Publicliterature.org's Comments RSS Syndication from SeekingAlpha.com http://seekingalpha.comuser/169866/comments http://seekingalpha.com/article/120798-what-does-a-bonus-really-cost?source=feed#comment-390944 390944 Mon, 16 Feb 2009 16:01:02 -0500 http://seekingalpha.com/article/118395-start-aggregating-already?source=feed#comment-375346 375346
This is essentially, the insurance "ring fence" solution without actually taking the asset of the books (which really shouldn't make a difference if enough transparency is present).]]> Wed, 04 Feb 2009 09:27:05 -0500
This is essentially, the insurance "ring fence" solution without actually taking the asset of the books (which really shouldn't make a difference if enough transparency is present).]]> http://seekingalpha.com/article/117753-nationalizing-bank-losses?source=feed#comment-372607 372607
So, the domino has fallen from the house price bubble, to the banks residential real estate portfolio, to the private sector businesses. If we don't stop it, it will domino into hitting the commercial loans then back the banks balance sheets and certainly cripple the banks in a Depression style insolvency.

I think the core issue needs to be addressed, but this is actually a bit hard to identify (esp. for the government). The core issue is that our financial system is flawed and that our model allows, perhaps encourages, executives to take on excessive risk for excessive short term return and compensation. Trusting a banker to act for the greater good, is a little naive on Greenspan's part.

I think the best idea I've finally heard suggested is increasing capital requirements on a sliding scale based on profits. A variation of this was suggested at Davos. This stifles excessive growth and could well prevent bubbles. Bubbles are the banks worst enemies and the regulation needs to be put in place to prevent it in the real estate sector at least.

Now, the only way to fix the system is to capitalize the banks, stop the job losses, and smooth the home prices at the same time. Easier said than done, especially while not inflating one's currency like Argentina.

On Jan 31 01:08 PM johnny g wrote:

> I have an idea that can help resolve the problems facing both our
> economy and financial industry. Front lines reports from academia,
> government, and the media explain in good measure that banking industries
> uncertainties and fears regarding asset viability on their own and
> others balance sheets have created immovable road blocks to reasonable
> distribution and capital access.
>
> The idea seeks to collapse the period of time to which a more predictable
> and reliable flow of capital through our system can be arrive at;
> it cannot in and of itself resolve all systemic problems. The limited
> and uncertain access to capital has in large measure hobbled our
> collective economic system; interested parties to productive assets
> have been beset by a vicious cycle of pessimism and diminishing valuations,
> many times leading to a complete loss to owners and counter parties.
> The recommendation is designed to impose upon the banking system
> requirements to fully deploy their capital, with the aim of arresting
> this downward cycle and arriving at the nexus where collateral valuations
> are affirmed and once again become a measure of strength and not
> weakness.
>
> The basic tool and in this solution is taxation. A new piece of legislation
> is to be formed in which banks are taxed when not meeting the required
> leveraging minimums, and somehow rewarded when they demonstrate full
> leveraging deployment. Despite the cajoling of the Feds and Treasury
> after massive capital injections and asset swaps, the banking industries
> collective uncertainties are preventing their raison d'être, banks
> continue to under deploy and hoard capital, this is where we are
> collectively bogging down.
>
> As commercial banks comply with new leveraging requirements, they
> deploy capital to the most favorable credit risk. A new competitive
> lending environment will spring forth; banks will compete with other
> banks to actively seek out the best risk reward borrowers for their
> offerings, or be subject to this new Federal tax or penalty. This
> new velocity of money will energize our economy, restore asset predictability
> and grow balance sheet valuations without further deficit spending.
>
>
> This novel catalyst along with other primers will reduce the distance
> and time that the wheels of Capitalism need to travel before growth
> and optimism is restored; preventing unneeded failures, losses, and
> human hardship due to degrading asset valuations and capital deprivation.
>
>
> Let the chip fall where they may there after. A forced renew will
> have begun.]]> Sun, 01 Feb 2009 13:54:51 -0500
So, the domino has fallen from the house price bubble, to the banks residential real estate portfolio, to the private sector businesses. If we don't stop it, it will domino into hitting the commercial loans then back the banks balance sheets and certainly cripple the banks in a Depression style insolvency.

I think the core issue needs to be addressed, but this is actually a bit hard to identify (esp. for the government). The core issue is that our financial system is flawed and that our model allows, perhaps encourages, executives to take on excessive risk for excessive short term return and compensation. Trusting a banker to act for the greater good, is a little naive on Greenspan's part.

I think the best idea I've finally heard suggested is increasing capital requirements on a sliding scale based on profits. A variation of this was suggested at Davos. This stifles excessive growth and could well prevent bubbles. Bubbles are the banks worst enemies and the regulation needs to be put in place to prevent it in the real estate sector at least.

Now, the only way to fix the system is to capitalize the banks, stop the job losses, and smooth the home prices at the same time. Easier said than done, especially while not inflating one's currency like Argentina.

On Jan 31 01:08 PM johnny g wrote:

> I have an idea that can help resolve the problems facing both our
> economy and financial industry. Front lines reports from academia,
> government, and the media explain in good measure that banking industries
> uncertainties and fears regarding asset viability on their own and
> others balance sheets have created immovable road blocks to reasonable
> distribution and capital access.
>
> The idea seeks to collapse the period of time to which a more predictable
> and reliable flow of capital through our system can be arrive at;
> it cannot in and of itself resolve all systemic problems. The limited
> and uncertain access to capital has in large measure hobbled our
> collective economic system; interested parties to productive assets
> have been beset by a vicious cycle of pessimism and diminishing valuations,
> many times leading to a complete loss to owners and counter parties.
> The recommendation is designed to impose upon the banking system
> requirements to fully deploy their capital, with the aim of arresting
> this downward cycle and arriving at the nexus where collateral valuations
> are affirmed and once again become a measure of strength and not
> weakness.
>
> The basic tool and in this solution is taxation. A new piece of legislation
> is to be formed in which banks are taxed when not meeting the required
> leveraging minimums, and somehow rewarded when they demonstrate full
> leveraging deployment. Despite the cajoling of the Feds and Treasury
> after massive capital injections and asset swaps, the banking industries
> collective uncertainties are preventing their raison d'être, banks
> continue to under deploy and hoard capital, this is where we are
> collectively bogging down.
>
> As commercial banks comply with new leveraging requirements, they
> deploy capital to the most favorable credit risk. A new competitive
> lending environment will spring forth; banks will compete with other
> banks to actively seek out the best risk reward borrowers for their
> offerings, or be subject to this new Federal tax or penalty. This
> new velocity of money will energize our economy, restore asset predictability
> and grow balance sheet valuations without further deficit spending.
>
>
> This novel catalyst along with other primers will reduce the distance
> and time that the wheels of Capitalism need to travel before growth
> and optimism is restored; preventing unneeded failures, losses, and
> human hardship due to degrading asset valuations and capital deprivation.
>
>
> Let the chip fall where they may there after. A forced renew will
> have begun.]]> http://seekingalpha.com/article/106619-s-p-500-fifty-day-historical-volatility-may-have-just-peaked?source=feed#comment-309546 309546
You might be on to something. I think we've run out of companies that could fail to push the VIX to new highs. This news is comforting. Buyers should slowly trickle in as the VIX returns to normal levels. Once the VIX is down to the 20s, where do you see the S&P? I would have to estimate 1100 as a ballpark. Great, quantitative article.]]> Wed, 19 Nov 2008 00:59:17 -0500
You might be on to something. I think we've run out of companies that could fail to push the VIX to new highs. This news is comforting. Buyers should slowly trickle in as the VIX returns to normal levels. Once the VIX is down to the 20s, where do you see the S&P? I would have to estimate 1100 as a ballpark. Great, quantitative article.]]> http://seekingalpha.com/article/98880-bank-of-america-s-acquisitions-what-was-ken-lewis-thinking?source=feed#comment-275696 275696 Tue, 07 Oct 2008 10:51:11 -0400 http://seekingalpha.com/article/95405-what-s-the-bofa-merrill-synergy?source=feed#comment-254518 254518 Sun, 14 Sep 2008 23:57:10 -0400 http://seekingalpha.com/article/91317-whats-going-on-with-sirius-xm-stock?source=feed#comment-232733 232733 Sun, 17 Aug 2008 21:54:56 -0400 http://seekingalpha.com/article/81859-the-20-highest-of-the-high-yield-dividend-aristocrats?source=feed#comment-188163 188163 Thu, 19 Jun 2008 00:21:21 -0400 http://seekingalpha.com/article/81794-homebuilder-values-overshot-to-the-downside?source=feed#comment-188148 188148 Wed, 18 Jun 2008 23:52:22 -0400 http://seekingalpha.com/article/79867-dividend-analysis-bank-of-america-corp?source=feed#comment-179786 179786 Thu, 05 Jun 2008 13:22:59 -0400 http://seekingalpha.com/article/77584-don-t-believe-paulson-s-l-2-0-the-bank-failure-redux?source=feed#comment-168796 168796
-Jack]]> Fri, 16 May 2008 11:13:37 -0400
-Jack]]> http://seekingalpha.com/article/75350-dangerous-optimism-in-homebuilders?source=feed#comment-160897 160897 Fri, 02 May 2008 15:57:04 -0400 http://seekingalpha.com/article/73013-libor-jump-means-more-pain-for-financials?source=feed#comment-154394 154394 Mon, 21 Apr 2008 20:25:09 -0400 http://seekingalpha.com/article/70975-closer-look-at-the-arms-reset-problem?source=feed#comment-136217 136217
Even if home prices remain at their current levels, the Fed understands the problem so well, that they will jump in again and be more accurate with their actions.]]> Thu, 03 Apr 2008 18:21:59 -0400
Even if home prices remain at their current levels, the Fed understands the problem so well, that they will jump in again and be more accurate with their actions.]]> http://seekingalpha.com/article/70348-upside-to-falling-prices-housing-affordabilty-index-reaches-4-year-high?source=feed#comment-133315 133315 Sat, 29 Mar 2008 01:00:39 -0400