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D_Virginia

D_Virginia
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  • With zero hour having nearly arrived for a government shutdown, DealBook looks into what it means for Wall Street: The SEC and CFTC would keep working with skeleton crews, but for government-funded regulators, that's about it; such things as SEC regulatory filings and FHA loans would come to a halt. On the other hand, financiers note, so would Dodd-Frank implementation.  [View news story]
    Furloughed watchdogs and stalled oversight changes?

    This would be what Wall Street calls "Open Season"
    Apr 8 11:56 AM | 1 Like Like |Link to Comment
  • Rep. Paul Ryan releases a new deficit reduction proposal that claims to cut $5.8T in spending over the next decade and includes major changes to Medicare and Medicaid. These problems won't get fixed because (choose one): A. they're unworkable; or B. politicians and voters don't have the stomach for such deep cuts.  [View news story]
    It is well documented that this site has a significant conservative slant. The editors try to mention Krugman and Obama as often as possible so that they will get more ad revenue from the conservative sheep coming to do their daily bashing as instructed by Rupert and Rush.
    Apr 5 07:53 PM | 4 Likes Like |Link to Comment
  • "Price fixing at its worst," JPMorgan Chase (JPM) CEO Jamie Dimon says of debit-card interchange fee limits set for later this year. The "middle of the night" change - which could slash the $12B/year in fees that banks get by 84% - "penalizes us for having debit cards." A delay campaign may be bearing fruit as the Fed is behind schedule on the caps.  [View news story]
    > I am in the industry

    Obviously, that's why you don't want to realize the truth.

    Did you know that less than a third of sub-prime mortgages were driven by CRA -- the rest were the banks making crappy loans of their own free will, competing with each other to see who could make the most crappy loans, er, I'm sorry, the most profits. Coincidentally, did you know that every developed nation in the world experienced the exact same housing and financial crisis as the US? And they had no Dodd or Frank to blame.

    Yes, the government told some banks to give loans to some people who probably shouldn't have gotten them.

    But the government, general failure that it is, never told anyone to dream up disasters waiting to happen like interest-only ARMs, nor to market those disasters to low-income borrowers. Ever look at the sub-prime default rate on 30-year fixed mortgages? It's not as bad as you think. But the default rate on ARMs is astronomical for both prime and subprime loans alike.

    Nor did the government ever tell anyone to package up mortgages such that the originating lenders no longer had any incentive to maintain healthy loan portfolios: they were going to sell the hot potatoes off to Wall Street before the ink was dry anyway, so they stopped caring.

    The government also never told anyone to leverage those hot potatoes to the hilt, turning a linear problem into an exponential one. Or was their a CDO bill that I missed? Or a CDS ammendment that never made the news? Didn't think so.

    > do you really believe the banks got together and agreed to relax
    > the guidelines and start writing bad loans

    Not in such an organized fashion, but they saw that there was money to be made in sub-prime, especially if they could pass the hot potato. So off they went, and went, and went, and went, and went.....

    Yes, the government deserves some blame, as do borrowers -- but Wall Street deserves more.

    Thanks for playing, better luck next time.
    Apr 1 12:41 PM | 4 Likes Like |Link to Comment
  • The Discount Window: Its Stigma and Full Disclosure [View article]
    Whew, lots of banker doublespeak here. I guess we know which side of the oligarchy vs. people war that Roche is on.

    1) First off, let's be candid: for the most part, the banks at discount window ARE insolvent, at least from a mark-to-market perspective. Let's call a spade a spade, people, and stop deluding ourselves.

    2) "Should healthy firms have to disclose the fact that they are receiving emergency loans?" Um, if they are publicly traded, then I would vote YES. Moreover, if they need "emergency loans," how healthy can they be? An otherwise healthy firm in a financial crisis is still unhealthy while in crisis. Stop the pretending.

    3) Which is it? Does the discount window "tend to be expensive" or does it "provide the cheapest funds available"? I'm not a central banker, but one would think it is the latter, especially these days.

    4) "Admittedly, the existence of the discount window may create some moral hazard" -- "may" create??? Ladies and gentlemen, I believe we have the understatement of the year here.

    5) "the Federal Reserve limits moral hazard by restricting discount window access to depository institutions that are closely regulated and supervised" -- pardon me while I laugh hysterically at this bold-faced lie. Until the derivatives market is as closely regulated as the weapons of mass destruction that they are, the above statement will remain wildly untrue.

    6) Lastly, the "stigma" would be removed if there was more transparency overall. If people knew what was going on and why, no one would panic when a bank hit discount window. Of course, this might expose more of the corruption and thievery that we all are pretty sure goes on -- and I guess we can't have that, not for the bankers who own the government.
    Apr 1 07:59 AM | 4 Likes Like |Link to Comment
  • "Price fixing at its worst," JPMorgan Chase (JPM) CEO Jamie Dimon says of debit-card interchange fee limits set for later this year. The "middle of the night" change - which could slash the $12B/year in fees that banks get by 84% - "penalizes us for having debit cards." A delay campaign may be bearing fruit as the Fed is behind schedule on the caps.  [View news story]
    > no showing responsibility for MY actions, hence MY
    > consequences?

    Borrowers are actually the only ones facing ANY consequences.

    Your corporate bank buddies got all their bills paid by the government (well, the taxpayers), and got extra large personal bonuses too -- all for fucking up the whole economy. How's THAT for "responsibility"?

    Tell you what Joey boy, the people will stop asking for the government to help them get a fair shake, just as soon as the government stops waiting on corporations hand and foot, turning down their beds, fluffing their pillows, and tucking them in at night like the whiny little babies they are.
    Mar 30 10:31 PM | 8 Likes Like |Link to Comment
  • "Price fixing at its worst," JPMorgan Chase (JPM) CEO Jamie Dimon says of debit-card interchange fee limits set for later this year. The "middle of the night" change - which could slash the $12B/year in fees that banks get by 84% - "penalizes us for having debit cards." A delay campaign may be bearing fruit as the Fed is behind schedule on the caps.  [View news story]
    > if you are really too stupid to understand the terms or get some
    > real advise on what you are signing

    Most financial advisers, lawyers, accountants, and of course lenders, realtors, and brokers, ALL gave the "advice" that everyone should take out what we now all realize were stupid loans.

    The problem came from the top down, not from the bottom up.

    It was as if most doctors suddenly telling their patients to eat a cupful of sugar and a cupful of fat with every meal. If most doctors said it, most people would do it.

    Fortunately, we have malpractice laws for the medical industry.

    We're still waiting on such laws (and enforcement) for the financial industry.
    Mar 30 02:47 PM | 13 Likes Like |Link to Comment
  • "Price fixing at its worst," JPMorgan Chase (JPM) CEO Jamie Dimon says of debit-card interchange fee limits set for later this year. The "middle of the night" change - which could slash the $12B/year in fees that banks get by 84% - "penalizes us for having debit cards." A delay campaign may be bearing fruit as the Fed is behind schedule on the caps.  [View news story]
    > The merchant can move from one provider (bank) to another to
    > obtain the best deal, under the current system.

    That is overly simplified and effectively untrue.

    Yes, the merchant can move from one bank to another, but all the big banks charge more or less the same, and all the smaller banks, that may offer slightly lower fees, don't have the market share to do much good for the merchant.

    You see, the market HAS determined the level of fees, and for the most part, it's highway robbery on what has become a simple commodity service.

    Much like phone and cable companies, regulation may guard against "monopolies", but it does nothing to prevent duopolies (or tri-opolies, hex-opolies, etc), where a small number of industry leaders can effectively control prices by mirroring each others' moves -- they each make more by cooperatively raising prices than they would make by individually competing.

    Ironically, it's kind of a corporation's union, if you think about it. You /do/ hate unions, right?

    Competition is great for consumers -- when it actually exists in a practical way.
    Mar 30 02:23 PM | 17 Likes Like |Link to Comment
  • "Price fixing at its worst," JPMorgan Chase (JPM) CEO Jamie Dimon says of debit-card interchange fee limits set for later this year. The "middle of the night" change - which could slash the $12B/year in fees that banks get by 84% - "penalizes us for having debit cards." A delay campaign may be bearing fruit as the Fed is behind schedule on the caps.  [View news story]
    And these services are, for the most part, fixed costs to the banks.

    Yet many of them currently charge fees as a % of each transactions.

    If these rules take effect, they can still charge for the services, just not insanely so.
    Mar 30 01:48 PM | 17 Likes Like |Link to Comment
  • "Price fixing at its worst," JPMorgan Chase (JPM) CEO Jamie Dimon says of debit-card interchange fee limits set for later this year. The "middle of the night" change - which could slash the $12B/year in fees that banks get by 84% - "penalizes us for having debit cards." A delay campaign may be bearing fruit as the Fed is behind schedule on the caps.  [View news story]
    Whenever Jamie Dimon throws one of his media tantrums, I know that someone is trying to do something good for consumers.
    Mar 30 01:41 PM | 17 Likes Like |Link to Comment
  • Elizabeth Warren sees a double standard among lawmakers looking to limit the new consumer protection agency: "If we’re going to go out there and spill ink on accountability, we should also ask about how to hold powerful financial institutions accountable... The idea that we should be worried that some agency that will speak up for consumers might get a little too loud is looking in the wrong direction.”  [View news story]
    Anyone "grabbing power" from the BANKS has my vote.
    Mar 25 06:51 PM | 18 Likes Like |Link to Comment
  • Elizabeth Warren sees a double standard among lawmakers looking to limit the new consumer protection agency: "If we’re going to go out there and spill ink on accountability, we should also ask about how to hold powerful financial institutions accountable... The idea that we should be worried that some agency that will speak up for consumers might get a little too loud is looking in the wrong direction.”  [View news story]
    Further evidence that the financial industry, not the elected government, really runs things around here.
    Mar 25 05:55 PM | 21 Likes Like |Link to Comment
  • General Electric (GE) is so skilled at avoiding taxes - even though it earned $14.2B in 2010, with $5.1B from U.S. operations - that the Treasury actually may owe the company money. Yves Smith's reaction: "The idea that U.S. corporations are heavily or even meaningfully taxed is a canard."  [View news story]
    > GE television stations being a shill for the administration

    That's a wildly ignorant statement -- do you know who owns CNBC? GE. And when's the last time you saw CNBC say anything good about the government? Probably the Bush years.

    Yes, there is MSNBC...but no one actually watches them.
    Mar 25 11:39 AM | 1 Like Like |Link to Comment
  • Mark Thoma on the problem for low-income households in food and energy inflation: "While there’s not much evidence that food and energy costs lead to higher inflation in the long-run... that’s not to say that [such] increases... are inconsequential. For households in the lowest 20% of the income distribution, spending on food and energy is 44.1% of after-tax income.”  [View news story]
    Blithering idiots like to whine that a lot of people on food stamps are obese -- without realizing that a high carb, high sugar, high fat diet is a LOT cheaper day-to-day than a low carb, low sugar, low fat diet.

    Use math: it's not just for your accountant anymore.
    Mar 23 08:37 PM | 2 Likes Like |Link to Comment
  • The economy is "getting better month by month," Warren Buffett (BRK.A) says - a credit not only to government aid but to the "underlying resilience of capitalism," with Americans "thinking about how to do something better tomorrow than they’ve done today." He's in India after canceling a trip to Japan (where he's making derivative bets on a rebound amid a buying opportunity).  [View news story]
    > If crony capitalism wasn't resilient, why do you complain about the
    > same scum doing the same scummy things?

    Fair point, allow me to rephrase:

    Capitalism provides a resilient economy.

    Crony capitalism does not provide a resilient economy -- the cronies are kept resilient, while the rest of the economy suffers.
    Mar 22 01:09 PM | 5 Likes Like |Link to Comment
  • The economy is "getting better month by month," Warren Buffett (BRK.A) says - a credit not only to government aid but to the "underlying resilience of capitalism," with Americans "thinking about how to do something better tomorrow than they’ve done today." He's in India after canceling a trip to Japan (where he's making derivative bets on a rebound amid a buying opportunity).  [View news story]
    Capitalism is resilient.

    Crony capitalism -- not so much.

    The same scum are already doing the same scummy things that caused the crash of 2008. No one has learned a damn thing.

    I predict another crash by 2015.
    Mar 22 11:39 AM | 8 Likes Like |Link to Comment
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