greedcanbgood

Congress Made the Bank Bailouts Work for Taxpayers

Old Trader - Unfortunately, the government continues to get its pound of flesh through the most recently passed and in process legislation with regard to the financial services industry.

Banks Are Damned if They Lend, Damned if They Don't

Anonymousbanker - I don't necessarily disagree with you, but check out an interesting WSJ editorial for a different perspective:

online.wsj.com/article...

Banks Are Damned if They Lend, Damned if They Don't

Good artice but lets not forget that not ALL banks required a bail out. Some (USB, BB&T and a handful of others) maintained a prudent lending strategy and were consequently FAR less impacted. Many banks also limited sub-prime, derivative and CDS exposure. Had ALL banks followed similar strategies we wouldn't be discussing this but that is an inevitable (and positive) result of a free market. Subprime is encouraged by the government (CRA), though not soley responsible for this mess and derivatives and CDS DO have their place. If utilized cautiously to mitigate risk they can help keep credit costs (rates) down.

For 368275, Michael Clark and others who feel similarly - don't give me the "bad-banker" BS - I grow tired of it. If capitalisim gets you down, move to a different country.

Giant Banks Are Trying to Make Bailouts Permanent

FormerBanker – You are quite correct. The article is little more than conjecture and hearsay with a smattering of “man-on-the-grassy-knoll” conspiracy.

As noted, most of the TBTF institutions have already repaid TARP not to mention a few TBTFs (i.e. USB and BB&T) that never found themselves in the trouble that others did and apparently have been run prudently.

If one accepts the notion of TBTF anyway, then one must be intellectually honest and be willing to apply it to ANY organization in ANY industry.

SteveTheHawk, while I don’t necessarily disagree with you about banks sticking “only to banking”, be prepared to pay higher rates on credit and receive lower rates on deposits if this were the case.

Bernanke Needs to Go

"The virtuous cycle that lead to the inflation of a Ponzi, housing economy has burst, and the deflationary forces that are unwinding are clearly in effect." Hymen Minsky lives!

It's a waiting game - at least that's the game they're playing. They're hoping that enough people can jump into the housing market while the "getting is good".

The problem is that it's not going to work.

The Too Big to Fail, Too Big to Exist Act of 2009

The govermnet has NEVER been able to make good business decisions. No such thing as "too big to fail". Let them exist and fail, thrive and falter at their own peril. Indeed, the government has itself become WAY too big. I'll endorse this bill when the government can pare down it's own size.

Limiting Banker Pay - Another Downside

Tom,

What measure would you use for breaking up a bank that is “too big”? What is the threshold of "too big"? Also, would you also put size restrictions on other privately held corporations, requiring that they don’t grow beyond a certain point? WAY too much government here. There is VERY little that the government does well and I don’t trust them to set limits like this. Let’s face it, it wasn’t the allure of size that caused this problem, it was classic Minsky economics at work. You can limit their size but eventually they will find more creative ways to make money which eventually will lead to another bubble.

I'm with you on the rest of your ideas though. ;-)

Is Too Big to Fail Now Too Big to Exist?

Once again, I challenge the “break them up” proponents to explain just how this should be done. What metric will you use? Will you (or the administration) ever be able to reach a consensus? Are you willing then to apply those same metrics to other organizations (i.e. Microsoft and Walmart) in case they are “too big” also? The dangerous precedent is permitting the government to make decisions with regard to the business model of a private organization.

I agree with an earlier poster, size is not the problem, excessive risk taking is. Measures to limit the amount or risk a bank takes on might be an appropriate solution but the bottom line is that the government is unwilling to go that route because it will return banks to the very conservative nature they had in decades past. Home buyers will HAVE to again come up with a 20% down-stroke. To qualify for a mortgage you will again have to meet the old standby 28/35 rule and people will again have to work hard to achieve home ownership. Not to mention what it will do to business and commercial lending…

Government Not Allowing Finance to Heal Itself

Adam....I'm not saying that they didn't have to raise capital, I'm saying the govermnet rammed TARP down their throats. Some institutions (i.e. USB & BB&T) could have simply raised the capital on their own because they were significantly less affected by the "crisis" than others.

'Too Big to Fail' Is Too Hot to Handle

epeon - Lest you forget that some institutions were forced to accept TARP funds....

With U.S. Economy Still on the Ropes, Where Are the Banks?

What a complete bunch of hogwash. Let’s see, first of all not ALL banks required assistance and yet it was forced down their throats and then followed up with a bunch of ex post facto rules. Second, do more homework. Consumer and business appetite for credit is at an all time low. Third, financial institutions have taken a serious beating for assuming too much risk (including lending risk) and yet now, here you (and congress) decry their unwillingness to lend. It's like the master who beats his dog when he feeds it and then wonders why the dog is reluctant to eat. Fourth, pending legislation may place de facto price controls on some consumer credit and fee income streams for banks without regard to the ramifications to the financial services industry. Clearly, they are trying to be prudent with cash in preparation for the coming storm.

Government Not Allowing Finance to Heal Itself

I'm getting terribly tired of these discussions. TARP was forced down the throats of many financial institutions and the government is WAY overstepping its authority in an egregious display of ex post facto.

In addition, all you people who say, "Good, let the talent go!" don't realize that all of these banks have other business lines that are profitable and had NOTHING do do with the demise of thier organizations. If you loose them, you loose leadership in profitable parts of the bank and end up throwing out the baby with the bathwater.

Big Banks: The Consensus Is Cracking

All you "break up" propoenets out there have yet to come up with a reasonable strategy for calculating how you would do so (by business line, by assets, by geography [which, by the way already occurrs], by deposit base). Everyone has opinions but no solutions.

Diana Farrell And The White House Theory Of Bank Size

I doubt anyone at any of the big banks particularly enjoys the oversight they already have. Painting the picture that the governemnt and the banks are in cahoots is WAY off base.

All you "too big" people out there, I wonder why you aren't writing to your congressional representatives to break up Microsoft also. You can't have it one way for one industry and anohter way for a different industry.

Let a free market reign and eventually, the poorly run will fail.

Modified Plans for Consumer Agency Are Still Doomed to Fail

Ugh! I can't say that I agree with your conclusions. Separate regulatory agencies for separate products is a bad idea. It would take VERY little time for a commercial bank that offers a full range of products to become mired in red tape and government bureaucracy. So if a bank has a checking account that has an overdraft protection line of credit, which agency is the regulator? Both products have very different characteristics and yet they are inexorably linked together. What about unsecured consumer lines of credit that, in every way look like a credit card without the actual card? How would you define each product? By its purpose, by the way it functions? I think that if you were to look further, you would find that the products and services financial institutions offer today are much more varied than they appear. Trying to get regulatory agreement, let alone industry understanding is going to be incredibly difficult and time consuming. In the end, I would assert that very little difference will be made.

You said, "fewer eggs in more baskets", how about, "too many cooks in the kitchen"?