johngonole

When Goldman Might Have Failed

I've got a comment. ^#*$^@ Goldman

Why Congress Is Asking Bernanke Bogus Questions

Somehow the banks win eitherway. The bankers still have their jobs even though they took the whole financial system to the brink of collaspe. They got to keep all those bonuses. It is perhaps the most crooked industry of all. When they no longer discount risk and are bailed out for it with tax payer money why should they care. Write as many loans as possible. Banks produce nothing. Their only job is to loan out other peoples monies using leverage on top of that (fractional reserve banking). When they stop caring about being good stewarts of the basis of their whole business why do we need them. I'm sure the public can loan out money to their in laws, the neighbor down the street, or the guy that promises to pay you right back though you hardly know him and has alcohol on his breath. I mean really the general public would have lost far less of their own money making loans with no contract at all. The bailouts I hear are costing each individual tax payer like $40-50,000 a piece. So I collect a few hundred dollars and interest by depositing my money at the bank and they in debt me $50,000. Heaven forbid your married. Now your family is in the hole for $100,000. I realize that not all of the stimulus, tarp, and other govt spending was to bail out the banks. But is a very real way the poor financial status and economic status is a direct result of the banks making very very poor decisions while at the same time leveraging our money.

Why aren't the architects of this disaster hanging from the gallows. Give me a show trial for cryin out loud. I want to see someone in jail other than just Bernie. If this is how things are going to be run (lets not forget the savings and loan crisis, and all the other every tenth year disaster) why do we need them at all. Honestly if they are going to loan our money out to people who are never going to pay them back then why do we need a banking system.

Don't give me that liquidity speach. Far too many of those who need to roll over the loans they have never intend on paying the banks back. Its always been for the Trumps of this world a game of how long can they rollover the debt into ever higher loans and then just declare chapter 7 later on after skimming from the large pot for cash along the way. Our society is decaying in every aspect and nobody cares. We should be seeing riots in the streets if this were a sane society. Or is it that everyone is playing this game of musical chairs. Can't afford to stop the game anymore.

As a society were have enslaved ourselves to debt.........I mean the bankers. Wake up America its time to fire your banker. They serve no purpose at all. The only companies that pay back their debt are the ones that didn't need it in the first place.

Pay as you go my friends. Businesses too.... I'd say pull all your money out of the bank to punish them but if we all did that at the same time.......well the money really isn't there at all is it.

My advice is just don't save money anymore. Spend it or lose it I say. Let the bankers steal someone elses money. When the government finally goes broke you can just leave the country. OR if the govt prints their way out of indebtness then you'll be glad you never saved in dollars.

Let AIG Go Bankrupt, Not America

MATTZN perhaps derivatives should just be outlawed. I mean first you have private physical ownership. Then you have stock, bonds, preferreed shares. Then we have options and futures. Then Derivatives? I mean really the financial world worked just fine before the existance of derivatives. They serve no other purpose other than to gamble.

Even options are pretty silly really. I mean there is a trade off on everything. Why buy a stock if you are simply going to write a call option. If you feel that you need to right a call option then probably you shouldn't have purchased the underlying stock in the first place.

If can actually understand the use of futures and options to hedge gas if you are an airline or something like that. I can even see doing the same if you are a large agricultural operation or a mining operation. I can see the use of these instruments in order to smooth out earnings. But they really aren't necessary if you are well capitalized. In the end using the instruments (while probably necessary for a leveraged operation) ultimately reduce your long term avg earnings. So I can see the use for some of this stuff. But if your a bank and you've just made a loan simply sell it or hold it. Why do you need a derivative......

It basically like Jim Cramer on Steroids. On day one he buys AIG. Then he gets scared so sells some shares short. Then writes a covered call......you get the idea. He ends up with all this stuff on his balance sheet but is quadriple hedged and can't make money either way. Counterparty risk exist however.

I get that derivatives have a time component but NONE of us or even the GOVT (I mean really none of them even read what the bills they vote on) has any idea how deep this hole is.

The question that seems to be debated these day basically amounts to HOW FAST DO WE RIP OFF THE BANDAID. Jim Roger thinks the body will die if we take too long. I agree. Others argue if we rip it off too fast then civilization fall into chaos. I personally think calm will help but we ultimately need the government to start dismanteling these companies quickly and responsibally. I'm afraid we have a government that is more concerned about how to take advantage of the situation and grow their monopoly all the while keeping leaching the tax payers to do so.

Let AIG Go Bankrupt, Not America

Are you saying that all those whole life insurance contracts are backed by anything real either.....not even dollars in an account. So insurance companies are also way undercapitolized or overleveraed. I thought AIG was an insurance company not a bank. The big problem we have is that the govt allowed these institutions to get way to large. They are all leaning on each other. If one falls they all fall. Funny that the small banks are OK. Monopolies always abuse their power. Jim Rogers is right.

I think everyone should just come clean. So far all problems have been solved by placing one level of debt on top of another. Eventually its got to happen now so lets get on with it and print money NAKED without any treasury, gold, silver, toxic assets, or any backing. REBOOT.

I think it is horifically wrong but if we are going to continue to do more of the same lets just skip to the end please and get on with it. Stop pretending. Its time to either get serious and live within our means. By that I mean using bankrupcy to ruin the irresponsible and allowing creative destruction to take place. Whatever assets remain they must be put into new hands. Governments on on levels (Fed, State, local) must balance their budgets, etc... If we as a country aren't going to go down the long and narrow road then just get on with it and print the money.


On Mar 04 01:43 AM The Daily Bail wrote:

> www.nytimes.com/2009/0...
>
>
> One of the biggest worries, besides the considerable collateral damage
> to the banking system, is a risk that most people aren’t talking
> about, perhaps because it’s too scary. This one is probably easier
> to understand than any kind of financial chicanery: the dangers lurking
> below A.I.G.’s seemingly stable, highly regulated life insurance
> business. In the United States, A.I.G. has more than 375 million
> policies with a face value of $19 trillion.
>
> If policyholders lost faith in A.I.G. and rushed to cash in their
> policies all at once, the entire insurance industry could falter.
>
>
> “A ‘run on the bank’ in the life and retirement business would have
> sweeping impacts across the economy in the U.S.,” according to the
> A.I.G. document. “In countries around the world with higher savings
> rates than in the U.S., the failure of insurance companies would
> be a catastrophe.”

AIG: Bigger Loss, Bigger Bailout

Isn't this company mainly an insurance company? Insurance companies usually go broke be underpricing risk and then the BIG ONE comes. AIG is actually a well diversified insurance company and the worse one would expect would be declining margins are short term losses.

I get the idea that assets must be marked to market if they devalue significantly. But why was an insurance company buying such volitale financial instruments to begin with. And lets say they do end up undercapitalized why not just let this company fail. Certainly the billions already pumped into it would help relieve the WHOLE LIFE insurance policies etc..

I think its time for AIG to enter bankrupcy. While I must admit I'm not an insider on the AIG issue and may not understand all the webs that AIG has spun I still don't see why letting AIG fail would be such a bad thing. I mean after all the creditors would simply claim the assets of whatever is let. AIG is not a bank. Perhaps banks could actually claim much needed capital from AIG if AIG owes them. Again I'm no financial genius but I say let AIG fail its about time.

Even more outrageous is the former CEO who led AIG for years claiming they ripped him off and hes owed more money. I'm sorry but whatever problems AIG has now I'm pretty sure most of those problems were created on his shift.

Funny how small banks all around the country are just fine. Its only the BIG banks and financial institutions in the big cities that are in trouble. Nothing against the city folk but perhaps those slow, conservative, simple minded people actually know what they are doing. I think Bank of America, Freddic Mac, Fannie Mae, Goldman Sachs, Citigroup, and pretty much all of them except maybe Wells Fargo should be dismanteled and sold off piece by piece to smaller institutions. Caps should be set on how big banks are allowed to get. Hit the limit and split the whole bank up, just not the stock. Economies of scale are wonderful but not worth the cost when you combine it with Facism/Socialism and the too big to fail mantra.

The Banksters and their do boys, the Senate, are robbing us blind. Not that we should return to the medival days. But if this stuff was going on even as short a time as 120 years ago heads would be rolling. I'm sure if people begin starving this will happen. I don't think that is going to happen and I sure hope it doesn't. But if it were to happen in my lifetime I can honestly say that corruption and the ignorance of the masses that allowed this level of corruption is squarely to blame

Bleak Economic News Continues

Agree time to mothball AIG and C. Investors have already been wiped out. While we are at it I also think its time for the Federal Government to let people freely start their own asset backed currencies.

Great Depression Not Imminent, But Inevitable

TAS - I agree with you. The US has lots and lots of corruption at all levels of government and at high levels of large corporations.

Contrast this with other countries where everyone and everything is corrupt and you can see why the US will still be on top when the business cycle finally turns around. In lots of places you must buy everyone off to get anything done.

I still see hyperinflation in our future eventually.