No Sympathy

Too Big to Fail: Now It Gets Interesting

Size is irrelevant. So to mitigate risk you cut the pie into ever smaller less efficient, less professional, less diversified little pieces in hope that the risk might some how disappear. Wrong, you have not reduced the collective risk you just broke it up into more pieces that now requires more less efficient oversight. One reason that these banks got so large is that the government pushed the failures into the larger banks so that they (FDIC) didn't have to pay off the depositors and manage the assets (ie. bad mortgages). The basic fundamental reason for the risk is Government meddling in the credit markets to fund mortgages and home sales to people who could not afford them. Of course the government did this due to pressure from voters (not necessarily tax payers). Tax payers ultimately pay for what voters want, we call this the tyranny of the majority.

Where's the Outrage at the Banks?

Your anger (outrage) is misplaced. The banks, who by the way are not traditionally mortgage lenders, sold and securitized mortgages because they did not want the risk in the first place. Remember the savings and loan mess? It wasn't the "banks" that failed it was the mortgage lenders. When the S&Ls were gone our government pushed the banks into mortgage lending thru such programs as the Community Reinvestment Act Program (CRAP) or they face the wrath of regulators. So our Government sets up programs such as Fannie and Freddie so that the banks can offload the risk that they didn't want in the fist place. The FDIC, OCC, State Banking regulators, and Federal Reserve inspectors and regulators were more likely to criticize a bank for Not making a bad loan than making one. I once, as a bank director, was chastised by the Federal Reserve for denying a mortgage loan to a young lady who had lost her employment after the application was and home purchase contract was signed. She was actually relieved and thankfully for the denial because since she had lost her employment she had no income to pay the mortgage on a home that she didn't now want. So the bank avoided a potentially bad loan, the customer was happy, but the Regulators were upset and criticized the bank and accused us of sex discrimination and that we might be in violation of the CRAP laws. Our government pushed the banks into mortgage banking after they pushed the S&L industry over the cliff.
We were encouraged to make bad loans and then push them on to others to avoid the risk and to avoid the wrath of the regulators. In other words the Banks did exactly what they were told to do by the government or be put out of business by the government. So save your wrath and outrage for Barney Frank who is still pushing banks to keep making bad loans. Oh by the way that young lady who was denied a loan... She is now my wife.

Cash for Clunkers May Cost Up to $45,354 Per Vehicle

Low Milage as in (Miles per gallion) Not (Miles on the car). Typical democrat makes a bad assumption and then blames Republicans for his mistake>


On Jul 31 01:43 PM dancingdad wrote:

> Avery must be a republican because he does math like one. His arguments
> are like the ones Bush made going into Iraq. First note he said 200,000
> low mileage cars are traded in a normal 3 month period. ( I'm willing
> to bet a large percentage of the clunkers coming in are high mileage
> ones.) He then assumes that all the clunker cars replace all the
> normal trades (bad assumption). His faulty logic leads him to conclude
> that 222,000 clunkers - 200,000 normal trades so we get 22,000 additional
> trade activity for $1B. All wrong, all worst case assumptions, typical
> republican BS.

Madoff Investors Deserve Sympathy, Not a Bailout

Sorry, but all you had to do was ask for a prospectus and a financial statement. The Auditors Opinion was written by someone you (or any body else) had never heard of. This simple due diligence would have taken 15 minuets tops, 20 if you actually tried to find out who the auditor was. Any financial statement of a fund this large that is not signed by one of four Accounting firms is and should be suspect. If you do not know the names of these four Accounting firms you are not a sophisticated investor and should not have any money invested in other than a FDIC bank account.


On Dec 29 01:34 PM User 327530 wrote:

> It wasn't only hedge funds that he stole from. It was people's IRA
> accounts. You talk about bailing out the auto industry because it
> will at least help "regular" people. Who do you think these people
> are? Not everyone was a billionaire. But even if they were, the SEC
> turned their back and probably took payoffs. So the government needs
> to fix this as the SEC is a government agency that failed the people
> they were supposed to protect. It's a joke. So my elderly parents
> have to go back to work because the SEC slacked off and Madoff stole
> what my father worked 40 years lugging pipes in and out of asbestos
> filled basements for. You act like everyone should have known...well
> they didn't. You use an investment firm because you're not an expert.
> I sincerely hope you never have anyone steal your future.

JPMorgan: Expect Fed to Cut to 0% in January

There are two main components of Money supply: M1 which is currency in the market where you are right on! and M2 which is M1 times the velocity that it is exchanged, The velocity is non existent thus M2 is down, thus deflation. Deflation happens when you put M1 under a mattress. ( i.e. no lending which causes deleverging.)

On Nov 20 10:59 AM dieuwer wrote:

> I will repeat this for the morons on this website: THERE IS NO DEFLATION!!!
> Yes, there is DELEVERAGING, but NO DEFLATION!!!
>
> Deflation = decrease in money supply. Well folks, that ain't happenin'.

Fed Bank Regulatory Powers: The Dog That Didn't Bark?

An economist for the fed just after the dot.com bust predicted the housing bubble to burst in July 2007. He made this prediction in July 2001. They knew!

In attending 20 years of bank reviews, the Bank where I was a director, was never criticized for any mortgage loan we made... only the ones we did not make. The "credit rights" of the customer is incompatible with the "safely and soundness" of banks. Since no one can serve two masters, the wishes of the master in DC who carried the bigger stick was served. When ever their was a conflict between safety and soundness and CRA (Community Reinvestment Act) CRA won. This was not the fault of the cops on the beat, their hands were tied by policy in DC. (read Congress).

Setting a New High Mark for the Next Housing Bubble

California is in for a long correction. Gwinner if a new house in San Diego is $168 a square foot then I expect that you will see another 26% decline before California is in parity with the mid west . In Ohio your $608k will get you 5000 square feet with a small farm for it to sit on! In some cases here we have Callifornia sellers buying twice the home and having half of their money left over. In 2007 California realest was 80% over sold compared to Ohio & Indiana where it was 20% undersold. This gap will close before California sees any upside.

The Global Food Crisis: From Panic to Organic

Why does "organic farming" need any investment give everyone some seed and a planting stick and let them go to it. The newly elected green party in Germany was very disapointed to learn that they could not produce enough organic and natural food to feed their own people and thus had to revert to traditional modern agriculture to survive. Natural, Organic, and local only food production will only work when we reduce the worlds population by half. I sugest that the liberals who propose such a solution volinteer their lives first so that their goal may become a reality.

Earnings Preview: Huntington Bancshares

I am sure UBS would love to raise more capital for Huntington so they can prop up their own capital with their brokerage fees! If Huntington has a profit in the second quarter they will have added capital net of dividends for two consecutive quarters plus raise 569M additional above tier 1 and tangable requirments. So what is the logic of raising more capital that they do not need?