Leftfield

Big Banks vs. Small Banks

It would be well to contrive a fair system that allowed small and regional banks a level playing field. Same with every business not TBTF. As our system descends more blatantly into fraudulence and patronism, our betters don't seem overly concerned about those who they consider, "too small to care."

Bigwigs Debate 'Too Big to Fail'

Krugman actually makes a valid point amidst his wrong conclusions: A visibly TBTF organization is not necessary to pose a systemic risk. LTCM is an example. Those off-balance-sheet items and leveraged counterparty risks create a situation where they, and now Dubai, can be the pinprick necessary to deflate a bubble and magnify unknown shocks to the whole ponzi system and start an avalanche.
Our leaders profit from this arrangement, not the taxpayers. Don't hold your breath for solutions.

Time for the U.S. Economy to Reindustrialize

I appreciate the sacrifices made to gain and preserve real rights. I have a problem with the overbearing, overreaching government that lets the largest offenders write the laws. it has failed in it's mission to provide basic predictable rule of law to facilitate the pursuit of opportunity without costly, useless and excessive, demeaning claptrap, obstacles and hurdles.
My mother is a lifelong Democrat, usually, and was night supervisor at a nursing home. She marveled how inspectors would come in, make them change a window one year, change it back the next.
I had a rental property, built 1890, after many inspections suddenly had to change the original bathroom window to put a much smaller one. One that wouldn't allow escape.
Not necessarily big deals in themselves except that the legal system and the bloated government and regulatory systems are dysfunctional, destructive and unevenly applied. There are more than enough straws on the camel's back. This is tyranny.

Time for the U.S. Economy to Reindustrialize

"Those control freaks you were talking about were no where in evidence as the mortgage/securitiztion ponzi scheme ran it's course. Nor were there any intrusive government regulations." Tom Armistead.

My point exactly. They pick on the little guy, let the fat political contributors get away with murder, followed by taxpayer assistance. This has been the means that has lowered objective standards in our society by almost every measure, including financial health. That the public, and even those who have the training and knowlege to know better, consider it benighted to even discuss it is appalling and bewildering to me.

Jamie Dimon Makes Best Case for Not Breaking Up Big Banks

Dimon actually advocates consequences to managements and unsecured investors in TBTF's. What's amazing is that that is radical a year after the epic bust. But, I've read convincing arguments that the large institutions do not provide better services or efficiencies. The talent picked for success of running a more local or regional size entity hardly scales effectively when size is excessive.
Those institutions are only succeeding because they are politically favored with overleveraging trading desks that put losses to the taxpayer and mark to magic accounting of their distressed assets. And, financial products have successfully imposed costs and created lavish compensation through opacity, complexity and deceit. All other types of businesses progress by creating efficiencies and lower costs.
Of course, the discussion by our misrepresentative "leaders" is so dishonest and ineffective that any thoughts of consequences at all by a major player is big news.

Time for the U.S. Economy to Reindustrialize

"Paint the building the required color, plant the right type of trees, make the bathroom window the right size, no big deal." Tom Armistead.
Pullease! That this once-great society has to be hobbled to the requirements of obsessive control freaks only is repugnant to me. Look at the results; we're lying, faking and stealing our way to buy a bit more time until the whole ponzi collapses rather than paying our way. Courtesy of all those regulators, lawmakers, paper-pushers we have so much of whose concept of orderliness and control fails where it really counts, such as Wall St. And, hey, what is positive about resultant US finances after this era of mandates, edicts, costs and taxes? Or the educational system?

Too Big to Fail: The Real Choice

Government is desperately, and only, looking for ways to cover up their TBTF friends like a cat covers up in a litter box. Not, properly disposing of the problem at all.
The word "conversion" is quite suitable, pertaining to "contingent convertible bonds." Legally, it means, theft.

Former Citi CEO John S. Reed: Mea Culpa

I see comments above that mention we would have problems even if we had Glass Steagall. Yes, we would have had some dodgy mortgages, but not as many. Those were made to rush them to Wall St. securitization and 40x leverage. Regardless of credit. And, jumbo loans were allowed by FNM and FRE in '05, I believe, so the dodgiest housing debt from the most inflated housing markets could go to the taxpayers and continue the game longer, thanks Chris Dodd and Barney Frank.
So, pretend and extend made things ultimately worse and influenced many of those banks since to go under since the bad real economy is still on it's own because the bailouts have gone to government and Wall St. Separating trading desks from commercial activity was, and remains, necessary.
Thanks for a view of a positive future in a competitive, not loaded, economic environment, John. Sometimes it's hard to envision that outcome with all the extravagant mistakes continuing to be made.

Charlie Gasparino: Another Crash 'Has to Happen Again'

A John Lounsbury instapost recently depicts a number of notables from
GS making the rounds of English churches to spread their notion that they haven't violated Biblical morality. One said that since it commanded to love thy neighbor as thyself, it's okay to be unstinting in self-love. I guess that includes cloaking oneself with unlimited wealth by any means necessary, no matter at whose expense.
Wall St. and Washington have already reached the greatest levels of looting in history, by plumbing some of the lowest levels of self-serving doublethink possible. It is only made possible by the insentience of Americans, who, as Vuke comments, must understand that they will always be pikers at this game. Handing Washington the keys to our future generation's future, hands it to the biggest liars and swindlers of all time, leaving behind only virtual crumbs now.

How Bloomberg Fabricates U.S. Housing Numbers

Our leaders have ripping us off to a science. Corporate managements cut corners from employees and customers, call it "productivity miracles" and pay themselves wealth beyond my wildest dreams. This is the group who has the revolving door to Washington, who aren't pikers rewarding themselves as middlemen for the greatest wealth transfer and fraud in history.
They've paid off enough voters: Government employees, recipients of government checks, and enough sliced off who can't seem to get a clue, to top 50%. So, the largest ripoff in history proceeds, with the "recovery" we're experiencing now providing another pretend and extend, another bonus period, another bailout until taxpayers are the largest bagholders in history.

The Next Step in the Bank Implosion Cycle

The same managements mostly in charge of the same banks (anyone replaced left with a generational fortune golden parachute), fewer, more concentrated players, thanks to taxpayer largess. They are playing another financial shell game; and I understand the financial carry trade is bad for business in the host country. We'll find out the degree of leverage when this pile implodes.
No discernible efforts to real reform from Washington. No clawback from upfront bonuses management receives for financial engineering that blows up later. No criminal charges; what the heck, they got Martha Stewart a few years ago.
Continued overbuilding thanks to bailouts added to foreclosures. No improvement in the real economy.
Wash, rinse, repeat.

The Secret to the Banking Sector's Success

Our economy and society have been levitated (increasingly badly for the majority) by magic, smoke and mirrors for decades. Going into debt before credit cards once meant, taking an advance on your salary. Clearly, a chunk of your pay was spoken for for a period of time. New, painless-sounding avenues for borrowing have been constantly invented and financially engineered since to hide the truth.
Every new or overworked euphemism for bankrupt, insolvent, broke or ruined has been to perfume, pretend and extend this farce. It's been obvious for decades that unfunded liabilities were multiples of GDP and that a private business using government accounting would be in jail. An advance is now taken out on, what, centuries of our descendants, and it is growing faster than ever. This article shows a new wrinkle ($trillions involved).
Are these lies worth it to us and our grandkids?

Big Banks: The Consensus Is Cracking

Music to my ears. King, a major government official willing to call delusional public policy, "a delusion."
Wall St. has been at the public trough repeatedly, and it got far worse after the repeal of Glass Steagall. So, that genie, at least, can and must be put back in the bottle.
Yes, break up the big banks. Don't forget clawback and, as banks are a publicly-licensed trust, abused like never before, there criminal avenues to pursue.

More on Greed, Regulation, Lehman, The Financial Industry

I admit I tended to swallow free-market ideology right up until TARP disabused me. The point you make about greed and sloth being different sides of the same coin, i.e: Both being about obtaining unearned "rewards" despite any suboptimal social outcomes, is most useful. Big government favors rent seekers of all sorts and I wished to be freed from it's burdens, but the most greedy, the oligarchs, discard free markets in a nanosecond to buy the influence that has suffering Main St. paying $trillions to kleptocrats and the largest bonuses in history to Wall St. this year (Bloomberg radio, 10/13).
So, your plan of regulation and a system to handle TBTF failures looks good to me. I like the part about haircuts; how is it GS got paid 100% on contracts it had with AIG?
I would like to see lots of clawback and, there has to be plenty of flagrant criminal activity to prosecute.

Debunking the 'Too Big to Fail' Myth Once and for All

Besides birth-death job creation by the stroke of a pen in BLS jobs reports, small business has disappeared down the memory hole now that it's suffering so badly. If you can't buy influence, you don't exist.
They say it's easier to give Wall St. $trillions than to nationalize TBTF banks. It's easier to rip off the public than to have a shred of accountability or rationality in public policy. Main St. is an annoying intrusion to the party, which goes for Washington and Wall St. It's best for them that Main St. is weakened and confused.