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Elliott R. Morss

 
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  • TrueBlue: Long Thesis Is Fading Fast [View article]
    Darspal:

    Thanks for your article on TrueBlue. You make some good points and might be right. However, I think times have changed. Gone forever are the full time 40 hr./wk permanent jobs with fringes. Individuals increasingly want jobs that are not full time, and employers are more focused on hiring workers for specific assignments with no fringes. It will be interesting to see what happens as the US economy continues its recovery.
    Sep 27 09:57 AM | Likes Like |Link to Comment
  • The Criminal Acts Of Large Banks: Are Substantial Fines/Penalties Enough? [View article]
    Kunst:

    Easy to proclaim what is wrong in general terms. If the US President asked you the one thing he should do to make banks safer, what would you recommend?
    Sep 6 09:07 PM | 1 Like Like |Link to Comment
  • The Criminal Acts Of Large Banks: Are Substantial Fines/Penalties Enough? [View article]
    sdz:

    In an earlier piece, I estimated that the panic following the bank collapse resulted in a global capital loss (stock market and real estate) of $50 trillion - http://bit.ly/JWHfH3. Point of reference - global GDP $62 trillion in 2008. We then had a huge loss in GDP resulting from the '08 global depression.

    You say BAC has been punished "out of proportion". BAC is the second largest American bank. How would you calculate what they should pay to compensate for their share of the criminal actions leading to the global collapse?
    Sep 6 11:09 AM | 1 Like Like |Link to Comment
  • The Criminal Acts Of Large Banks: Are Substantial Fines/Penalties Enough? [View article]
    205427:

    Let's fill out the picture.

    1. Mortgages companies have no money of their own to make mortgages.

    2. Their very existence depends on them having buyers of the mortgages they write.

    2. The Federal agencies by law are not allowed to purchase sub-prime loans. They obviously did. That means they engaged in criminal activities. They now claim fraud and are now collecting large fines for fraudulent bank representations. But still, the Federal Agencies did not buy sub-mortgages directly from mortgage companies.

    3. So who does this leave to buy the sub-prime mortgages from the mortgage companies? The banks.

    I have a friend who worked in wealth management at the time in one of the big banks. He says the managers in the mortgage buy and sell end of the business did not care about quality. Their bosses only looked at the bottom line. And that meant earning commissions from the sale of mortgage security packages. Buy them all as soon as they are written!

    The banks had no idea of the quality of the mortgages they bought. They even lost documentation on who held title to buildings backing the mortgages.

    And in the eagerness to sell, the banks, like AIG, started to securitize [insure] the packages they sold.

    And then someone asked a "quality" question. And nobody knew. And overnight, the market for the mortgage packages disappeared because nobody knew what was in the packages.

    The absence of that market effectively bankrupted the big banks....
    Sep 6 10:55 AM | 2 Likes Like |Link to Comment
  • The Criminal Acts Of Large Banks: Are Substantial Fines/Penalties Enough? [View article]
    It is patently clear that what now gets done in DC is controlled by lobbyists and does not reflect the interests of the American people. This is true of the how lobbyists changed the health care bill and Dodd-Frank. We cannot even get legislation passed to ban machine gun sales and meaningful background checks on people wanting to buy guns. A great source of information on lobbying and campaign gifts is Open Secrets - http://bit.ly/1t3WpO5.
    Sep 4 10:41 AM | 1 Like Like |Link to Comment
  • The Criminal Acts Of Large Banks: Are Substantial Fines/Penalties Enough? [View article]
    I see no free market interference. Insurance companies have the right to determine what they can insure. The FDIC is an insurance company. Why can't it say we will only insure depository institutions that don't sell off their loans - too risky otherwise....
    Sep 3 03:56 PM | 1 Like Like |Link to Comment
  • The Criminal Acts Of Large Banks: Are Substantial Fines/Penalties Enough? [View article]
    surplusmarketing:

    My bank is the Lenox National Bank. They manage their own loans and they have never had a default. Why is this? Because they live on their lending income. They keep track if their borrowers and help them out if necessary. The TARP people urged them to take some TARP money. They said: Why? No."
    Sep 3 02:01 PM | 1 Like Like |Link to Comment
  • The Criminal Acts Of Large Banks: Are Substantial Fines/Penalties Enough? [View article]
    surplusmarketing:

    I agree. How Obama could have relied on Rubin, Summers and Geithner for economic policies is truly mystifying. It might be that since he did know much about banking, he figured he would be safer with establishment players.

    I also agree that Sheila Blair did all she could to set things right. But ultimately, she ran into a stone wall and quit.
    Sep 3 01:56 PM | Likes Like |Link to Comment
  • The Criminal Acts Of Large Banks: Are Substantial Fines/Penalties Enough? [View article]
    People have very strong and apparently fixed views on why the bank collapse happened. But 205... makes a somewhat unique point. He claims that getting rid of Glass-Stegall actually made the US banking system better. His evidence? The defensive ramblings of an ex-president.

    I do not buy it.

    Let the economic historians draw conclusions about what happened and why. Today, we need to find ways to address the risky and criminal actions of our largest banks.
    Sep 3 09:58 AM | 1 Like Like |Link to Comment
  • The Criminal Acts Of Large Banks: Are Substantial Fines/Penalties Enough? [View article]
    Anyoption:

    Thanks for your comment. I believe incentive structures determine most business behavior.

    Right now, banks make a lot more by packaging and selling off mortgages they originate than by holding them to maturity,

    Note how this affects incentives: to maximize commission income, you write as many mortgages as you can w/out regard to quality.

    If banks were not allowed to trade and had to hold the mortgages they wrote to maturity, they would have to care about the quality of the mortgages and other loans they wrote.
    Sep 2 08:33 PM | 3 Likes Like |Link to Comment
  • The Criminal Acts Of Large Banks: Are Substantial Fines/Penalties Enough? [View article]
    Just a couple of more points on bank regulations.

    1. I urge everyone interested in this subject to go to the latest 10-K report of any large bank available at the SEC Edgar site - http://1.usa.gov/WiR8CG.

    For example go to the JPM report - http://1.usa.gov/WiR8CG and look through the 362 pages of the report, with particular attention to the notes to the consolidated financial statements. I know a couple of bank regulators. They are overwhelmed by this stuff and do not have the resources to really examine them.

    2. We have heard a lot about the Basel Accords - I, II, and III. They have been very "sophisticated" about what can count as part of reserves the banks must hold. However, until Greece collapsed, the Basel regulators were allowing sovereign debt to be given the same weight as Euros in calculating reserve requirements!

    From both of these examples, I conclude the solution will not come from more regulation. Keep the regulations simple and understandable: the only thing that will count as reserves are cash holdings.
    Sep 2 01:26 PM | 1 Like Like |Link to Comment
  • The Criminal Acts Of Large Banks: Are Substantial Fines/Penalties Enough? [View article]
    surplusmarketing:

    Regulation has not worked with the banks, and that includes the Basel accords.

    For any new regulation brought forth, the banks, working with their lobbyists, will find a way to get around.

    In my view, the only thing that will make banks safe is having the Federal Deposit Insurance Corporation say they will only insure banks that:

    a. hold all the loans they originate to maturity;
    b. do not trade.
    Sep 2 11:47 AM | 8 Likes Like |Link to Comment
  • The Criminal Acts Of Large Banks: Are Substantial Fines/Penalties Enough? [View article]
    sdz and sammyjt:

    People love to rant and rave about all the greed that led to the global depression. Sure, there was a real estate bubble. But the global depression would not have happened when it did without the bottom falling out of the mortgage securities market. People panicked resulting in tremendous capital and property losses that in turn led to a global fall off in consumption and investments.

    That having been said, this article is about the ongoing criminal actions of large banks....
    Sep 2 10:36 AM | 2 Likes Like |Link to Comment
  • Were European Bonds Mispriced In 2012 Or Are They Now? [View article]
    The IMF tried austerity and structural reform in Greece and failed. Now the IMF is saying Greece must default again because a debt to GDP ratio of 170% is not sustainable.

    What structural reforms are needed? As long as weak sisters use Euro, structural reforms would have to make weak sisters competitive w/Germany and Dutch. Not going to happen.

    Low interest rates unrealistic reflecting heavy ECB buying.
    Aug 31 09:01 PM | Likes Like |Link to Comment
  • Is The Middle Class On A Sinking Ship? No Economic Good Times For Them Or Their Retirement [View article]
    George:

    Thanks for your article. As I have recently argued, the "hollowing out" of the US middle class is irreversible and is mostly attributable to the information revolution replacing well paid, middle class jobs with automation. This has happened not just in manufacturing but in service industries as well We are increasingly shopping on the web (retail), who needs real estate agents, and anyone who relies on doctors for their ailments.

    So those cushy middle class jobs with fringes are gone forever. That is the bad news.

    The good news is that with labor costs and content in products now so low, the US is now very competitive globally. This means US producers will be providing goods and services to the growing middle classes in China, India, and Latin America in the future.

    Documentation on these assertions can be found at - http://bit.ly/YXiGnU.
    Aug 27 09:33 AM | 1 Like Like |Link to Comment
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