jsc173

Banks: Just a Shadow of Their Former Selves

If the system was forced to go cold turkey, wouldn't that help define a bottom? It's been like throwing a drowning man a life preserver that's water soluble -- you gotta keep tossing more, hoping that he makes it to shallow water before you run out of life preservers.

If there was a permanent fix forced on them from the beginning (break up into managable businesses, bring all off balance sheet assets on, mark everything to market, etc., etc., maybe they wouldn't still be drowning?

Of course, the best solution of all would have been to let the market exact its punishment. Would a short death have been any worse than the slow death we're now experiencing?

How Are Banks Spending Bailout Money? Anyone's Guess

How is the TARP investment "being spent?" Hopefully, not at all!

Do you know anything about banking? If you did, you would know that capital (which is what TARP investments are) is not "spent."

Capital is a cushion against future expected and unexpected losses. It isn't spent, it is held.

The spread earned from investing deposits and borrowed funds in loans and other types of investments is what is "spent" on day-to-day operations.

TARP investments, per se, would never be lent out or used to pay salaries or other expenses.

All the TARP investments have done, so far, is replace capital that was burned-off due to unexpected write-downs of non-performing loans and investments.

Wall Street, R.I.P. Now What?

Puh-leez.

Once the "big kids" on Wall Street started playing with other people's money -- e.g., when the firms converted from private partnerships with their own money at risk to public corporations, it was only a matter of time.

It wasn't pure greed that killed them.

It was simple arrogance.

Or, as a wise sage once told me during the peak of the bull market, "they're like fat guys riding their bicycles downhill thinking they're going fast because they're good athletes."