other sites More sharing options...
Park Life 71 Posted May 8, 2009 Share Posted May 8, 2009 $ ceased to be real sometime in the late 70's/ early 80's. Link to comment Share on other sites More sharing options...
NJS 4411 Posted May 8, 2009 Share Posted May 8, 2009 It looks like banks are getting back into profit going by first quarter figures (though RBS made a small loss) so I would guess the bottom has been hit. Of course its probably cyclical as ever but I think the armageddon stuff is bollocks as well. Link to comment Share on other sites More sharing options...
Happy Face 29 Posted May 8, 2009 Author Share Posted May 8, 2009 It looks like banks are getting back into profit going by first quarter figures (though RBS made a small loss) so I would guess the bottom has been hit. Of course its probably cyclical as ever but I think the armageddon stuff is bollocks as well. Wonder if they'll pay us back with their profits. Link to comment Share on other sites More sharing options...
NJS 4411 Posted May 8, 2009 Share Posted May 8, 2009 It looks like banks are getting back into profit going by first quarter figures (though RBS made a small loss) so I would guess the bottom has been hit. Of course its probably cyclical as ever but I think the armageddon stuff is bollocks as well. Wonder if they'll pay us back with their profits. NR certainly have to be fair. Link to comment Share on other sites More sharing options...
Cid_MCDP 0 Posted May 8, 2009 Share Posted May 8, 2009 Hooray! The banking crisis is over! Let’s party! O.K., maybe not. The New York Times Paul Krugman In the end, the actual release of the much-hyped bank stress tests on Thursday came as an anticlimax. Everyone knew more or less what the results would say: some big players need to raise more capital, but over all, the kids, I mean the banks, are all right. Even before the results were announced, Tim Geithner, the Treasury secretary, told us they would be “reassuring.” But whether you actually should feel reassured depends on who you are: a banker, or someone trying to make a living in another profession. I won’t weigh in on the debate over the quality of the stress tests themselves, except to repeat what many observers have noted: the regulators didn’t have the resources to make a really careful assessment of the banks’ assets, and in any case they allowed the banks to bargain over what the results would say. A rigorous audit it wasn’t. But focusing on the process can distract from the larger picture. What we’re really seeing here is a decision on the part of President Obama and his officials to muddle through the financial crisis, hoping that the banks can earn their way back to health. It’s a strategy that might work. After all, right now the banks are lending at high interest rates, while paying virtually no interest on their (government-insured) deposits. Given enough time, the banks could be flush again. But it’s important to see the strategy for what it is and to understand the risks. Remember, it was the markets, not the government, that in effect declared the banks undercapitalized. And while market indicators of distrust in banks, like the interest rates on bank bonds and the prices of bank credit-default swaps, have fallen somewhat in recent weeks, they’re still at levels that would have been considered inconceivable before the crisis. As a result, the odds are that the financial system won’t function normally until the crucial players get much stronger financially than they are now. Yet the Obama administration has decided not to do anything dramatic to recapitalize the banks. Can the economy recover even with weak banks? Maybe. Banks won’t be expanding credit any time soon, but government-backed lenders have stepped in to fill the gap. The Federal Reserve has expanded its credit by $1.2 trillion over the past year; Fannie Mae and Freddie Mac have become the principal sources of mortgage finance. So maybe we can let the economy fix the banks instead of the other way around. But there are many things that could go wrong. It’s not at all clear that credit from the Fed, Fannie and Freddie can fully substitute for a healthy banking system. If it can’t, the muddle-through strategy will turn out to be a recipe for a prolonged, Japanese-style era of high unemployment and weak growth. Actually, a multiyear period of economic weakness looks likely in any case. The economy may no longer be plunging, but it’s very hard to see where a real recovery will come from. And if the economy does stay depressed for a long time, banks will be in much bigger trouble than the stress tests — which looked only two years ahead — are able to capture. Finally, given the possibility of bigger losses in the future, the government’s evident unwillingness either to own banks or let them fail creates a heads-they-win-tails-we-lose situation. If all goes well, the bankers will win big. If the current strategy fails, taxpayers will be forced to pay for another bailout. But what worries me most about the way policy is going isn’t any of these things. It’s my sense that the prospects for fundamental financial reform are fading. Does anyone remember the case of H. Rodgin Cohen, a prominent New York lawyer whom The Times has described as a “Wall Street éminence grise”? He briefly made the news in March when he reportedly withdrew his name after being considered a top pick for deputy Treasury secretary. Well, earlier this week, Mr. Cohen told an audience that the future of Wall Street won’t be very different from its recent past, declaring, “I am far from convinced there was something inherently wrong with the system.” Hey, that little thing about causing the worst global slump since the Great Depression? Never mind. Those are frightening words. They suggest that while the Federal Reserve and the Obama administration continue to insist that they’re committed to tighter financial regulation and greater oversight, Wall Street insiders are taking the mildness of bank policy so far as a sign that they’ll soon be able to go back to playing the same games as before. So as I said, while bankers may find the results of the stress tests “reassuring,” the rest of us should be very, very afraid. http://www.nytimes.com/2009/05/08/opinion/...ugman.html?_r=1 Krugman agrees with me That's what's great about this whole thing- the government couldn't be making it easier for these corrupt and nepotistic fools to get their collective shit together, but they still aren't expanding credit. We'll piss all over the American auto industry and how terrible it is, but I'll tell you this- the president of my company just quit to go run another company. We're not replacing him. The CEO is taking on his duties apparently. Now, I fully realize that's probably akin to me saying I'll officially take over the duty of watching hockey and football in my household, but at the end of the day, it's one less massive salary my company is paying out. Point is, we've stopped raises, let people go and not replaced people from the bottom to nearly the very top of our organization. We're not an auto manufacturer, but we are a global auto industry supplier and we've done this to stay viable in these tough times. What have the banks done besides layoff a few thousand office drones from their already over-staffed cube farms? Link to comment Share on other sites More sharing options...
Cid_MCDP 0 Posted May 8, 2009 Share Posted May 8, 2009 $ ceased to be real sometime in the late 70's/ early 80's. 1971 was when a dollar was no longer "backed" by the gold in Fort Knox. Courtesy of tricky Dick Nixon. Well, that and the ruination of the U.S. Healthcare system, aka the origin of the HMOs. Link to comment Share on other sites More sharing options...
Happy Face 29 Posted August 26, 2009 Author Share Posted August 26, 2009 The recently-crowned head of international financial embarrassment AIG, Robert Benmosche, has launched a campaign to “restore morale” to his beleaguered employees, who are apparently a) cracking under the strain of public anger and having performance anxiety that may be linked to a fear that they will never again be allowed to make obscene and undeserved bonuses, so long as the taxpayer is writing their checks. This is very sad, no doubt, and must be a terrible burden for anyone working on Wall Street to have to bear. So into the breach steps Benmosche, who became CEO of the firm last month. His new public mantra is that what happened to AIG isn’t the fault of AIG, but rather the fault of the government regulators who allowed AIG to destroy itself and iceberg the hull of the American economy. This is how he put it: “It’s time the people in Congress stopped talking about you as the problem, because you’re the solution. It’s not your fault, it’s their fault, it’s the regulators’ fault. “My fear is that you’ll say, ‘I don’t know if Treasury wants it, I don’t know if the Fed wants it, I don’t know if the lawyers want it, I don’t know whatever. If you sit there every day not making the right decisions to take us to the next level, we’ll miss an opportunity.” Full article (I particularly like the URL used)... http://trueslant.com/matttaibbi/2009/08/21...aging-dickhead/ Link to comment Share on other sites More sharing options...
Park Life 71 Posted August 26, 2009 Share Posted August 26, 2009 $ ceased to be real sometime in the late 70's/ early 80's. 1971 was when a dollar was no longer "backed" by the gold in Fort Knox. Courtesy of tricky Dick Nixon. Well, that and the ruination of the U.S. Healthcare system, aka the origin of the HMOs. The second fall will take care of it.....I reckons around April when the slush/flush/injection cash is burnt. Link to comment Share on other sites More sharing options...
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