dont agree with his politics, well some things, but thought this was an interesting article, There seems to be a growing movement that the bad guys are blue and red and that movement seems to be growing...
Well, there is this mantra out there - "live within our means" - and while that sounds really nice . . . and it sounds really responsible, it's meaningless. Our means are completely within our control . . . We have just given away huge corporate subsidies in February; we have given away other tax reductions over many, many years; we've created tax loopholes; in good times, we routinely give away taxes, and then in lean times we never replace those tax deductions or close those loopholes. . . . So "live within our means" doesn't mean anything. The fact is, we have a state with a population that have [sic] needs that we have a moral obligation to provide.
This really underscores Bernanke's repeated statements that we "don't want to stifle financial innovation".
Good grief. Wall street poisoned the well and Bernanke still won't reign in the fraud.
Fire Bernanke NOW!
99% of the time, financial innovation is fraud. Here's the jig. The fed eases. The easy money environment gets people excited. Wall street then figures out a sham that the investing community will swallow. The sham is marketed as innovation. The idea for the fed is to increase money/credit in the hopes of increasing output. But increasing output is hard work. Wall street understands that shams are sure things thanks to the fed. The fed is the enabler of wall street shams.
this has to be the most absurd regulation of all- and is the first thing that any regulatory reform should address.
How can it count as capital for the issuing bank holding company and not be subtracted from the capital of the bank purchasing the security? Isn't that just double counting the capital in the banking system? I believe the same rules apply for Fannie and Freddie securities. Also insurance companies were able to issue policies that were counted as capital for the bank/financial institution but it didn't result i lower capital for them.
leverage upon leverage and the answer is another stimulus package.
Small banks sold loans to make CDOs which they then bought back except now they magically became tier 1 capital. The phrase that comes to mind is money laundering. Worse, when they stopped paying dividends they stopped paying themselves. Spreadsheets trump common sense. Me, I blame the regulators.
Tier 1 capital links directly to the amount banks are allowed to lend in conjunction with their deposits. Essentially what this sets up is a feedback loop whereby banks move loans into their equity capital holdings, and increase the amount they're allowed to lend, assuming they have an excess of deposits over loans. As those loans go into the larger fractional reserve system, they increase the total amount of deposits held by the banks, which then provides more money for lending, providing that the banks can increase their equity capital to support it.
Although, granted, compared to the damage Asset Backed Securities have done by being allowed as part of Tier 2 capital, it may not be that much in the grand scheme of things.
Yes I think we need to start talking about this as a drug issue. I am so tired of hearing how this whole problem is my generation's fault for not living within our means, and inflating this whole credit bubble. If we are the users, then stuff like this was caused by the pushers. I may be guilty of imploding my life at home through bad judgment and addiction to credit and worthless stuff, but what the banks and lenders have done is the equivalent of handing out free samples in the school cafeteria with the principal giving his approval. Where is the justice?
nades,
It's easy to get pigged when you read what others have to say and then spend somr time thinking about your words. I saw the Pig™ but didn't want to bleed onto the next subject.
Why has no one noticed the technique every child learns in Kindergarten. When you steal a cookie, always take more then you want and then split up the loot so everybody gets some. That way your all in it together..................
The main stealer always gets to blame the others for the central theft.
And often gets the extra cookie after the others take the blame.
Always let the weakest one take all the blame.
So much for the idea that we don't need any regulators if you just force banks to own preferred shares in other banks, they will regulate their brethren.
Broken?
fixed...
GIGO
Neal Boortz : How's the stimulus working for you so far? - Townhall.com
dont agree with his politics, well some things, but thought this was an interesting article, There seems to be a growing movement that the bad guys are blue and red and that movement seems to be growing...
Well, there is this mantra out there - "live within our means" - and while that sounds really nice . . . and it sounds really responsible, it's meaningless. Our means are completely within our control . . . We have just given away huge corporate subsidies in February; we have given away other tax reductions over many, many years; we've created tax loopholes; in good times, we routinely give away taxes, and then in lean times we never replace those tax deductions or close those loopholes. . . . So "live within our means" doesn't mean anything. The fact is, we have a state with a population that have [sic] needs that we have a moral obligation to provide.
--Santa Rosa (D) Noreen Evans
This really underscores Bernanke's repeated statements that we "don't want to stifle financial innovation".
Good grief. Wall street poisoned the well and Bernanke still won't reign in the fraud.
Fire Bernanke NOW!
99% of the time, financial innovation is fraud. Here's the jig. The fed eases. The easy money environment gets people excited. Wall street then figures out a sham that the investing community will swallow. The sham is marketed as innovation. The idea for the fed is to increase money/credit in the hopes of increasing output. But increasing output is hard work. Wall street understands that shams are sure things thanks to the fed. The fed is the enabler of wall street shams.
What a system.
this has to be the most absurd regulation of all- and is the first thing that any regulatory reform should address.
How can it count as capital for the issuing bank holding company and not be subtracted from the capital of the bank purchasing the security? Isn't that just double counting the capital in the banking system? I believe the same rules apply for Fannie and Freddie securities. Also insurance companies were able to issue policies that were counted as capital for the bank/financial institution but it didn't result i lower capital for them.
leverage upon leverage and the answer is another stimulus package.
AS - you dont get it.... insert relationship about drug use and cold turkey here.... // snark off....
"Our means are completely within our control"
Dangerous delusion to hold on to as a legislator with budget authority.
Small banks sold loans to make CDOs which they then bought back except now they magically became tier 1 capital. The phrase that comes to mind is money laundering. Worse, when they stopped paying dividends they stopped paying themselves. Spreadsheets trump common sense. Me, I blame the regulators.
That was quick....
Serious question.... Has anyone been pigged more than Rob Dawg? LOL!
Oh this just keeps getting better and better.
Tier 1 capital links directly to the amount banks are allowed to lend in conjunction with their deposits. Essentially what this sets up is a feedback loop whereby banks move loans into their equity capital holdings, and increase the amount they're allowed to lend, assuming they have an excess of deposits over loans. As those loans go into the larger fractional reserve system, they increase the total amount of deposits held by the banks, which then provides more money for lending, providing that the banks can increase their equity capital to support it.
Although, granted, compared to the damage Asset Backed Securities have done by being allowed as part of Tier 2 capital, it may not be that much in the grand scheme of things.
There's just so much more money in the ABS's.
-- w
Whats the 3 year note come in at today.... Any guesses....
Yes I think we need to start talking about this as a drug issue. I am so tired of hearing how this whole problem is my generation's fault for not living within our means, and inflating this whole credit bubble. If we are the users, then stuff like this was caused by the pushers. I may be guilty of imploding my life at home through bad judgment and addiction to credit and worthless stuff, but what the banks and lenders have done is the equivalent of handing out free samples in the school cafeteria with the principal giving his approval. Where is the justice?
@warlock - thanks for the analysis.
nades,
It's easy to get pigged when you read what others have to say and then spend somr time thinking about your words. I saw the Pig™ but didn't want to bleed onto the next subject.
Why has no one noticed the technique every child learns in Kindergarten. When you steal a cookie, always take more then you want and then split up the loot so everybody gets some. That way your all in it together..................
The main stealer always gets to blame the others for the central theft.
And often gets the extra cookie after the others take the blame.
Always let the weakest one take all the blame.
Hence the Bailouts
Kindergarten has many lessons for us.
-- BS
Kindergarten has many lessons for us.
I learned that oxen is the irregular plural of ox--but they neglected to explain that mine would be gored.
So much for the idea that we don't need any regulators if you just force banks to own preferred shares in other banks, they will regulate their brethren.