Tesa

Accounting for Losses at BofA and Fannie

Lets not forget Fanny and Freddie were obliged by the law to purchase mortgages that BAC and other banks had issued so most of these banks have passed on quite a bit of their toxic assets to the public and namely Fannie and Freddie for years.

The speculation in housing market was so wild that American banks were still holding on to massively more toxic assets that they could dump on public accounts. BAC has been subsidized to neutralize its losses so it is very possible that it is playing games to extract more cash the public by extracting more cash through tax cuts by claiming ownership of the same toxic assets.

These bank will never stop extracting cash from public through predatory mortgage lending business . Americans are better off cutting their losses now and remove publicly subsidized mortgage business from private banking forever because the business is funded through interest rates funded by public that are sold back to them with a hefty cost.

Fannie Mae Plus Goldman Plus Tax Credits Plus U.S. Treasury Add Up to Big Mess

Basically these banks:

- have passed their losses to the public
- they have traded against worthless leverage assets that they have dumped on the public
- they have received a subsidy from public to prevent their collapse and in return they have rewarded their executives with bonuses

And now they want to extract more cash from public through :
- further tax subsidy and taking those collapsed assets
- To either sell them again back to the public through the back door or hold on to these assets and jack them up and profit from them.

It is obvious that privatizing Fannie and Freddy has been very costly for American public. There is no way that public ownership of mortgage business would have cost the American public this much losses over and over.

The mortgage vending that is virtually subsidized by the public should be removed from private banking because they use this business to dump their losses on public using multiple paths.

Unemployment Has Become a Leading Indicator

Unemployment can be a lagging indicator and still not respond to low interest rates and asset subsidy to reverse its trend.

Only when the industries and financial markets are going to take advantage of cheap money by hiring people will the unemployment trends reverse themselves.

Given that making money has become function of flipping assets and handing the losses to the population rather than industrial output, the unemployment will not respond to cheap money. Why would industries invest money in industrial output when they can extract massive amount of easy cash from the government by just investing!

The Heart of the Too-Big-to-Fail Problem

I have to agree again, whether its 10 banks or 120 or 500 banks, it is the intermixing of the risk in assets that induces systematic risk and not just the size.

My suggestion is to allow single banks to build walls within their subsidiaries and spawn different different companies with different symbols to contain these risk. The high risk assets should not intermix with low risk assets.

Why Too-Big-to-Fail Shouldn't Be Codified

Yes the brake up alone does not fix the problem. The easiest solution would be to have banks spawn their various operations into different symbols and isolate their operations. Different money streams with different risk profiles should not be used to subsidize each other in financial world.

The operational brake up is what is material and not the size. The financial companies should be able to spawn their various operations easily and that will actually create more transparency as sell.

And not just banks, financial arm of an Engineering company or auto company should be listed in the markets with a different symbol for example and be insulated. And yet big companies can grow bigger with this style of growth by adding growth of same components with similar risks with less of ability to hide risk under their carpets.

Is This the End of 'Too Big to Fail'?

It shouldn't be just the size that is material here. Financial companies which are vested in stock markets should not subsidize various operations with different risk portfolios and lump them together.

A single bank should have multiple listing in the stock market with operations that are insulated from each other with no intermixing of risk types or racketeering. Financial companies should offer salaries that are directly related to the losses and gains and the executive should suffer losses or negative salaries deducted from what they have banked when their companies collapse or suffer major losses.

Consumer Financial Protection: Revisiting the Scene of the Crime

James Kwak, I agree, its more than logical to remove poorly engineered products whether they were developed to exploit the markets or not. The public is protected from poor technology through documentation and statistical analysis. Batteries in the laptops that blow up are recalled and yet the financial industry expects their poorly engineered products to be consumed without scrutiny.

Big Banks: The Consensus Is Cracking

Its not just the bigger banks that are corrupt. There many small banks that issue credit cards with 30-75% annual interest rates too. The systematic problem with the financial industry is not related to their size. It is related to lack of regulation that contains their rackets.

Both small and large banks have incentives to scam the public and participate in increasing systematic risk because only high risk actions are very profitable.

The Secret Paulson-Goldman Meeting

Felix Salmon, they had done it before and that is why Paulson would guesstimate the response.

Either the banks behind the scene would racketeer and collude to buy the failed banks to keep themselves afloat or given lack of sufficient capital in total and they would force the government to subsidize them by showing the results of the first collapse.

It is not possible for Paulson to have not known that the collapse of Lehman would trigger a chain reaction.

Hands Off Goldman Bonuses

davidbdc, it doesn't even matter if they pay it or not. It is the public assets that they have raided to make those profits. Many people have lost their assets when the markets collapsed. GM and Chrysler are bankrupt.

The profits that they make through buying collapsed assets was not ever theirs.

Hands Off Goldman Bonuses

You have to realize for anyone to extract millions from markets, others have to lose money.

Those assets sold during collapse of the markets at lower valuations became assets were sold by the public and bought up by the financial markets who sold at higher prices to make a profit. It is the public assets that got raided because of the collapse.

We have a case here where finanancial institutions are selling and buying public assets with public money and they use leverage to increase their take in any directions that the winds take them. The other side of their trades are public assets and pensions that they can raid. The speculative highly leveraged markets provide the means to bubble up and then collapse the markets on a whim.

The public assets have become subjected to gambling house evaluations through excessive use of levering as the source of funding for a gambling industry that extracts cash from it.

Upon miscalculating and losing their game the governments have no choice but to fund their game all over again because they have public assets as their hostages.

Financial money game has become a very profitable business as the risk is shed to the public and profits are extracted through sphisticated computer programming that trade these assets.

Both the financial industry and the governments are very aware of that scamming the public has become a big in financial industry but public is prevented from regulating it through vast amount of propaganda that is propagated by those that profit by these schemes.

The Dangers of Fiat Money: 'End the Fed,' by Ron Paul

Getting ride of federal reserve is yet another form of deregulation that nutters have lobbied for. We have seen the result of many deregulation and this is yet another one. Getting rid of federal Reserve as a regulator is the last thing that USA needs.

If you are curious about depression, you can elect Ron Paul and experience it all over again. Just make sure he is in charge while the banking system is collapsing. Unfortunately you failed to see him in action eating his words so he can sell his theology in a book. It doesn't appear that he understand economics and why these institutions became necessary as regulators.

The fact is that printing money is a last resort solution in a box of many tools but never the less a solution when nothing else works. Federal reserve is a regulator of the last resort and it plays an important role and Americans need more regulation rather than less, specially now.

Pinning the Blame on the House Republicans

Cjhies, Presidents can veto bills so you are not being truthful.

Pinning the Blame on the House Republicans

Socialism_, it is not just theory or a thesis, it has mass of data that can prove it, just look at the outcome in Finland. The facts are out and all you need is to look at them.

All the actors in this case were in fact Republicans and they are all anti-socialists and pro capitalists. They did let GM fail and they blasted at them for having high wages and yet they let Capitalists with much higher wages survive obviously ( letting a token Lehman fail) but also because they would have taken the whole population with them just like Finland.

Pinning the Blame on the House Republicans

Mark Bern, USA would have experienced a full blown economic collapse if all banks failed simultaneously and that is why they spread the toxic assets pretty widely. The banksters know how to play this poker game which is pretty straight forward, when the banking system collapses, the entire population loses their equity so they take the whole population with them to the poker game.