It Can Happen Here: The Confiscation Scheme Planned For U.S. And U.K. Depositors [View article]
"The value of the MBS or CDO is "derived" from the underlying asset or assets"
I disagree. The MBS gives you all or part of a group of bonds. Divide a bond into 2 (or more) parts, you still have bonds. Add 2 or more bonds together, you still have bonds.
A futures contract on a bond derives its value from the underlying.
"It has no value in and of itself"
A bond or a part of a bond or a group of bonds does have value in and of itself, it is not a derivative.
"An MBS, made up of a number of mortgages allows an investor to invest a lesser amount than having to buy all the mortgages in the asset pool. The investment costs a lot less than full purchase price for all the mortgages"
You are mistaken. An MBS made up of $1,000,000 in mortgages would cost $1,000,000. You must be thinking of options or futures contracts, which are derivatives.
Thanks for the link. It doesn't support your claim.
Gold: Yes, It Will Drop. No, Don't Short It. [View article]
"FED member banks are now taking out nonperforming home loans out of the bundled securities and put them together in another bundle that has only nonperforming loans in it that get sold to the FED at full price paid with newly created digital credits"
The Fed only buys guaranteed MBS. They won't buy the ones you imagine banks are selling them.
"These new digital credits are then used by the FED member banks to replace the bad loan taken out of the bunled mortgages with a good loan they pay for with the new digital credits gotten for the bad loan sold to the FED"
Huh? Banks wouldn't use cash to "replace a bad loan", they would use cash to pay down debt.
Winner Takes All: The Super-Priority Status Of Derivatives [View article]
"In the U.S. after the Glass-Steagall Act was implemented in 1933, a bank could not gamble with depositor funds for its own account, but in 1999 that barrier was removed"
Good point Ellen, under Glass-Steagall banks were unable to make bad loans. Oh, wait......what?
You're always good for a laugh Ellen.
Glass-Steagall wouldn't have prevented the crisis.
"The tab for the 2008 bailout was $700 billion in taxpayer funds, and that was just to start"
The bank portion of TARP was profitable for the Treasury. The losing portions were Fannie, Freddie, the auto makers and the mortgage forgiveness program.
It Can Happen Here: The Confiscation Scheme Planned For U.S. And U.K. Depositors [View article]
"Due to the way fractional reserve banking works, if I deposit a check for $1,000 the bank then will loan out $10,000 based on that 'fractional reserve'"
Nope. They can lend ($1,000-reserve held), which is less than $1,000 not multiples of $1,000.
It's The Interest, Stupid! Why Bankers Rule The World [View article]
"But Krauss had a solution to that problem: the city could form its own bank and use it to generate credit for the city from public revenues"
Instead of spending public revenues, the city will deposit these revenues in its own bank and magically have more money to spend? And probably earn lots of juicy interest too? LOL!
Ellen, you and Mike Krauss have the silliest ideas. Your math doesn't work, but it does make me chuckle.
It Can Happen Here: The Confiscation Scheme Planned For U.S. And U.K. Depositors [View article]
Yes, there is a lot of confusion out there.
A derivative is a bet. A derivative is a synthetic security.
A bond is not a bet. A bond is not a synthetic security.
It Can Happen Here: The Confiscation Scheme Planned For U.S. And U.K. Depositors [View article]
I disagree. The MBS gives you all or part of a group of bonds.
Divide a bond into 2 (or more) parts, you still have bonds.
Add 2 or more bonds together, you still have bonds.
A futures contract on a bond derives its value from the underlying.
"It has no value in and of itself"
A bond or a part of a bond or a group of bonds does have value in and of itself, it is not a derivative.
"An MBS, made up of a number of mortgages allows an investor to invest a lesser amount than having to buy all the mortgages in the asset pool. The investment costs a lot less than full purchase price for all the mortgages"
You are mistaken. An MBS made up of $1,000,000 in mortgages would cost $1,000,000. You must be thinking of options or futures contracts, which are derivatives.
Thanks for the link. It doesn't support your claim.
It Can Happen Here: The Confiscation Scheme Planned For U.S. And U.K. Depositors [View article]
I see where your confusion originates. MBS (and CDOs) are bonds, not derivatives.
A derivative would be a futures contract, an option or a CDS, among others.
It Can Happen Here: The Confiscation Scheme Planned For U.S. And U.K. Depositors [View article]
Only if you consider a mortgage to be a derivative.
It Can Happen Here: The Confiscation Scheme Planned For U.S. And U.K. Depositors [View article]
Gold: Yes, It Will Drop. No, Don't Short It. [View article]
The Fed only buys guaranteed MBS. They won't buy the ones you imagine banks are selling them.
"These new digital credits are then used by the FED member banks to replace the bad loan taken out of the bunled mortgages with a good loan they pay for with the new digital credits gotten for the bad loan sold to the FED"
Huh? Banks wouldn't use cash to "replace a bad loan", they would use cash to pay down debt.
Your confusing gibberish is confusing.
It Can Happen Here: The Confiscation Scheme Planned For U.S. And U.K. Depositors [View article]
Still no list of banks that went under because of derivatives.
And no proof that Glass-Steagall would have prevented the crisis.
It Can Happen Here: The Confiscation Scheme Planned For U.S. And U.K. Depositors [View article]
Winner Takes All: The Super-Priority Status Of Derivatives [View article]
Good point Ellen, under Glass-Steagall banks were unable to make bad loans. Oh, wait......what?
You're always good for a laugh Ellen.
Glass-Steagall wouldn't have prevented the crisis.
"The tab for the 2008 bailout was $700 billion in taxpayer funds, and that was just to start"
The bank portion of TARP was profitable for the Treasury.
The losing portions were Fannie, Freddie, the auto makers and the mortgage forgiveness program.
It Can Happen Here: The Confiscation Scheme Planned For U.S. And U.K. Depositors [View article]
Yes, because credit unions didn't lose any money on bad mortgages.
Which banks went under because of derivatives?
It Can Happen Here: The Confiscation Scheme Planned For U.S. And U.K. Depositors [View article]
Nope. They can lend ($1,000-reserve held), which is less than $1,000 not multiples of $1,000.
It's The Interest, Stupid! Why Bankers Rule The World [View article]
Who is the idiot that is going to lend to this city at 0.25%?
And do you realize that's an overnight loan? What happens when the other bank realizes your city is a bad risk and refuses to roll over the loan?
I guess they can just declare bankruptcy. LOL!
The 'Crash JPMorgan' Campaign [View article]
So now they made 2 purchases. Where is the spread? LOL!
It's The Interest, Stupid! Why Bankers Rule The World [View article]
Instead of spending public revenues, the city will deposit these revenues in its own bank and magically have more money to spend?
And probably earn lots of juicy interest too? LOL!
Ellen, you and Mike Krauss have the silliest ideas.
Your math doesn't work, but it does make me chuckle.
Fiscal Cliff: Let's Call Their Bluff [View article]
No she wasn't.
"Today nearly all our money originates in banks"
Nope. Nothing close to "nearly all our money" comes from Federal Reserve banks.