Tesa

The Road to Economic Hell

Patio, for how long you people are going to lie and push nonsensical agenda that have collapsed these markets. You have capitalist have done nothing but distort to protect those responsible both politically and financially . Unhedged credit default swaps that you capitalistic hit the the market with pushed has destroyed this market. The CDS business ramp up was not run by the communists, it was run by fraudulent "capitalist" bankster.

You people should take responsibility for the pain you have caused but instead you rant to cover your track.

Glass-Steagall: If Not the Cause, Maybe the Cure?

Here were the arguments for and against the act in 1987. Its obvious now that none of arguments for its removal were valid. Conflicts of interest was not resolved and the diversification only worsened the situation by exporting more fraudulent assets. The more blurring of disjunction between loans and assets were outcome of the act.

"The argument for preserving Glass-Steagall (as written in 1987):

1. Conflicts of interest characterize the granting of credit – lending – and the use of credit – investing – by the same entity, which led to abuses that originally produced the Act

2. Depository institutions possess enormous financial power, by virtue of their control of other people’s money; its extent must be limited to ensure soundness and competition in the market for funds, whether loans or investments.

3. Securities activities can be risky, leading to enormous losses. Such losses could threaten the integrity of deposits. In turn, the Government insures deposits and could be required to pay large sums if depository institutions were to collapse as the result of securities losses.

4. Depository institutions are supposed to be managed to limit risk. Their managers thus may not be conditioned to operate prudently in more speculative securities businesses. An example is the crash of real estate investment trusts sponsored by bank holding companies (in the 1970s and 1980s).

The argument against preserving the Act (as written in 1987):

1. Depository institutions will now operate in “deregulated” financial markets in which distinctions between loans, securities, and deposits are not well drawn. They are losing market shares to securities firms that are not so strictly regulated, and to foreign financial institutions operating without much restriction from the Act.

2. Conflicts of interest can be prevented by enforcing legislation against them, and by separating the lending and credit functions through forming distinctly separate subsidiaries of financial firms.

3. The securities activities that depository institutions are seeking are both low-risk by their very nature, and would reduce the total risk of organizations offering them – by diversification

4. In much of the rest of the world, depository institutions operate simultaneously and successfully in both banking and securities markets. Lessons learned from their experience can be applied to our national financial structure and regulation.[7]"
en.wikipedia.org/wiki/...

10 New Year's Questions for Paul Krugman

The financial community which has made outrageous living doing nothing other than flipping government subsidized investments can not bear to hear that they are redundant. So what he says is not music to their ears but it is in fact the truth.

Rethinking Subsidized Finance

To me, the governments lend out cash at prime rate to the banks and the banks cash in a huge profit just to lend it to their customers and when that wouldn't be producing sufficient profit, they would resort to fraud.

Government might as welll do the lending directly to customers and let these institutions offer other services. That would be a back to future scenario that I like to see.

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 Free Market Votes: Still No Change We Can Believe In

To the author has posted nothing pure rubbish:

You claim that there is self corrective mechanism in the market that deliver in a fast pace unlike politics . That must be why the fraudsters like Madoff survived through multiple presidents.

It must have been the self correcting mechanism they gave bonuses and massive salaries to CEOs for bankrupting companies. The more corrupt ones got higher incomes.

The corruption of rating agencies must have been part of self corrective mechanism too where the bigs learn how to fudge numbers.

The massively corrupt predatory lending schemes brewing must be part of these self correcting mechanism where the market corrected itself to collect by fraud.

As for your claim regarding Obama's remark to be the cause today's fall after a rally yesterday, to be part of genuine nonsensical gems that the street spews regularly and it is not unique.

The Road to Economic Hell

SW Richmond, what is interesting is that you capitalist didn't have any money for health care but lots of of money for military. Half the federal budget.
vis.berkeley.edu/cours...

Economic Forecasts: Why Is There No Bottom?

Did any of them say that the market has not priced in the future scenarios. Of course they have not. What is it that has been priced in, when the markets is trading 1990s valuations, is the future and not today.

In fact because so many of them have said the same thing, the future that they see is already priced in. So if what they say does not materialize then the market will rally violently and if it does, we have already hit the bottom..

The Good, The Bad, And the Inaccurate Oil Forecasts

It is now known what the long term prospects are, just watch.
therealnews.com/t/inde...

The crash was in fact due to privious too low prices because the growth was not sustainable. If the price of oil goes even lower, the prospects for future prices are even higher than the last peak as expensive to run facilities and wells will shut down as they will lose money to keep them going but the demand would be higher as more countries use more power due to the expected growth.

Its your choice, if you don't pay now, then you will pay later and the peak will be even higher next time and the pain would be even worse next time around. The price of oil "has" to be high enough for alternative energy to develop. There is no free production of cheap energy because you don't want to pay for it.

So remember, the lower it goes, the higher the expected peak next time will be.

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.

Will Americans Learn That a House Is Not an ATM?

Good news is to hear that people will finally ignore the financial industry advise with regards to housing. The industry created the ATM machine ad they benefited themselves and real estate agents encouraging the flipping. They should have also ignored financial industry recommendation on retirement planning. Buying a house is likely to be better than listening to their advise.

Why AIG Wasn't Allowed to Fail

Felix, good article. If AIG had failed, the number of bag holders would have increased to 1000s of institutions who would have failed and not only they would have failed, credit market would literally have frazen all over the world for years.

Why Felix Should Walk Away

If the markets were regulated, this caller would lose his down payment if he walked away and that would have been the cost of walking away. If Felix hasn't paid any down payment, he is better off walking away obviously. But the call was suspicious, someone with relatively high income and 300k question would have referred to a lawyer rather than a TV talking heads - so the caller is just making a rubbish call as a form of entertainment.

I wonder if Felix the author made this call.

The Road to Economic Hell

plumstupid, USA banking system in totality had collapsed sometime in Sept 2008. Federal government insures the banks and private insurers like AIG augment that and AIG had collapsed too. There was not enough private capital to prevent the collapse of US financial system, period. Only thing that any government can do is borrow and save the system or there will be anarchy . No private capital in midst of collapse could have saved such a large collapse.

Rethinking Subsidized Finance

John Lounsbury, IRS does vastly more complex operations than lending. IRS has a good understanding of all the functional units that do transactions in USA and they can add yet another function to their task.. and that would be direct lending.