Posted on 08/30/2014 1:34:48 PM PDT by Kaslin
His major flaw was his inability to control his friends. When he was a young man, his father once said to him, “Warren, you’re lucky you weren’t born a girl, because you just can’t say no!”
In this way the banks continue to function, but the total loss of value to those controlling the companies would serve as a lesson that would echo for generations.
How do you figure? Does their smallness protect them when the mortgages they hold go into default?
Also there have been moves to separate investment banks from commercial banks which helps.
Why would that help?
It’s the investment banks that were the bundlers and high fliers.
It's the mortgage holders who were in trouble. Mortgages drove banks to the edge, not derivatives.
Debt is greater than the money in existence, and printing money is going to fix that.
Mortgages were considered safe by everyone, not just the 13 biggest institutions.
So maybe half would have gone broke and the rest would have survived.
No change in impact from the 6 biggest going bust.
$1 trillion in defaults doesn't get smaller when you split in into more parts, it's still a $1 trillion hit to the banking system.
You see the result of government meddling in the concept of the federal reserve.
The Fed's meddling now worked much better than their lack of meddling in the 1930s.
Always has been.
Our current government, both Commies and GOPe want to consolidate all businesses into a handful of very large corporations, the better to control every aspect of life in our Country. That is why Obama is trying to destroy all small businesses.
With the Government controlling the corporations they can control who gets employed and who starves. Follow their edicts or you get nothing and with our current state of technology they can control every single aspect of every individual's life, something the Soviets could not even envision or dream of.
Actually, it was “securitizing” mortgages: packaging them, fraudulently rating the packages, and selling the derivatives that drove the collapse. And the same people who led the practices now lead the Fed and our treasury and SEC.
Combine that with the Federal government forcing banks to abandon standard lending practice and you have a pretty bleak outlook. But of course, federal intervention is never the issue.
As for the separation of commercial banks, it’s rather simple: it keeps people honest and limits losses to legitimate investors, rather than having the public bear the burden. This has been standard practice throughout history, and when this has been occasionally abandoned, it has led to disastrous results.
You are wrong on every point.
Why was it that community banks needed no bailout?
Why did banks like BB&T not need a bailout?
Because they were careful about their mortgage lending and were more conservative in other ways.
If all banks had operated as they did, there would not have been $1 trillion in defaults.
As for the 1930’s, we have finally come to the understanding, that is most of us who are not socialists, that government meddling in the ‘30’s made the Great Depression exactly what it was: the Great Depression.
The fact still remains that if you have 1,000 different CEO’s you will see maybe not 1,000 different approaches to the same problem, but certainly many hundreds more than when you have only one person calling the shots.
That is exactly why socialism always fails. It takes time, but it always fails.
Bernanke’s policies have ruined this country. Zero interest rates are the reason for the present craziness in the stock market and the stagnation in housing, manufacturing and other real assets.
But even worse, one day we will be like Argentina and will be required to pay high interest rates on government securities, whether federal or municipal. Simply because of our unsustainable debt, brought on by the idea that money is free.
And whose concept is it that money should be free? Bernanke.
You are not getting the point. Our current debt exceeds the total of all economic transactions of the entirety of human existence.
That wrongheaded statement describes precisely why the government should not have intervened. Those things happened because of the Fed's and Obama's interventions.
I am just an old country boy who many many years ago at the end of WWII took my money and banking course from a German Jew refugee from Nazi Germany.
His accent was so thick that it was very very hard to understand an otherwise complex subject.
But even a country boy should understand that something is amiss when the fed is paying banks to borrow money and charging large financial institutions a fee to park money at the fed.
If that does not make you suspect that there is a skunk in the woodpile, you are as gullible as the rube at his first county fair. Or his first trip to New York.
Are you actually suggesting that a free market exists, or has in your lifetime? I don’t know your age, but unless you’re next of kin to Methusula, it’s highly unlikely.
Free market theory is great, but your ivory tower is just as fragile as anyone else’s. The constant tension between freedom and regulation is part and parcel of the real world.
The intersection of federalism and finance is a good ideal: local markets with local control limits excess and increases true competition.
I agree. However, our country is no longer populated with the economically literate. I am as guilty as the rest. Even when you are aware, the depth of the problem is truly inconceivable.
It is so much easier to pretend it doesn’t exist. That won’t stop the coming calamity, but, luckily, there is no cosmic scorecard when it comes to finance. If anyone survives, the victors of the next world war will just start anew with pretty rocks and nuggets.
And it has gotten even worse: giant companies are threatening to change their nationality if government raises their taxes.
So now they're also too big to tax.
What a perfectly silly claim.
Creating debt is an economic transaction.
You got that right.
We are sliding into an economic feudalism in which the oligarchs are using technology to brainwash us, and where brainwashing fails, to force us into compliance.
Packaged mortgages are not derivatives, they're bonds.
As for the separation of commercial banks, it’s rather simple: it keeps people honest and limits losses to legitimate investors
How is a commercial bank that lost $1 billion on bad mortgages better than a commercial bank (which owns an investment bank) that lost $1 billion on bad mortgages?
rather than having the public bear the burden.
Do you think there is a commercial bank that failed because of its investment banking?
This has been standard practice throughout history
Where?
No community banks needed a bailout? Link?
Why did banks like BB&T not need a bailout?
Why did banks like Wells Fargo not need a bailout?
If all banks had operated as they did, there would not have been $1 trillion in defaults.
I agree, so what? Community organizers would have sued.
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