x oil -field: Wow,could you please explain further, did I read this post correctly TBTF BANK/S do better at risk management like in say 06-08 for example?

Josh Krause: I agree. Since there is no risk for the TBTF, why bother managing it?

x oil -field: I enjoy most if not all your post, but this one has thrown me for A loop, was it & attempt at sarcasm-humor?

x oil -field: J.Krause TY for the explanation makes more sense to me now.''Since there is no risk for the TBTF,why bother managing it?'' Thank U. X SMILES

David White: It was not a joke. They are big, but they balance risk well. If a bunch of funds had had their holdings, they would have mostly failed.

David White: The US economy would have failed with them. I don't think many appreciate how bad the damage would have been. They just buy the rhetoric

David White: that TBTF banks are the root of all evil. That is simply not true. It was almost assuredly good that much fo the banking sector could be

David White: saved with relatively little effort. I still can't believe that the so many have so completely accepted Obama's foolish rhetoric.

David White: That does not mean some improvements couldn't be made. It just means that the "popular view" has been completely distorted.

David White: If you have $1 million to invest, you can diversify much better than if you have $10,000. Really the same is true of the banks.

Josh Krause: The big banks DID fail, or were you not paying attention when Bernanke and Paulson stuffed trillions of dollars down their gullets?

David White: For that case you can make hedges, etc. For the $10,000 case you are likely investing in only 2-3 things with no hedging. SOL if market

Josh Krause: Some improvements? Like maybe ending TBTF and perp walks? That would require political capital to be used to fight Obama's biggest support

David White: turns against you.

Josh Krause: Obama has proven that he is not willing to implement change in the markets, Holder and Geithner are his main tools to ensure nothing changes

David White: Hundreds of small banks failed. Not all of the big banks failed. They were all forced to make themselves safer by accepting help. JPM was

David White: one that didn't really fail. Plus it was a much easier task to nurse the banking system back to health with just a small number of big

David White: banks to worry about. A bunch of small banks would have just resulted in a huge rout of the entire system. Puting the peices back together

David White: would ahve been much more difficult in that case. Obama and others are assuming the failure would remain small if all banks were small.

David White: There is no guarantee that this would be true. It's another case of ASSUMING making an ass out of you and me.

Josh Krause: It would have remained smaller if the banks were banks, and not super leveraged government supported hedge funds.

Josh Krause: TBTF are no longer banks in the traditional sense, they are hybrid hedge funds with government garauntees until Glass Steagall returns

David White: A lot of insurance co's, etc. bought the questionable MBS's. Banking was partially responsible for creating many of the bad loans. But

David White: greedy RE agents and loan agents who didn't work for the banks were at least as responsible. Demand was partially responsible.

Josh Krause: The banks were the demand. The banks are the ones that made the CDO's, the banks made the demand for the garbage loans.

Josh Krause: The banks ignored lending standards, wanted more and more loans regardless of fraud, etc. Then falsified docs on foreclosure, Linda Green

David White: Josh: That is bunk!! The insurance companies, the hedge funds, the mutual funds, and the pension funds made the biggest part of the demand

David White: for the mortgages. The banks merely tried to supply the demand.

Josh Krause: They bought the CDOs from the banks, true, but the banks were the ones making the drugs. Do you blame the junky or the dealer?

Josh Krause: Junkies need rehab, Dealers need jail time.

Josh Krause: Because they were able to sell their AAA rated rat poison to suckers, it's just buyer beware and too bad so sad?

Josh Krause: To blame return starved underfunded pension funds, etc. for trusting the banks and the rating agencies (pawns of the banks) is asinine.

David White: Josh: First I think MBS's were the biggest instrument. Then they got a bit esoteric around those. It gets complex explain it exactly.

David White: I won't try here. However, the insurance company investment officers were as often as not as high powered or more so than some of the

David White: banking people. Ditto pension funds. These folks were not naive children. They just got caught up in the game the same way the banks did.

Josh Krause: Oh please. The bankers were floating absolute garbage to the suckers in the industry and you know it. Paulson much? Customer made to

Josh Krause: blow up. They were making fun of them as they sold them products they knew to be worthless. Email documentation exists to back it up.

Josh Krause: MBS, CDO, same difference. They were just chopped up sub prime garbage that they sold off as AAA rated prime super safe paper.

Josh Krause: Banks took in as many horrible mortgages they could, mixed them with the sub prime rat poison and sold it to everyone as prime AAA paper

David White: That joker from GS impressed me as someone who would always say he got the better of the deal. He would always denigrate his

Josh Krause: Then bet against the same organizations they were selling the garbage to. Yeah, sure, even playing field, we promise.

David White: customer, when the customer was not there. For some that is just their way of bragging. Did he think the packages were weaker than they

David White: should be? I'me sure he did. I also think Paulson (an independent) did approximately what they asked of him. A lot of questionable packages

David White: were being put together then. I have thought basic materials were going to take a hit for some time. I bet on them going down. My articles

David White: verify this. Does that mean I did something wrong? If 6 months earlier I had put together a portfolio of basic materials stocks I liked for

Josh Krause: Paulson went to GS and they built it together. Complicit in the scam. Should have been perp walks galore, not small fines with no admmision

Josh Krause: of guilt. SEC, Holder and Obama failed and continue to fail in their role as regulators. MF Global? No perp walks there, 6 months later.

David White: for GS, does that mean they did something wrong by selling that portfolio to pension fund managers who should be knowledgeable in their own

David White: right? I don't think so. The investment officers are supposed to knwo what they are doing. I should point out that the RE agents and the

David White: loan agents (often not affiliated with banks) often broke the rules or bent them as far as they could. Some of the deals they brokered

Josh Krause: Right, and the investment managers had both the banks and the rating agencies saying that the garbage they were buying was AAA.

David White: should never have happened. If they hadn't, the banks would have had better portfolios to start with. The Fed has since change many of the

Josh Krause: And the Banks were actively pressuring the rating agencies to rate everything they submitted as AAA because banks held the purse strings.

David White: rules for these transactions. Now the guidlines are stricter. Many of the bad loans will not be made. Could the Fed and Congress have

Josh Krause: TBTF had all the leverage due to their size and their implicit government backing. Take that away and there is a more even playing field

David White: insisted on doing this sooner? Yes. Is it all their fault. Your idea that it is all the banks fault seems a product of the Obama rhetoric.

David White: To my mind he is a dangerous fool for propagating his irresponsible scapegoating. Too many people take as gospel the words of the President.

David White: A little knowledge can be a dangerous thing. When too little knowledge is propagated as fact by the President of the US, that's beyond

x oil -field: Mr.White won't have discussion politics but have CTL pertaining housing banking Sir what do you believe is need to straighten out this affair?

David White: foolish. This is one of the reasons young, inexperienced Presidents are dangerous.

Josh Krause: Banksters own the politicians. Financials determine the playground, to say that Obama has been harsh on the banks is a complete farce

Josh Krause: My answer: Re-implement Glass Steagall, Clear house in the SEC, No more small fine and no admission of guilt BS, Perp walks.

Josh Krause: The acceptance of fraud is simply systemic. Tons of people knew about Madoff but the SEC completely ignored warnings. Unacceptable. Purge!

x oil -field: Think we can agree the housing & banking affair,matter was just a little messy Y Mr.D.White a CTL what do you believe is needed going forward?

Josh Krause: Well, we saw that a few high profile perp walks in the 30's along with a strong SEC and Glass Steagall allowed the market to heal

Josh Krause: At this point we may have to break the bone and realign it to have it heal straight so it can support weight. Right now it is still crooked

Josh Krause: There have been no fundamental changes, simply cosmetic to distract attention so that TPTB can maintain the status quo of fleecing muppets

x oil -field: Mr.Krause, believe (most) of what you have posted I could agree with ''curb-walks'' could be a good start, but then Sir where does it stop?

Josh Krause: The shadow banking needs to be brought into the light, CDS should be echange traded, reimplement Mark to market accounting.

Josh Krause: At this point if the TBTF are still insolvent, they need to be broken up and parceled off. Can't sacrifice accounting standards to keep

Josh Krause: zombie banks alive.

Josh Krause: I just think that more companies should operate like CSCO. Amazing company. Would be better if more companies operated like them.

x oil -field: *There is more than enough blame for everyone involved,it was funny until it wasn't yes? (laughing to self)

x oil -field: Will say this then backout of topic, try to extract myself ''all '' parties involved where at the table having a picnic witnessed it.

x oil -field: *Witnessed it on both sides of the pond, it was a funny money bubble 4 all the players yes?Gentlemen, ladies, have great evening & morning.

David White: The biggest part of the change that needed to be made was the tightening of rules concerning RE sales and loans. Fed has done this.

David White: Pension funds, insurance companies, etc. provide the demand. From there demand trickles down trhough banks to loan & RE brokers.

David White: They have tightened up a few other rules that needed it. But they have also created a huge amount of unnec., expensive bureaucracy.

David White: That Fabrice guy from GS was just an example of a near or complete sociopath who happened to work for GS because he had talent.

David White: I watched some of the Congressional testimony. Most of the GS folks were a different breed. GS shouldn't be judged by one guy.

David White: GS should have weeded out Fabrice before it ever got to that point. He had to be as derisive to his fellow employees too.